Startup entrepreneurs and corporate venture builders, who I call Corporate Explorers, share a lot in common. They are also fundamentally different. Understanding this can help corporations be better at spotting their potential innovation leaders and give them the opportunity to generate new value, before they leave to try their hand outside the firm.
The entrepreneur is a modern-day hero archetype. An entrepreneur is willing to take personal risks to advance an ambitious, even outrageous idea. Characters like Elon Musk, Mark Zuckerberg, and Jeff Bezos have shown the way to creating extraordinary wealth and global impact.
Corporate innovators live a less glamorous life. Even the idea of a corporate venture builder is ridiculous to some. They reason that large, slow organizations, led by people obsessed with sustaining earnings-per-share and the value of their personal retirement plans, cannot possibly move at the speed of new opportunities.
However, there are countless examples of leaders inside existing corporations building new ventures with breakout results. Jim Peck built a multi-billion-dollar big data analytics unit inside LexisNexis, a venerable firm and also a part of a larger corporation. UNIQA Insurance, a 200-year-old Vienna based firm, is building multiple new businesses from digital insurance to healthcare. Following an effort led by Venu Gopinathan, Analog Devices just received FDA approval for an extraordinary technology that can give patients advance warning of heart failure. Deborah DiSanzo at Best Buy Health has built a new unit applying the assets of the well-known retail business to the problem of enabling patients to receive care at home through remote monitoring technology.
Corporate explorers are as real as entrepreneurs. Leaders face the challenge of how to identify and develop corporate explorers within large and complex organizations.
So, what are the characteristics that make the difference between success and failure for the corporate explorer? In The Creator’s Code, Amy Wilkinson describes the six characteristics of a successful entrepreneur. I have leaned on Amy’s description to develop my own set of five characteristics that I argue apply to both types of venture builder. I have then added three additional characteristics that have emerged from five years of research into corporate explorers, before and after publishing my first book in 2022.
Not every successful Corporate Explorer exhibits all eight attributes. But I believe they can help us better identify those leaders that can step into venture building roles.
5 Shared Characteristics of successful startup and corporate venture leaders.
A restless explorer seeking novelty – drawn to the future, finding what’s new, and making things change for the better. The Dutch psychologist Peter Robertson links the innate need to explore with human evolution. He says that some of us show the trait of a hunter, ranging far and wide to find food, whereas others prefer creating stability and structure within the social system. Both attributes are needed, but this growth orientation is defining for entrepreneurs and corporate explorers alike.
Curiosity to solve a problem – Amy Wilkinson describes how entrepreneurs are passionate about “closing a gap” for customers. They see something in the world that does not work right and they are inspired to construct a solution. When Kristian Tapaninaho moved to London, he was frustrated at not being able to make pizza over an open fire as he had in his native Finland. Out of this came the success of the Ooni at home pizza oven. You only see these gaps if you are curious about the world and the frustrations customers experience.
Open to learning what they do not know – Satya Nadella's reinvention of the notoriously arrogant Microsoft culture is defined by the shift from a “know-all” to “learn-all” company. Explorers and entrepreneurs are not afraid to test deeply held assumptions and pivot mid-course. The best obsess not about their idea, but about the problem they are trying to solve. They iterate solutions to the problem, adding and subtracting features, as they learn more about what customers value and how they want to use a given product or service.
Courage to commit in the face of uncertainty – Entrepreneurs are famous for being willing to take personal risk to move an idea from concept to reality. Adam Singolda, founder of the multi-billion-dollar recommendation engine software , told me he started and ran the firm for its first seven years from his childhood bedroom. Explorers usually retain the trappings of corporate life; an office, expense account, even a personal assistant. However, they start with more to lose. They are putting their career advancement on the line in the uncertain hope of turning the venture into a success. That takes courage.
Scale of ambition – many CEOs refer to explore projects as “moonshots.” This means the project has a big ambition. It is not about incremental additions to the current business. It is a step into a new area, and these projects want to scale to the fullest extent of the new opportunity. It is much easier for an entrepreneur to make this case. Venture capital firms like to see opportunity and invest in those with ambition. The opposite is true of corporate managers who believe that they are more likely to get investment if their project doesn’t sound too ambitious. This creates a mismatch with CEOs who are looking for ambition and don’t want to undershoot the opportunity by playing it safe.
My first Corporate Explorer was Carol Kovac, leader of the Life Sciences emerging business unit at IBM. Carol had a personal vision for the unit to transform medicine that she encouraged her team to buy into. She set the apparently crazy target of building a one-billion-dollar business within three years. That she achieved this goal owed much to the fierce commitment and sense of identity she created within the team. Purpose is the fuel on which Corporate Explorers thrive.
3 Characteristics of successful Corporate Explorers
Performance Credibility – I asked a CEO for what he felt were the key characteristics for the Corporate Explorer. He had almost the exact same list as me, but he added that “they must have a track record. I need to see that they can follow a project through from beginning to end.” This CEO is very good at personally intervening to ensure that Corporate Explorers survive the day-to-day pressures of the core business. However, he knows he can only do this for a few projects. A performance track record is a strong indication that an individual is a good investment.
Social Influence – we like to view organizations as hierarchies with clear lines of accountability. However, they are really networks of influence, reputation, and informal power. If you hire an outsider to lead a new venture inside a corporation, then they have no social capital. One would-be corporate explorer told me that as soon as she started to succeed nobody would help her. In her words; “it was like trying to paddle up the Amazon with a butter knife.” She had no social influence. Corporate explorers need to be respected by people at multiple levels in the organization and be able to call on those relationships to get things done.
Humility & Resilience – perhaps the biggest difference between entrepreneurs and corporate explorers is humility. Multiple studies have demonstrated a link between entrepreneurship and narcissism. That means that they lack empathy toward others, coupled with a strong sense of self-importance and need to be admired. Perhaps it takes a narcissist to have the self-belief required to sustain an idea through many rounds of investor rejection.
Corporate explorers, however, need to demonstrate humility if they are to win support inside the organization. Stable social systems quickly reject people perceived as self-aggrandizing. The best corporate explorers let others take credit for what they have achieved. When I interviewed the top team of a prominent firm several executives each told me that they had originated the same new venture. The leader that thinks it was all their idea is far more likely to feel that they have a stake in the venture’s success.
Humility helps the Corporate Explorer navigate the choppy waters of winning and sustaining senior leadership support. It also helps them demonstrate resilience in the face of obstacles. It is not all about them, so they do not take every set back as a personal rejection. That makes it much easier to ride the ups and downs of corporate innovation.
It makes it possible for the new venture to be coded as a shared goal, rather than a predetermined agenda to aggrandize the individual advocating the innovation.
This is a model for helping organizations identify and develop potential future corporate explorers. There is a great myth that large organizations do not have these people and need to go outside for new entrepreneurial talent. Or, that organizations first must transform their culture before they can possibly hope to develop these individuals. This is rarely true. It is more likely the organization has just not found and nurtured the talent they already have.
Corporate explorers can succeed in a range of corporate cultures and business models. Organizations with successful corporate explorers, like Best Buy, LexisNexis, Analog Devices in the USA, Bosch and UNIQA Insurance in Europe, and AGC and Panasonic in Japan, are all very different. Some have dynamic cultures that foster innovation, others are more hierarchical. But all share the ability to identify potential corporate explorers and give them opportunities to succeed.
In my next article, I will explore what it takes for organizations to identify and develop a cadre of corporate explorers using these 8 characteristics. Some are not easily teachable. However, you can activate latent ability and help improve the odds an individual will succeed. For instance, you can take someone with natural curiosity, and train them to use it to uncover unsolved customer problems. You can partner an introvert technologist with a high social network partner, to build support around an idea.
Entrepreneurs will always have an edge when it comes to attention and glory. They get to give their new companies funky names, announce funding rounds, and place new listings on stock exchanges. However, beneath this froth there will be Corporate Explorers, who are able to build new value propositions for existing businesses. Those corporations that can identify and encourage this talent to emerge will put themselves in a stronger position relative to both competitors and startups.
