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Venture Management versus Traditional Corporate Management |
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by Vadim Kotelnikov, Founder, Ten3 Business e-Coach, 1000ventures.com
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ISSUES
Used in
Lifestyle Corporations
High-Growth Ventures
Building Business Around
Competence-driven idea
Opportunities: customer-driven idea or a new technology
Market Focus
Serving established customers
Entering emerging market that has yet to be recognized and exploited
Results
Quite predictable
Quite unpredictable
Time-to-Market
Willingness to sacrifice speed for thoroughness
Speed is above all; must be first to market
Success Measure
Earnings
Market capitalization
Market Research
Analysis, review, methodical consideration of facts.
"Living the data", agility, experimentation, adaptation, and rapid response
Management Attitude
Dedicated to delivering an operating plan
Dedicated to identifying and adapting to unmet, unserved customer needs
Management Style
Thorough planning and plan implementation; incremental logic of strategic improvement
Driven by imagination and faith; chaotic; always ready to adapt rapidly and change
Core Competence
Performing core manager's functions
Ability to move quickly from idea to product to market
Independence
Responsibility and control
Anarchic, demands space for action
Risk Management
Reason, caution, predictability, avoiding failure at almost any cost
Experimenting, adapting, failing, and experimenting again
Change Management
Formal procedures
Turning 180 degrees at top speed, and resuming cruising speed
Motivation
Promotion
Risk-reward structure
Decision Making
Slower; corporate approval procedures to be followed
Faster; entrepreneur is the key decision maker
Funding Source
Annual plan
Financial Focus
Profit
Cash flow
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MINI-QUIZ: Define which managerial approach - traditional or venture management - is more suitable for your organization In today's innovation driven economy, many top managers act as though they want all their people to be entrepreneurs. However, a verbal statement only is not enough - corporate environment and conditions favoring creation of new ventures need to be established. To check how entrepreneur-friendly your corporate environment is, answer the following question. If your established organizational procedures create a barrier to achieving your immediate objective, would you rather:
Or, if your strategic objective cannot be achieved because of restrictive organizational procedures, would you revolutionary change the procedures or sacrifice the strategic objective? Or, try not to sacrifice anything and find a solution "outside the box" through outsourcing some critical functions? |
See also:
Master of Business Synergies (MBS) e-Coach: Venture Management
Managing Innovation versus Managing Operations
Bibliography:
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"Venture Catalyst", Donald L. Laurie, 2001
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"Project Manager's MBA", Cohen E. Graham, 2001
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"High Tech Start Up", John L. Nesheim, 2000
