New Ventures Group

The first step would be the formation of a New Ventures Group, a group that would be responsible for discovery, evaluation, elaboration and acceleration. Such a group “has one primary advantage – it protects the new and often unpopular new ideas from the mainstream organization until they have achieved some measure of commercial viability” (Bessant et al., 1).

• Discovery
• Development and Deployment of Idea Generation Methods: Assist with the development and deployment of idea generation methods throughout the organization. Many organizations struggle with idea generation and often approach it without the expertise or tools needed to leverage the size and scope of the firm.
  
  In mid 80s I was a member of a group whose mission was to change the way General Motors did business. Our group developed concept development and competitive analysis methods before they became popular at many of the management schools. The impact was immediate and within a year our group was in heavy demand throughout the organization. At the time I spent most of my time teaching the different divisions and suppliers the methods that we developed. We were highly valued by the organization because the methods we developed were useful and produced results.
  
  By developing tools that can assist their organization, the NVG is able to establish ties throughout the organization with the people who are coming up with ideas. This type of structure is consistent with the concept of a “gatherer” put forth by the Radical Innovation authors. In addition, this would allow the NVG to tune into the “Weak Signals inside the Firm”, that the Discontinuous Innovation authors discuss.
• Deployment of External Scanning Capabilities: With idea generation the NVG is involved with the development and deployment of methods throughout the organization. However, with external scanning capabilities the NVG is directly involved with not only developing the mechanisms such as establishing ties with universities but is directly involved in the scanning process. The NVG is actively looking not only within the organization but also outside the organization for ideas that can potentially be commercialized.
• Other: Other aspects of discovery that the NVG can be involved in are coordinating efforts to develop an Innovation roadmap for the organization. Such a roadmap can be used to identify the gaps and blind spots as discussed by the Open Innovation authors.
• Evaluation
• The NVG would evaluate potential ideas based on the type of innovation. As Christensen suggests, a potentially disruptive innovation would be judged on how well it fits the disruptive innovation pattern. A sustaining radical innovation might be judged on the basis of market potential and application domains. If the innovation is an incremental innovation, then it would be directed to the appropriate SBU or product development group, where it would go through the standard product development processes. Discontinuous, radical or disruptive innovations go through a different process of evaluation that is handled by the NVG where “a core group of innovation experts implements a systematic approach to evaluation, using a pool of qualified people inside and outside organization that are skilled at evaluating . . . concepts. An appropriate evaluation team is assembled for each . . . idea as needed” (O’Connor et al., 3), however it is the NVG that manages the evaluation process. The NVG understands the innovation theories at a deep level and have applied them frequently, so their guidance is crucial to the evaluation process.
• Elaboration
• The formation of project teams within the NVG to take on the responsibility of elaboration allows the idea to be developed outside the mainstream organization in a protected environment (Bessant et al., 1), where the group sees the idea as a pure upside opportunity (Christensen et al., 2). These project teams act like start-up companies at the seed stage, which means there must tight controls on funding, while offering a great deal of guidance and support. This is the stage where a great deal of market learning takes place and where the use of tools like the “Learning Plan” is used to probe the market place for potential application/market domains.
• Acceleration
• At this stage the NVG must be able to transition the project to an SBU; to transition the project to a spin out organization or license the technology to an outside organization. As the RI authors point out, transitioning the project to an SBU presents numerous challenges. First step in the process is to make sure that the SBU is able to fund the new venture, if not then it would be best to either spin the venture out or to license it. Forcing the venture upon an SBU is a sure way to kill the venture. If the venture is going to the SBU then it requires the formation of a transition team to ensure a smooth transition. The team would be made up of personnel from the NVG and the SBU.
• Human Resource Management
• It is important to deal with the culture of the organization. Many NVGs work under the radar, so they do not have to deal with the organizations culture. And in cases where the NVG is further down the food chain, this may be a reasonable strategy. But for an organization that had made a commitment to innovation and has placed the NVG high up the food chain, then the culture must be dealt with. The DI authors have come up with a set of goals that innovative company should strive for:
• Build a Culture that Tolerates Uncertainty
• Foster Divergent Thinking
• Build Entrepreneurial Skills in Employees
• Develop New Technical Capabilities within the Firm
• Innovation Infrastructure
  
  
  
  
• Technology Development: The deployment of a NVG requires substantial coordination among many different players throughout an organization. The development of IT tools to assist in the capturing and processing of ideas is critical, as one of the dangers sited by a number of organizations is dealing with an overwhelming number of ideas. Innovation project management tools like the learning plan, need further development to become useful in a large scale environment.

1 Bessant, Birkinshaw, and Delbridge, Managing the Challenge of Discontinuous Innovation. AIM Research. 2004
2 Christensen and Raynor, The Innovators Solution, Harvard Business Press, p 34, 2003
3 O’Connor, Leifer, McDermott, Peters, Rice and Veryzer, Radical Innovation, Harvard Business School Press, p5, 2000

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