INTERNAL MARKET FOR OPPORTUNITY CREATION
Venturing for high performance
By Professors Stuart Read and Maneesh Mehta (September, 2006)
Your company desperately needs to generate new opportunities. A proposal for a new products sits on the top of your in-tray. If it is successful, will it cannibalise our existing products? If it fails, will I lose my job?
Sounds familiar? If so, you probably work at a large company inefficient at innovation. You may not be surprised to hear that, using the same amount of resources, venture capital (VC) funded start-ups are more than three times more successful creating opportunities given the same R&D development dollar than their corporate peers.
Internal market for opportunity creation
Derived from best practices in the venture capital industry, the internal market for opportunity creation is designed to create a situation that encourages and challenges new opportunities. In this way, both firm and individual creator benefit. The core idea, is that a large corporation represents a portfolio of differentiated opportunities which have some technology or market commonality. Ideas might originate anywhere. Nurture these ideas at an appropriate level so their full potential can be realized with minimal risk. The internal market for opportunity creation is based on the following principles:
The internal market drives innovation
The ultimate aim of the internal market for opportunity creation is to use all the principles in concert and shift internal thinking. Move away from the traditional model where management “pulls” innovation through the organization, and towards a culture that “pushes” resources and ideas together smoothly.
With this sort of environment, do you think you might pick up the new product proposal rather than leaving it for another day?
Professor Stuart Read teaches on the Building on Talent and the Managing Corporate Resources programs.
Maneesh Mehta is Managing Director of the Deloitte Touche Tohmatsu Global Emerging Strategic Clients Program.