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The Need for
Managing Radical Innovation Separately
A
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New Product or service may be
launched either from within an established management system or from a
brand-new operation. In both cases, autonomy is a precondition of success
however.
Innovation needs to be managed
separately as the established company would load insupportable burdens on
the new venture: burdensome examples include highly structured
reward
schemes, return-on-investment targets, and lack of clear accountability for
the venture...
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Managing
Innovation through Spin-outs
Technology spinouts are designed to provide
independence and space for action and allow management to enhance market
capitalization. New ventures established as
independent companies can more readily fulfill their potential. In this
case, the
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entrepreneurs do not have to argue with superiors or put up with
interference.
A spin-out enterprise differs from
a spin-off. Spinouts remain closely tied to the company that developed them.
In most cases, the ties are both financial and operational. Financial ties
can be enforced through interlocking of stock ownership and financial
oversight by the parent company. Operational ties may include shared
professional and administrative services as well as marketing and leadership
support.
Top
Management Support
However small the new
ventures may be in relation to its parent, a top manager must
have the specific assignment to work on tomorrow as a
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strategic innovator
and
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entrepreneur and be responsible for developing and implementing
corporate venture strategies.
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