4 Takeaways from companies actively building ventures in Singapore

Panellists from left: Eileen Tan, VP, Digital Customer Experience and Analytics at SATS Ltd; Michael Pareles, Open Innovation Lead (APAC) at Bayer Crop Science; Belina Lee, CEO of Mandai Global and Deputy CEO, Transformation & Growth, Mandai Wildlife Group; and Alvin Cai, VP, EDB New Ventures.

 

To stay ahead of the curve amidst market disruptions, companies are embarking on corporate venture building, where established companies build new capabilities beyond their core businesses. A 2021 Leap by McKinsey survey found over half of 1,178 business leaders across regions and industries placed venture building as a top-three priority, while a fifth ranked it number one.  

 

Recognising this, the Singapore Economic Development Board (EDB)’s corporate venturing arm, EDB New Ventures, launched its pilot Corporate Venture Launchpad (CVL) programme in 2021.

Last month, executives from the programme’s appointed studio partners and participating companies, alongside EDB New Ventures, gathered to wrap up the first edition of CVL. More than 70 attendants at the event heard first-hand insights on what goes on in a venture building sprint.

Core members of various corporate venturing sprints and other key executives who have been successful in building a venture engine – an internal arm within the parent company with the capabilities to build a portfolio of new ventures – were also present to share their learnings and best practices. They are:

• Belina Lee, CEO, Mandai Global and Deputy CEO, Transformation & Growth, Mandai Wildlife Group
• Eileen Tan, VP, Digital Customer Experience and Analytics at SATS Limited
• Jochen Lorenz, Head of grow platform (ASEAN), a Bosch company
• Michael Pareles, Open Innovation Lead (APAC), Bayer Crop Science
• Suresh Sundararajan, CEO, Olam Ventures

 

Here are key takeaways they shared:

1. Make it make cents for senior management

Management’s support and alignment can make or break the venture. To secure senior management’s buy-in, it is important to identify a clear impetus for the company to build a new venture. This largely depends on the maturity and nature of the business.

The main concerns of any business boil down to two things: money and talent. Building a compelling case means satisfying these priorities. SATS’ Eileen Tan explains that the CVL programme helped her company in both ways with co-funding and the promise of external validation.

The finite sprint timeline also supported their proposition: “Instead of asking management for, say, $1 billion upfront, you’re saying, ‘Give me eight weeks, I’ll prove to you that this concept is valid and a viable business opportunity.’ If at the end of the sprint, it’s not successful, that’s where you [can] stop.”

For more experienced corporates keen on building a venture engine, it necessitates a different ballgame of consensus building with leadership over time. Management should note that not all new business ventures serve to improve the core business. Such ventures should be able to create value on a standalone basis.  

Once a common understanding is reached, Olam Ventures’ Suresh Sundararajan explains that the next step is to project how much capital will be needed over the span of the next three to five years.

2. Assemble the dream team

Once past the hurdle of convincing top management, the next and perennial challenge most companies face is finding the right talent. All panellists at the event were emphatic that there can be no compromise on securing good talent. Importantly, this is the point at which the corporate should already consider who will run the venture if or when it launches.

From pulling a member from the core business to initiating the hiring process, building a venture team can be a daunting endeavour. It can take time figuring out who has the makings of an intrapreneur — a corporate executive driving innovation internally.

Mandai Wildlife Group’s Belina Lee explains that while Mandai Wildlife Group initially had an internal startup team made up of members from the parent company, “It [was] difficult having a start-stop momentum”. Members had to manage the demands of their original job scope while working on the venture sprint, which led to breaks in the sprint. Eventually, a full-time core team was assembled, together with subject matter experts that were called in where needed to provide insight.  

Meanwhile, Bayer Crop Science’s Michael Pareles, muses about his unique experience, “Internally, there are some people we put on sprints for their mindsets and, of course, their expertise. At other times, we also bring in external talent. When we worked with [the CVL appointed venture studio], they helped bring in people with an entrepreneurial mindset.”

Ultimately, different strategies are needed depending on the existing core team and venture opportunity. The CVL programme helps corporates by providing partnerships with appointed venture studios, and filling talent gaps through access to industry networks.

Another crucial insight: talent should be kept and not just found. To have them take ownership over the venture, Bosch’s grow platform’s Jochen Lorenz recommends that talent be incentivised and compensated adequately. If treated as an employee, they will act as employees — not intrapreneurs.

 

3. Minimise barriers, maximise autonomy

While pre-sprint processes are crucial, momentum must carry through during the sprint itself. To maintain agility, sprint leaders should create a space of autonomy for the team to make full use of the sprint’s short time span.

In the case of building their respective venture engines, both Sundararajan and Lorenz agree that corporate ventures should be run as independently from the company’s core business as possible, so that things can move smoothly and efficiently.

Governance from the corporates should be minimal, and the venture team should only go back to the board for business updates at pre-agreed intervals. The only exceptions are critical decisions that the board ought to take as warranted by business conditions, for example a major pivot in strategy or capital infusion which was not planned for, Sundararajan quips.

“Everything else is done with an open mind and should not be influenced by existing corporate systems and processes. Even in areas like corporate functions where one would typically prefer to leverage on the corporate, both should objectively decide on what is best for the venture rather than imposing pre-set processes. It is a fine balance of autonomy, outcome, benefits of standardisation, and control,” Sundararajan explains.

4. Prepare for lift-off, keep the momentum

As the sprint draws to an end, the next challenge is ensuring there is no drop-off in momentum after approval is received.

Lee explains that it is important to do scenario planning even before the sprint to ensure that the team can act quickly once approval is gained. “Once we have the green light, we’re ready to go. We don’t have to ask, ‘What are the next steps?’ and then start planning.”

Building a new venture is by no means simple. While these tips bolster a venture’s chances of success, nothing is guaranteed in corporate venturing. Not all concepts might be validated, and not all new ventures can scale successfully. However, with a clear roadmap in place, risks can be mitigated to allow the team to move forward with confidence.  

Ventures made possible

Promisingly, at least 40 corporate ventures have successfully launched in Singapore (as at January 2020). EDB New Ventures’ Michelle Tan, shares how the interest received on the CVL is owed not only to the conviction of the corporates, but also the quality of the appointed venture studios and the work that they do.

New Ventures will be launching an enhanced version of the programme on 26 July 2022.