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LEAN VENTURING: LEARNING TO CREATE NEW BUSINESS THROUGH EXPLORATION, ELABORATION, EVALUATION, EXPERIMENTATION, AND EVOLUTION

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International Journal of Innovation Management
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Henning Breuer at University of Applied Sciences for Media, Communication and Management
Henning Breuer
  • University of Applied Sciences for Media, Communication and Management
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Abstract

Corporate venturing is a real adventure that teams may only master gradually through research and learning, which proceeds through iterative specification and validation of business models. Based on this understanding we have developed a five E framework for corporate venturing that is organized by learning objectives on five levels of maturity, and backed up with scaffolding tools and methods. It shows how to explore, elaborate upon, evaluate, experiment with and evolve assumptions. Scaffolding tools and methods support the two main sets of activities required within this framework: the creative exploration of new ideas and opportunities, and the iterative specification, quantification and evaluation of assumptions. Examples from nine new venture projects in the telecommunication industry illustrate the approach.
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LEAN VENTURING: LEARNING TO CREATE NEW
BUSINESS THROUGH EXPLORATION, ELABORATION,
EVALUATION, EXPERIMENTATION, AND EVOLUTION
HENNING BREUER
Telekom Innovation Laboratories
Schlesische Str. 28, 10997 Berlin, Germany
henning.breuer@uxberlin.com
Published 31 May 2013
Corporate venturing is a real adventure that teams may only master gradually through
research and learning, which proceeds through iterative specification and validation of
business models. Based on this understanding we have developed a five E framework for
corporate venturing that is organized by learning objectives on five levels of maturity, and
backed up with scaffolding tools and methods. It shows how to explore, elaborate upon,
evaluate, experiment with and evolve assumptions. Scaffolding tools and methods support
the two main sets of activities required within this framework: the creative exploration of
new ideas and opportunities, and the iterative specification, quantification and evaluation
of assumptions. Examples from nine new venture projects in the telecommunication
industry illustrate the approach.
Keywords: Corporate venturing; lean management; business models; business model in-
novation; corporate venturing portfolio; innovation management; organizational learning.
Old Hands on New Venture Ships
Corporate venturing is a real adventure: high-risk loving crews gather to leave
their comfort zone and enter an open-ended journey, exploring and exploiting
potentials for business that did not exist before. No reliable maps exist; even
guiding stars shift positions. Very few survive as not only adverse winds and
unforeseen icebergs abound, but also intellectual property pirates and copycat
carriers populate even blue oceans. The ships that are venturing out are being built
on the way. Their mortality rate is much higher than their survival rate. Crews
need unique capabilities to sense, seize, and transform short-lived opportunities
into sustainable progress. And yet, while fashionable figures of open and
International Journal of Innovation Management
Vol. 17, No. 3 (June 2013) 1340013 (22 pages)
© Imperial College Press
DOI: 10.1142/S1363919613400136
1340013-1
... However, most of the currently available approaches do not explicitly address the subjective values and normative orientations underlying business and innovation. Therefore, we subsequently address this gap by pointing out how to consider values in business modelling and presents the 'Business Innovation Kit' (based on Breuer 2013) and the 'Sustainability Innovation Pack' (Breuer andLüdeke-Freund 2015, 2017a, b). Together they provide a powerful and practically proven toolbox with consecutive modules to design values-based and sustainabilityoriented business models. ...
... However, most of the currently available approaches do not explicitly address the subjective values and normative orientations underlying business and innovation. Therefore, we subsequently address this gap by pointing out how to consider values in business modelling and presents the 'Business Innovation Kit' (based on Breuer 2013) and the 'Sustainability Innovation Pack' (Breuer andLüdeke-Freund 2015, 2017a, b). Together they provide a powerful and practically proven toolbox with consecutive modules to design values-based and sustainabilityoriented business models. ...
... Private and public decision makers are supported to model other and their environmental and social concerns regarding infrastructure projects. • Business Innovation Kit and Sustainability Innovation Pack: Based on a review and clarification of stakeholder values, moderation cards didactically guide users through a self-explanatory process (Breuer 2013;Breuer andLüdeke-Freund 2015, 2017a). The supplementary Sustainability Innovation Pack facilitates modelling of sustainability-oriented business models and "business cases for sustainability". ...
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... In the second category of articles, the authors agree that there is no way for an entrepreneur to formulate business models by comparing or reproducing other cases of companies already established in the market, because each venture is an idiosyncratic effort that generates unique elements of a singular structure (Breuer, 2013) for which there is no standard measure (Li et al. 2011). The articles of Mansoori and Lackéus The third category encompasses articles that claim that innovation produces unprecedented applications for existing resources (Roach et al. 2016), improvement opportunities leading to market transformation or disruption , therefore the singularity comes from innovation, as in In the literature it is evident the recognition of the singularity of business models, so there is no management standard to follow, each entrepreneur will manage the experimentation according to their choices and preferences. ...
... The entrepreneur facing the uncertain market is unaware of all the variables that may interfere with the success or failure of his business, so until the entrepreneur has effectively invested in a business it is unlikely to know if he will be successful. The works of Balocco et al. (2019), Breuer (2013, Deligianni et al. (2017), Maine et al. (2015), Mansoori and Lackéus (2019), Reymen et al. (2015), Shepherd et al. (2021), Reymen et al. (2017) and Roach et al. (2016) share this view, ...
... processes are performed:Andries et al. (2013),Baldassarre et al. (2017),Baldassarre et al. (2020),Bocken et al. (2017),Bocken et al. (2018),Bojovic et al. (2018), Breuer (2013,Cosenz and Noto (2018), Ganguly and Euchner (2018), Hampel et al. (2020), Kerr et al. (2014), Konietzko et al. (2020), Roach et al. (2016), Trimi and Berbegal-Mirabent (2012) and Weissbrod and Bocken (2017). Maine et al. (2015) argue that experimentation is carried out through small structured tests based on limited resources to generate learning, as well as Balocco et al. (2019), Chandler et al. (2011), Deligianni et al. (2017), Shepherd et al. (2021), Reymen et al. (2017) and Reymen et al. (2015).In this view, experiments are specifically designed to provide validated knowledge about a new product or service through close and constant interactions with current and potential customers and used to validate or pivot key assumptions of the venture. ...
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... Creative people are flexible in thinking, and they can quickly leave the old way of thinking and replace it with a new way of thinking; (3). Elaboration is the ability to develop ideas and describe them in detail (Breuer, 2013); and (4). Originality is the ability to come up with original ideas (Maric et al., 2021). ...
... Several main aspects form creativity: the fluency of thinking, which is the number of ideas that come out of one's mind (Gabbrielli, 2020); Flexibility is the ability to use various approaches in overcoming problems (Bock et al., 2012;Fredericks, 2005). Creative people are flexible in thinking; they can quickly leave the old way of thinking and replace it with a new way of thinking; Elaboration is the ability to develop ideas and describe them in detail (Breuer, 2013). Therefore, the concept of creativity can be supported as long the locus of control of business actors is in a condition full of optimism. ...
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There are not many studies that examine business continuity and business strategy combined with business people’s psychological and psychological approaches. This study relates the elaboration between the HRM, strategic management, and business management fields analyzed with a quantitative approach. This study involved 100 respondents of handicraft business actors at the border between Indonesia and Malaysia. The data collection method used a survey method. Data processing uses the Structural Equation Model (SEM-PLS) approach in the SMART-PLS. This research study states that through direct relationship, all demonstration variables have a positive and significant effect. Meanwhile, the demonstration of the relationship between variables states that there are two patterns of relationship that do not have a significant effect. Through a combination of human resource management variables, business strategy, creativity, entrepreneurship capability, and SME sustainability perceived, packaged with a planned behavior theory (TPB) approach, several main research findings conclude. First, our study indicate that business sustainability can be achieved if an optimal business strategy (BS) has been realized by forming good entrepreneurial capabilities. Second, the role of antecedent human resource locus of control (HR) is a variable that has complete control in creating the creativity of small-medium enterprise actors and creating entrepreneurial capabilities.
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... The business model, describing how companies create and capture value, allows for competitive differentiation and mid-term corporate renewal. Whereas environmental and social engagement, for example, may be constitutive parts of a business model, systematically using it as a basis for innovation (Breuer, 2013) requires consistent values-based decisions, thorough elaboration, and normative dedication -each to be facilitated by suitable collaboration methods and activities. Relevant values on the strategic level include rather implicitly grown orientations like the ones identified by Jones (2002). ...
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Book
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What is the mean reason to formulate values in the firms or organizations? The main answer is to facilitate the alignment of employees and organizational values to increase motivation and effectiveness with better outcomes in performance and investment alike. However, there are few efforts to design, implement and prove empirical models to analyze their results that conform an integral view of factors involved in a value-based management model. The mentioned above, represents a great opportunity for the management sciences to show their abilities to propose a model able to determine and weight an inventory of values per industry/sector and select the values, according the division or department of the firm or corporate organization. Due to the values-based innovation is the main reason of this book and according as mentioned above, this is divided in: Chapter 1 highlites the importance of values for management sciences, showing, several values studies and models that describe them, and the main key performance indicators to assess them, inspired on values-based management. Remarkable models are explained, such as Evaluation VAlue protocol (eva protocol), that is introduced as a tool of selecting values from a previous determined inventory. Chapter 2, describes the relationship between values and innovation and the recent and novelty models as the value-based innovation management model (Breuer, H. and Lüdeke-Freund (2015), and its relationship with the open innovation model (Mejía-Trejo, 2017 b) Chapter 3, describes the general conceptual model proposal, based on the models mentioned above, and describing the process of eva protocol to be applied. The model proposal includes a broad scope to define specific values into specific areas, interchangeables along horizontal or vertical structure of the firm or corporate organization, with certain characteristics such as: normative, strategic and/or instrumental/operational as management views. It is previewed, three innovation management associated with each one of the management views: the normative, the business model and the process-product-service innovation views. A decision point is incorporated in order to change or not the actual values on operation. If the answer is no, the process continues in its own flow of feedback linkage to keep the supervision of the key performance indicators such as efficiency or effectiveness inspired in values-based management as a feedback linkage; if the answer is yes, then the eva protocol process is applied as a feedback linkage to review, modify, interchange, suppress or enter new values according to the division, the department within the firm or corporate organization. Chapter 4, as a benchmarking research of the most innovators firms at worldwide, no matter what industries or sectors are being, shows an empirically study case as a preliminary stage to determine an inventory of values with innovation view, based on Mejía-Trejo (2017c) research applied at Guadalajara’s Mexico software development firms with the hope to be implemented in Spain for future studies. Finally,the conceptual model proposal is considered important and ready to be applied in any sector of the industry interested in the values-based innovation management, due its flexibility, simplicity and broad scope to measure the performance of the firm or corporate organization not only in the economic value, but in the general perception of value in all the involved parties.
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... Yet another approach to supporting business model innovation for sustainability is represented by the Business Innovation Kit. This toolkit provides a six-step process to facilitate business model development from understanding the values of the involved stakeholders to refining the various elements and activities that make up a business model (Breuer, 2013;Breuer & Lüdeke-Freund, 2017). The Business Innovation Kit makes use of gamification by 'playing cards' and allows mixed stakeholder groups to run their own business model innovation processes. ...
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This chapter introduces business model innovation for sustainability as a new way of achieving corporate sustainability. Why is thinking about business models and business model innovation useful in this regard? Because business models are essentially about how companies create value for themselves and for their stakeholders, such as customers, employees, or business partners. And value creation, in turn, relates in various ways to the natural environment and society. Hence, the business model perspective is very helpful in dealing with corporate sustainability challenges. In this chapter, we explain how business models support proactive approaches to corporate sustainability; how business model innovation can help integrate sustainability principles (such as efficiency, consistency, or sufficiency) into companies’ activities; and how it can help companies extend their value creation potential to be more inclusive towards non-financial stakeholders. Finally, some patterns and tools to develop business models for sustainability are introduced.
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... In the last decade, innovation management literature shifted its attention from products, processes and single business activities to the level of business model innovation (Breuer and Lüdeke-Freund, 2017). While innovation in entire business models and their components moved to the centre of strategy and innovation scholars' attention (e.g., Breuer, 2013;Chesbrough, 2010;Teece, 2010), two crucial issues still need further attention. The first is the role of values in innovation management. ...
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