Accelerating Innovation and Growth through Corporate Venturing

Posted on 16th December 2014

Global Corporate Venturing Magazine, December 2014
by Scott Bowman, Partner at Clareo

With so much change, how are leaders to respond and prepare for the future? How do they accelerate growth in new areas, create optionality for the future and build resilience? 

Insights from Castrol 2020: Enabling the Future Beyond Lubricants 

For years, Castrol built its growth strategies in the ways you might expect—exploring new channels of distribution, new geographies, new ingredient technologies, etc. However, there came a point when Mike Johnson, the former CEO of Castrol asked a very provocative question, “What do we do in a world that doesn’t need lubricants?” Multiple trends and forces were impinging on Castrol creating potential future threats and disruptions including the growth in electric vehicles that require no lubrication. The leadership of Castrol launched an initiative called Castrol 2020, designed to explore scenarios, gain insights and create an innovation portfolio for the
future.

clareo corp venturing 2

Roy Williamson, keynote speaker for the corporate venturing event, spoke about the Castrol 2020 journey and the role that Castrol innoVentures, the company’s corporate venturing unit, is now playing in advancing strategic innovation. Castrol explored broad trends shaping its future, engaging
with the venture community to challenge conventional thinking and assumptions along the way. They defined futures around areas such as electric vehicles, ownership vs. access, the “fourth space,” intelligent factories, designer materials and others. Then, the group engaged in a rich ideation effort to define & articulate four future ‘territories’ for the business:

Intelligent Operations

Next Generation Engineering

Smart Mobility

Responsible Castrol

(see www.castrolinnoventures.com for more).

Castrol innoVentures was then formed with a very clear mandate— to build, invest, partner and acquire businesses for Castrol beyond lubricants and aligned with these future territories. Castrol sees innoVentures as a platform for open innovation with the dual mandate of creating the foundation for emerging business opportunities and broadening its capabilities and understanding in emerging markets.

Supporting customers in facilitating and improving the production and logistics process. Providing sustainable solutions for consumers and industry in the context of accelerated demand and a low carbon world. Providing a better Mobility Experience in the vehicle, around the vehicle and independent of the vehicle. Exploring and investing in technology leadership in liquids and materials, transform the capabilities of engines and machines.

Roy shared a number of insights and lessons learned through innoVentures thus far:

• Start with a CV strategy that aligns with corporate strategy. By drawing on your company’s expertise, the corporate venture will have a better chance of succeeding.
• Think of venture investments as opportunities for gaining early insights into new technologies ahead of your competition and a low-cost way to participate in emerging sectors.
• Leverage industry relationships and partner with organizations in areas outside your company’s core capabilities to add value.
• Manage the cost of failure, not the rate of failure.
• Utilize venturing as a means of challenging conventional thinking and assumptions. Engaging the venture community can be a form of “shock therapy” for senior leadership.
• Manage expectations internally. The venturing world is very different than the world of internally-developed innovation: development times, risk tolerance, measurements of success, cycle times and other factors.

Link to the full article