16 April, 2025
How can large firms foster corporate venture building?

How can large firms unlock the corporate entrepreneur within their own ranks? In a recent publication Xu (Henry) Han and Martine R. Haas discus how highly specialized employees can become successful corporate entrepreneurs—but only if they’ve had the chance to work in functionally diverse groups. It’s not just what you know, but who you’ve worked with across the firm.

They examine how firms can prepare their employees to undertake corporate (internal) venture building activities by shaping their work experiences inside the firm. Based on a rich longitudinal dataset of over 16,000 employees, this study sheds light on the micro-foundations of internal corporate venturing, offering practical insights for designing work experiences that fuel innovation from within. They tested the hypotheses using data collected from a large multinational company in the home appliance industry. The company is headquartered in East Asia, and it is among the largest firms in its industry, with products including large domestic appliances (e.g., refrigerators), other home appliances, and electronics.

They conclude that, while large firms are increasingly keen for their employees to identify and pursue opportunities to build new business ventures, their ability to effectively promote corporate venture building is constrained by limited understanding of the factors that influence employees' propensity to undertake this activity. To expand this understanding, the study has taken a strategic human capital perspective on internal corporate venturing that considers individual-level variation in employees' work assignments within a firm's formal organizational structure, including the functional diversity of their work groups as well as the functional specialization of their jobs. Their findings suggest that firms can potentially enhance employees' engagement in corporate venturing building initiatives by strategically influencing their formal work experiences within the firm. They suggest that to build future venture leaders on should start by crafting cross-functional work experiences that stretch perspectives and spark collaboration.