The Identity of a Corporate Venture
Last time I talked about how corporate ventures carve out their identities in response to some problem that they were created to solve. Here’s an excerpt from something I wrote a number of years ago (but did not publish) on this subject. It’s a discussion led by Dr. Grizzled Mane (a lame attempt at humor, I realize).
“Recognize this?” He holds up a round metallic object.
“It’s a thermostat,” somebody says, but a handyman in the group inspects the object more closely: “It’s a Honeywell Round, to be exact.”
“You’re right,” says GM. “And that makes all the difference. From early on, Honeywell’s upper management conceived their mission as being about more than just thermostats. They set out to be the leader of the controls industry. A thermostat is, after all, just one example of a control device. Do you know what I mean by ‘control device’?” he asks us.
“Sure,” says the handyman. “A thermostat controls the temperature. You set it to what you want and you walk away. It does the rest.”
“But it’s not just about convenience,” GM says.
“No, it’s not,” agrees the handyman. “It’s about efficiency mostly. A thermostat’s more efficient than we are. When the temperature drops one degree, we can’t detect it, but the thermostat can and the furnace kicks in. If it was up to us, we’d let the room get too cold, then we’d overheat it to compensate, then it would get too cold again, and on and on like that. The thermostat keeps the room right at the desired temperature.”
“Thanks,” says GM. “Can anyone think of other control devices?”
“Lots of ‘em,” says the handyman. “Cruise control, for one. You’re drivin’ along lookin’ at the scenery, and one minute you’re goin’ 70 then the next you’re goin’ 75. Cruise control takes the strain off your leg, but it also helps you drive more efficiently. You set it to the speed you want and you let the control take over.”
“Planes use control devices, I assume,” says GM.
“Sure do. They got controls for altitude, longitude, you name it. Awful hard to keep a plane right on target, ‘specially with wind currents and such.”
“And spacecraft need controls, I imagine,” adds GM.
The handyman laughs. “Unless you want to end up lost in space!”
“Wouldn’t want that!” GM agrees, then he turns to the rest of us. “Honeywell could have thought of themselves as a maker of thermostats, period. Instead, they conceived a bigger idea. They wanted to be the leader of the controls industry. And because their idea was big enough to cover a wide variety of products, they will probably stay in business for a long time to come.” [Honeywell was acquired by a larger company after I wrote this. So much for my talents as a prognosticator.]
“Then there’s bombs,” says the handyman. “Gotta have control devices for bombs, you know. Guidance systems and such. Very precise business nowadays.”
The members of the group glance at each other and smirk. This guy could go on all night.
But to our surprise, GM appears pleased that he brought it up. “Yes, Honeywell has had its share of woes in that regard. Should they contribute to the killing of human beings? Should they supply the controls for war planes and bombs? Many people over the years, both inside and outside the company, have been critical of them for going in that direction. Once again, a company’s story has much to do with ideas, in this case ideas about what the company should or should not be doing. And it is an important question for this company, because Honeywell’s top managers have often been very serious about their obligations to society.
“At any rate, I believe I’ve communicated the first few points I wanted you to get. Companies start out as embodiments of ideas, but once the companies are up and running, their survival becomes as important as the ideas that they embody. Whether they are successful at surviving is due in large part to the adaptability of their founding ideas. . .”