Venture capitalists, by their very nature, are accountable for every dollar they spend. Their mindset is simple — for every $1 they spend, they expect to make $X dollars back. Typically the ratio is 3-5:1. Furthermore, they have short- and long-term goals to ensure they are on track to delivering the ROI they promised to the board. They often hire a new management team that brings outside perspective to the business, and give them a lot of leeway on decision making and spending.   

A few small to mid-size companies have taken on this same model. They have internal “venture capitalists” (typically a combination of players from the C-Suite — CEO, CFO, CMO) that look at innovation as a new source of revenue vs. just incremental dollars on a brand. This is a very big distinction because it turns innovation into its own business vs. continuously over-extending current brands.  That distinction in and of itself makes the life of the innovator, and his or her team, that much more liberated by not forcing their hands with success metrics like “must live within the current brand’s criteria.”    

Now, I am not recommending abandoning innovation within your current brands. That is a must-have to keep your brands relevant. But as a company looks to the future (3-5 years out) and how innovation will play into transforming the company, then create an innovation department that is funded similar to the VC model.  

By definition, true groundbreaking innovation is a venture.  

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