Innovators in corporate IT = the new VCs ?

I’m delighted to take a new position within Schlumberger: I’m coordinating our corporate IT Innovation efforts, with an emphasis on knowledge management (stop laughing, this is not your father’s KM, I’ll look at the most innovative stuff here). Also relocating to Paris from London.

We structure this activity in a pretty standard way, and I won’t go into the details here. I do want to say how I am approaching this role, however. In one word: I’m thinking of myself as a kind of VC.

I have to invest a limited fund of money and resources in a series of deals, and maximize the returns to our limited partners. That’s how I see my job, and to me that’s a VC job:

• VC firm = IT Innovation team
• Fund = our investable budget + the technical skills (internal or outsourced) we need in order to make our investments work
• Limited partners = stakeholders having a say in where we invest and judging our returns – in terms of increased corporate performance
• VCs main activity is sourcing, evaluating, analyzing deals and anticipating the future market and technological shifts = the same, only to add our corporate strategy layer

Very appealing and stimulating. I will work as a VC to source some deals where I’ve a rationale and look for a company to invest in. This isn’t working with established vendors, you have to work with early-stage start-ups and work more as a partnership than a vendor-client relationship. As a VC, my main job will be to screen these opportunities, and determine which will yield the higher return. As a VC, I will have to stay up to date with the new start-ups, new trends, new market context. I could go on and on here.

True, the activity is half-partner and half-analyst, and you also have to take into account the internal context to determine the anticipated ROI. Some (particularly the VCs!) might say this is all bullshit. But seriously, the more I am looking at it, the more it seems to be a VC activity. Evaluating the small companies you are working with is essential, you operate with very lean management fees (aka our overhead budget), you need to go for the higher ROI, not invest to soon (timing is everything), etc.

You also are the eyes of your limited partners “out there”, and they rely on you to stay plugged in the marketplace, and most importantly, to anticipate the next dynamics and shifts that will occur and keep playing in advance of them. You need to be aware of the short-term context, because the pace of change is daunting, but you’re in a fundamentally long-term play. You need a deep understanding of the global context and the major shifts that are currently under way in order, for example, to take advantage of peer production economics in corporate knowledge management.

The only difference I see is that we, inside an organization, actually have to make these deals – the innovations we’re bringing in from the outside – work. So add to the mix a good slice of management consulting (strategic management, change management, yadayada…).

We can actually push the metaphor further and say that, in today’s organizations, you won’t go anywhere with the traditional change management techniques. We need to be inspired by the likes of Seth Godin when planning for change management. We need to sell, literally, as if we were an early-stage start-up selling a disruptive product, and using these very same techniques.

The amounts we are investing and the risks we are taking are of a different order of magnitude than real VCs of course. But the dynamics are the same. I want to change the way organizations are operating, using the latest technologies to improve their performance. Boosting the efficiency of a company like SLB is not a minor task, and it will have real-world consequences.

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