Executives wax and wane in their enthusiasm for launching new ventures outside an organization’s core business. In their more enthusiastic moments, leaders often see corporate venturing initiatives as sources of organic growth and vitally important engines of renewal. However, in their more disenchanted periods executives may see new ventures as high-risk, foolhardy distractions from effectively running the core business. What’s more, such pessimism isn’t wrong. Corporate ventures are risky and they usually do not produce hoped-for results.1

Executives thus face a dilemma. Creating vital innovation and organic growth generally requires investing in new ventures. The venturing process, however, is unpredictable and failure-prone. Is it possible to invest sensibly in corporate ventures, despite their risky nature? And how do new ventures contribute to the overall renewal of organizations? These questions stimulated us to consider how managers can extract value from venturing while recognizing its risky nature. To research these questions, we launched an in-depth investigation of the venturing process at Nokia Corp. of Finland, the world’s leading mobile phone supplier and a company respected for its innovative capabilities. (See “About the Research,” p. 52.) Our research yielded eight key lessons relevant to executives grappling with the challenge of corporate venturing. One overarching conclusion of our research is that to extract value from the ambiguous and uncertain world of venturing, companies need to apply different management practices than they use in their mainstream businesses.

The New Ventures Division at Nokia

Nokia is familiar to many business readers worldwide for its well-known brand and its leadership in the telecommunications industry. Between 1998 and 2002, the period covered in our research, Nokia experienced substantial growth but also, in 2001–2002, weathered a generally difficult time for the global telecommunications industry. (See “Nokia’s Sales and Number of Employees — 1998–2002,” p. 55.)

As some of its key business areas, such as mobile phones, began to show signs of maturation, Nokia’s leaders sought to discover new areas with the potential to help the company achieve its ambitions for future growth. In 1997, the company established a Venture Board to provide senior-level sponsorship for growth initiatives. Then, in 1998, Nokia created a new division focused exclusively on venturing called theNokia Ventures Organization. The stated mission of the NVO was to “look for growth opportunities that are beyond the remit [scope] of the existing businesses but within Nokia’s overall vision.” Ventures that were based on a different business