Corporate venturing — the practice of employees launching new businesses within large firms — has become an important part of the growth playbook for many companies, such as search giant Google. But who actually steps forward to build these ventures, and what prepares them to do so?
It’s not who shouts the loudest or has the boldest idea. According to a new study co-authored by Wharton management professor Martine Haas, it’s those who’ve worked in functionally diverse teams — colleagues from across areas like marketing, engineering, or operations — who bring a mix of expertise and perspectives. “This gives them the skills and the confidence to work across silos,” Haas said. “That’s essential when you’re building something new.”
Unlike mergers and acquisitions, which bring in innovation or market access from outside, corporate venturing is about harnessing talent and ideas from within. These corporate ventures often look and operate like startups. Think of Google’s “moonshot” lab X, where internal teams developed self-driving cars (Waymo), delivery drones (Wing), and internet-beaming balloons (Loon).
The paper suggests that success in these endeavors is shaped by the structure of everyday work. Haas studied more than 16,000 employees at a global manufacturing company — under the pseudonym “E-Co” — looking at how roles and team experience shaped who went on to launch new ventures.
“Giving employees the chance to work in diverse teams helps build the confidence and capability to take on new ventures.”— Martine Haas
Why Team Diversity Is Key for Corporate Venturing
On its own, a narrow career track can suppress the odds of venturing; the research suggests employees with deep but focused experience may feel, or be seen as, less prepared for the broad demands of building a new business.
But that picture shifts when they’ve worked closely with colleagues from other functions. “That kind of exposure helps specialists get past the usual barriers: the jargon, the priorities, the way other parts of the business think and work,” Haas said.
Employees who had worked in more functionally diverse groups were more than 40% more likely to launch a venture. For those with a narrow career track, the effect was even stronger: At high levels of team diversity, they were nearly three times more likely to step into venturing than colleagues with broader backgrounds.
Haas and co-author Xu Han, a Wharton adjunct associate professor, outline two ways diverse team experience can prepare employees for venturing: by helping them learn how to work across functions — what the researchers call “knowing how” — and by expanding their network of contacts, or “knowing who.”
For companies hoping to boost entrepreneurial behavior from within, the research offers a key recommendation: Start by shaping the work experiences of your people. “Giving employees the chance to work in diverse teams helps build the confidence and capability to take on new ventures,” Haas said. “And it’s something firms can do without overhauling their structure.”
Moreover, deep expertise — often seen as a barrier to entrepreneurship — may actually be an advantage, in the right setting. “Specialization can be an asset,” Haas said, “when it’s combined with the right kind of cross-functional experience.”
“Firms don’t always realize how much their internal structures shape who ends up driving innovation.”— Martine Haas
How Firm Structure Shapes Innovation
Ultimately, the authors argue that innovation in big firms goes beyond a top-down strategy. It’s rooted in what they call the “micro-foundations” of work, or the everyday assignments and group dynamics that influence who’s ready to build what’s next.
For companies weighing how to grow — whether through corporate venturing or mergers and acquisitions — the study highlights a distinct advantage of the former: It builds innovation capacity from within, developing employees who are equipped to lead new initiatives.
While much of the existing research looks at corporate venturing from the top down, Haas and Han turn the lens on individual employees. “Firms don’t always realize how much their internal structures shape who ends up driving innovation,” Haas said.
For companies investing in venture building, the message is clear: Before launching incubators or allocating budgets, take a look at your org chart. The seeds of the next great business — be it self-driving cars or internet-beaming balloons — might be hiding in your team structure.
