This interesting question is currently discussed in the following HBR blog: http://bit.ly/i94S6k.
The key thoughts in Ron Ashkenas view are summarized below:
- Set up a venture group that can fund internal (and external) entrepreneurs who want to start businesses that are related to or adjacent to your core. Obviously, criteria need to be established about types and sizes of investments, but if run like a real venture fund this kind of approach can attract people who have the right mentality and energy both from inside and outside the company.
- Carve off skunk-works groups to tackle new opportunities that might be threatening to existing business units, or that will never get enough attention from them. However, treat these groups themselves like start-ups — with risks and incentives that match. Don’t overfund them or they will become projects rather than start-ups; and put real rewards on the table so that start-up types of people will want to play.
- Sponsor innovation contests to generate ideas for new businesses and innovations related to your company and its space. Put up enough money that it will attract internal or external entrepreneurs who will want to turn the idea into a start-up.
Especially the aspect of “not overfunding” seems to clearly relate to Lean Startup principles. I am not so sure about the sponsoring of innovation contests with “enough money” – although common in some open innovation platforms. Intrinsic incentives (that is motivation) can be crowded out by extrinsic ones, such as monetary rewards (Festre & Garrouste, 2008). So it really depends on a careful setup and utilization of the money provided in order to not risk contradicting effects. However, with a professional setup and probably external support to get it right, in can certainly be a very viable option.