Strategy shift at Allianz X

Just weeks after two of the most successful German venture builders were acquired by major consulting firms, German insurance company Allianz announces a major strategy shift within their in-house venture unit.

In 2016 the insurer managed to spring a surprise, when they announced Peter Borchers as the new CEO of the in-house venture unit Allianz X. Before joining Allianz X, Borchers founded and successfully led the Telekom accelerator hub:raum. With his track record Borchers was a perfect fit for the position at Allianz X. During his tenure, Allianz X launched the car selling platform Abracar and invested in lemonade, among others. Now — just a year after he had joined Allianz X — Borchers left the company in November. At the same time the company announced a strategy shift away from venture building.

After Borchers’ departure, former Co-CEO Dr. Nazim Cetin will take on sole leadership of Allianz X immediately. Instead of building ventures in-house, Cetin will transition the unit towards a sole focus on digital investments in alignment with the insurers overall strategy. Therefore, Allianz X is now focusing on invest in five ecosystems, including mobility, connected property, connected health, wealth management and retirement, and data intelligence and cybersecurity.

How does this relate to the success of venture builders like makers, etventure, and others?

The Allianz states that this shift in strategy was an important pivot to prepare the entity for long-term success. But, what does this imply for all those venture builders that just moved into the spotlight? What about the success of makers and etventure — will they need to think about their venture builder activities as well? Is venture building just another trend that is about to fade? No!

The fact that Allianz as one of the world’s largest leading insurers announced to end its venture building activities does not have any negative implications for companies like makers, etventure, and alike. Allianz’ change in strategy simply highlights one of the major weaknesses of corporates — their inability to innovate. It becomes obvious that fixing a corporate’s inability to innovate cannot be remedied by merely hiring outstanding personnel like Peter Borchers, given that even during his tenure Allianz X never really took off.

The failure of Allianz X highlights the pressing need for innovation-as-a-service

It is exactly this institutional weakness of corporates that venture builders like makers and etventure manage to exploit, by offering innovation-as-a-service. Innovation-as-a-service means that corporates hire external company builders to drive innovation for them — outside of the corporate context and institutional structure. This means that corporates that are incapable of driving innovation and developing new ventures in-house can simply hire a venture builder to do it for them.

Therefore, the failure of Allianz X as an in-house venture builder just underlines the fact that corporates still struggle with in-house innovation. The Allianz X case further highlights that even hiring outstanding personnel and launching venture unit that is only loosely affiliated with the core business does not do the trick. This is good news for all freely operating venture builders that offer innovation-as-a-service. This also underlines that the hype around venture builders is far from flattening. Instead venture builders will grow increasingly important for any corporate that seeks to remain innovative and therefore competitive.

In this context, it is going to be interesting to follow up on how makers and etventure fare after merging with major consulting firms. Naturally, a number of questions emerge here: will makers and etventure remain as innovative as they were as freely operating venture builders?  Can both companies retain their key staff?  Will the experience of makers and etventure allow to draw any conclusions on whether it makes a difference to be part of traditional corporate or a corporate sized consulting firm?

Written by: Bastian Halecker, Florian Lorisch, Jonas C. Blauth


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