Strategic Challenges Faced by CVCs

The 2023 Japan CVC Survey reveals key strategic challenges faced by Japanese CVCs, with organizational issues, such as the difficulty in defining KPIs and collaboration with business units, ranking among the top concerns.

Key Strategic Challenges in Japan's CVCs

1. Difficulty in Setting KPIs
The survey highlights that the most common issue (36%) is the difficulty in defining KPIs for CVC activities, making consensus-building and evaluation challenging. This reflects the difficulty in measuring the outcomes of investment activities.

2. Relationship with Business Units
34% of respondents mentioned challenges in gaining cooperation from business units or interference from them. This suggests a gap in objectives and expectations between CVCs and business units.

3. Decision-Making Process
27% of respondents noted that the limited decision-making authority of CVCs leads to delays in decision-making. In startup investments, swift decisions are crucial, and this issue can have significant consequences.

4. Goal Setting
26% reported that the objectives and goals of CVC activities have not been agreed upon at the executive level. This reflects a lack of clear organizational direction.

5. Consistency of Investment Strategy
22% highlighted the ambiguity of investment areas and themes, resulting in a lack of consistency in activities. A clear investment strategy is crucial for long-term success.

6. Executive Understanding
22% noted that executives show low interest or priority for CVC activities, which could affect the sustainability of these activities.

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Summary‍

Many of Japan's CVCs' strategic challenges are organizational in nature. Key issues include defining and evaluating KPIs, strengthening collaboration with business units, and streamlining decision-making processes. To address these challenges, the following actions are essential:

• Establishing clear KPIs and evaluation criteria.
• Building a close collaboration framework with business units.
• Delegating decision-making authority for faster action.
• Sharing goals and objectives across the organization, including at the executive level.
• Creating a consistent investment strategy.

CVCs that can effectively address these challenges are likely to achieve sustainable results.