1. If you were in Rainer Simons position, how would you suggest restructuring the system to develop the companys entrepreneurial approach?

The tradition of the Robert Bosch Group goes back to the 19^th century.¹ Headquartered in Stuttgart, Germany, the company employed 402.000 associates in 2017, and was one of Europes leaders in the high-technology industry. Roughly 440 subsidiaries and regional companies were spread over 60 countries. In 2017, the company had generated sales of EUR 78.1 billion. Ninety-two percent of the companys share capital was held by the Robert Bosch Foundation. The majority of the voting rights, however, were residing in the Robert Bosch Industrietreuhand KG, consisting of previous members of the company management, members of the Bosch family, and selected people from industry³. Being privately-owned and thus not subject to the reporting cycles of public companies, the Bosch Group was able to avoid shareholder pressures that plagued a number of its competitors. The special ownership structure guaranteed additional freedom: The Bosch group worked with a long-term horizon and typically invested ten percent of its revenue in research and development. Innovative strength was seen as the basis for future growth and sustainable success. In addition, the strategic goals were socially driven: With its ethos invented for life, the Robert Bosch Group expressed its objective to develop products for improving the quality of life while conserving natural resources.

Traditionally, Bosch had relied on its internal R&D departments to drive innovation, and it had used its corporate venture capital unit Robert Bosch Venture Capital (RBVC) to source externally for innovations that had the potential to make considerable impact on the market. Robert Bosch Venture Capital (RBVC) had been founded in 2008 as a 100 percent subsidiary. The aim had been to invest in technology startups and industry-specific venture capital funds around the world. The creation of an independent unit was considered important to be able to act independently from the main corporation. Investment decisions were thus unrelated from economic conditions of the parent company, as well as individual interests of business units. The investment goals of RBVC were two-fold. On the one hand, the company was looking for a healthy return on the capital invested. The venture-capital arm aimed on holding a stake of 10 to 20 percent in young companies. On the other hand, having access to disruptive innovations from an early stage on also offered a clear strategic advantage as highlighted by Paul Weber, managing director of RBVC. By 2018, RBVC was operating out of five locations worldwide, with the Shanghai office having been the last addition to a presence in key global hotspots of entrepreneurial activity. The ability to tap into the talent and ideas of the likes of Shanghai, Silicon Valley and Tel Aviv, were seen to be crucial to the companys long-term success. Each year, RBVC screened more than 2000 startups worldwide, of which about a hundred were shortlisted for further consideration. RBVC not only provided money; it also offered expertise and connected the startups to relevant stakeholders within the Bosch organization. Within ten years, the RBVC subsidiary had established itself as a major institutional venture capital company. Robert Bosch Venture Capital managed funds with a total of EUR 420 million. In 2018, the portfolio comprised over 35 pioneering startups.¹¹ Most of them involved new technologies and business models that fit particularly well with the Bosch Group. Focus areas were autonomous driving, AI, IoT, Analytics, and Distributed Legers, to name a few.

Challenges of Corporate Entrepreneurship Within Bosch

In order to be able to make a well-founded decision, Rainer Simons had sent out his support team to conduct a number of interviews with various parties directly and indirectly affiliated with the existing innovation initiatives. He could rely on both reports about exemplary cases that had come out of the Bosch Business Model Framework and interviews with Bosch internal units.

The Case of Alpha

Alpha was founded by two engineers that had the vision to create a new approach to last- mile mobility. The team had started at Grow. Based on several customer interviews, the first product idea had been quickly developed. However, pressure to swiftly move forward was high, as one of the co-founders explained:As investment costs were assumed high and direct strategic fit to other business units inside Bosch were not given, the companys internal interest to acquire the startup was limited. Finally, in 2017, the technology ended up being sold to a development partner.

The Case of Beta

In the beginning of 2015, a group of five people from the Corporate Research Lab in Palo Alto came up with the idea of creating Beta, a technology to enter a completely new market for Boschthe home robotics market. Since the early beginnings, the startup team established its own culture and tried to set itself apart from the core company. Additional robotic engineers, as well as a CEO with startup experience were hired. Coming from outside, the CEO brought the needed experience and a different drive to run the business. He shielded the team from any interactions with the main corporation to make sure that the team could fully concentrate on the job. Within ten years, the RBVC subsidiary had established itself as a major institutional venture capital company. Robert Bosch Venture Capital managed funds with a total of EUR 420 million. In 2018, the portfolio comprised over 35 pioneering startups.¹¹ Most of them involved new technologies and business models that fit particularly well with the Bosch Group. Focus areas were autonomous driving, AI, IoT, Analytics, and Distributed Legers, to name a few.

The History of the Robert Bosch Group

In 1886, the company was set up by Robert Bosch as Workshop for Precision Mechanics and Electrical Engineering in Stuttgart, Germany. Robert Bosch focused on precision mechanical and electrical engineering work and soon presented a magneto ignition device for a stationary engine. The first magneto for automobiles followed, establishing the company as the major supplier for the automotive industry.then the first Bosch company was founded outside Germany in 1898, the way into the global market was paved. Shortly after, sales offices opened in other European cities and later on, all over the world. As automobiles became more and more popular, Bosch launched new products such as a lighting system to make driving safer, consolidating its position as a technology supplier for car manufacturers.The first world war interrupted the growth of the company, which switched operations to military production. Numerous associates were sent to the front and never returned. After the war, despite increased competition Bosch worked off its innovative strength and further expanded its product portfolio. From 1925 on, assembly lines were introduced and manufacturing became faster and cheaper. The diesel-injection pump that contributed to the companys great success was invented in 1927.During the second world war, Bosch again switched its operations to military production. Forced laborers from the occupied territories replaced the associates that had to fight at the frontier. Many of the production facilities were bombed and Bosch lost the international sites. The post-war period was devoted to reconstruction. In 1942, Robert Bosch had died but left the company with clear vision and wishes how to re-build. It took decades until international sales were back at pre-war levels. In the 1950s, the company began to sell consumer products such as kitchen appliances or car radios. Bosch also re-emerged as a major automotive supplier through its electronic components. From 1960 to 1980 the company transformed its structures and turned into a diversified group with different divisions, adding sectors such as packaging technology. The number of employees increased constantly. Bosch invested in a new research center in order to be able to further focus on its innovative strength. Technologies such as the antilock braking system (ABS) and the lambda sensor shaped the companys success until today. By 2018, Bosch faced new challenges: getting prepared for automated driving, smart homes and autonomous communication were of utmost importance to guarantee continued innovation leadership and business.