A centuries-old bank launches a digital app offering a host of services. It’s so appealing and easy-to-use, the organization gains 26 million clients in two years. An apartment complex, empty for months, is now fully occupied, attracting tenants with a new suite of personalized services, ranging from grocery delivery to housekeeping.
These are just two examples of the 380 new businesses that our Leap by McKinsey team has helped develop, from a spark of an idea through to full-fledged business, over the past five years.
Now our business building unit has just been appointed as one of four venture studios for the Economic Development Board of Singapore, with whom we have long-standing partnerships, in their newest initiative, the Corporate Venture Launchpad. This year-long program will provide up to $10 million in grants to help established companies create Singapore-based ventures that can serve regional and global markets.
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McKinsey_Website_Accessibility@mckinsey.comMcKinsey has partnered with the Economic Development Board of Singapore on a number of projects, including the Digital Capability Center pictured above.
“We are incredibly excited,” says Badrinath Ramanathan, managing partner of our Singapore office. “At a round table last October, 11 out of 13 CEOs of Singapore-listed companies shared that venture-building is among their top priorities. We believe the next wave in creating value will come from innovation by incumbent companies, even more so than start-ups.”
For the Corporate Venture Launchpad—which also includes FutureLabs, a studio founded by McKinsey alum Mario Aquino—we will create a six-week Venture Program with eight team members who run sprints, from validating concepts through developing a viable business plan. Based on Leap’s work to date, our methodology delivers a 5.1x average ROI compared to venture capital’s average of 2.9x, and a 67 percent likelihood of the business scaling compared to the startup average of 2 percent.
The Leap team is uniquely positioned to marshal the full resources of our firm: 700 business builders and 5000 experts across multiple disciplines. “We bring the best of our strategy expertise with deep digital skills across analytics, design, cloud, and software engineering,” says Andrew Roth, an expert associate partner and seasoned entrepreneur. “This allows us to orchestrate what makes a business viable, technically feasible, and desirable in the marketplace, thereby putting the odds in favor of our client.”
Leap colleagues have helped launch new businesses in more than 60 countries, delivering a range of products and services to users with a variety of needs and desires. The work has taught them what works and what doesn’t when it comes to launching and scaling new businesses. “For example, to inspire conviction in the client leadership team, we offer ‘go and see’ visits with peer founders, interactive workshops, and virtual experiences with artifacts in which executives can start to see opportunity,” explains Yishan Lam, a design director.
This is a wonderful opportunity to create Singapore’s next generation of business leaders.
Badrinath Ramanathan, managing partner of McKinsey’s Singapore office
To test out different product and service concepts quickly, our analysts can undertake ethnographic and social media testing and tap into industry and geographic research so that we are building a product grounded in customer insight. For the technical requirements of a new offering, one of our architects then reviews the client's current tech environment and configures one that illustrates how the new product or service might work.
“From day one, we work closely with the client team to create a strong culture, focused on moving forward towards our goal,” adds Yishan. “This includes introducing or developing the capabilities the team needs, such as agile experts and more.”
That dynamic, according to Badrinath, is increasingly indicative of the way our firm works today, as we build products, services, and businesses side by side with our clients. “Consumers and companies are at a turning point, and they are ready for this kind of entrepreneurship,” he says. “This is a wonderful opportunity to create Singapore’s next generation of business leaders.”