With the corporate world burdened with bureaucracy and complicated processes, working with agile startups is becoming an increasingly appealing route to fast-track innovation within large organisations seeking a competitive edge. At the same time, startups determined to turn their innovative ideas into a reality have recognised the huge potential for tapping into the customer base, resources and experience of these larger organisations.
Our latest report, Collaborate to Innovate, reveals how startups and corporates can successfully work together and foster mutually-beneficial relationships that will accelerate innovation while helping to disrupt industries together.
The fear of disruption
It is this fear of industry disruption, or the “Uber-effect”, that is driving many corporates to try and embrace innovation wholeheartedly, yet many are still merely paying lip service and have a long way to go. And this isn’t going unnoticed by the startup community. More than half (53%) of the startups we surveyed feel that larger organisations are failing to create genuine disruption in their relevant markets and need to be doing more to innovate. But how can they overcome this?
While ultimately every big business would like to be more innovative, the reality is that cultural change is extremely difficult and takes a long time. And the disruption clock is ticking! So collaborating with startups can give access to the much-craved agility and entrepreneurial drive to create new products and services. This is becoming hugely popular in the business world, with over 180 independent accelerators worldwide offering a variety of ways to help introduce innovation to the enterprise and speed up the pace of change.
In the Netherlands, Rabobank was one of the earliest banks to realise this. Harrie Vollaard, Head of Innovation for Rabobank explains: “The incumbents just don’t have primary control anymore. Instead of looking only at running our own innovation projects, we had to redefine our strategy and extend innovation activities to link the FinTech ecosystem by collaborating with new FinTech startups.”
The benefits of collaboration are far-reaching
However, far from just adding a layer of innovation to the outreaches of a corporate, collaboration with startups, if done well, can have much deeper-reaching implications. With the right innovation strategy in place, exposing employees to startups can assist with cultural change and help develop thinking and approaches that flourishes within the wider business, providing a longer-term, more sustainable way of embracing innovation.
Many of the corporate executives involved with Startupbootcamp will attest to the advantages of being immersed in the startup culture through initiatives like becoming ‘intrapreneurs in residence’, which is designed to help absorb innovation culture first hand and apply those learnings back into their daily jobs.
On the flip side, by working with corporates effectively, startups do not only benefit from the goal of pilot schemes, sales opportunities and even potential acquisition, but they also make long-term contacts, gain referrals and get constructive feedback to refine both their proposition and their approach to dealing with big-businesses in the future. In fact, 70% of startups we surveyed feel that corporates are fundamental to their success.
Planning and process are the secrets of success
Despite all the benefits, the road to effective collaboration isn’t easy. According to our survey, finding the right partner with the right strategic fit is by far the biggest challenge when collaborating. Over a third (39%) of the Startupbootcamp alumni surveyed were unsure of who to approach within their targeted organisations while the larger organisations often struggle to validate who the relevant startups are to invest time into.
Tom Kneen, Head of Business Development for Cisco’s British Innovation Gateaway, emphasises this struggle from the corporate perspective too:
“We have no problem finding startups, but the challenge is finding the relevant ones that will support our business objectives and get the balance right.”
According to Florian Piroth, EMEA Startups Program Manager for Intel, working with startups has huge benefits, but requires a streamlined and centralised program with rock-solid internal mentoring processes and transparent measurability, KPIs and recognition.
Tom from Cisco agrees:
“Once you’ve got those steps right, working with startups can be brilliant!”
So the message for both corporates and startups is clear – know what you want from a partner, look for cultural fit and mutual benefit, and have well-defined parameters for how to engage and what success looks like. But above all, be flexible to adapt to each other and new opportunities that can be created.
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