The CSC Conundrum
Corporate Startup Collaboration is becoming a centrepiece of modern day innovation. Large corporations have significant market reach and brand power, but often aren’t as nimble as startups when it comes to disruptive, technological breakthroughs. Startups are light on their feet and innovate rapidly – but don’t possess the same reach and access to markets or customer networks like their corporate counterparts.
Set to this context, a collaboration between the two, when successful, can be a win-win, combination for both. However, because corporates and startups & scale-ups operate in two drastically different worlds, the road to successful collaboration between both parties, poses unique challenges.
Getting Closer to the Issues: Roundtable Discussions
Over the last few years at Startupbootcamp, we have had many different experiences working closely with startups and corporates, as well as facilitating cross-collaborations between startups and corporates. This year, we have developed and tested several new propositions aimed at tackling the challenges of CSC. To further unearth the pain-points surrounding the topic, we’re hosting a series of monthly CSC Round Table sessions on both internal and open innovation topics, as well as on the specific industries we operate in. During these roundtables we want to share experiences and learnings with our clients and other ecosystem players, and deep dive into the problems they grapple with when it comes to these topics.
Here we summarise the main insights from the first two roundtables around Corporate Startup Collaboration this November.
This month we hosted our first 2 sessions with a group of innovation directors from different sectors within the corporate world. Before the session, we asked each of them to fill in a ‘CSC Readiness Scan’ questionnaire – a diagnostic tool we’ve developed, to help us better understand and measure an organisation’s CSC ‘Readiness’. With this, we gathered some insights:
- What are the Top 3 reasons why corporates want to work with startups?
- To run Proof-of-Concepts (PoCs)
- To integrate validated solutions into the business and accelerate growth
- To learn about new business models utilised by startups.
- What are the main challenges for setting up a Proof of Concept (PoC)?
- Risk management
- Misalignment between internal teams
- Heavy legal process
- Delivery issues (on the corporate side) as well as
- Setting the right priorities (which impact resource management – budgets, people etc).
These challenges hinder companies from establishing PoCs in a time-efficient manner.
- The PoC’s are one thing – but what happens after?
It’s also not always the case that collaborations continue after PoCs. What we’ve learnt so far is that only half of all the PoCs started, actually continue after they’ve ended. Why? In this instance, delivery issues on the startup side were sighted as one of the main reasons for a collaboration break-down. Additionally, it is often the case that priorities within the corporate shift, putting the brakes on continuation of such collaboration.
We used the results of the CSC Readiness Scan to guide our first 2 Round Table discussions.
Key takeaways from the Roundtables
- Stakeholder Management is business crucial
Within large corporates – there are plenty of stakeholders to consider. Though there is no one way of doing innovation, it is important to find out who within the organisation, is open to innovation. Having an ‘execution lead’ – someone who is capable of building and nurturing (internal) relationships that are fundamental to the innovation process, is key. This is how you empower innovation internally and manage the expectations of key stakeholders and decision makers within the company. During the roundtable this was widely regarded as a make or break factor in CSC.
“This a very difficult issue to solve and something that I can’t think of a solution for. I feel like this would be a process that takes too long – changing mindsets. We need talents, who also have the ‘entrepreneurial heart’ in them. We need people who say ‘I’m going to do it because i believe in it, and if i fail, I will recognise that I’ve learnt a lot and share what I’ve learnt. The challenge with mindset change, is perhaps the most important thing.” – Quote from Roundtable
- Formalise it: Make it structured and formal.
Our research shows that in almost 60% of the cases, it takes more than 2 months to go from verbal agreement to a PoC with a startup. Why? Resources (paperwork), scoping, gaining approval from relevant parties internally (governance), and the need to explore the initiative further (lack of sense of urgency) all contribute to the breakdown of innovation. Corporates need to create a formalised process to track and report the progress of CSC projects to their management teams internally. Such a process, will also help tackle problems that arise from the startup side in terms of deliverables and meeting progress timeliness.
- Middle Management and Mindsets
In traditional organisations, there is often no connection with the ‘new’ (i.e: digital innovation.) More often than not, middle management poses as a problem – this generation often sees things differently and tends to continue working in the ways they are used to (based on the business cases of 5 years ago). This hinders the process of innovation. Digitization and innovation in the ‘startup way’ requires a culture change. Having an ‘execution lead’ (explained above) and equipping your organisation with tools and trainings, can help change this.
“Biggest challenge is in the culture of the company, and molding mindsets to focus on the today and tomorrow, instead of the ‘shit’ of yesterday. I’m more interested in changing mindsets – if we want to test business models faster and move beyond our own industries / incremental innovation we have to work together in a different way.” – Quote from Roundtable
Join the conversation – Sign up now, for the upcoming Roundtable sessions
It has been very insightful for us to have these discussions with multiple executives coming from different corporate sectors, with a similar innovation portfolio. Through these sessions we’ve learned about the different challenges faced by organisations and how to tackle some of them. If you’re interested in participating in our CSC Roundtables in the coming months, sign up here.
“It was a valuable session – One of the things I wanted to achieve is to see how it is done within other organizations and how it can be done differently. A lot of food for thought. This whole process is a learning for everyone – for startups and for us. We’re all figuring out what possibilities there are, and when to apply them.” – Quote from Roundtable