Threats to business continuity can come from many directions, but disruption potential is a very attractive flame drawing the attention of an increasing population of entrepreneurial moths. You’d have to have checked out ten years ago not to know about it.
Despite the risks, it’s a certainty that if you’re not thinking of ways to innovate and disrupt your own business, know that someone else is doing it and the credits in your ledger will begin to disappear. No hiding, no postponing and no amount of maneuvering will protect businesses from the disruptive influence of startups. They have the tools, the generational hunger for change, access to funding and willingness to risk everything needed to take a ballooning piece of the action.
Rather than compete, business leaders are increasingly seeking out startup collaborations as an effective way of accelerating growth, tapping into new markets and adopting new, leaner ways of working. What is less well understood is how best to go about it. After all, embracing the former ‘enemy’ doesn’t usually come naturally, and that’s before even considering the weight of successes to failures which can be a frightening prospect when reputations and budgets are on the line.
So why are some corporate collaborations with startups proving so successful while others flounder? Well, not all businesses are structured or led to adopt ‘in’ these startup enterprises. Fewer still have conditions under which these collaborations tend to thrive, instead falling foul of toxic elements and influences that can easily doom these efforts to an unsightly end.
To keep up with the innovation curve, an organization will need to both invest in its own incubated ventures and development pipeline, as well as seek out and foster strong relationships with like-minded corporate partners. The objective then is, with expert intermediary curation, to create a rich marriage between the organization and ideally matched startups that can accelerate both in ways which are practically impossible to do alone. Having done this for a while now, I’ve learned a few things along the way that are worth sharing.
Know what you bring and what you need - There’s an old saying that if you have two managers in a room who always agree, one of them is wasted. Great collaborations are formed when both the corporate and startup know exactly what they each have to offer, what they want and expect from teaming up, how proprietary intellectual property will be preserved and how new IP will be shared. The skills and expertise of each need to be explicitly understood so that each plays their best hand, can get things done at pace and with a few resources as possible.
Don’t be too precious - The lines between what’s ‘ours’ and ‘theirs’ will be blurry. You need to live with that and be able to trust each other that your mutual goals and aspirations are the guiding light that will guide you. Don’t get hung up on the small stuff along the way.
Get comfortable with discomfort - Embarking on any form of innovation venture requires a huge sense of curiosity and willingness to change. Sometimes that change will mean you’re potentially designing yourself out of a job, or that the skills to execute aren’t ones you learned in business school or throughout your career. It takes bravery to push forward when the writing on the wall points to an unsettling future. Others in your business will be fearful of this too and push back hard on your best efforts because of that fear (and for self-preservation).
Accept failure as inevitable - Change your risk profile and that of your business to accept that failure is normal, and perfectly acceptable, so long as it happens fast. Don't fall in love with your own ideas and become blind to their shortcomings. Kill off things that aren’t working optimally without delay.
Learn until your brain hurts - Iterate often. Interrogate data until it reveals the truth. Challenge yourself and your business to continually reassess the problem solution fit, the product market definition, the business market fit and the organizational learning and development capability. Do all of this working with imperfect information.
Show and reward good behaviours - Be transparent about successes and failures. It builds trust and demonstrates that both are valuable to improve learning and encourage participation. Lean on those who show they can step up and remove hierarchical barriers getting in the way.
Keep things ‘at arm's length’ - there are few better ways to kill innovation-based initiatives than by having them follow the same rules, processes and reporting lines as other lines of traditional business. They are by nature different, and therefore need to be treated differently which extends from designing enterprise success metrics to innovation accounting practices.
Follow the Kenny Rogers rules - In Kenny Rogers famous song, The Gambler character knew his stuff. He knew when to hold them, when to fold them, when to walk away and when to run… There’s no substitute for commercial acumen and some startup experience here. Be like The Gambler.
Everyone learns as they go, so don’t try to hit the front of the curve before starting. Start now. If you’ve already begun, dial it up. The future belongs to those who can learn fastest. While we know that past performance isn’t a guarantee of future success, I’m equally certain that we tend to overestimate the risk of collaborating with those outside our organization and misjudge the rewards. In my experience in Australia, the USA and Europe the appetite to innovate and the speed that can be reached teaming up far outweigh any roadblocks. It works.
Assessing the success or otherwise of open innovation efforts can be akin to thinking of them like the Schrödinger’s Cat thought experiment - for a while at least they are both alive and dead. Right now, the signs of life are strong.
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