Many articles these days discuss how startups should interact with large corporations but none discuss how corporations should interact and work with startups.
Jack Welch, the Head of General Electric, formulated the #1 rule for company survival: “Change or Die” many years ago yet it is just as relevant today. There are companies that develop and there are those that remain stagnant, and eventually meet the same fate as that of dinosaurs.
If, before, large companies were competing with the same giants as themselves, now a new threat has appeared – startups.
What’s the single key advantage that startups consistently hold over big businesses?
Startups can and do move faster and change course quicker than large corporations.
Start-ups have to be agile to survive. Since they are not sure what will work in the marketplace, they are forced to try various different angles to find the right way to solve problems, market, and sell. The same cannot always be said for larger, more established companies who have been executing in the same way for decades. These companies often struggle to adapt and evolve as they are stuck in the rut of their existing processes, resistant to changes, and have a more rigid decision-making hierarchy.
Creative Approaches to Innovation
In a study recently conducted by Dell, across 16 countries and among several thousand top managers, almost half of the respondents believed that their organizations may become obsolete in the next 3-5 years due to competition with startups.
“So far, the fourth industrial revolution has proved as ruthless as its predecessors. If companies can’t keep up, they will fall behind… or worse. The ‘delay until another day’ approach simply won’t work,” explains Jeremy Burton, Chief Marketing Officer of Dell Technologies.
We live in an area where technologies developed in one’s garage can take market shares from even the classical industry leaders.
But large corporations today are not just facing the classic model of competition of goods and services. After all, large corporations innovate too. The corporations are also facing a competition on the level of talent. It’s no secret that many founders of successful startups come from the giants of their industry.
Why did these talents decide to leave and start a separate start up? Why could they not develop it within the framework of the large corporate? How can corporate maintain and engage these talents internally?
How to Build Systems and Mechanisms to Support Employees’ Entrepreneurial Aspirations?
Ahi Gvirtsman, Global Innovation Vice President at HPE and Advisor at Duco, tries to answer that question in his recent book: “The 8 Skills of Organizational Innovation”. The promise of this book is that, when you complete it, you will have set of principles and a game-plan you can apply to your organization in order to make it highly innovative.
Setting up an innovation system requires a dedicated team entrusted to act on three levels:
- Setting up the innovation pipeline and maintaining it,
- Supporting the projects it contains in various ways,
- Affecting the organizational environment so that it becomes conducive to the innovation system’s activities.
So let’s understand first how to build the innovation pipeline.
One of the first steps to creating a bottom-up flow of ideas is forcing dialogue between teams, offering them insight into parts of the company other than their own, and allowing them to “step into the shoes” of other teams. At established companies you will regularly find that personnel have spent years working in the same job, and have no idea what other departments’ day-to-day work consists of and how they contribute to creating value for the end customer.
At the root of a culture that enables entrepreneurial action amongst all employees is the desire to think independently and take action, and having the skills to do so.
One without the other doesn’t really work. It is important for companies of all shapes and sizes, but especially larger scale enterprises, to educate their individual team members that they ‘can’ and ‘should’ put ideas into action, regardless of whether they are in a management position or not.
After teaching employees how to work in a way that supports new value creation, you then have to develop systems and mechanisms that allow and encourage this newfound entrepreneurial spirit to flourish.
One of the most important components in creating a pipeline process in your organization is a challenge-driven ideas competition based on a SaaS platform. Using a SaaS platform enables you to scale the process easily and choose the best ideas to move into the incubation stage.
The Incubation process empowers the selected ideators and the teams get to leverage the company’s resources to develop the product/service/business model and prepare the go-to-market strategy.
The final goal of the incubation process is to prepare strong projects for the next stage – Funded MVP (Minimum Valuable Project). At this stage, the project gets initial funding from the corporation to prove the concept and to develop the product for the next stage – implementation.
The final implementation stage of the project is the most challenging and important process. The number of “implemented ideas” at the end of the innovation process is the most accurate metric for the corporate management team.
But the innovation process can be measured by other metrics, such as the number of innovation workshops held, the number of ideas that came from the employees, the number of teams that went through the incubation process and the number of active innovation leaders and mentors in the company.
These metrics can be visible after creating the active internal innovation community. The community will help you engage and empower employees who dream of becoming entrepreneurs to stay at the company and became intrapreneurs. Future Intrapreneurs will lead the innovation process within the company and help big organizations innovate at the speed of small ones.
Integrating the innovation process into large corporations will lead them to change and open new horizons and markets. Innovative corporations are more flexible and can easily develop the infrastructure to execute at the speed of startups. [/vc_column_text][/vc_column][/vc_row]