How corporations & startups can work together better
120 CINOs in 22 sectors talk about strategies that work.
Corporates have launched accelerators and venture builders to spur innovation and long-term success. Corporate investments in startups have nearly tripled since 2013, from 980 deals to 2795 in 2018.
Yet the success rate of these initiatives is low. Research we conducted with chief innovation officers (CINOs) and others in similar roles in the United States, Asia and Europe, shows that around three quarters of corporate innovation initiatives fail to deliver the desired results. Failed projects don’t help a company fend off hungry, agile competitors.Harvard Business Review
Speaking to 120 CINOs in 22 sectors, HBR found three strategies that work for 80% of the issues:
Boost the value of venturing to the rest of the business
Buy in from the CEO is not enough. Other departments need to collaborate with the corporate venture (CV) unit and work with the startups for corporate success. One way to do this is to involve startups in corporate projects, and allow departments to leverage their potential.
Look outside traditional business startups
Don’t just look for startups in the obvious realm. Go to universities and research institutions. You’ll be surprised how well they can help you reach the next level by incorporating new technology.
Adidas did this to answer its the issue of 3D printed running shoes, and approached Joseph DeSimone, a professor of chemistry at the University of North Carolina, and the founder of a digital 3D manufacturing startup called Carbon.
Eliminate conflicts of interest between the CV unit and the startup
CEOs want to buy low, startups want to sell high, and CV director struggles with satisfying the CEO while knowing the bigger the deal, the more value it brings to his career.
Removing the money aspect from the process reduces conflict of interest. It would need changes in performance measuring ways and salary structure, but it can give a lot more value to corporates.
Corporates and startups need to work together for success. They need to see how they can bring value in routine projects and get credits for it. It fairs poorly for both when corporates just make deals, without providing opportunities for startups to succeed and show the value they can bring.
Read more about how corporates can solve CV unit issues here.
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