An overview of how corporates are reacting to new transformation reality
VC investments backed by corporate budgets have been recording YoY growth
Corporate leaders have increasingly started unlocking intrapreneurship within their organisations
Silicon Valley, America’s hotbed of technology and entrepreneurship, is widely regarded as the birthplace of the startup culture that has permeated across geographies and built some of the world’s most successful companies. The culture of innovation and ingenuity continues to thrive worldwide as a rising number of startup founders are busy chasing the next big idea and building their dream team.
Even as the entrepreneurial ecosystem is transforming to accommodate new and disruptive players on the block, the original and established trailblazers, such as Apple, Google and Microsoft, among others, are embracing new approaches to innovation through startups.
Refreshingly, their hunger to stay at the forefront of innovation and new market opportunities has propelled the tech behemoths spawn off incubators, accelerators and collaborators, to mentor entrepreneurs, share resources and improve the life-cycle outcome of young firms that are at the cusp of growth.
The older, more established firms are paving the way for the next generation of tech giants by being valuable partners to help them move fast on the innovation highway. For example, Microsoft has partnered with WeWork on an international scale to create a dynamic new culture at work.
This is a win-win situation for both. Microsoft employees have the option to work out of any of WeWork’s multiple locations in a particular city, resulting in high employee morale and productivity. WeWork also stands to gain significantly from Microsoft by getting the desired visibility and possible technology investments.
VC investments backed by corporate budgets have been recording YoY growth. This reflects the new reality of established corporations exploring partnerships with agile startups for identifying cutting edge solutions to accelerate their own evolution.
For instance, the Danish shipping giant, Maersk, created OceanPro, a startup accelerator programme to partner with startups to identify tech-driven solutions for a wide range of issues, such as customers’ supply chain, equipment maintenance and end-to-end tracking solutions, among others.
While Maersk hopes to leverage these innovative solutions to drive its next phase of digital growth, it will aid the selected startup’s scale, explore funding and networking opportunities to capture a larger market share.
Thus, if the next wave of innovations has to survive and thrive, it is important for some of the largest global corporations to cultivate a new startup mentality. This will help them improve not only their bottom-line, but also infuse new energy into their organisational culture. So how else do big corporates rewire their organisations to fit in with the evolving startup culture?
Innovate Through Intrapreneurship
Corporate leaders have increasingly started unlocking intrapreneurship within their organisations by giving their employees the authority to ideate, create and take charge of certain areas of business. Large corporates can no longer be smug about their continued success as their growth largely depends on developing a robust model of intrapreneurship.
Through unique intrapreneurship opportunities, employees are able to tap into their creativity and attempt disruptive innovation at the workplace. A collaborative environment that encourages employees to fearlessly innovate and drive business growth through new revenue streams is a true reflection of an organisation’s entrepreneurial mindset.
For instance, The BMW Innovation Lab introduced the intrapreneur programme for its UK employees to provide them with a platform to brainstorm and contribute innovative ideas that might hold commercial merit. The new programme is in addition to the Lab’s continued partnership with startups to explore disruptive business models to enhance customer satisfaction.
In the rapidly changing digital landscape, other large corporations are also advocating a culture of entrepreneurship through intrapreneurship to help their employees build world-class products and services. For example, Google’s Area 120 is the company’s in-house incubator that pushes its employees to explore unique ideas and build innovative products.
Microsoft for Startups is a platform especially designed to engage with startups to scale their businesses and go to market faster. Its unique acceleration programme connects startups with large corporates, resulting in strategic partnerships and pioneering solutions for the ecosystem.
Open And Collaborative Environment
To succeed in today’s rapidly changing technology landscape, it has become necessary for firms to offer their employees a workplace that is conducive for fostering a spirit of innovation. If a team-oriented workforce has to be built, business leaders must work hard to infuse a culture that inspires accessibility and communication among employees.
An open-plan office arrangement, sans cubicles and silos, will not only encourage healthy collaboration and ideation across departments and teams but also foster trust. Therefore, it’s not just about building a ‘cool’ office space with bean bags and foosball tables — the larger picture is about offering intangible benefits that would keep employees loyal and productive.
For instance, Google’s famously creative work culture that allows for flexible schedules and generous perks has put the emphasis on trust, efficiency and job satisfaction. Organisations that go the extra mile to create a platform for sharing ideas and knowledge are the ones that embody the true spirit of startup culture.
Innovation Is Key To Survival
High-value companies have consistently managed to retain the core attributes of early-stage startups. In particular, even traditional companies have adapted a startup mentality to build a more agile organisation.
For instance, the automotive industry has had to embrace new technologies such as big data and the Internet of Things (IoT) to solve long-standing legacy issues and make strategic decisions in the era of autonomous cars.
Ford Motor Company, a traditional automaker, has felt the need to keep up with the times by pumping in precious dollars to develop a new generation of electric vehicles. Healthcare, aviation and retail are other areas where innovation has come to shape the future of these industries.
As the world is buying into the future, it is all the more relevant for global organisations and young startups to collaborate and create a synergetic environment wherein they leverage their respective strengths. However, corporate-startup collaborations can result in mutually beneficial partnerships only if both sides are swift to act on unique market opportunities.
Unfortunately, not all companies are able to keep up with the dynamic market trends and some even risk bankruptcy. Kodak is a classic example of a market leader that didn’t grasp the concept of digital photography, a blunder that eventually led it into the red.
Likewise, Amazon’s digital media ecosystem disrupted retail and spelt the death knell of the once formidable Borders bookstore chain. Borders were unable to adapt to digital transformation and eventually filed for bankruptcy.
If the largest corporations neglect to innovate and reinvent themselves, they are at risk of being left behind in the new wave of entrepreneurship sweeping across the world’s startup landscape. They need to take a proactive approach if they wish to stay relevant for the long haul. Therefore, cultivating a startup mindset is no longer a choice, it is a necessity for the future.
Ravi G Narayana, CEO at T-Hub, Hyderabad
Also published in inc42: https://bit.ly/2WJNA0Y