The innovators dilemma for start ups
Recently I delivered a workshop on innovation management. The audience was a number of high potential start-ups. It is a tricky one. Innovation management needs to be ingrained into the DNA of a start-up company, particularly when they start to scale.
Innovation management for corporates
It is also not high on the priority list. The priority should be on sales and product/market fit. If the startup is targeting large organisations, that invariably means that the startup becomes part of the innovation management of that large corporation.
That is not an easy task. As one of the founders of Smallbusinesscan, working closely with Ulster Bank on a variety of projects, including innovation, I know how difficult it is.
At the moment a full-blown innovation team of Ulster Banks is in Dogpatch engaging with Fintech.They shared some of the challenges that they are facing and this is where start-ups need to take note. As a unit of the bank they have to deal with over 30 key policies which are all required to ensure they keep their customers and their information safe, including
- Anti-Money Laundering
- Anti-Bribery and Corruption
- Complaint Handling
- Privacy and Client Confidentiality
- Information Security
- Business Continuity
- IT Continuity
- Fraud Prevention
- Payment Security
As a regulated entity and being part of the RBS group, they maintain strong security standard to keep their customers safe and secure (for example ISO27001 and ISO27002).
The process that RBS applies to scouting and engagement with startups
- Idea (2000)
- Qualification (200)
- Proof of concept (20–50)
- Pilot (10)
- Launch (5)
The statistics are frightening. From 2000 ideas, 200 get to the next stage. Ultimately five get to launch. That is a 0.25% success rate.
Not only banks
I have no reason to believe that this only applies to banks. There are always internal policies, foreign ownership issues and regulations that large companies have to deal with.
The concern for start-ups is that in an IOT world you will have to deal with one corporate platform or another. The book to read is “The Third Wave.”
It shows the importance of understanding the innovation management of your potential clients and the rules they apply. It might not be the best use of your limited resources.
If you want some materials to think it through, a copy of the workshop on innovation management is available here.