Seeing Through The Innovation Theater
It is hard to tell what works and what doesn’t, when corporations work with startups. Culture clashes often kill great ideas. But where startup engagement succeeds, the opportunity is massive.
Every founder knows the grand show. Big brands putting on flashy innovation events and startup accelerators, pretending to care about helping startups succeed. Often feeling like props in a performance, founders pose and photos are snapped for the annual report. Rarely do startups leave corporate accelerators and rave about the help they got, quite the opposite — that 3-month move to tiny Älmhult, Sweden, perhaps was not the best way to scale globally, even if IKEA was founded there.
But there is a method to the madness. Large corporations need to change drastically to succeed in tomorrow’s global economy. The fear of disruption is everywhere — when is the Uber or Amazon moment in my industry? Stockholders are pushing for change. Employees worry about their future. Consumers are less loyal than ever. So time and money is pouring into corporate innovation and global startup engagement, as we witnessed at the inaugural Big Tech Summit in Copenhagen inearly September.
Gathered in the ultra trendy meatpacking district in central Copenhagen, 15 local and global brands volunteered to openly share “what works and what doesn’t” in order to get better at this. We all vowed “less innovation theater, more action”, and a surprisingly honest dialogue ensued throughout the day about how to actually bring about change in both companies and society.
During the Big Tech Summit, we explored some of the common obstacles between startups and brands. On the startup side, founders are rarely prepared for the radically different culture and structure inside large organizations. On the corporate side, that very structure often limits ambitious internal leaders in their attempt to integrate new technologies, business models, or entire startup teams. The fear of failure, or not getting their next promotion, often kills otherwise obvious business cases between technology-driven startups and global market leaders.
A few days ago, the Startup Europe Partnership released their latest report on startup acquisitions. European corporations lag far behind their American counterparts in terms of acquiring startups — a whopping third of all successful European startups are bought by American companies, which is a massive talent and technology outflow problem from the European innovation ecosystem. But the flip-side of the coin is that the large European corporations miss out on crucial invigoration and innovation, limiting their competitiveness on the global market.
So what are brands and corporations to do? (Almost) every time they engage a startup, internal obstacles and bureaucracy prevent value from being created. Geoffrey Moore (Crossing The Chasm) explains it fairly simply in Zone To Win: To achieve transformative change, all of top management need to fully commit, at a clearly defined inflection point, to the extent that their compensation and performance bonus is tied to the success of the new project/technology/business unit. Only then can large organizations truly change, and that is perhaps the biggest obstacle for building the economy of tomorrow, whether in Europe or elsewhere.
And see you all at the next Big Tech Summit, watch out for the Techfestival 2019 program!
