How to develop collaborations with external innovators, a 6 step plan for corporate venturing.

Collaborating with external innovators such as startups and scale-ups , known as corporate venturing, requires a structured approach. Apart from the practicals such as aligning processes and deciding on KPI’s, the true success factors have to do with the way your business works and how people thrive in bother collaborating organisations.

With these 6 success factors we defined a concrete step-by-step plan to boost your innovation by developing win-win relationships with innovative entrepreneurs.

So you have identified one or more startups or scale-ups with which you want to collaborate. What are the steps to make a success out of that collaboration? That will be more than just laying down a few practical agreements and processes. The personal objectives of the entrepreneurs, the business model of both the startup and your company and the differences in corporate culture between a corporate and a startup are factors that often make a collaboration go wrong.

That is why we developed this 6-step plan at THINK with people.

1. Align Visions

What problem do we want to solve? What end result do both parties expect? These are crucial questions that you should ask at the start of any collaboration. There will undoubtedly be differences, but are they miles apart, or are they variants that ultimately go in the same direction.

You can gauge those visions on the basis of the “Five Whys”. This is an iterative interrogative technique used to investigate the cause-effect relationships underlying a particular problem. The primary goal of the technique in this case is to expose the core of a vision through the question “Why?” to repeat. Each answer forms the basis of the next question. The “five” in the name is derived from an anecdotal observation of the number of iterations it takes to get to the gist.

2. Align the business models

Small and innovative companies can have big ambitions, but in order to realize these ambitions they often go through one or more business models. In that context, a large company can be a catalyst for the startup to take the step to a more complex and larger business level. The corporate can then simultaneously increase its own turnover or impact. In its simplest form, the startup uses an extensive distribution or sales network of your company. But more advanced ways of linking business models are also possible.

How do you put two business models next to each other? The business model test that we developed at THINK with people (click here to take the business model test) offers a practical approach. For the start-up or scale-up, one model will most likely emerge clearly, for a large company, different divisions often have different business models. Based on the results of the test, you can make the ideal match and find a win-win approach.

3. Align company cultures

Next, it is crucial to create openness about the corporate culture on both sides. Different corporate cultures need not be a problem in a collaboration, but it is important that all parties understand what those differences are. This helps people understand each other have open conversations.

A corporate culture is a complex interplay of factors and most companies have not mapped it out. Here too, different divisions in a large company may have different cultures. The company culture test helps you to get an idea of ​​the company culture in an accessible way (click here to do the company culture test). It is best if different people complete the test independently of each other, to then discuss and find a consensus about the culture of your organization. Usually you end up with two main lines and third less important factor (there are 8 dimensions in total). Then compare your company culture with that of your partner and discuss what this means in practice.

4. Connect the processes

With all noses in the same direction, it is now time to work on processes. You want to develop a way of working that suits both parties and is in line with governance and legal requirements. At a young company these will probably be ‘lean and mean’, but your larger organization may work a lot more structured. Not every process has to be adapted of course, but the core business processes must find a connection.

By the way, if you plan to collaborate more with external parties, you can consider setting up a number of processes such as APIs in a software system. You define the required input and output for both parties and ensure that they are always there. From there on, each organization can then do its thing.

5. Create value together

After all, that is what we are all about: to create value together. This does not come by itself and requires sustained effort. You are constantly looking for improvement, you manage the teams on both sides, you monitor both results and behavior and take action where necessary. Here too, a relevant governance structure will be important, one that is consistent with all previous points, of course.

6. Evaluate Success

Nothing lasts forever, every collaboration has to be evaluated. That is why it is important to decide on success criteria, OKRs or KPIs. And also determine triggers that indicate that the time has come to end the collaboration or to reshape it. And to ensure that such a transition runs as smoothly as possible for everyone, it makes sense to agree on a process around it. Governance structures also come into play here.

Does this step-by-step plan seem big and heavy to you? Then remember that you determine how complex you make the various parts. With the accessible tools that we have developed at THINK with people, you quickly come to relevant insights that simplify and clarify conversations between stakeholders. And that gets you a long way. At the same time, you should not forget that collaborating with startups, scale-ups or other external innovators is not a ‘free ride’. To make it a success, hard work from both sides is crucial.