New ways of Collaboration: How large Enterprises work with Startups

Eric Schott explains, how large companies can collaborate with startups and how to profit from their high innovation power.

More and more large companies need to increase their degree of innovation. In parallel they want to transform their internal culture into a more collaborative and agile way of working. To achieve this, companies design corporate startup programs, so called "innovation labs".

By this, large enterprises want to cooperate with startups on a regular and managed basis. However, the biggest challenge arises from the specific collaboration setting of projects between very small (and new) and very big (and established) companies.

In a cooperation between Campana & Schott and the Berlin Institute of Technology (TU Berlin) we tried to find out what makes those projects successful for all parties involved and what kind of collaboration is most promising. In a series of case studies decision-makers, stakeholders from executive management level, startup program managers as well as participating startups were interviewed. Here are the top three findings:

Strategic objectives determine startup program design and success

Collaboration startup program design is highly dependent on the underlying strategic objectives. The established enterprises have to be very clear on which startups to select, how many to select, how and how long to (financially) engage and how to collaborate with the startups. The intended objectives can be split into (a) hard objectives such as a diverse innovation portfolio or customer access and (b) soft goals such as intended cultural change. Following the case study results it seems to be a best-practice to focus on one objective at a time and cumulate later on.

Cultural change needs networking, open communication and internal marketing

Cultural change is, next to innovation, the central goal for many companies. In order to achieve sustainable change (a) networking, (b) open communication and (c) internal marketing were identified as main drivers for success. Networking typically happens on three points of contact between the established company and the startups involved: Actual events, daily interaction and digital networks. Events are organized by the startup program (or innovation lab) and bring employees and startups together. Daily interactions, sometimes as simple as shared co-working space, start interaction and keep the conversations alive. The digital networks help scale discussions and extend the reach, e.g. across locations and across business units. The top management needs to continuously demonstrate personal commitment to the cause on all three of those focal points of cultural change.

Hybrid innovation labs help span the bridge between startup programs and corporate HQ

Startup programs often show an organizational and/or a geographical distance to their "parent" companies. This makes it difficult to transform and to "digest" innovations coming from a particular startup. Sometimes, low visibility on what is developed within the startup leaves employees and their business units uninformed or untouched, hindering innovation as well as change. The results of the case studies suggest a solution where a hybrid (digital and physical) innovation unit is built around a digital platform with physical representative spaces in entrepreneurship culture hotspots and corporate HQ.