Enhancing customer value and driving innovation is more critical than ever, not only because of the pandemic, but also because technology evolves so quickly that it is difficult for companies to keep up. Is it still possible for a single organization to effectively pursue innovation? Ernesto Ciorra, Chief Innovability® Officer, believes that, when it comes to embarking on new ventures and navigating the future, going solo is not an option.
Of course internal, incremental change – in response to global competition and disruptive technologies – is possible; but if organizations want to attempt exponential change, they should partner with others who will help them think outside the box.
For startups, the first corporate partnership is an exciting milestone. It is important to remember that these agreements are meant to be a win-win situation for both parties. Corporates can provide economies of scale, capital, resources, and overall access to the market; startups, on the other hand, are disrupting entire industries – from hospitality to banking, and from mobility to energy – and can bring to the table the fresh perspective and talent of highly motivated and versatile teams.
According to a research study by Imaginatik and MassChallenge, nearly 45% of corporate and startup respondents cited strategic fit as the most important factor in the success or failure of a given partnership. Taking the strength of both parties into consideration, entrepreneurs need to reflect on their values and long-term goals to determine if a relationship is right for them and which kind of agreement will help them to achieve their vision. Let’s dive into some key considerations to take into account in order to make the best out of this opportunity.
1 – Meet the right people
When partnering with a corporate, consider the exact problem you are trying to solve and whom you are trying to solve it for. Whom should you interact with? Tina Sharkey, CEO and co-founder of Brandless, mentions that “startup founders often try to build a partnering relationship with the CEO of the corporate, but it's better to use the CEO as a channel to find the right person in the organization and then cultivate that relationship closely”. Another important tip is to always ask for at least two points of contact to join you at the negotiation table: this will ensure that communication is constantly flowing with the right people.
2 – Consider different working methods
Startups, by nature, are known for working at a faster pace and with a higher capacity of organizational agility. This may sometimes lead to skipping over established operational and HR strategies. In contrast, at large corporations nearly every decision must pass through multiple ranks of stakeholders before it can be executed. When you combine corporate experience with robust processes and startups’ flexible approach, it’s possible to create a balanced operational structure. Startups can learn from corporate experience to anticipate “growing pains”. In order to best navigate corporate bureaucracy, be clear on corporate approval regulations and procedures: this way everyone will be aligned as the project moves forward.
3 – Optimize the pilot project
Pilot projects have become the best way for corporations and startups to deliver quick results and prove the business value of a product. With a controlled group of customers and clearly defined KPIs to measure success, a well-designed pilot project can lead to a long-term client relationship. Remember to leverage this program to prove that you have a viable product and a viable business model. When negotiating the terms of a pilot program, make sure to be clear about what you need. If the enterprise is truly forward-thinking and open to innovation, it will agree to fair conditions.
4 – Keep consistent communication
Regardless of the business model, communication is one of the most important pillars of success for any company. As a startup, don’t be afraid to be curious and ask questions. Being efficient and direct is very important when working with big corporates. All in all, make sure you understand everything the corporate expects from the collaboration, but also make your own goals and expectations known from the very beginning.
5 – Adjust as needed
As with any business venture, there will be bumps on the road and obstacles to face. Before moving forward, be sure that you have an actionable plan that includes well-defined objectives and time parameters with a schedule that has margins built into it; this will allow for adjustments and contingency plans to be implemented, if necessary. With a clear-eyed focus on measurable progress from both parties, you can guarantee success despite any obstacles.