Many executives recognize the value of the innovation occurring within start-ups but struggle to find the best ways to link their organizations to the start-up ecosystem. Matching the capabilities of a small, agile company to a large, lumbering corporation can seem near impossible. Identifying the right framework for a relationship is essential in order to structure something durable and mutually beneficial. There are a few starting points for open innovation with start-ups.
- Opening networks: large companies are built out of expansive and deeply entrenched networks. Within them, however, are large corporations whose teams focus on a specific remit – and miss opportunities. If they were to open their networks to start-ups, they would find numerous entrepreneurial opportunities.
- Unlocking data: there is a large amount of latent data in most corporations, and yet this valuable resource is frequently overlooked. In many cases, this is because the company is not “tooled” to make use of its own data in new and creative ways. This is where partnering with a start-up can help.
- Massaging culture: encouraging a company to be more receptive to open innovation is fundamental. Large corporations are typically “siloed”, and often constrained by working habits and a business-as-usual mindset. Enthusiasm for external innovation is a natural prerequisite for collaborating with start-ups.
Once the essential components of the framework have been agreed, the next step is a tactical approach. Corporations need to closely examine their own structures and culture to locate the highest levels of tolerance for external input and collaboration. When it comes to the tactical side of open innovation with start-ups, companies face some universal challenges. They stand to benefit from sharing best practices with one another.
In that spirit, here are a few examples of engagements we have recently employed at Barclays:
Accelerator models are increasingly seen as a logical way to co-create with innovative start-ups, because they offer active mentoring and often initial seed-funding. Corporate accelerators usually combine an element of collaboration with internal project teams and frequently partner with start-up experts to help facilitate the programme. As an example, the Barclays Accelerator is powered by Techstars (itself an acceleration company) and will create more than 60 new joint-venture tech companies in under three years. Barclays will provide executive-level mentors, data sets, wide access to networks, and channels to existing customers that will help these start-ups scale up quickly.
These projects are one of the more complex ways to develop strategic initiatives with start-ups. It requires broad support and involvement across the whole corporation. In October 2013, Barclays launched its first open-innovation project with start-ups throughout the United Kingdom. The project began with an executive-led company-wide audit to identify challenges that could be solved by start-ups. More than 80 challenges surfaced, and “challenge owners” from each business unit were assigned to develop solutions. The challenges were showcased on an online portal and start-ups invited to pitch their solutions to senior Barclays colleagues at a formal event in October.
The event began with workshops where entrepreneurs could query Barclays challenge owners and discuss relevant issues. This was followed by public and private sessions where start-ups offered their solutions. More than 300 companies attended the event and 90 companies were identified for further discussions. Many of the latter have gone on to launch pilots and develop partnerships with Barclays.
Creating channels for continuous engagement
Temporarily dipping your toe into the river of nascent innovation is very different to having a daily swim. Many companies struggle to develop a sustainable channel for continuous engagement with start-ups, but constant, mutually beneficial engagement is a necessity for keeping pace with innovation. In April, Barclays will open its first physical platform for ongoing, face-to-face collaboration with start-ups. The site will be home to more than 50 new enterprises and will host a regular series of events and forums with more than 30 world-class organizations that specialize in helping start-ups to scale up. As start-ups evolve we see this kind of constant, and mutually beneficial, engagement as a necessity for keeping our finger on the pulse of innovation.
If large corporations are to survive, it’s important that they build structures that aid agility and foster creative disruption. Creating a win-win strategy with start-ups to accomplish this is not only dollar-smart but also increasingly necessary in order to remain competitive.
Author: Arian Lewis is a director in the Design Office at Barclays. The Design Office is responsible for driving innovation and customer experience across the corporation.
Image: An employee opens a power-generating window in an office building in Taiyuan, China, December 3, 2010. REUTERS/Stringer
This blog is part of a series of articles lending context to the World Economic Forum’s work in the field of European entrepreneurship. Click here to read Nicholas Davis’s introduction to the series.
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