It’s been over 25 years since the modern internet went mainstream. It’s nearly impossible to imagine life before e-commerce, instant delivery, and on-demand everything.
Consumers are driving the transformation of industries, not simply reacting to change. Unfortunately, the same can’t always be said for the large corporations and legacy business models being disrupted by the onset of industry 4.0.
Digital disruption is coming for every company, ready or not. Many CEOs are ahead of the curve, furiously pushing to disrupt themselves. Others are still wrapping their head around the “innovator’s dilemma,” which is the idea that you can’t move away from your core business just because you want to. Business transformation is a delicate and challenging balance beam to walk, and many don’t make it to the other side.
This shift is more than just moving a business to the cloud, but usually includes business model, operations, management, and company culture shifts as well. One of the most familiar is through partnerships (and acquisitions) of startups.
Over the last several years, I’ve had the opportunity to work on hundreds of deals – or rather, potential deals between large corporations and startup companies. In theory, it should be a win-win every time. Startups are nimble, exciting, and full of fresh ideas and talent. Large companies have resources and “street cred,” which serves as a huge validation for a young startup.
However, like most relationships, it can get complicated. Here are a few tips for both sides.
Have a champion
It’s important for BigCos to know that startups DON’T always understand how the inside of complex organizations work. Annual plans, budget cycles, and internal KPIs pushed down from senior management may be foreign concepts. Often startups just know they have something that would be cool for a BigCo to try. So, if you are serious about a startup opportunity, assign a champion that can be the owner of the initiative and tour guide for the startup. Projects without champions always die.
Listen and learn
Startups, you are not the center of the universe. If you are wise, deeply listen for the true pain points of the company and/or consumers involved. Try and understand how to get your contact their next promotion by meeting their true needs, not just the needs that benefit you.
Have a plan and be patient
This advice is the same for both sides. Understand clearly what you are trying to achieve, and focus intensely on that. The name of the game is to win early and win often. The small victories will add up. Something worth building together is worth the wait to be methodical and get it right – although, you do need to keep a sense of momentum.
Be Quiet
Tamara Franklin, chief digital officer at IBM, taught me to be quiet and let my playing do the talking on the field. Everyone wants to send a press release, and you should when the time is right, but a better way to ensure that you have a good, long opportunity to execute an experiment or trial is to not put too much pressure on it.
Be Open
Building trust is hard, losing it is easy. The partnerships that I’ve seen work have a high degree of transparency, shared vision, and commitment to the goal. This goes for both sides.
Jonathan Sexton is a serial entrepreneur and corporate innovation strategist who helps companies of all sizes innovate and change, both inside and out.
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September 08, 2020 at 05:02PM
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Relationship advice for large companies and startups - Knoxville News Sentinel
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