Most collaboration between startups and corporations shows very little results. The reason is that they are just trying to improve bits and pieces of, for example, the offering. That’s not enough. The winners will be the ones that can renew their attitude, learn to adapt and embrace the change. Startup collaboration is the best tool for that, but it needs to be done right.
Startup collaboration is not an innovation band-aid
Many corporations still try to filter out the perfect startup candidates before starting to work with them. They usually end up with companies that have a product that can be easily integrated with the current offering. Good for them if they can provide something useful for their customers, but that approach rarely ends up in changing anything. It usually just turns into an incremental improvement.
It doesn’t help you if you do the same thing a bit better than before. Not when in most industries you don’t know how your business will look like in just a few years. Corporations need to break the familiar ways of doing things, break the patterns to get ready for the unknown. Companies need to build skills to be ready for the future. The old skills may not become obsolete, but everyone needs to find new ways of using the old skills in new environments. We need to be experts at finding new uses for the things we’re good at. We also need to become experts in the new things that are needed to solve our customers problems.
While startups can learn a lot from corporations, also the startups can teach the corporations many things. So, why do many corporations go only for the incremental improvements and one-by-one collaboration with startups? Because this way fits their existing way of working. They have used subcontractors and other types of partner forever and startups are no different. Corporations are really good at buying products and services. They have developed efficient procurement models and processes that they want to use also with startups. But that is not enough. In fact, I think that this way of working totally misses the point and the big opportunity.
Turning from individual innovation partnerships to powering the renewal at corporations
Nestholma started with the idea of helping startups and corporations to build new innovations and make deals together. In our accelerator model, we make the startups and corporation work together with clear business goals in mind. That has worked really well in the 20 accelerators we’ve done. Still, over the past two years, we’ve realized that it’s much more than making a few deals happen or arranging a great Demo Day pitching events.
Couple of interesting things have happened: HRD and entreprenership
To make the impact of the accelerators as big as possible, we’ve ended up coaching not just the startups and also the corporation’s employees. Regardless if you talk in the context of change management or broader transformation, our work has been more and more about helping the employees to learn from the startups. This has helped them to become better at facing whatever challenge may lie ahead of them.
Many times the management is a bit worried that the employees may not have enough time to work with the startups. Our experience is that the employees love to work with the startups and find the time if there’s good support for them. Also, we’ve found that it’s not just the innovation people, but everyone in the organization that wants to join from customer care to sales and tech. After working with startups many corporate employees have told us that the work with startups has given them new boost on working with the other things, as well.
The other interesting thing has been the work we’ve done for the ex-employees of Microsoft and Nokia. These companies have laid-off thousands of employees in Finland over the past couple of years. As a Finnish company we wanted to see if we could use our business coaching and accelerator model to help them to find their new path in life as entrepreneurs. In great co-operation with both Microsoft and Nokia, we’ve coached hundreds of ex-employees from these companies. Some have become entrepreneurs, some have gone to work in small companies and some are just using the entrepreneurial mindset to pursue whatever else they want in life (read more in Finnish). Not everyone has ended up being a growth company entrepreneur, but we have found it important give back a little by using our expertise to help them.
Business leadership and HR can drive the change with startups
Still, what started out as an interesting experiment and an effort to share our knowledge, turned out to be one of the biggest learnings for Nestholma. This experience in coaching the entrepreneurs has helped us to develop a deep understanding on how to help also the employees still working inside a corporation to change. In fact, we find ourselves increasingly in the same tables with the business leadership and HR. They want concrete business results fast, but they also want to make sure it’s not just what I sometimes call an innovation band-aid. They want to see sustainable impact in the entire organization and business as well as sustainable renewal of the company.
Business leadership and HR want to make sure the entire company is able to quickly
- adapt to new market conditions
- find out what are the problems worth solving
- learn new skills while they are working
- move effortlessly between different types of internal and external operational models (startups, internal ventures, line organization etc.)
- reinvigorate the employees to pursue new paths in their personal professional growth
- turn high level strategic goals into real business initiatives
And we’re very happy to be there. With our two-part accelerator and entrepreneurship coaching model, we can provide the tools to tackle these needs and more. The great thing is that this is also the best way to help the startups learn and succeed.
Topi Järvinen @topij