06 Mar 2018
Many large, traditional enterprises in sectors like financial services got where they are today because of their aversion to risk. As nimble and agile startups stand at the gate, ready to disrupt, how can the older organisations compete?
bluenotes sat down with three experts , including Nicola Hazell, SheStarts Director at BlueChilli, Danielle Owen Whitford, CEO and Founder of Pioneera and Andrèz Coco, CEO and Founder, Knowlly, to investigate the challenge.
We started by asking them about what large organisations and startups can learn from each other. Below is the full audio and an edited transcript of that discussion.
NICOLA HAZELL: The economy is rapidly changing and the digital transformation occurring right around the world is having an impact on corporates in terms of how they need to disrupt the way they've been doing things.
"Startups are people as well - and we do tend to come at things differently.” - Danielle Owen Whitford
Large corporates often face challenges when changing. How do you shift the behaviours of thousands of people? How do you do that while not affecting efficiency and the day to day processes in place?
The role startups can play, when you can actually get partnerships between the two right, is enabling a corporate to tap into ideas being developed in a much-more agile environment, where risks are more easily taken than they are in an organisation which by necessity has a lower risk appetite.
The reality is, no matter how innovative a large organisation is, creating spaces for people to get outside their everyday thinking and try new ideas can be challenging.
It's that whole idea of two minds are better than one - but two minds coming at something from different perspectives are ten times better than one.
That's where startups and corporates can really bring a different lens to problems. Partnering can help drive solutions in a way which is really quite profound.
ANDREZ COCO: I have had some great experiences working for corporates with startups - partnering with them, speeding up the process of getting to new propositions and launching those in the market.
It's absolutely possible. Corporates see the possibilities. They see the economic growth as well and it's a matter of finding the right ways for them to utilise their own employees to work with other parties.
DANIELLE OWEN WHITFORD: It’s important to remember corporates are just people. Organisations will have their goals and objectives. They want to be competitive and want to keep up with technology but ultimately at the end of the day we're talking about people.
Startups are people as well - and we do tend to come at things differently. I think about all of my years in running large-scale transformation projects and I think if you can tap into people's motivation - if you can give them a reason for coming to work other than just meeting their KPIs and doing what their boss says every day, you'll get the best out of people.
I actually think that's the benefit of startups and corporates working together.
CARINA PARISELLA: Danielle, there’s this argument over whether you can actually be entrepreneurial within a large corporate. We hear all the time about how big corporates can be fat and lazy.
I personally believe in the power of being an intrepreneur and tapping into change communities, helping unlock an entrepreneurial spirit in corporates. Bringing that to life within a corporate is really challenging but I think it's doable.
DOW: I think it's doable. I think people are under a hell of a lot of pressure in big corporates because they are trying to achieve more with less. So people have very defined roles, usually very defined KPIs and some people then feel very trapped.
I think if you can free that up for people and give them that permission you get a very different conversation. I think internal processes really need to line up with what the organisation is trying to achieve.
AC: That's exactly right. In a lot of cases people don't really get rewarded for that kind of behaviour. It needs to come from people’s own intrinsic motivation and internal rewarding - which is really hard if they still have their personal targets they need to work towards.
I absolutely agree with you Danielle, it is about the process which allows them to do this.
NH: Understanding as well I think the joys and the beauty of entrepreneurship is you tend to go through 10 other loops before you get a good result.
Being entrepreneurial in a corporate environment isn't just about saying ‘one day a week we're going to create some time where you can work on this great project’ and then only rewarding it when it works.
It’s about taking risks and them not always working out - and actually celebrating and learning from that. Celebrating failure is a buzzword from the last couple of years but it is actually really important.
If you want to create an entrepreneurial mindset within an organisation you need to create an environment where it's not only okay to try something which doesn't work but where you're actually looking for those opportunities to learn.
That's where we need to understand and unpack what it means to have an entrepreneurial mindset. If as an organisation the outcome you're trying to achieve is a certain set of results or a certain vision that's got to drive the way you empower and work with your people.
It is a big risk if corporates say ‘we just want everybody to have an entrepreneurial mindset’ because they think that's what they're supposed to have. There are some environments where it's not a good idea to have lots of creative and experimental risk-taking people.
Sometimes you need someone who is going to stick to process and play it safe. You don't try something new or fun when you're doing some brain surgery, for example.
CP: Understanding some of the conditions of the environment you're working in will alleviate a lot of frustration. When we talk about startups trying to do business or partner with corporates there is a lot of frustration there around big, corporate red tape and bureaucracy.
That’s really important, the internal processes. Personally I feel often in a corporate when you get a startup coming to speak with you they're not necessarily clear about what it is that they want.
Really understanding what it is they want from you - whether it's market share or to be bought or collaborate on a pilot - is super helpful.
What do you think is that early stage kind of gate into a corporate? How do we break down those barriers?
AC: It's different obviously for each startup and corporate but also who you're speaking to. If you speak to a middle manager for example that person can be really focused on specific targets or what they have on their roadmap, or even technological issues.
Those are quite hard barriers to overcome and it's usually up to the startup to creatively come up with different scenarios in order for a corporate to say, ‘oh we might be able to work around it’ or ‘okay we see that you make it comfortable enough for us to partner with you’.
There are so many different scenarios and sometimes it's also a matter of, as a startup, going back to the same corporate but just talking to different people to get different perspectives.
As a startup you need to do a hell of a lot of work to understand all those different perspectives. It takes a lot of effort.
DOW: And sometimes those answers aren't clear. The questions around what do you want from us. Do you want to buy us? You want a partner or whatever. We actually don't necessarily have firm answers on those just yet.
And that's I guess the difference between the corporates and the startups. Corporates usually have very firm ideas in their mind.
Whereas we - I won't go as far as saying making it up as we go along - but the agile way means we try something and if it works great and if it doesn't then we change it. That's something which has been interesting from my experience.
NH: One of the challenges I see when startups are working in major partnerships with large corporates is understanding as a startup you've got a limited runway. Financially, personally, emotionally, physically.
When you're trying to partner with a corporate you might end up in six meetings over six months to set up a decision on a project. It means you have to find a way to compromise between those two different behaviour sets - to be able to ensure a startup doesn't therefore go into a partnership and it takes so long their company dies before it has the chance to thrive.
In doing that, it's about understanding where both sides are coming from. But also I think it's around setting reasonable expectations about what's possible and what's not.
Carina Parisella is bluenotes innovation editor
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
06 Mar 2018
03 Jul 2018