How Companies Can Better Work With Startups

DZone 's Guide to

How Companies Can Better Work With Startups

An overview of three common issues companies had when attempting to partner with startups.

· Agile Zone ·
Free Resource

Innovation has scarcely been as popular and trendy as it is today but, as Wired’s David Rowan pithily points out in his latest book, a lot of what passes for innovation is bullshit smothered in multiple layers of jargon and obfuscation that creates the impression that much is being done, but it’s largely a superficial veneer.

This often inadequate attempt at innovating is prompting many to reassess how they do things, and look for quality efforts rather than high quantities of ‘innovation’.  One of the most frustrating methods of innovation is partnerships with startups.  At a recent event from consultancy firm Arthur D Little, an entrepreneur explained how he had participated in several corporate accelerators and incubators, with all but one doing little but waste their time, money and effort, none of which any startup has a limitless supply of.

A recent paper from IESE highlights some of the ways companies can work effectively with startups that hopefully produce a more fruitful experience for all concerned.

More Successful Corporate Venturing

The researchers interviewed over 120 chief innovation officers to understand how they engage with startups in their organization, together with some of the challenges they face.  When the data was crunched, it emerged that there were consistently three problems:


The interviews revealed how important it was to have buy-in from across the business.  If business unit heads are bought into the importance of working with startups, then it’s much more likely to integrate their technology into the workflow of their unit.


It was difficult to find the right startups to partner with, especially if you’re operating in an environment where there aren’t a ready supply of high profile startups beating a path to your door.  The authors highlight how a number of the companies they interviewed expanded their search in new areas, such as those startups associated with universities and research institutions.


Last, but not least, the authors propose thinking ahead of time about any potential conflicts of interest between the interests of the startup and the corporate venturing unit.  These differences often emerge because of fundamentally different ways of measuring performance at both entities, so it’s important to understand these as early as possible so they can be addressed.

The researchers believe that their findings can help corporate venturing units maximize both their return and impact in a variety of ways, and they make six recommendations to achieve the best results:

  1. Design metrics and incentives oriented towards value integration
  2. Keep an eye on agility metrics within your innovation process
  3. Involve a sponsor from the parent company’s executive committee in decision making
  4. Consider increasing the time span of reporting cycles
  5. Ensure there is an independent cost center
  6. Evaluate your autonomy and integration capabilities before choosing the location

startups ,partnering ,agile

Published at DZone with permission of Adi Gaskell , DZone MVB. See the original article here.

Opinions expressed by DZone contributors are their own.

{{ parent.title || parent.header.title}}

{{ parent.tldr }}

{{ parent.urlSource.name }}