Over the past few years there has been a shift in the way large corporations view innovation. Common characteristics of these companies are endless meetings, executive approval and bureaucracy with many different stakeholders, all of which bogs down innovation.
When these corporations look to startups, they see small groups of people creating a wealth of new ideas and bringing these to market with incomprehensible agility. However, if these corporations are looking to grow and innovate, they not only need to start thinking differently but also start making some changes.
In an attempt to emulate startups and develop a culture of innovation, many larger corporations have introduced innovation teams into their larger infrastructure. Recruiting entrepreneurial outsiders to look at the corporation with a discerning eye and develop small groups with the idea that if they get a small group of innovators together, surely, they will come up with great ideas.
Many companies who opt for innovation teams keep them physically separate from other sectors of their organisation to avoid influencing the team with ideas of the existing enterprise, or are under the assumption that the team need to be in a separate and incubated environment to be creative. Often this disconnect between the corporation and the innovation team makes the team ineffective.
The group would benefit greatly from the collective expertise of the current employees, and gain a better understanding of the company and what type of innovation is actually needed. Being separated from the different parts of the organisation means they are unable to scale the innovation to make it benefit different stakeholders successfully.
The corporation also doesn't have opportunity to take advantage of the offshoots of the innovation process. The team’s journey and learning to create innovation often leads to customer and market insights as well as other sub-innovations that the larger corporation misses out on. These teams usually fall flat and are ineffective.
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The ineffectiveness of these internal innovation teams means that a lot of larger corporations are now looking for solutions externally, in the form of corporate accelerators. These companies are able to tap into the startup and innovation culture and stay close to emerging trends by sponsoring early-stage startups and providing them with investment and mentoring.
Microsoft and Telefonica were some of the first corporations to offer these opportunities in 2010, and retailers such as Target and John Lewis also followed suit. By bridging the gap between innovation and the corporation, the company has a means to capture the innovation and the startup has the opportunity to work closely with an established company and develop under the guidance of a potential investor and partner.
Corporations looking to grow and innovate not only need to start thinking differently, but also start making some changes."
There are some critics of corporate-sponsored accelerators, who believe that independent accelerator programmes are more beneficial to startups. Their main argument is that sponsored accelerators tend to focus too much on the company investing in the programme, rather than what the startups actually need.
As a startup, it is more attractive to enter a programme with the possibility of making multiple investor and company relationships, rather than vying with the other startups to sign up with only one sponsor.
The opportunity of connecting with so many different corporations helps startups gain an understanding of how a product could become a solution for many different companies, rather than just one. These introductions to several companies means that the startup can meet countless potential partners and also expand their customer base.
Companies participating in these seed accelerators also have the added benefit of getting introduced to a diverse range of startups, chosen by an unbiased committee, which might not happen with the development of its own corporate accelerator.
There is no doubt that the future growth of larger companies lies in looking outward and positioning itself alongside the latest new trends. This new corporate-startup ecosystem gives individuals in the tech scene the opportunity to meet a wide-range of corporations and in turn, these corporations are introduced to new technologies they otherwise might not have considered.