A unique new inflight entertainment system that allows you to start watching movies on your iPad before the flight. A connected car that knows what you are going to do during the day. Selling car insurance by the mile instead of by the year.
What these innovations have in common is that none of them started in a garage in Silicon Valley or in an office in Shoreditch. Rather, they emerged from the offices of a major airline, a massive car manufacturer and a global insurance company.
Over the last decade our lives have been transformed as our smartphones allow us to shop, travel, play, bank, share, get fit, get a cab or even rent out our houses at the swipe of our fingers.
Almost all of these innovations, often resulting in billion dollar companies, have come from startups and entrepreneurs spotting a market need, raising money and creating new technologies to meet that need.
But spare a thought for the businesses that have lived through this disruption. From banks and supermarkets to TV companies and taxi firms; traditional businesses have had their worlds turned upside-down. The truth is, they have been struggling to keep up as the likes of eBay, Amazon, Google and Netflix changed their lives as well as ours.
Most major corporations and many public sector organisations now recognise that they must join the startups that have utterly transformed some markets and created other entirely new ones.
Corporations must become technology innovators too.
Of course, this is easier said than done. Big businesses are by nature not geared towards developing and fostering ideas that may completely challenge their existing business models. However much they may try to create an entrepreneurial culture internally, there are inevitably major barriers. Business practices and operational structures; teams with expertise and experience geared to the existing business models and (let’s face it) politics, will all get in the way. This means big corporates are slow to grasp the challenges they face and implement change.
Most big companies, particularly consumer brands, have created excellent digital channels to communicate or sell to consumers, but fundamental changes to business operations are more challenging to achieve.
Nevertheless, we’re entering what will be a new epoch in the transformation of business by technology.
We’re going to witness a decade or so of deliberate corporate disruption. We will see eye-catching new tech innovations appearing from within banks, healthcare companies, transportation firms and retailers – and there are a stack of reasons why.
One of these is fear: no-one wants to be the next Blockbuster, innovated into irrelevance by another Netflix. Talking to executives in many different companies, it is clear that senior management are acutely aware of the threat of external innovation and the need to create change within their organisations.
The days of stuffy board members dismissing digital are over.
Another reason why big corporate innovation is about to come to the fore is that companies are realising that they have assets that all startups covet, and are trying to acquire. Large corporations already have a loyal customer base and a brand. They are beginning to re-think how they can serve these customers, by looking “outside in” instead of “inside out”.
With this new mindset, companies can experiment and not be afraid of failure.
“Fail fast” is becoming a corporate mantra, so when you do succeed, you hit it big. Every corporate leader will have noted the speed at which startups such as Uber and Airbnb attracted huge valuations.
Executives know that simply buying startups won't be the answer.
But there are ways for large companies to foster and adopt innovation that could help them regain the initiative and fight back against fast-moving tech startups emerging to challenge them. Executives are learning to think more fluidly and act more quickly in order to innovate.
They are learning to be entrepreneurs again.