Once upon a time, corporate CEOs could largely avoid the startup world. Yes, they might peer out of their castles every once in a while to see what the neophytes were doing, but they knew that large businesses like theirs were still the primary bearers of the world’s most innovative ideas and products. They enjoyed enormous market share and slept well thanks to the security of committed customers.
Things have changed. Corporations are no longer the most innovative entities in the business world. Through venture capital backing, startups continue to grow and capture market share. As a result, customers now find themselves with endless options, and they often flock to more disruptive brands that are willing to take a risk with new technology.
This mindset is tough for larger companies to adopt. According to an executive at software company Intuit, when team members took the initiative to walk and talk like a large company, launching new ideas fell by the wayside because it took too much time and money to execute.
The above scenario is why many corporations are now attempting to make their practices more productive, mimicking the approach of startups. In fact, according to a survey of 170 development executives at large public companies, 82 percent admit they’re trying to implement lean elements into their work methodology.
Innovation Tourism vs. Innovation Immersion
Despite the above statistic, many corporate CEOs are still stubborn when it comes to getting more involved in the startup community. Instead, they engage in “innovation tourism,” merely paying lip service to startup culture. They do this by trying to appear cool or trendy by handing out corporate swag or hosting a craft beer night rather than actively exploring the exciting startups around them and learning new things that could make their businesses better.
The problem with such half-hearted engagement is that it simply doesn’t fly with younger audiences. Innovation tourism lacks authenticity and ultimately does little to achieve strategic goals. True innovation comes down to problem-solving, and if companies are just printing T-shirts with their logos, they’re clearly not solving pressing issues. To really get into the weeds of how innovation is happening in the country today, corporate CEOs must form meaningful relationships with the innovation ecosystem.
In addition, business leaders who take notice of smaller companies will give their own enterprises a leg up when it comes to staying in touch with talent. Today’s scrappy newcomers might become the masterminds of the next Netflix or Airbnb, and companies that shy away could miss out on partnerships that might push them ahead of the competition.
The smartest corporate leaders are immersing themselves in the startup scene and seeking strategic partnerships that keep them on the cutting edge of innovation in their industries. One company leading this initiative is Ameren. As a public utility company, engaging with startups for Ameren means investing in and incubating them. Through its Ameren Accelerator, the company partners with local university systems to support young startups, such as software companies aiming to control energy consumption or grid stability.
The 4 Biggest Benefits for Startup-Friendly CEOs
Corporations that can build meaningful partnerships with innovative communities in their fields of expertise will evolve from startups’ dynamism, flexibility, talent, and ideas. The following are a few main benefits and how CEOs can take advantage of them:
1. Keep tomorrow’s technology in close range.
Corporations that are embedded in the startup world will witness tomorrow’s technologies firsthand. Such ideas might seem insignificant today, but in the near future, they’ll be the tools disrupting the status quo and making consumers think in new ways. The corporations that have kept a close eye on startup happenings (such as Google’s stalking of young gun EasyEmail) have historically been able to leap into new areas of opportunity.
If you’re unsure of how to get involved with a startup community, ask around either in person or online. Familiarize yourself with local bulletin boards at coffee shops, libraries, and grocery stores. Or subscribe to RSS feeds that notify you when certain subjects and tags are mentioned in your city. After all, the only way to be the first to know about tomorrow’s technology is to tap into the innovative hubs today.
2. Stay connected with emerging talent.
Building partnerships with startups allows corporations to find and connect with emerging talent who might be more exciting and creative than the usual candidates they seek. While the skills of a startup employee might not seem to fit initially, people working on startups frequently use tools that will become more mainstream in the future and develop soon-to-be-invaluable skills.
Consider starting a project with your HR department in which recruiters send messages and invites to individuals with startup roles in your city. A simple introductory LinkedIn message could help you connect not only with one person, but also with other startup professionals within that individual’s community.
3. Nurture entrepreneurial thinking.
Corporations used to exist on trust and tradition, but not anymore. Leaders of corporations need to be aware that “business as usual” will not carry them far or insulate their careers. Getting out of the corporate mold of meetings and protocols can expose corporate employees to a more disruptive, dynamic mindset that leads to creativity and innovation. Such changes could include asking more questions, allowing more freedom in tasks and processes, and reinventing accepted methods.
Encourage your team members to break the corporate routine by sending out a staff-wide survey that asks how meetings, workspaces, and culture could better stimulate creativity. Then, take the feedback and put it into action. For example, less formal meetings that allow individuals to walk around the room or a quarterly brainstorm session hosted in a green space could shake up the agenda and foster greater entrepreneurial thinking.
4. Read future customers’ minds.
Corporate CEOs who stay close to the startup world will inevitably stay close to future customers, too. Part of the job of a startup is to predict the needs and desires of future cohorts of consumers. By observing and involving themselves in this startup mindset, larger companies can gain critical insight into how they might need to refine their own product offering.
If you have a trusting, professional relationship with startup members in your community, ask them about their favorite methods and tools that help them effectively iterate their future products. This curious inquiry can take on many forms, such as a surface-level debrief on analytics and data point over coffee or even a deep dive of a survey program a startup uses when reaching out to consumers. In both instances, this is your chance to actively listen, take notes, and see how such approaches can translate to your company’s needs.
It’s time for corporations to swallow their pride, get out of their rut of stubborn innovation tourism, and start opening up the castle gates to expose themselves to all the small-scale magic happening outside. Consider how the benefits above could help your company today and into the future, and then flex your networking skills and get talking.