As a startup we have had a lot of talks with corporate open innovation departments. After a couple of years of interaction with them and thanks to our previous life working in a corporate, here are some suggestions to improve the relation with startups.
Before going further, let’s check some definitions of concepts we mention in this article:
As I might use a lot the expression Open Innovation Department, I may prefer to employ this acronym.
Depending on their size and the multiplicity of their expertise, corporate can be divided in business units, departments, services, … So to be the most relevent to any kind of organization, I will only employ “department” to talk about a group of collaborators working on same topics.
It is the Human Resources department at corporates.
We may have a biased conception of what is a OID at corporate. Obviously we didn’t meet all the OIDs. We encountered some that were very effective and some other that weren’t. So we do not claim here that we know everything there is to know about open innovation. The reflexions exposed here are from our own limited humble startup point of view. The best outcome of this article would be to initiate a brainstorm with corporates about how to improve OID so please do not hesitate to comment and share you experience in the comment section.
What is the Open Innovation Department from the startup point of view?
First, let’s share our conception of what is the OID. Corporate have different models for this peculiar department. If we sum up the interactions we had with it, its most frequently encountered features are:
- It is a dedicated entry point into the corporate for the startups. This entry point can consist in a web platform where startup can create a profile and tell their innovation or where the corporate can publish a call for solution. Another possibility is to spontaneously send a presentation message to the mailbox of the OID.
- OID can collect the intern requests of new solutions. If another department inside the corporate has a new problematic, OID can perform a need assessment and turn it into a call for solution.
- OID can perform a continuous watch over startups in order to find one able to match a corporate need.
- After a spontaneous message from a startup, OID can look into the corporate department if their is an existing use-case.
- Finally OID can act like a third party between the corporate department in need and the startup to ease the collaboration
Corporates may have different name for such a department. It can be “External communication”, “Startup relations”, “Partnership department”, …
So in this article, we will keep on referring to this specified department as OID.
What are the limitations of such an OID ?
Those most common features of the OID lead to 3 main difficulties or lack of efficiency.
The bottleneck effect
OID is usually the dedicated entry point for startups. That means OID receives continuously big amount of startup presentations. Then OID must identify the best corporate interlocutor if he exists. But this might not be a quick task to do. It takes time because this interlocutor has his own work and might not be available soon enough. So, on one side you have a virtually infinite amount of startups, they are looking for a qualified interlocutor amongst several thousands of corporate collaborators, and OID is in the middle!
The turnover within the corporate
Corporates may have several thousands of collaborators located in multiple offices distributed all over the world. It is already difficult to map the whole corporate department hierarchy in such a configuration. And it becomes twice as difficult when you add turnover!
By the time the startup interlocutor at OID identifies the right person to contact within the corporate, this person might not be in charge anymore. Startup should be very careful and have several contact at corporate. Let’s avoid putting all the eggs in the same basket. Communication with big company can last several months, and you don’t want to restart them all over again if your main contact retires in the process (true story)!
In my opinion, here the issue is that the OID must know very well its corporate but, because of the inherent turnover, this knowledge is a living entity that requires constant update to be efficiently reliable.
The bottom-up communication
Finally, even after those last two issues, there is a third one, in my opinion, that needs to be solved simultaneously. Even if OID could address all the startup requests by sending them to the right department thanks to a real-time-updated department atlas, it risks not to be in line with those department needs.
So while running fast ahead of those 2 issues, it also has to be regularly and closely updated with the corporate department innovation needs in order to give them aligned solutions. If not, OID and its inner customer risk to be out of phase.
All those problematics turn the OID into a bottleneck on several levels. This is why OID must be at least decentralized.
How to optimize OID ?
Open Innovation and Human Resources
Once I was in a workshop about optimization of the startup – corporate relation. While describing her daily tasks, a corporate told us she wasn’t a good example :
“I’m not a good example of an Open Innovation Department because I used to work at the Human Resources. So I perfectly know my company and when a startup comes with an innovation, I know immediately which collaborator to introduce it to”.
What if that was exactly what OID shall be ? A department supported by HR ? HR knows exactly the composition of the corporate, that’s its purpose. It is the first department to be updated with the turnover.
Innovation isn’t something that can be carried by one department. It is rather a kind of mindset, a way to work, a way to manage a project. You don’t need to have an IOD to be innovative and having an OID doesn’t consequently makes your company innovative.
So the will to look for innovative solutions must be spread amongst all the collaborators. As an open innovation director I once met said : “this will shall be a criteria to recruit a new collaborator.” But evolving the core spirit of the company is a long run.
A second solution solving both the need to decentralize and the bottleneck effect would be to have open innovation referrer in each and every department of the company. He or she would be the bridge between the technical teams and the OID. The referrer would directly communicate to the OID the innovation needs of the teams and the OID would show him the potentially interesting startups for validation. This architecture of OID + referrers would create an innovation network within the corporate accelerating the communication and the evolution of the core spirit.
The Avengers of open innovation
Let’s go a little further. On one hand we have open innovation sneaking into all the corporate departments with its decentralization and what if, on the other hand, those department would infiltrate also the IOD?
That same open innovation director also told for example that the purchasing shall be more innovative too in his opinion. Earlier, we suggested to merge OID into the HR to know the company better. So what if the OID was a rotating team of people from all the non technical departments : HR, Purchasing, Legal, Accountability, IT, …
Why those departments ? Because once a startup and a technical team have found common interest in a collaboration, the startup will have to face all those non technical department to close the deal. And so begins a whole new round of negotiations on topics the startup isn’t familiar with at all. So if the OID, the entry point for the startup, was made of people from the non technical departments, OID could brief the startup on those topics very early in the negotiations.
Why a rotating team? Because it would ease to spread the innovative spirit within the non technical departments. People could bring new ideas to the OID from each of their department. Having a continuously evolving team would make it adapt fast and find its own innovating way to improve the OID.
You can have rotating technical referrers too! And soon you have a setup for innovation made by an OID in constant evolution with a network of referrers covering all the company expertise, which is a living and very powerful tool !
A platform to kill the bottleneck effect
And finally, to solve the bottleneck effect for the incoming startups, the OID can be supported by a platform. This platform would have several purposes:
- A startup directory: this platform is now the new entry point for a startup. This is where it can create a profile with descriptions of its innovation, the use-cases of its products and some elements to describe its final users to help OID find the best corporate contact. In the end, this would be a real phone book of startups. Any collaborators of the corporate could check the platform to look for a solution for its topic.
- Call for projects : on this platform, the corporate technical teams can upload call for projects to openly tell the startups their needs for innovations in order to have very precise solutions. This would ease the identification of the right startup, accelerate the kick-off of the collaboration, give more independence to the technical teams and free some time for the OID.
As a startup, we candidate to lots of such corporate platforms. Not all of them have the same features, or the same level of details. So the application to them can be very time consuming. From our point of view, the best would not to be for the corporate to have its own platform but to use a third party one, such as for example :
Actually there are lots of them too. And just like the corporate ones, those independent platforms have also the problems I just listed. But the more we use them, the better they get. Besides the development of such a platform is a full-time job that would slow down the activity of a corporate OID.
And finally, the third party platforms have a benefit that cannot have a corporates : they make it possible for two corporate with the same need to partner on the same call for project. And consequently they can share the funds for the project and for the startup it makes two customers at once !
So there are many things that can be done to enhance the open innovation at corporates and speed up the collaboration with startups.
If you are a corporate, please share with us your thoughts about those suggestions and your owns ideas in the comment section below.
What do you think about those suggestions?
Please tell us your experience of a startup x corporate collaboration.
As a corporate, which process has your company set to ease the open innovation, the collaboration with startups?
What are your best practices?