Companies used to obsessively innovate secretly. Now, it’s all about opening up to the right partners

It’s a whole new world for business.

Technology has changed not only the way people live and work but has also vastly changed the way companies do business.

With better technology comes more options to engage with companies. Customers today know that they have options, and companies have to make sure that not only are they one of the said options, but that they stand out amongst all the available ones.

More than anything, companies need to be able to catch up to the changing times. This is important if they want to be able keep up with the demands of their customers and continue growing their business.

Large corporates are able to scale globally due to the fact that they have the resources and are able to maintain their service standards through compliance to processes that require several layers of approvals to change. These layers, while helpful in terms of maintaining the standards, are also the same layers that make it difficult for companies to rapidly innovate.

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Startups, on the other hand, lack these layers. Each group or person in the team can quickly make decisions to execute new solutions or try new technologies. But startups often lack the resources needed to scale their product.

A lot of large companies have seen the wisdom in using their resources improve their product or processes by way of helping support a startup to build and develop tech solutions.

A need to accelerate innovation

In banking, for example, startups are stepping up by targeting the unbanked population – something that large banks have had difficulty doing and addressing.

“The banking industry is going through a major upheaval at the moment, and it is driven largely by changing customer expectations and behaviours,” said Amran Hassan, Head of Maybank Innovation.

From serving the unbanked to making current processes easier and more efficient, there is a need for large banking institutions to innovate faster and better to avoid becoming obsolete. And with the accelerating growth of fintech, they are capitalising by collaborating with startups to develop new technologies to address their service issues.

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“We have been working closely with startups since 2014,” said Hassan. “Their capabilities have extended our engagement with our customers.”

It’s not easy for large enterprises to disrupt themselves – which is why innovating internally is slow. It is in the nature of startups, on the other hand, to move fast. By collaborating with startups, corporates have the advantage of sourcing the latest technology or trying the latest business models that could accelerate innovation.

Inject fresh ideas into established businesses

Fresh eyes bring in fresh perspective. Yours truly would argue that the reason most large companies have difficulty innovating is because not only are they neck deep into the day-to-day operations, they are also focussed on making sure that their current business and customers are maintained sufficiently.

Bringing in someone new, especially one whose focus has been to address the gaps that you leave, can help inject fresh ideas into the business.

L’Oreal, one of the world’s largest cosmetics company and popular beauty brand, has launched the L’Oreal Innovation Runway in 2017, a startup challenge that searches for early-stage startups and small enterprises in the Asia Pacific Region that can offer solutions specific to the needs to of L’Oreal.

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For 2018, the programme’s finalists are two startups who had developed a new personalised cosmetic product based on genetics and environment, and a proprietary platform that could potentially create more efficient and environmentally viable manufacturing processes, respectively.

Programmes like the L’Oreal Innovation Runway acknowledges the fact that they do not have the monopoly on good ideas. By opening up to startups and SMEs, corporates give themselves the opportunity to benefit from the experience, technology, and insight of someone else.

The challenge of collaboration

One of the first challenges corporates face when they decide to collaborate with startups is how and where to start.

How can one company sift through the thousands of startups to find potential collaborators?

One solution could be creating a programme to search for collaborators, such as L’Oreal did. Another would be to join and be active in communities to help them gain knowledge about the startup ecosystem.

Others take advantage of proximity and regular engagement to find their innovation partners. WeWork, for example, creates a platform that enables corporates and startups to regularly engage with each other, both online and offline. Sharing workspaces (and, in the case of WeWork, having an online component to connect the global community) facilitates awareness of possible collaboration opportunities.

Today, openness to innovation is crucial. Companies who fail to innovate and thrive in this increasingly digital world will get left behind. That’s why it’s important for corporates to stop working in silos and begin venturing out to engage with innovators of the tech startup ecosystem.

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WeWork offers more than just shared workspaces – they create environments that increase productivity, innovation, and collaboration. For enquiries on WeWork membership, visit their website or schedule a visit a WeWork location near you.

The post To keep up with the times, corporates are changing the way they innovate appeared first on e27.

Source: E27