Corporates are paying more attention to startups but there is still a long way to go when it comes to the two collaborating, according to a number of experts helping Australian businesses drive innovation.
Speaking at the SouthStart conference in Adelaide, Jenny Vandyke – author of The Innovation Recipe: Key ingredients for world-class results in big business – said innovation is one of the most-hyped words used in business today.
“Everyone is talking about it,” she says.
“When you look at corporates and entrepreneurship, a lot of people would say that they are two worlds that are completely different. The wardrobe that people wear might be different, and the language, but when it comes to innovation the key ingredients are the same for all businesses of all shapes and sizes, and the mistakes are the same.”
Vandyke says part of the reason why corporates are turning to startups is their graduate programs are not yielding the same results as they once did because talented individuals are exploring opportunities beyond big brands.
“There are so many different opportunities for the corporates and what you [as startups] are going to get out of the situation,” she says.
Mark Drasutis, national innovation manager at News Corp Australia, agrees.
“Corporates are going down that line of taking cues from startups that they need to have plastic structures and innovate very quickly,” he says.
“It’s the maturity of a corporate to realise it can’t do everything. We need to understand what customers are doing in this space and people outside that platform.”
Trey Zagante, founder of the Venturetec Group, told the crowd that a corporate partnering with a startup can be a huge brand risk because the corporate world is all about minimising failure.
“Sponsorships of events like this and sponsorships of co-working spaces are quite easy ways for corporates to dip their toes into the water,” he says.
“Other ways they can get innovative is through accelerator programs – we’ve seen Telstra run their own accelerator program.”
Zagante also says corporates need to understand that if they really want to innovate, they can’t kill off a program at the first sign of failure.
“You can’t expect that there is going to be any success at all from a corporate startup, or that you are going to get quick returns from it,” he says.
“The KPIs need to be thought through very thoughtfully at the start so you have some kind of proper expectation about what the return on investment is going to be. There needs to be some sort of strategic alignment… it can’t be ad hoc innovation.”
Neal Mann, senior manager of digital media and editorial at News Corp, says for a company to really drive innovation it has to get the right people to do the right things.
“The two major issues are the failure issue and accepting that failure is OK, and ripping apart the status quo of the business you’ve got and probably for the first time putting the customer first,” he says.
“You have to understand that and work out how you get members of staff who work at a corporate – who are used to doing their job on a daily basis – to come out of their comfort zone and drive in the same way a startup drives.”
This article originally appeared on StartupSmart.
StartupSmart travelled to Adelaide courtesy of Brand South Australia.