THE FIVE KEYS TO SUCCESSFULLY WORKING WITH STARTUPS

ELENA DONETS, CO-FOUNDER AND COO AT SPYRE - INNOVATION ECOSYSTEM DESIGN

HOW STARTUP TECHNOLOGY CAN BE INCORPORATED INTO EVEN THE MOST CONSERVATIVE OF ORGANIZATIONS.

MANY ORGANIZATIONS SEE THE VALUE OF INCORPORATING STARTUP TECHNOLOGY INTO THEIR WORK PROCESSES AND ROUTINES. IT IS, HOWEVER, VERY CHALLENGING TO TAKE SUCH A PROMISING OPPORTUNITY THROUGH THE ARDUOUS STEPS OF GETTING BUY-IN, CIRCUMVENTING THE MANY PITFALLS, AND EVENTUALLY MAKING IT TO THE ORGANIZATION’S OFFICIAL WORK PLANS. THE MORE CONSERVATIVE AN ORGANIZATION IS, THE HARDER IT IS TO ACHIEVE THIS, ESPECIALLY WITH ANY CONSISTENCY. MY PARTNERS AND I HAD THE OPPORTUNITY TO WORK WITH SUCH A HIGHLY SECRETIVE AND COMPARTMENTALIZED ORGANIZATION. THE CHIEF INNOVATION OFFICER OF THIS ORGANIZATION SAYS THAT “YOU COULD BE SITTING IN AN OFFICE NOT KNOWING WHAT THE PERSON IN THE NEIGHBORING CUBICLE IS WORKING ON”.

DESPITE THIS HIGH LEVEL OF INHERENT RIGIDITY, THE ORGANIZATION WAS ABLE TO FACILITATE A VERY HIGH NUMBER OF PILOTS AND DEPLOYMENTS IN A SYSTEMATIC WAY. BASED ON LEARNINGS ACCUMULATED FROM OUR WORK WITH THIS PARTICULAR ORGANIZATION AND NUMEROUS OTHERS IN DIFFERENT SECTORS, THE FOLLOWING ARE FIVE KEYS FOR SUCCESSFULLY WORKING WITH STARTUPS IN ORGANIZATIONS.

KEY1

SEPARATE THE PAIN FROM THE TECHNOLOGY

When organization stakeholders or open innovation teams identify a startup they like, it is very common to strive to a pilot where they can test the technology in the field. This “Let’s kick the tires” approach focuses its attention on the question “Does the technology work?” A much better approach, however, is to identify a real pain point that will be resolved by the technology, thereby affecting an important KPI in a significant way. A much better question to ask first is “Assuming the technology works, will it resolve a significant problem for the organization?”. Such an approach also keeps the door open in cases where the technology isn’t the best solution since once an interesting problem is identified, there is motivation to continue seeking solutions in the form of startup technology.

Key 2

ASSIGN AN OWNER

It’s common to see stakeholders in organizations getting excited about a startup they encounter at a demo day and then stating they’d like to see this pursued further. The startup team then finds itself having to work with a multi-headed monster in the form of various functions, each with its own questions, objections and demands. Startups usually have a deep understanding of their professional domain but zero familiarity with the inner workings of their potential customer. Having an internal owner to the venture significantly increases the chances of success. In cases where this owner is the one who came up with the idea of how to apply the startup to the organization, chances become even higher since people are much more dedicated to ideas they came up with.

KEY3

DECISION MAKERS

When promoting startup-based organizational ventures, the ultimate goal is having decision makers prioritize a venture over other tasks that are in the endless backlog. Give them control over which opportunities make it into an evaluation stage preceding a decision about a pilot. The key here is building a sense of ownership with decision makers so that once a pilot is proposed they’re excited and curious about the outcome. If a pilot is successful we want decision makers to effortlessly make the decision to go ahead with deployment. This gradual building of buy-in and the formulation of clear rules of engagement increase the level of consistency and significantly increases conversion ratios. At one of our clients, a naval port, we were able to achieve, using these principles, almost 50% conversion from startups of interest brought into an acceleration program to successful pilots adopted by decision makers. That’s one successful pilot to every two startups that began the accelerator. A correct involvement of decision makers was key.

KEY 4

A STRICTLY DEFINED PILOT

Pilots tend to be loosely defined and focus on applicability (“Does the technology do what the startup claims it does?”). A much better approach is to design a pilot that can demonstrate the actual impact of the technology. For example, a startup that was tested by a food manufacturer offered an augmented reality interface for maintenance procedures so that its personnel would have the ability to perform the numerous and varied procedures even if they were relatively new to their job. This is a typical approach to knowledge management and the natural tendency would be to design a pilot that tests the usability of the technology and the level of user satisfaction of maintenance personnel. However, in this case the focus was correctly placed on how this technology will increase production. And so, the pilot was designed as an experiment, focusing on a particular machine, performing the maintenance procedures that were causing it the most production delays and demonstrating after three months that its total production time increased compared to the three preceding months used as control data. Defining pilots so strictly as if they were scientific experiments is key to getting more such pilots approved and serving as a “contract” between decision makers and the innovation team. There are higher chances that successful pilots will then be approved to proceed to actual deployment.

KEY5

ALIGN WITH STRATEGY

Open innovation managers tend to think that the technology they bring via scouting and the level of excitement that it generates will then drive decision makers to do the right thing. Our experience is that it will mostly lead to pain and frustration. Before embarking on any sort of open innovation agenda, the first thing to do is to identify the executives that will approve deployments of successful pilots at the final spot of the process. Then you should have them define the goals for open innovation i.e. what KPI’s they wish innovation to push forward in ways that serves their purposes. Executives will take ownership of open innovation deployments, allocating budget, resources and attention at the expense of the endless list of items on their backlog, if they see how it significantly impacts outcomes they care about. Other than that, you’ll be dealing with theatre with no real purpose.

Working with startups can be an incredibly gratifying and impactful experience when done correctly. Follow the five keys above and you will be much further along the road to success.