After working (in a corporation from traditional industry) with start-up scene for some years now, I have to say that lean start-up methodologies are great. Whether it is about lean and agile development, design thinking, UX, Business Model and Value Proposition Canvases, failing fast to succeed soon mindset or so, they for sure serve their purpose.
There is a lot that traditional corporations can learn from these and utilize in their own development, especially now that also more conservative industries are turning their heads towards digitalization and industrial internet. This is what many bigger companies are also doing within their digital journey: trying to turn the huge stage-gate vessel into iterative and agile Proof-of-Concept machine. Having said that, one has to note that also the stage-gate approach and linear development has its value especially in investment intensive fields.
Where startup mentality is very powerful tool in developing more radical innovations serving hidden needs of the customer, there is also vast amount of added value in improving the perceived user value with incremental innovations for existing assets. I would say that this is like maintaining and developing the backbone that is the enabler for transformational initiatives – one would not survive without the other.
This is also where working like a startup and working with a start-up play a different, but vital, role in digital disruption. To be honest, big companies will not become lean and mean startups being able to develop those truly disruptive solutions. They even should not, at least as a whole, as they are good with streamlined stage-gate development serving the aforementioned backbone. The real beef is to work together with the startups in a manner that the competitive advantage and capabilities of both can form a win-win situation. Let the startups stay in agile environment where they can pivot 180 degrees overnight if required by the customer needs, and support this by providing the industry expertise and backbone for the development.
What is distinctive with start-up collaboration is that it also requires getting rid of rigid corporate mindset on collaboration with heavy agreement and IP protection policy, and slow decision making processes – otherwise one will never be able to attract the best start-ups. But a good thing with this is that one does not have to rock the whole boat at once, it is adequate to have the interfacing parts being able to be agile, looking for true joint benefit, and admitting that we do not know it all nor do we have capabilities to develop everything ourselves. OK, this also requires totally new ways of working and open mind towards initiatives that may seem totally bizarre in the beginning. So it is also anything but easy, but the first step is already taken when one recognizes this need and one’s own deficiencies in being able to do so.
One could summarize the above by saying that yes, corporates can and should learn from start-ups and utilize the best practices in their own development. But it is a different thing to work like a startup and to work with a startup, and for the latter one must humbly admit that we cannot do it all and we need the agile disruptive players to help us out with the disruption – in a way that serves mutual benefit of all concerned parties.
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Tero Hottinen is General Manager, Business Innovation at Wärtsilä. He works with innovation management and business development in the Services Business Division; combining an MBA with a versatile technology background and experience in innovation management, coordinating research networks and programmes, technology development and R&D. Tero is currently, looking into startup collaborations to gain a better understanding of disruptive (and digital) initiatives and the ability to be truly agile. Follow him @TeroHottinen