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When large firms attempt to move quickly it doesn’t always work and they run into problems. A large number of companies are slowly dying, as parts of businesses are being attacked by other companies and in particular startups. The decline of large corporations has increased in the last decade, perhaps not surprisingly as the global economy had to claw its way out of the financial crisis of 2007. This period has resulted in a continual wave of innovation and the surge in investment in the startup economy, not just in its usual cradle of the west coast of the USA, but now equally in the UK and other parts of Europe.
Throwing money at innovation schemes doesn’t mean they will be successful.
Just look how companies like Amazon, Facebook, Netflix and Google have counteracted the general trend over the past 10 years. So why is it the case that in so many cases “corporate innovation does not work”? Well, there are many reasons we see too many firms are still too slow to move and change their working practices.
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According to research, corporate innovation, accelerators, and venture capital schemes are not always the best approaches for some of the biggest and oldest firms.
Failure is not a bad thing. Tell that to the line manager who has quarterly KPIs to meet. The ‘fear of failure’ is often misunderstood. The belief that startups fear failure because they will go out of business and large corporates move slowly on projects because they are afraid does paint the full picture.
For startups there isn’t a fear of failure. Instead, there is the fear of not succeeding.
So is there a solution to this problem? Yes – collaboration. Where larger companies work with startups, that’s where business results are created.
Targeted research by large companies, investment in startups, scaling companies up and venture co-development can be successful options for business leaders to take. It’s an upcoming trend as now around 80 percent of corporates are either interested in working with or knowing more about startups – this wasn’t the case five years ago.