When I Googled “examples of small businesses helping big businesses”, my screen was filled instantly with examples of the reverse—big companies helping small ones, with that assistance coming in the form of funding—beneficent gestures for the smaller guy and the local economy.
While those efforts are great, they fall short of the richness offered by a deliberate collaboration between large and small companies—a union that creates a powerful synergy based on each party bolstering their weaker areas with the other’s strengths.
In his new book Collective Disruption: How Corporations & Start-Ups Can Co-Create Transformative New Businesses, Michael Docherty, CEO of Venture2, challenges the paradigm that it’s always startups that disrupt large companies, highlighting the opportunities inherent in the collaboration of big brands and startups.
Shortly after Sunbeam was gutted by Al “Chainsaw” Dunlap, Docherty joined the company as its Vice President of Product Development. Battling the stigma of bankruptcy, the company realized it had to find unprecedented ways to survive. Partnering with outside companies, vendors, and suppliers, Sunbeam went from introducing 10 new products the first year to launching 150 the following year. What Docherty found was that those relationships with smaller businesses created a “collective transformation” within Sunbeam, as well as within the smaller companies. Little companies can be innovative and nimble in ways that larger ones cannot. Whereas a large corporation is typically well-financed, with established marketing and distribution channels, what a small business brings to the table is its agility at anticipating and responding to market trends, plus its ability to quickly capitalize on new technologies.
According to Standard & Poor’s, most new companies today can expect to survive just 18 years. Even solid corporate giants founded on a bedrock of innovation like Eastman Kodak, can find themselves quickly floundering in rapidly-changing markets. For many organizations, Collective Transformation can be the answer to that problem.
Past Edison Award winner Coca-Cola is forging into this new arena to hone its competitive edge. Carie Davis, Global Director of Innovation & Entrepreneurship at The Coca-Cola Company, describes how the industry giant teamed up with Startup Weekend to infuse their corporation with innovative life:
We did our first internal Startup Weekend at Coca-Cola and we had about 100 people. We just put the word out. It wasn’t top down; it was grass roots. We found the people who instantly connected with the message of maybe you have ideas and you don’t really know where to start.
The things that came out of it were “I never realized what I could actually accomplish…in 2½ days.” The focus on customer development over product development—essential for entrepreneurs who want to succeed, also resonated with people who went through the experience…These emerging leaders of the company…want to help us create a movement and they’re actually coming up with new ways that we can continue to do this kind of work.
I recently visited with Stan Lech, President, PharmaMax Corporation and former Vice President, Research & Development with GlaxoSmithKline. He named the many factions pulling at a company—stockholders, customers, employees, boards—
Corporations are pulled in so many directions that it can be difficult, if not impossible, for them to pursue new innovations. Trying to meet the needs of these various factions puts them in turmoil.
People need to have jobs and to eat – they are super risk-averse in companies. Everything is led by committee; no one wants to cross anyone. Executives realize if they lose their jobs, the probably can’t get another one.
To work around those corporate dynamics, senior leadership stakeholder commitment is necessary for collective transformation—the senior executives in one company partnering with the senior executives in the other company. Lech reflected on the qualities he sees in leaders who make this happen:
Leaders who do [collective transformation] have several traits in common. They are not selfish. They believe deeply in the business, and in the greater cause—not just themselves.
They are relentless about creating this environment. Today’s environment is “flavor of the month”, so it takes executives being relentless to get new messages through. They stuck to the message and were consistent.
Leaders who are looking to please others are victims of their own strategies. Leaders who don’t take that innovation role themselves (who delegate it) cannot make these changes.
Lech cited a variety of ways that companies can create this collaboration. Some create external development departments and programs. Others establish an “entrepreneur in residence” who serves as the company’s lightning rod. Some companies set up an independent arm that reports to a senior executive who can cut through the resistance. Corporations can set up internal and external competitions with a separate, unbiased
group evaluating the results.
How do employees take to these changes? Not always well. “This pisses off a lot of people inside,” Lech explained, but strong leaders forge ahead nonetheless.
At the Edison Awards, we see this dynamic in action each year, where executives from Fortune 500 companies and dynamic startups connect in ways that spark profitable ideas. Attendees cite the unique networking opportunities at the event as one of the main benefits of attending.
Are you a part of such a collaborative teaming? If so, your company may be eligible for an Edison Award. The Collective Transformation Award is presented to two partner companies that together have conceived and developed a transformative innovation through collaboration and co-creation. This year’s nomination season closes December 12, 2014.