Scouting for Corporate Innovation
the High Five (Rules) for Successful Corporate Strategy in Scouting for Innovation.
Article By Hannan Carmeli, October 2020
Corporates are eager to innovate. But they also have a business to run. They often have capable (internal) R&D teams – but can these teams provide true out-of-the-box innovation? If this was their main mandate – maybe. But it is not. R&D teams are usually focused on materializing a set roadmap, and are often inundated with attending to customers’ requests, complaints and other rush jobs.
So how can such a corporate truly engage with innovation and seek breakthroughs which are relevant to its products and business?
The answer is through OPEN INNOVATION, where open innovation is best supported by cooperating with nimble and aggressive STARTUPS, and where startups engagements with CORPORATIONS are best facilitated through collaboration with VC platforms or innovation hubs.
This article focuses on a set of rules which were polished through a few joint projects theDOCK performed with leading maritime corporates over the last 3 years. A recent one took place with thyssenkrupp Marine Systems and ATLAS ELEKTRONIK. These were cases in which theDOCK bridged the gap between these well-reputed corporates and creative startups, scouting for technology solutions that attend to the corporate's needs. The desired outcome was to get screened ideas on the corporate radar screen.
Here are the five rules:
1. Off to a good start. Answers are usually as good as the questions asked. If you seek great solutions, make sure to present great challenges. Bold, inspiring yet clear and down to earth. Ensure the challenges as well as the overall screening and selection processes are well articulated.
2. Smoothly and accurately cross-translate critical messages. Technology entrepreneurs may not speak the corporate language and vice versa. They often have totally different cultures and in many cases, the startups may have addressed “adjacent” verticals but do not have experience with the relevant marine/maritime application. Proper “translation” needs to take place between the operational domain (of the challenge) and the tech talk (of the potential solution).
3. The challenge of inferring a potential match. Both sides – the corporate seeking innovation, and the startup proposing such (innovation) need to apply a good dose of vision (and imagination) in inferring a potential match. This requires healthy abstraction, induction, and deduction. An expert middle entity (integrator) is often needed to help with this, as in many cases the startup’s ideas are merely a “diamond in the rough” which without polishing, may not shine with the spark visible to the corporate eye.
4. World-class business people and world-class scouters:
World-class business people - a good and reliable access route needs to be guaranteed to the business experts within the corporate organization. This is critical for a successful screening process, and even more so, to assure buy-in and facilitate successful onboarding of the chosen solutions.a.
World-class scouters – to successfully scout for great solutions which address the presented challenges, top-notch technology startups need to be attracted. An important component of attracting a startup is to understand their funding trajectory related to their solution. Yet, corporates do not want to be “bothered” with it. Not at the beginning of the discussion, and definitely not as a pre-requisite. The scouting platform has to make up for it, as the startup will always look for the “holy grail” – path to market and opportunity for funding. In those cases where the scouting platform also has a VC arm, together (Corporate and VC) provide for what entrepreneurs often call – a RUNWAY. And actually, this cooperation may provide them with not just a long runway (funding) but also equipped with powerful boosters (market validation and commercial agreements) which together will unleash the potential for a powerful takeoff.
5. Good enough is actually not good enough…
Try to serve as both (market expertise as well as acting as CVC or Corporate Accelerator) and you risk running into different conflicts.
The drive for excellence will be best served by connecting experts in the marine business domain (corporate) with experts in technology screening and funding (scouting platform which includes the needed databases, screening methodologies, market reach, etc.).
Passion and great rapport across the combined team is always a pre-requisite in the pursuit of excellence.