It’s an often-overheard observation: ‘big companies lack the energy and agility for true innovation’. I have been thinking about this a lot. It seems an empirical fact that large numbers of employees, multiple generations of IT-systems and compounded portfolios do something to a company culture. It seems to significantly reduce their creativity. In a Danish context, I can only really think of one major company that managed to deliver a significant product that changed the market – Danske Bank’s MobilePay, the app that enables you to make quick and easy money transactions. It makes one think: is all other disruption then done by start-ups, bringing in the real agility?
Are large corporations cut out for innovation?
Most larger corporations are certainly on the lookout for fintech startups - ready to hit that ‘Buy’ button when the right disrupter presents itself. However, certainly they would have preferred to be the creator rather than the purchaser. So why don’t they create?
The answer lies in the community, it seems. Innovation, at its core, demands the dedication of the entire organisation – including those who’d rather concern themselves with running the business than contemplating on the market of tomorrow. The challenge facing large corporations is that you can’t hire ingenious entrepreneurs, set them up with a desk at your headquarters and then sit back and watch them innovate. Entrepreneurs need inspiration and a community that inspires discussions and challenges them to ventilate and bounce ideas off – innovation demands a culture that simply seems inconceivable in large companies.
The fact that large companies don’t have the culture to facilitate innovation, may in itself seem harmless, because instead they offer a type of culture that ensures stability and sustainability. But the omnipresent threat of ‘Disruption’ – hungry start-ups introducing a product that may not only threaten your position but can take and devour significant chunks of your present market, makes it necessary for all businesses to at least consider how they can better facilitate innovation within their territory.
So let’s take a look at what these companies should change if they want to facilitate innovation.
Close the gap and find yourself disrupting
Here in Valtech we call it The Experience Gap, when we talk about innovation and actual disruption. What it means is this: if you want to disrupt, you need to find the place where your product can close the gap between what people feel they need and that what isn’t there. The gap between the good old supply and demand.
We’ve all been there: Standing in the pouring rain waiting for an expensive taxi. Booking an overpriced hotel room. The hassle of wiring money to your friend on the spot. There was no supply on the market to better these experiences. But along came Uber, along came Airbnb and along came MobilePay - tending to previously unknown demands and thereby closing the gaps and interrupting markets.
But let’s return to the point of start-up culture and why big business can’t feed these ideas. Is there really no way?
How Co_lab facilitates start-up culture and disrupts the big-business mindset
Our opinion is that there should be a way. Having witnessed how efficient the agility, high energy, fail fast, lean start-up formula is, while at the same time being very aware of the difficulties of establishing a start-up culture in a well-established billion-dollar business, we created Co_lab. Co_lab is a start-up laboratory for established businesses, located right alongside our Valtech office in Copenhagen. It’s a space that brings together some of today’s strongest start-ups while at the same time keeping its doors open to smaller teams sent out to innovate on behalf of bigger corporations.
This seems to be the perfect space for true innovation. It lets start-ups infect these disconnected teams with their agility, energy, speed, creativity, ferociousness and true go-getter attitude. And on top of that, they have experienced management- and digital consultants available right alongside them.
It might take 3 days, 3 weeks, 3 months – but a new product will hit the streets running at some point. That new product is set out to benefit those who need it but perhaps don’t even know it yet. It’s time to stop those prolonged, overcomplicated and tedious processes of development, and time to just get sh.. done! – Co_lab is the place for it.
The road ahead
Needless to say, innovation is not for all. But with the right guidance and the right settings, even the giants now have the opportunity to tap into that start-up energy and grab the bull by the horns instead of merely closing their eyes and hoping for the best while the profit goes to the rest.