Posted: Thu 22nd May 2014
British corporates are attempting to capture the startup risk-taking mindset in order to influence their own long-term success.
In a world where billion dollar businesses can emerge in a matter of months, firms like John Lewis, M&S, Cisco, Dell and Telefonica have all invested in a new breed of initiatives that give them the opportunity to incubate, accelerate and absorb new ideas and technical innovation directly from startups in order to stay ahead of the pack, the audience at Small Business: Big Opportunity heard on Tuesday.
JLab, M&S Digital Lab, Cisco's IDEA London, Telefonica's Wayra are all examples of how the largest firms are venturing in this new, fast-moving world. Or they are tapping into independent incubators like The Bakery, London, which offers startup insight to fee-paying corporates looking to interrogate and test new territory.
Alex Dunsdon, co-founder of The Bakery said: "Large companies have a lot of big ideas on their walls that never get made, even though the intention is there. The Bakery has an ability to bridge that gap. We're the match between big and small."
Ben Dowd, business director at Telefonica O2 UK said: "We've helped 350 startups globally and 50 businesses have gone through our Wayra Academy in London. We want to be a maverick, we want to take risk but it's hard to do when you are a large organisation. Wayra is a way for us to bridge that gap between the startup and large enterprise."
Dowd explained the Wayra initiative gives Telefonica an 'optionality' that wouldn't otherwise exist in the context of the corporate need for a repeatable, scalable business model.
By contrast, Professor Tomas Chamorro-Premuzic, founder of META Psychometric Measure of Entrepreneurial Talent and Abilities and UCL professor of business psychology suggests big firms should rather look to create internal agents of change - or intrapreneurs who will help the business retain its competitive edge.
He said: "Most companies don't know who their internal innovators are."
Pinpointing who these people are and then following through by creating the right conditions and the organisational culture to support entrepreneurial behaviours and managing them appropriately is important - otherwise this exercise is just a passive intervention and you will not retain them, he said.
The characteristics are creativity, vision, proactivity and opportunism.
He added: "Flourishing entrepreneurship is a sign that people with the characteristics of an entrepreneur are not being nurtured elsewhere, within companies. If companies don't embrace entrepreneurial thinking, they are destined for extinction."
Startups described how transformative working with a big firm has been for their business. Startup founders like Lucy Woodhouse, co-founder of new Greek yoghurt lollies firm Claudi & Fin and Jo Hockley, founder of Toddlebike said the experience of working with a large corporate had been transformative for their businesses.
Lucy said: "It's an odd thought to know that a little firm like ours can be negotiating on the same level as Unilever. The challenge for any business owner is to find the right buyer and then do the right deal.'
Simon Blagden, non-executive chairman of Fujitsu said his firm had developed a policy of working with small firms - and paying them within six days. He says it's the least bigger firms can do to help UK PLC to stay competitive.
He said: "Half of all our suppliers are SMEs. We are desperate and hungry for more tech companies to come through in the UK. Most of our news ideas are coming from these new companies.
"It makes no difference to this business to pay our small business suppliers in this time frame, and it shouldn't to other firms."
Finally M&C Saatchi's worldwide CEO Moray MacLennan explained why the advertising firm described itself as a federation of entrepreneurs that are employed on the basis that they have a desire to make an impact, have an effect and make a difference to the world.
He said this was an important consideration because: "If you've employed the wrong person with the wrong approach, before you know it, they've employed two more people and the company is not going the way you want it to."
He warned companies should 'never let a strategy get in the way of a good idea.'
Minister for Enterprise Matthew Hancock concluded the event, saying finding ways to allow the small business community to flourish and for bigger firms to work with small was 'mission critical' for the Government and that the Government was 'listening and learning'.
To download the programme from our Small Business: Big Opportunity event, including results from our survey about how small firms are working with big businesses, click here (PDF, 122 KB).
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