Companies that last are those that constantly challenge themselves, their operating model, and the value they bring to their customers. Startups are very good at this, by necessity, but it’s equally important for corporates and enterprises. Corporate innovation allows big players to use startup-style hustle to keep evolving with the quickly changing landscape.
Working in the innovation, we’re constantly made to practice what we preach and disrupt ourselves. Creative HQ, the delivery partner for the Kiwibank FinTech Accelerator, has had many incarnations: providing incubation services; acting as a startup hub for the Wellington region; and delivering every flavour of Accelerator programme. Seriously, from a hard-tech manufacturing accelerator, to a female-founder-focused programme, to GovTech accelerators, Accelerators-of-one, to internal corporate accelerators, to this FinTech programme in partnership with Kiwibank, and soon onto an accelerator in the Energy space. Creative HQ has delivered it all.
Why do we keep iterating? One, we’re easily bored. Two, we can’t do better if we don’t change. Three, the market for innovation services in New Zealand is growing rapidly, particularly in the corporate sector. Innovation has been a focus for corporates in other, larger markets for many years. But it’s just beginning to catch fire here in New Zealand. And we couldn’t be more excited.
Corporate innovation, corporate entrepreneurship, innovation labs, intrapreneurs…
There are as many different corporate innovation models as there are companies to adopt them. And what works for one company, won’t work for the next. In many cases, what works for one team or one project won’t work for another within the same organisation. That said, I’ve seen the accelerator model often work well as a starting point for corporate programmes. The model is flexible, easy to understand, and aligns with what corporates are looking for from their innovation initiatives. Corporates can provide funds that wouldn’t wouldn’t otherwise be available to a startup, as well as a tonne of industry expertise and connections.
internal vs external accelerators
Let me dive a little deeper. There are two broad classifications of corporate accelerators: internal and external.
Internal accelerators take employees from within an organisation with entrepreneurial flair and give them a set period of time to work on a project in a startup-style teams. This is a real win for employees and employers.
Working as part of startup-style unit gives employees the opportunity to spread their wings and use a much broader range of skills. We’ve also noted that it’s an empowering experience for employees who get to see the end results of their work and really own their results; as opposed to working within a silo in the organisation.
For the company, an accelerator is a great (and comparatively cheap) way to trial a new product or market. Within three months or so, they’ll have validated or invalidated a value proposition and have a clear path forward. How do projects in acceleration make these findings where their mothership organisation can’t? Smaller units dealing with a particular challenge or opportunity holistically are able to do the one thing that I’ve observed every company struggle with once it gets to a certain size—talk to its customers.
External accelerators are a bit different. A company will sponsor an accelerator, looking for people or teams outside their organisation that are working on ideas that might improve the company’s offering. Companies often negotiate a first right-of-refusal with teams brought into an external accelerator; giving them an edge on their corporate competitors if the startups’ ideas are any good. It’s also an amazing opportunity for a company to see at close-quarters what the future of their industry might look like.
So which is the Kiwibank FinTech accelerator? It’s a bit of both. A hybrid, if you will. We have six startup teams and two corporate teams. It’s a new model, but it’s working magic. It’s been great to have both the startup and corporate teams sharing learnings about the industry and the landscape. For the corporate teams in particular, it’s allowed them to live and breathe startup world in a way that can be hard to cultivate in a fully internal accelerator.
True innovation requires being prepared to cannibalise your current business. If a company isn’t prepared to disrupt itself, it’s competitors surely will. This is another benefit for corporates running accelerators; they can see what or who is coming to take their customers.
For corporates, it can be hard conversation to bring to the table. Innovation will always be confronting for those who are thriving in the staus quo. However, with technology moving faster and faster, all companies will need to embrace these tough calls to stay relevant and retain their market share.
A company always needs to be looking to reinvent how it meets its customers needs, how it brings them value, before someone else does. A great example of this aggressively forward thinking is UPS and Fedex developing and scaling up their 3D printing operations. One day soon, customers who at the moment are sending and receiving goods require physical . See what both companies realised is that their customers tend to care about receiving their goods quickly and cheaply, in the majority of cases, it doesn’t matter how the goods get from A to B, whether that’s by freight or over an internet connection.
The counter example (to cite a classic) of a company afraid to cannibalise it’s current model is Kodak. Kodak is often (chastised) for clinging to film and becoming obsolete in the digital age, despite dominating the camera market a decade earlier. Few people realise that a Kodak employee invented and prototyped the first digital camera way back in 1975. Kodak could have been well ahead of the game, but wouldn’t commercialise it. The success of digital could have meant the demise of film, and Kodak weren’t prepared to spark that change. They liked the status quo.
It’s easy to look back from 2017, and label Kodak short-sighted. But calls like that are still being made today within big corporates, at every level. Fear is powerful driver and change will always be a threat to something or someone. However by fostering innovation, corporates can get in front of the curve and future-proof their offerings. Because the thing about the status quo, is that it’s almost always overrated and more fragile than you imagine.