By Gabriela Matic, cofounder & director, Metta
Collaborations can be hugely rewarding for both a corporate and a startup. Corporations can take advantage of the fast, agile and disruptive nature of startups to speed up innovation and time to market of new products and services, while for startups a corporate partnership can lead to healthy funding, access to useful resources and immediate customers, as well as a positive boost to their reputation and brand.
On paper this pairing should result in the ultimate dream team. But like many relationships that appear at first to be a match made in heaven, niggles, challenges and even resentment can kick in when things don’t go as well as expected and the honeymoon period begins to fade away.
It is suggested by varying sources that anywhere between 50 to 80 per cent of business partnerships fail within their first year after one or both partners fall out of love with the collaboration, while McKinsey data reveals that as many as 72 per cent of startups are not fully satisfied with their partnership.
McKinsey’s research has also identified key reasons why startup-corporate partnerships deteriorate, including cultural and technological clashes due to different working styles and conflicting technical infrastructures; lower than expected impact; and high administrative effort of integrating external partners and managing multiple decision-makers.
This data is echoed by a World Economic Forum whitepaper that highlights complications, such as agile versus static work processes, different work ethics and different levels of appetite for risk. Another common problem cited is that startups leaderhship teams often find themselves communicating to employees (who lack decision-making power) much further down the hierarchy instead of more senior decision makers
So, what’s the best way for two very different organisations to navigate the ups and downs of integrating their different processes and temper the ensuing culture clashes in order to ensure lasting mutual benefits?
Bring in the corporate champion
A corporate champion is usually an experienced employee with vast industry experience, a strong network, close contact with – and perhaps even influence over – key decision-makers and, most crucially, is open to innovation.
Because startups often don’t have insight into a corporate’s internal processes and structures, or silos of communication and internal politics, corporate champions can serve as translators and moderators over the difference in culture and conflicting expectations.
Ideally, these champions are also not too detached from the business units but can still give an ‘outsider’s’ perspective. An outsider can ‘typically innovate by acting on insights and experiences that are new to the context they enter but familiar to the context they come from’ and can challenge the founder and identify constraints early. This can go a long way in helping startups understand internal processes and what they have to do to get ready.
Personal relationships are also key: having regular technical chats or progress meetings as well as individual catchups can help to build relationships. Regular meetings can also help to bridge any gaps between teams, enable relationships within businesses to be strengthened and ensure a balanced and motivated work environment.
How it can still go wrong
While a corporate champion can prove to be very helpful and game changing, a startup might still struggle for varying reasons.
Sometimes it all comes down to the product and a startup simply isn’t always able to provide the right solution for the right problem at the right time. It is commonplace to think that the latest technology or automotive processes will solve everyone’s problems. But, while they may offer a fantastic solution, sometimes it’s for a problem that the corporate isn’t even experiencing.
What also often happens, is that a startup doesn’t spend enough time actually diagnosing the corporate’s needs to understand the problems, spending far too much time focusing on pitching their solution or product. Not diagnosing the company’s problem before attempting to offer a solution is a simple – but far too common – ‘missed the boat’ moment.
Finally, let’s not forget that the corporate champion has their own raison d’etre and may no longer be able to engage with people when they move on to pastures new or take on a different job role that’s irrelevant to the partnership. If the startup only had this one contact point this can prove problematic and lead to a breakdown in the corporate-startup communication channels.
Corporate champions are a vital liaison, providing a crucial and much-needed perspective on processes, people, culture and values. But essentially it is all about teamwork. Both startup and corporate need to listen and understand the multiple motives for collaboration. The startup needs to be at the right stage, have a clear value proposition and be prepared to adapt and really dig into the needs of the corporate, making their champion and client look good in return.
Gabriela (Gabi) Matic is the co-founder and director of Metta, which has supported startups, industry and governments with sustainable technology-driven innovation since 2019. Gabi is passionate about making businesses more sustainable and creating meaningful change for teams and individuals, and has supported founders in all sorts of industries, including the aerospace sector, for many years.