Jack Welch, former CEO of GE once said, “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”
We’ve seen “the end” happen over and over again as advancements in technology have fundamentally changed entire industries before businesses can catch up–remember Blockbuster?
As a result, many corporations are feeling the pressure to increase the pace of innovation or risk being disrupted. Enter corporate accelerators.
Corporate accelerators, designed to power innovation opportunities in conjunction with early-stage startups, are a staple in any well-rounded corporate innovation program. When done correctly, they are capable of increasing brand awareness, encouraging experimentation, and opening the door to potential partnership or investment opportunities for corporate brands.
These programs benefit startups, too. Creating connections, gaining valuable feedback from seasoned executives, leveraging resources to grow at scale, developing partnerships, and obtaining investment are all major advantages for these young companies. That said, startups do need to make sure they are finding the right opportunity that enables them to grow–but this goes both ways. Benefits for both corporations and startups can only be realized when opportunities align with long-term business objectives.
So what should corporate brands be doing to ensure that they’re getting the most out their accelerator program?
Accelerator programs can be run in many different ways depending on the needs of each individual company, but I believe there are four fundamental things that all brands should do to ensure that they are setting themselves and the startups they partner with up for success.
The overall design of an accelerator program is critical to driving impact for both the corporation and the startup. Corporate accelerators aren’t just about adding the coolest startups to your portfolio. In order to be truly successful, brands need to clearly map out their strategy and goals, and anticipate outcomes.
For instance, Pearson’s corporate accelerator program, Pearson Catalyst for Education, was designed with a very specific set of strategies in mind. Vice President of Innovation Partnerships & Developer Relations Diana Stepner works directly with senior leaders across Pearson’s lines of business to identify challenges that, in turn, determine the approach for the program and corresponding startup connections. Having a clearly defined strategy from the beginning has led to close collaborations between Pearson and the Catalyst startups, with three of out five in the first cohort having established longer-term partnerships.
Traditionally, most large companies have resorted to developing their corporate accelerator programs within their own walls. This doesn’t work anymore. Nielsen published a report in 2011 that said innovation stifles when kept inside corporate walls, and brands are finally starting to catch on.
It is so important for brands to get out and innovate with the world around them. What would be the upside for a startup, entrepreneur, or an internal employee if the environment restricts the creative process? Brands must make sure they are building their accelerators in an environment that both inspires internal employees and attracts the startup community. This will also give startups a better sense of autonomy, which is crucial to a program’s success.
I highly recommend developing an accelerator within an already existing tech ecosystem so that, instead of spending time building one from scratch, you can focus on your core competencies from the onset.
The one constant about the business landscape is that it’s always changing. Almost every day there is something new to consider: Should your company start accepting bitcoin? Does it make sense to develop an app for the latest wearable device? How can your business model adapt (and succeed) in a world where everything is connected?
When developing an accelerator program, create a solid process up front for quickly addressing changes in your industry. Know whom the decision makers and players are and be prepared to make important choices fast.
This level of flexibility is often what holds corporate brands back in the innovation process, but it’s also something that startups do very well. As long as internal employees are capable of rising up to the challenge, startups will be right there with them.
While accelerators are traditionally thought of as working with the startup community, what about the ideas and opportunities identified by employees?
Empowering employees to act quickly and decisively, companies need to empower the employees that are in charge of driving innovation to think like entrepreneurs. Within a corporate accelerator, internal employees should be given the opportunity to further develop a concept from prototype through to a properly built solution. The startups in your program might have some fantastic ideas and/or products that could add significant value to your business, but if your internal employees don’t have the power or experience to take those ideas to the next level, what good does that do anyone? Involving third parties, like design and development firms, into the equation is often a good idea too.
While some have expressed skepticism around the effectiveness of corporate accelerators, I believe that the skepticism comes from an overuse of the phrase and a lack of understanding of what corporate accelerators are actually intended to accomplish.
The strategic intent of any accelerator must be to push the boundaries of the current market for any particular company, and those that approach these programs with an ill-defined strategy will fail.
However, being smart about the fundamental elements required to build a strong accelerator program–long-term strategy, physical environment, increased flexibility, and a sense of intrapreneurship–will enable both corporate brands and startups to work together to challenge current solutions and inspire new approaches.
—Michele McConomy is the vice president of RocketX, the corporate innovation program at RocketSpace, a technology campus in San Francisco. With over 13 years of experience in innovation management, McConomy helps facilitate relationships between large corporate brands and tech startups.