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How GE, Target, And Levi’s Keep Their Cool

What happens when big brands partner up with innovative startups.

How GE, Target, And Levi’s Keep Their Cool
[Illustration: Miguel Montaner]

In his new book, Unleashing the Innovators, Jim Stengel, former global marketing officer at Procter & Gamble, studied some 200 “odd couple” partnerships between established companies and tech-focused upstarts. Here’s how the arrangement helped three veteran brands rediscover their vitality.

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GE Kills Its Darlings

The alliance: To become more nimble in sectors such as energy, health care, and manufacturing, GE created GE Ventures, a four-year-old fund that backs early-stage startups.

Unleashing the Innovators: How Mature Companies Find New Life with Startups

The result: Working with smaller companies has helped GE identify up-and-coming technology—and spurred it to reevaluate its own practices. “GE had an ironclad performance system,” says Stengel of the company’s long-standing tradition of quarterly and annual employee reviews. After observing the more flexible feedback process at the startups it backed, GE ditched its system in favor of one that allows for real-time feedback and coaching. “They’re now thinking about how they can make their compensation much more tailored, personal, and flexible,” Stengel says.

Target Makes Room For Improvements

The alliance: When he joined Tar­get as CEO three years ago, Brian Cornell confronted “bleak challenges,” writes Stengel, including flat revenue and digital disruption. To help the retailer move more quickly to launch new technology and products, Cornell teamed up with the entrepreneurship network Techstars to establish an in-house accelerator.

The result: A handful of Techstars companies—including Branch Messenger, a scheduling app for hourly workers, and Nexosis, an AI-backed retail-trend forecaster—have pilot programs within Target. Just as significant: Working with startups has made the retailer more supportive of risk-taking. “As a culture, we’d become very good at shooting holes through ideas,” Cornell told Stengel. “Yet working with these leaders and watching them start the conversation by asking ‘what if’ became incredibly energizing and invigorating.”

Levi’s Gets Over Its Fear of Failure

The alliance: In 2014, James Cur­leigh, executive vice president of Levi Strauss and Co., was looking for ways to make the denim brand “both iconic and innovative again,” according to Stengel. After Curleigh expressed his interest in wearable technology to Google executives, the companies partnered to create a connected garment.

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The result: This fall, Google and Levi’s will release Project Jacquard, a denim jacket embedded with conductive thread that can control mobile devices. Stengel says that Levi’s got more than a product out of the collaboration. Working with Google pushed the clothing brand to develop a new tolerance for setbacks, such as when it discovered that the original fibers it had developed didn’t hold up in stress tests. “[Google is] far more comfortable with failure than we are,” Paul Dillinger, head of global product innovation at Levi’s, told Stengel. “Google simply saw this as an opportunity for them to solve another problem.”