The first two posts of this new column highlighted new ways that forward-thinking organizations are deploying innovative solutions, business models and internal capabilities through startup partnerships. These organizations are actively scouting startups against a clear set of strategic opportunities and challenges, and are showcasing their desire to engage startups openly and collaboratively .
Of course that isn’t the end of the story. Too many promising partnerships end abruptly at a seemingly impenetrable wall, or slowly wither amid organizational overhead and apathy.
By contrast, organizations which can partner successfully have developed a superpower to exploit growth and innovation opportunities that are inaccessible to their competitors. Consider the transformational outcomes if you can apply your streamlined partnering and go-to-market capabilities to ‘core’ business initiatives. These returns are exponential.
Here are some important guideposts for creating repeatable outcomes and realizing value for your organization through effective startup partnerships:
- Validate the problem or opportunity. To be clear, this is NOT making a hypothetical business case to justify moving forward. Rather, it is testing the hypothesis that the focus and scope of the project is sufficiently valuable to justify the investment of scarce time and resources to explore. The test should be considered as an opportunity cost against other priorities. Killing bad projects early is the goal, and makes it easier to stand by projects with compelling and demonstrable evidence of success as they run into inevitable headwinds.
- Establish executive sponsorship and organizational will. Do you have a leader who will stand with you through wins and losses? Is your organization ready to see a partnership all the way to commercialization or deployment? If not, it’s worth spending the time to build this alignment before starting down the path. Go-to-market stakeholders such as marketing, risk-and-compliance, legal, procurement and others should be engaged early so they can be your internal partners in the project – and beneficiaries of the success.
- Be honest with your internal stakeholders. It won’t pay to sugarcoat projections on expected outcomes, or minimize the expected effort and challenges. Focus on meaningful and reasonable hurdle rates at clear an incremental milestones for problem validation, prototyping, pilot, and eventual launch.
- Be honest with your intended partner. Be transparent on your best, worst, and most likely cases as a spectrum of potential outcomes. Know which milestones and hurdle rates will signal additional investment – or the intentional abandonment of a project. The worst failure is one that is allowed to perpetuate. The startup and the startup ecosystem will respect you for it and see this intentional behaviour as a sign of your viability as a partner.
- Provide coaching and stewardship. Your promising partnership will inevitably run into challenges. You must be actively engaged with your internal and external partners to manage the issues and the relationships through those challenges. You should also think like a good board of directors, scanning the horizon for issues ahead so they can be handled proactively. There are stages where you need to hand off responsibility to others – but you can’t afford to hand-off the accountability for outcomes.
Being a great (startup) partner isn’t easy – but the direct returns can be well worth the investment, and you will also have helped your organization become more effective and more adaptable than ever before.