Outside innovation has become more and more of an imperative for large, global enterprises over the last four years. These Global 2000 corporations recognize that disruptive products and business models usually doesn’t come from within. They’re looking to startups for growth and competitive advantage, as well as to strengthen all aspects of their business, from the most intractable problems to existing initiatives.
Consider the fact that enterprises invest massive resources in threats like cyber attacks, but none of the big events of late have put them out of business (e.g. Sony, Target). On the other hand, corporations are not investing nearly enough into startup and emerging technology innovation, which have pushed some of the largest companies out of business or put them at risk (e.g. Kodak, Nokia, Borders, etc.).
A few corporations recognized the need for outside innovation early and began testing, learning and building to future-proof themselves as fast as possible. Unilever has been one of the most prominent leaders in this space, and KITE has been fortunate to support these efforts since the beginning.
After releasing their ‘State of Innovation’ white paper, we interviewed Jonathan Hammond, head of the Unilever Foundry, which allows startups and innovators to engage, collaborate and explore business ideas with Unilever and its 400+ brands around the world. Read on for his valuable insights, case studies and advice for other corporate innovators.
Jonathan Hammond: The relationship between corporations and startups has evolved rapidly since the Unilever Foundry was founded over three years ago and the importance of innovation and collaboration has grown by a huge scale. So we wanted to deep dive into the industry, see what else we could learn and launch the State of Innovation.
We all now operate in a far more disruptive, agile and responsive environment and large companies need to approach innovation from different angles. We know that startups can help to drive this inspiration and as such, partnerships between the two are becoming more commonplace.
Our ‘State of Innovation’ white paper is a global study that looks at how the relationship between corporates and startups will continue to evolve as the Unilever Foundry continues its journey looking for exciting new partnerships.
Unilever was one of the first companies to create a global startup partnership platform so we’ve had over three years of learnings to apply to the questions.
We believe innovation partnerships between corporates and startups have reached a tipping point and as a result, collaboration can no longer be viewed as an optional extra or an experiment to boost reputation.
We also wanted to use the research to address the rise of ‘tech tourism’, as well as structured programs. The spectrum has exploded to incorporate everything from casual approaches designed to generate publicity, to schemes created to drive new revenue streams and solve problems at the core of the business with ideas that can scale.
The report reaffirmed our belief that startup and corporate collaboration is highly effective for fueling innovation and pioneering business solutions when conducted in the right way. 90% of corporates already working with a startup expect to continue to do so in the future whilst four out of five (80%) corporates believe that startups can have a positive impact on a large company’s approach to innovation.
In just over three years, we’ve launched over 100 pilots, with two-thirds of our brands seeing an increase in revenue and three-quarters generating above-average campaign engagement. We’re looking ahead to our next stage of innovation as we continue to pioneer with new technologies and ideas for our brands.
As more and more corporates begin to roll out these programs, it’s important that they’re strategically focused. For example, ‘tech tourism’ lacks the ability to impact core business aims. ‘Tech tourism’ often constitutes meetings with no particular goal and little likelihood of developing into a valuable partnership. This activity can range from exploratory trips to tech HQs to engaging in ‘innovation theater’ to manufacture instant PR gains. The research has cemented our belief in structured programs winning out.
While the positive effect of corporate collaboration is already recognized by many startups, our research found that only 46% of startups who have not worked with corporates are likely to do so in the future. However, this rises to 91% among those who have experience of working with corporates, demonstrating that with greater access to partnerships, startups can fully understand and embrace the positive impact on their business.
Already advancing the trend for creating new shared working spaces, Unilever Foundry has launched collaborations with co-working spaces. In Singapore we have launched LEVEL3 in partnership with Padang & Co, and in Dublin we’ve partnered with existing co-working space Dogpatch Labs.
As found in our white paper, co-working spaces are proven to promote collaboration and fuel innovation through uniting businesses, startups and entrepreneurs. Working side-by-side has a positive impact on culture and we’ve found this to be the case within our own co-working spaces.
Allowing for greater proximity with startups and encouraging new ways of thinking, it allows us to be brave, take calculated risks and experiment.
Unilever Foundry strongly supports a structured approach where progressive formal partnerships trump “innovation theater.” We have a unique focus by taking established startups on the route to scale up using a Pitch-Pilot-Partner approach to dramatically cut the time it takes to get a new initiative to market. This approach allows us to learn and adapt at each stage. We invite startups to pitch against a brief, select one and move it into pilot, if it works then we scale into a partnership.
The Unilever Foundry works hard to ensure all of these new exciting ideas have practical application for Unilever to solve genuine business challenges, so we can be sure these partnerships will benefit our brands and most importantly, consumers.
We recently looked back at our first 100 pilots globally with startups see where we are now. Over 48% of our pilots resulted in a longer-term partnership, and 45% of these then rolled out into multiple markets. So, while there are plenty of big brands who realize the possibilities, innovation and creativity that arises from working with startups – we also know our focus on scaling up makes us different.
One of our most recent partnerships has been between Skip, the global laundry brand, and emerging French startup and laundry app, Cowash, to provide the ultimate sharing economy led laundry experience. Skip formed the partnership with Cowash following a competitive pitch through the Unilever Foundry, as part of a search across Europe for a new business model in digital laundry services.
Additionally, global dressings brand, Hellmann’s recently partnered with on-demand delivery startup Quiqup to deliver fresh ingredients to consumers at the click of a finger. Through Unilever Foundry and our unique pitch-pilot-partner process, Hellmann’s and Quiqup were identified as an ideal match for a project that directly engaged with a new audience and to trial a direct-to-consumer model.
We will continue to seek opportunities to partner with the world’s best startups and experiment with new business models, while continuing to scale Unilever Foundry across the globe.
Our advice would be to create a formal process based on mutually beneficial goals to drive core business impact. What makes Unilever Foundry successful is the ability to get into that experimental and collaborative mind-set and leverage unique ways of thinking.
Through blending the needs of both corporates and startups, the research identified four key elements that make collaboration a success in the long-term:
KITE empowers Global 2000 enterprises to map, monitor and manage outside innovation. Join your peers from Unilever, Visa, Molson Coors and more: Subscribe to our monthly Corporate Innovators newsletter to receive top innovation news, snapshots of proprietary trends, case studies, tips, curated views of startups and event guides.