Big Companies and Small Startups Need Each Other, But Their Cultures Can Conflict. Here’s How They Can Work Together.
December 21, 2016
GE Reports Canada
When startups and established companies partner, the potential for conflict is as great as the opportunity for synergy and growth. Large corporations often achieve success through careful planning and long-term decision-making. But when they work with startups, some of those same habits may cause friction.
“There is a tremendous win-win to be attained here if the large corporation understands how to leverage these opportunities,” says Gandeephan Ganeshalingam, leader of GE’s Customer Innovation Centre in Calgary.
The path to the win-win begins with acknowledging conflicting values.
“Big corporations tend to over-process relationships and innovation,” says Ganeshalingam. “We have processes and steps that we need to take because of the risks involved with our brand name. That takes time.”
Time is something that startups can’t afford to waste. A small enterprise may not see much value in the processes that are part of a larger company’s way of doing business, and startups may be willing to take risks that their more-established partners find reckless. That’s a recipe for frustration and failure.To avoid this fate, the two partners need to recognize each other’s priorities and create a working relationship that fits the needs of both. According to Ganeshalingam, successful collaborations between startups and their corporate partners must be structured. Also, it helps to have a referee.
The innovation accelerator Zone Startups Calgary provides GE and its startup partners with both a structure and a referee. Ryerson Futures, a non-profit affiliated with Ryerson University, helps companies inside the program with hands-on strategic and tactical guidance, and it also plays an intermediary role. The team at Ryerson, versed in the cultures of both big business and startups, explains each partner to the other, and ensures everyone’s moving in the same direction.
“We all want the same thing: to bring a value proposition to our customers as quickly as possible,” says Ganeshalingam. “This structure lets us do that.”
GE also operates another program to facilitate collaboration, called FastWorks. By applying lean startup principles to a global company, Fastworks decreases cycle time for product development, explains Ganeshalingam.“Working within ZSC and with GE has been immensely rewarding,” says Scott Benesh, COO of Veerum Inc. Veerum entered GE’s innovation program as two distinct companies: True Site View Inc. and SmartMat. Within six months of joining, the companies have increased their value proposition by merging, which allowed them to win several major oil producers as clients.
“Working with GE taught us how to approach our company more strategically—to think about how to grow the company, not just develop the technology,” says Benesh. “And, most importantly, how to engage our customers in a more meaningful way.”
The learning wasn’t a one-way street.
“Working with startups like us rubs off on GE,” says Benesh. “Small companies have different models and different drives, and GE sees that and feeds off it. They feed off our ambition and innovation and we feed off their structure in growing the company. It’s a good symbiotic relationship.”
These partnerships are good for startups and for corporate partners alike. But the biggest beneficiary? Their shared customers.