A decade ago, when asked who Thomson Reuters’ largest competitors were, I would have named the list of usual suspects—other large global media and technology giants that provided customers comparable services and products to our own set.
While many of those competitors still remain, the pace of innovation and lower barriers to entry has enabled startups to compete in market segments that were previously inaccessible.
This rapidly changing landscape makes for a much murkier definition of ‘competitor;’ we’re no longer just dealing with a few known heavy hitters, there are now hundreds of startups of varying size and shape all jockeying for a slice of the pie – and while a percentage of them will fail, many of them are brilliant.
With so many players now in the game, you’d get whiplash trying to take them all head on.
Technology evolution is only accelerating this trend. Advances in neural networks, artificial intelligence, and machine learning are opening the doors for entirely new ways of solving customer problems. This shift is fuelling massive investment in research and development – in startups, in corporations, and in academia. Working in isolation is not an option.
I have seen first hand how large companies can grow successfully through a robust acquisition pipeline. However, over the last few years, our strategy has shifted to focus substantially on organic growth through internal capabilities and partnerships. This means that building a culture of innovation — one that supports experimentation and provides innovators with the tools they need to succeed – is more critical than ever.
Ivory power houses
For many businesses, partnering with universities doesn’t go further than building a recruitment pipeline. The dated view of the ‘ivory towers’ meant that academic research was viewed as relatively inconsequential to commercial markets and outcomes. Why has that changed?
First, universities feel a pressure and an obligation to commercialize. The Bayh-Dole Act in the US, and similar IP treatments elsewhere in the globe, gave universities a commercial incentive to exploit their own research. And second, the computing revolution has created an ease of experimentation, commercialization and collaboration breaking down barriers to the Who, How and What is required to create value.
But this doesn’t change the fundamental mission of university research to publish and to have time to work on the biggest, most challenging problems. In order to be successful, both the corporation and the university need to define scope, timeline and collaboration techniques that deliver on the academic rigor, as well as the market demand.
The most successful partnerships with universities are the long-term ones, built on trust and a shared understanding of objectives. Effective enablement tools, such as various types of workshops and hackathons, alongside open data and platforms enhance the still important recruiting pipelines.
The perfect match?
Additionally, working with startups is becoming both standard practice for many businesses, as well as necessary practice for large companies. While the relationship can sometimes seem paradoxical – depending on the strategy, they can just as easily become competitors as partners – the positives exist if a shared strategy or even shared experimentation occurs.
For the startup, corporate partnerships can mean investment, co-creation, co-branding or co-marketing, advancing down the path to scale and access to new markets. For a large corporation, a start-up relationship can reduce risk in exploring new markets, technologies or business models, and more often than not allow for this exploration at a far faster speed than internal capabilities allow.
Shifting your mindset
In an ‘innovate or die’ world, it is imperative for large, global corporations to partner with academic and start ups.
We need to embrace this way of doing business in markets that are constantly evolving, and where competition is fierce. Open platforms, shared data and information, and defined alliances are trends that will keep large corporations current.
Even though Partnerships are more common now than ever, they still are not turnkey deals. They have their own challenges. You need to have manageable contracts that level set expectations on Intellectual Property and resources exchanged, while not being so replete with boundaries that opportunities seem hard to envision. The mere process of this contracting period can help to determine where and how cultures may clash, so that those intangibles receive adequate attention.
Building a culture of leadership that embraces this change and shift in setting strategy and conducting business is the only way to thrive. Are you finding partners a powerful source for growth? What are your tips to make these relationships successful?