What Startups Can Teach Big Companies About The Power Of Incentives by Forbes – Entrepreneurs

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Startups can inspire new thinking with the Fortune 500

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Stu Willson lives at the intersection of startups and big companies.  He is the co-founder and CEO of Radicle, a future-focused research and advisory business that helps some of the world’s leading companies better navigate the future.  They do that through a suite of products that range from top-of-the-funnel opportunity identification and mapping tools to deep dives into areas of interest, to events that bring the people writing the future of various industries to our customers. Overall, that work helps big companies make better decisions about how to engage with startups and emerging technologies.  I sat down with Stu to learn more about what he is seeing at the front lines of the Fortune 500 and innovation:

Dave Knox:                         Which Fortune 500 companies are taking interesting approaches to facing the threat of technology eating the world?

Stu Willson:                        I’m pretty intrigued by some of the big companies making aggressive moves. I think about Edgewell, which just bought Harry’s and where Harry’s co-founders will now run US operations and I think about Serta, which had last year merged with Tuft & Needle, and named one of the co-founders to be Chief Strategy Officer. I’m pretty intrigued by what those companies are doing. I haven’t seen incremental Innovation like picking at that and poking at that really move the needle for big companies.  I don’t know whether these moves pay off, but I think they position those companies to be much more entrepreneurial and that’s a big step.  An entrepreneurial mindset is a big component in the success of an innovation. And so having that entrepreneurial mindset and buy-in come from the top, positions those companies to be much more successful with their efforts.

Dave Knox:                         A core tenant of Radicle is the concept of being proactive. What do you think are the benefits of a company making the switch in its process and becoming more proactive?

Stu Willson:                        We really push proactivity as one of the benefits of working with us, and I see proactivity enabling better decision-making, which in turns increases the odds of success whether we’re talking about incubating a new product or making an acquisition or anything in between.

There are a couple reasons why proactivity can lead to in value creation.  First, It just reduces the risk of adverse selection and making bad decisions. Often times big companies are either partnering with a startup that sent them an email or that they’d read an article about, and I think that’s fine. But for every one company, there are doing something they’re probably ten others that may be better partners. We want to put our customers in the position of making the right decision, not the decision that ended up in their inbox.

Second, if you take proactivity, and you pair it with the process, you enable replicability and skill building. We want our partners to move the needle you know when it comes to what they’re doing with respect Innovation, and that requires a scalable approach.

Dave Knox:                         When it comes to startup engagement, the first inclination of most companies is to build their own efforts.  Why should companies instead think about outsourcing certain processes?

Stu Willson:                        When I think about like the benefits of outsourcing I think about ROI on one’s time and the fact that startups are very high touch relationships.  Big Companies just don’t have the time to meet with thousands of companies. They can’t be on the street meeting with three thousand companies in a year to better understand the market and to find the right partner. Outsourcing with the right partner enables them to effectively do that.  It’s not about outsourcing core competencies so much as its finding leverage for your team.

Dave Knox:                         You find yourself at this intersection of Entrepreneurship in the Fortune 500. What do you think these worlds can learn from each other both the companies and the people?

“What I think big companies can learn most from startups is the importance of incentives.” – @stuartawillson

Stu Willson:                        Everyone talks about how startups can teach big companies to be nimble and iterate quickly. And I think that’s all true. But what I think big companies can learn most from startups is the importance of incentives.  When I think about big companies, and their ability to truly innovate and invest behind future growth and especially exponential growth, they need to create incentives for that growth. You have to set up a culture of risk-taking, an understanding of the power law, and nature of entrepreneurial returns. Big companies need to understand that putting in place these incentives allow bets to be made and enough bets to be made to realize success.

With respect to startups learning from big companies, there are a lot of assets big companies have that they can bring to the table when partnering with startups.  A huge one is distribution.  To the importance of distribution, you’re seeing that play out now as a direct to consumer markets are becoming more expensive and that channel is becoming much more difficult.  You’re going to see the value of distribution, and the value of some of the core capabilities of big companies become much more important and much more important in service of making startup acquisition successful as well as making a startup successful through a partnership.

Dave Knox:                         While big companies need to figure this out, the employees at these companies need to do the same. They are not going to have a career that is the next 30 years working at a single company. What advice do you give to people on how they can thrive in the decades to come?

Stu Willson:                        Employees at big companies can learn a lot from entrepreneurs by adopting an entrepreneurial mindset. They need to practice things like moving more quickly things like being more efficient and adapting to change.  Employees tomorrow have to learn what is second nature to entrepreneurs like how do you spot an opportunity? Or how do you test your ideas? And how do you hire and retain talent? Those are things the employees must focus on for their future careers.

July 1, 2019 at 10:55AM
https://www.forbes.com/sites/daveknox/2019/07/01/what-startups-can-teach-big-companies-about-the-power-of-incentives/
Forbes – Entrepreneurs
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