Innovate or fail.
Have those three words ever crossed your mind? Have they come up in board meetings or growth strategies? Have you ever watched your competitors capitalize on new industry trends while you sat there wondering, Why didn’t we think of that?
We only need to take a look at companies like Borders, AOL Time Warner, and Yahoo! to remind us of what happens if we don’t innovate. In fact, according to research from Innosight, 52 percent of companies that were included in the Fortune 500 in the year 2000 have since declared bankruptcy, been acquired, or otherwise gone out of business.
Make no mistake. These companies were run with a high degree of intelligence and ambition and were successful for years, but each of them eventually fell, thanks to disruption. The roots of disruption are always more complex than a single bad decision or trend, but one thing is certain. The outcome of these companies could have been different had they invested more of their resources into one strategy: corporate innovation.
Corporate innovation can mean the difference between success and failure.
The Importance of Corporate Innovation
According to a Bain Innovation Performance Survey, companies that have successful innovation programs with a formal approach perform better and grow significantly faster than companies without a formal, structured system in place. That’s why Fortune 500 companies from Amazon and Home Depot to CocaCola have incorporated research labs to further corporate innovation efforts.
Although most companies recognize innovation as a necessity for future growth, 54 percent of business executives struggle to align innovation strategy with corporate strategy.
Corporate accelerators help bridge that gap.
Why a Corporate Accelerator Works
Corporations vs.startups, stability vs. high risk. These two seemingly disconnected ways of doing business are joining together to connect innovation and corporate structure through accelerator programs.
How is that possible?
Startups are major sources of innovation, as they capitalize on emerging technologies to invent products and services or reinvent business models. Corporations that welcome open innovation strategies are turning to startups as a source of external innovation.
For startups and corporations, a corporate accelerator offers the best of both worlds. Startups benefit through mentorship, resources, and opportunities large corporations have to offer. In exchange, startups provide corporations with emerging technology insights that are on the brink of disrupting the industry.
5 Reasons Your Company Needs a Corporate Accelerator
If you’re still not convinced your company needs a corporate accelerator, here are five reasons why you should reconsider.
1. Get Fresh Insight to New Industry Trends and Technology
When a company is so focused on its core business, sometimes it can be challenging to think outside the box. Startup teams come from varied backgrounds and have different experiences, which can lead to unique ideas and insights into your industry.
Leveraging an accelerator program is a great way to explore emerging technology that companies might not have the resources to delve into themselves. Reviewing different applications, research, and selecting startups for an accelerator program can also lead to new ideations. The corporation can gain valuable insight into a wide range of business ventures and ideas to identify new opportunities.
2. Establish Company Intrapreneurship Culture
One of the biggest challenges for most corporations is their inability to shift their vision to a more intrapreneurship-based culture.
Whether through mentoring or attending accelerator activities, corporate employees and managers are exposed to startup innovation which can lead to the adoption of a startup culture. By seeing the way startups work, companies often learn new methodologies that can be applied to everyday business processes and workflow.
Getting intrapreneurship buy-in is crucial to innovation success. Companies need to empower the employees who are in charge of driving innovation to think like entrepreneurs. The startups partnering with a corporate accelerator program might have some excellent ideas or inventions that could add significant value to the business, but to leverage this thinking it’s imperative that the corporation’s employees have the power, mindset, and experience to take those ideas to the next level.
3. Gain Speed and Momentum
In a world where innovation is an ongoing competition, speed can be the difference between becoming a market leader or being left in the dust. Startups work fast: in fact, their time is often measured in days and weeks rather than quarters or a fiscal year.
Corporations that have specific problems or innovative ideas that would otherwise lose momentum internally can benefit from the speed of startups and the accelerator structure. Corporate accelerators provide an intensive, targeted framework that accelerates ideas and innovation.
4. Make R&D More Efficient
Internally, the corporate innovation process can be both costly and time-consuming. Allocating resources and a stable infrastructure for various industry-specific experiments is a challenge for many organizations. With a corporate accelerator, companies can observe and test how new ideas succeed or fail without having to deal with the costs or logistical challenges associated with internal research and development.
5. Diversify Your Investment Portfolio
When a corporation decides to partake in an accelerator program, it has the opportunity to not only invest in the startups it accelerates, but it gets access to other relevant companies within the program.
Although the main purpose of an accelerator program is it to drive corporate innovation for an organization, companies that take equity stakes in their accelerator startups have the opportunity to generate significant returns if a startup is acquired or goes public.
Corporations are a valuable resource for mentors, experience, influence, and infrastructure that startup companies need. If a company runs a successful corporate accelerator, there is a high potential for other investment and partnership opportunities.
Every day, startups from all over the world are using startup accelerators to turn their innovative ideas into reality — ideas that can significantly benefit large companies. Corporate accelerators are an extremely valuable resource for organizations, giving them an edge up in today’s extremely disruptive and competitive market place.
Boomtown Accelerators design and run customized corporate accelerators that provide singular access to early stage technologies. If you’re interested in learning more about how our corporate accelerator program could benefit your organization, it’s time to start a conversation.