There are some innovations only big companies can pull off, but there is also plenty that their size prevents them from doing and at times they need to partner with other companies and overcome their differences; here’s how Diageo does it.

Start with something broken: Innovation departments exist to solve problems rather than to bring in tech for its own sake. Speaking at ad:tech (London, September 2019), Benni Lickfett, Diageo’s head of technology and innovation, explained how his department set out to fix sampling. (For more read WARC’s in-depth report: Diageo’s model for collaborating with startups.)

When Diageo brought out a dairy-free Baileys ‘Almande’, the typical sampling campaign of handouts on Oxford street was clearly ineffective because the product was designed for a very specific subset of people.

This led to a partnership with the sampling startup, Send Me a Sample, which allowed people to ask their Google or Amazon voice assistants to send out a sample to their address.

Scarcity: Some critics of big corporates’ innovation efforts alight on the problem of too much funding. Where startups can only follow a strategy as far as their funding will take them, a big company can keep ploughing money into an idea, whether it’s working or not.

Lickfett advocates an idea of metred funding, which means unlocking funding for projects in instalments off the back of key stages both with partners and internally. This keeps teams to deadline and pushes aggressively toward important product elements like minimum viable offerings or in-market testing.

It’s not the only company employing these methods, big publicly listed firms like GE, Citibank, and Dropbox have all put it to use.

Scalability: Assess potential partners/investments for scalability rather than scale. Lickfett’s observation is that big corporates tend to be obsessed with the scale that a technology, format, or medium already has. However, this thinking precludes your being ahead of the curve and benefiting from that growth.

Help them navigate your organisation: Startups and big corporates, after all, speak and operate very differently. Corporate timelines are different, and decisions will take longer than they are used to, far longer.

It’s important, when bringing in a startup, that they begin to build a network through the organisation that will help them to keep the project going. As Lickfett noted, there is always churn in big corporates and it’s not impossible that their champion in the organisation might end up elsewhere, and the startup is left without support.

Sourced from WARC