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PA OPINION

Embrace the disruptors: how big brands can work with start-ups to innovate for sustainability

The heightening global focus on sustainability is leading large corporates to re-direct their innovation investment towards sustainability goals. And whilst many brilliant ideas will come internally from these organisations, there are also hundreds of thousands of start-ups launching every year. And many are dedicated to solving our most pressing environmental and sustainability problems.

This presents a very real opportunity for large corporates to partner with start-ups to reach their goals. The challenge is in identifying the best bets in the deluge of start-ups and then finding the right way to work together. Having helped many large corporates effectively collaborate with start-ups, we’ve identified some key ingredients for success.

Choose well

Picking the start-ups most likely to help you deliver a positive human future isn’t easy. It requires a systematic and thorough analysis of their underlying intellectual property and scalability.

Can you accommodate their business model, cost structure and leadership personalities? How do they stand against the competition? And, to avoid the risk of green-washing, will the solution deliver a net gain in sustainability when you look at the whole system?

To get ahead of the game and spot the most promising start-ups, big brands should start proactively landscaping innovations in the areas in which they want to drive sustainability.

Make it easy

The sophisticated and often complex procedures big brands have evolved to ensure management oversight and production efficiency are likely to swamp small start-ups. Sometimes all they have is a great idea and lots of energy, and they don’t yet have the data and proofs you want. So, if you apply all the assessment criteria and terms of business you normally would for an established supplier, you may well kill a brilliant sustainability opportunity before it’s started. Try to remove practical barriers to success, for example:

  • change your attitude to risk
    There will always be reasons to say no, you need to look for the reasons to say yes. A belief in doing good will likely be the foundation of the start-up, so align your attitudes to that purpose
  • re-think your investment strategy
    What may be a pocket change investment for a large corporate may equate to the founder of a start-up re-mortgaging their house. Your financial terms may well make the difference between success and failure
  • share the intellectual property
    When a start-up only has a great idea, new material or innovative technology, trying to grab all the intellectual property up front will damage the relationship. Instead, be creative about intellectual property, recognising the start-up’s core value and aspiration
  • be careful with specification standards
    A sustainable new idea is unlikely to be directly comparable to the thing it’s replacing, so be careful what criteria you’re expecting it to meet. If your previous product had a three-year shelf-life, for example, does the sustainable alternative really need the same?

Dedicate a team

Don’t drown partner start-ups in people. The start-up’s CEO may also be their principal scientist and the person who makes the coffee. Consider creating a dedicated team, matched to the size and ambition of the start-up, to provide an authoritative point of contact and safe channel to the wider business.

Embrace sustainability and circular economy to transform business performance

FInd out how

Find the skills

Most start-ups have a small number of employees, so the skills and capabilities you already have in your business could be incredibly valuable to helping the project succeed. Make these skills available. You also need to recognise when the initiative would benefit from skills or capabilities that are outside both your experiences. You’ll need to acquire these skills in a way that lets you switch resources on and off without inefficient and costly handovers between companies or departments. The answers to many problems could exist in other industries or technological approaches - help the start-up to access that experience and borrow with pride.

Get to value fast

Plan your development in small, fast, agile steps, focussing on the biggest challenges first. It’s important to recognise that start-ups often run on daily and weekly schedules and might not survive if they have to wait for monthly and quarterly review meetings. So, identify the key challenges that get you to customer desirability, technical feasibility and financial viability fast.

A sustainability mindset unlocks opportunities

By shifting the way you think about sustainability, you can create a mindset that drives success whilst also creating opportunities to partner with disruptive new entrants. Making this move won’t be simple, but by doing so, you can gain significant value whilst making a positive difference.

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