Corporate Goliaths Discover Ways To Become Davids By Disrupting From Within  

Emily Porro

David versus Goliath, an ageless tale of a boy who defeated a giant. But why did the giant lose? According to Albert Castelltort Mikkelsen, partner and associate at Heywood & Sons, although the giant had strength and size in his favor, David had agility and speed.

Nowadays, the corporate world’s Davids – startups – have have more tools to enable success than ever before. Empowered by incubators, crowdfunding, and open software, for example, the gap between idea and market for startups is shorter than ever, posing a real threat to today’s corporate Goliaths.

“As corporations become big, they establish processes and become really good and efficient at the one thing they do. But they naturally lose agility,” said Mr. Mikkelsen.

Regaining the speed and agility of a startup within a corporate behemoth was a hot topic as business leaders from several multinational corporations shared effective models for achieving disruptive innovation with a standing-room-only crowd at Wednesday’s “Disruption Inside: Corporate Innovation Models” panel at the World Mobile Congress in Barcelona.

Bosch, a German multinational engineering and electronics company, traditionally innovated through acquisitions. However, the emergence of the Internet of Things drove the company to explore new models. The company embraced a university partnership model, naming an esteemed professor to lead a newly formed IoT lab within Bosch with the goal of finding new technology, applications, and revenue channels. “We already have creative employees applying for thousands of patents every year, but we need to get access to fresh eyes of people not caught up in thinking about the company,” said Markus Weinberger, director of the Bosch Internet of Things and Services Lab at the University of St. Gallen in Switzerland.

ServiZurich S.L.U, an insurance provider in Barcelona, has also embraced the internal startup model. Xavier Tuduri, CEO of ServiZurich, led the development of a program in which employees are asked to develop prototypes for their ideas in less than three months. They then collaborate with startups and universities through the Zurich Innovation Lab, which combines and experiments with internal and external ideas through “open innovation.” “We have 55,000 employees, and saw a lot of presentations showing disruptive ideas and asking for budget,” said Mr. Tuduri. “Unconventional thinking changes the way we see the world.”

Claudia De Antoni, a director at Virgin, echoed Mr. Tuduri’s point on innovation coming from the inside. While the company employs innovation models and has incubated several of its companies, she remarked, “It takes a lot to be a Virgin business. It’s much easier to build it ourselves than try to change the DNA of someone else.” She remarked that Virgin has built nine successful billion dollar companies.

Meanwhile, BMW has decided to focus on working with external startups to accelerate innovation. According to Gregor Gimmy, founder and head of BMW’s Startup Garage, which defines itself as “a startup’s gateway into the global, multi-trillion dollar automotive industry,” startups are all about financing, and very little about clients. Mr. Gimmy saw an opportunity to better leverage the power of BMW by turning the traditional startup model on its head. “Instead of doing venture capital for startups, we need to be venture clients,” he said. Mr. Gimmy championed a model where a startup becomes a technology supplier from the first day, empowered to work with the BMW research and development team while being paid for the effort. The technology is validated and a prototype is built, followed by a long-term agreement, if it makes sense.

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Emily Porro

About Emily Porro

Emily Porro is a writer and blogger focusing on the people, products, services and technology driving global innovation across industries.