Start-ups overcome with apparent ease the challenges of digitization with the help of new methods such as Design Thinking, Lean Start-Up, Agile Development and the freedom to take a few bounding conditions into account. Unlike start-ups, established companies are paralyzed by legacy business models, highly complex organizational structures and a certain degree of convenience, and find it difficult to keep up in a dynamic world. For many established companies, the contradiction between high investments and an uncertain return on investment in the foreseeable future seems insurmountable, especially in the case of innovation projects. On top, innovation initiatives such as accelerator programs, hackathons, innovation units and corporate venture capital do not automatically lead to satisfactory results, as start-ups and established companies often have conflicting differences in, for example, their culture and working methods.
But how can established companies manage to strengthen their competitiveness, survive in the market and become the leading innovators of tomorrow?
At Bitrock Digital Partners, we believe in combining the experience and resources of incumbents with the agility and dynamism of start-ups through company building to successfully implement innovation projects. As Company Building we understand the foundation of an innovative company with methods from the start-up world and the support of an established company. Based on our findings with clients from various industries, we have summarized the following six critical success factors in company building:
1. Rapid learning through prototype development as a principle
In order to develop fast and agile solutions for customers, established companies must first turn away from classical, linearly structured development processes and truly adopt iterative prototype development. The iterative construction of prototypes is an essential success criteria in company building and at its core a kind of intelligent learning. A Build-Measure-Learn approach can help to build up knowledge that has been tried and tested at the customer and thus to further develop products and bring them to the market.
2. Customer orientation as driver of relevant solutions
A tireless customer orientation is the engine for successful products and services in company building projects. Understanding the customer and his problems must be a top priority for every company. Only those who have fully understood the customer and his problems can define and implement relevant solutions.
3. Support through dedicated communication strategy
In order to sustainably develop innovation projects and build ventures, these must be known throughout the entire company beyond the relevant decision-makers at all levels and functions. The awareness of the innovation project through the company hierarchies is the basis for necessary support by personnel and resources. A target-oriented and comprehensive communication strategy ensures that ideas and support from the company can reach the innovation projects.
4.Flexibility in personnel planning and on-demand experts
Innovation projects are often characterized by a scarcity of resources – also with regard to personnel. Within flexible conditions, external service providers can compensate urgent bottlenecks of projects. Furthermore, access to critical know-how and skills can be covered by external experts on demand and in a resource-conserving manner.
5. Dedicated project team in a protected environment
Project managers should ensure that the project team is detached from everyday operational duties and can develop the ventrue in an environment isolated from regular processes. The project team and the innovation project shouldn’t get distracted by the core business of the company. A content and local detachment in a co-location can help to ensure the team is able to completely focus on the project.
6. Clearly defined reporting structure and decision paths
Established companies have to find the fine line between speedy decision-making and being compliant with the established company without slowing down the project through artificial bureaucracy or jeopardizing the motivation of those responsible for the project. The proximity of products and services to the core business can determine the degree of formalism and the way decisions are made. Products that are located closely to the core business of a business line require a careful adaptation of the decision making and reporting to the business line’s processes.