Generalisations. They’re everywhere and they’re all completely unhelpful.
Yes, I’m generalising to make a point. Of course, it’s not completely true. But there is something to be said, I think, for avoiding the temptation of making sweeping statements. After all, so many things in life are rendered in shades of grey rather than in black and white. And it’s the same in business too.
Let’s consider two broad camps of businesses – innovators and incumbents. The former are usually depicted as young, agile startups, full of ideas and energy. The latter are large, long-established, and slow-moving.
These are familiar stereotypes. But I’m not sure where Google fits in. Nor Amazon, or Alibaba, or Tencent. The oldest of them is Amazon, which was only founded in 1994. Yet they are among the biggest, most successful, and most innovative businesses in the world.
It even reminds me of one of my favorite quotes, from the 2012 James Bond movie, Skyfall – age is no guarantee of efficiency, and youth is no guarantee of innovation.
Of course, it is possible to discern a dividing line in most business sectors between incumbents and innovators. But it is just a line – it’s not a chasm. And bit by bit that line is blurring thanks to increased collaboration.
On one side of that line are businesses that are sometimes many decades, or even hundreds of years old. They have often built vast networks and ecosystems around themselves and have reputations that have been earned through hard work, commitment, and professionalism. There will also be significant amounts of infrastructure and processes that represent many years of growth and development. Not to mention the knowledge capital within the organisation – the many, many combined years of collective expertise.
The other side of the line is where we find startup businesses. The disruptors. The innovators. The new kids on the block, with all that energy, drive, and zeal. And unlike the established businesses they seek to disrupt, they don’t have a legacy of investment in infrastructure and development. They are just starting out and have everything to gain. In order to be heard at all, they have to pull out all the stops.
Blueprints for a new collaboration model
Branching out in bold new directions can be a challenge for an established business with a reputation for excellence in service delivery. The big questions that trouble its leaders are likely to be what if we try something new and end up alienating our loyal customers? or how can we balance the risks of pursuing a new opportunity with safeguarding our reputation and maintaining customer trust?
It’s a valid question. From internal communications to investor relations, from supply chain realignment to marketing and promotional activity there are many competing pressures to balance. It’s like the proverbial turning of an oil tanker – changing direction can be painstaking and time-consuming. But if you were the captain of an oil tanker heading for a collision you’d try to do something, surely.
Meanwhile agile, flexible innovators face a very different set of challenges – especially when they are still in the startup phase. They don’t have lots of loyal customers or a long-standing reputation for excellence. And with no legacy to fall back on they can suffer from a credibility deficit. That can be a problem when attracting customers, investors, and partners. They have the ideas, the solutions, and the outlook but they don’t have the support network or ecosystem.
You don’t need to possess a genius-level IQ to see how these startups and incumbents can help each other out.
The fintech experience
Against a backdrop of ever-increasing regulation and the pressure to adopt a digital-first strategy, there’s never been a greater need in the financial services industry for collaboration.
As an industry, we must share the responsibility for digital innovation if we hope to benefit from it. Which is why I am always open to the right partnering and investment opportunities: from accelerator programs and mentoring, to early-stage investment and even acquisitions.
I firmly believe we have a responsibility to do what we can, to foster a startup ecosystem. We’ve worked with several new businesses to help them develop proofs-of-concept they can use to bring their services to market. We also try to help lend our organisational credibility to them and help them benefit from the expertise of the mentors we provide.
Part of that means I’m always encouraging my team to dedicate more time to mentoring activities, getting them to act as a sounding board to help entrepreneurs find their feet. The benefits to the recipient are clear. But there are tremendous benefits for the mentors too. It’s all about having an opportunity to grow, both professionally and personally.
Investing in joint successes
No one should make an investment without a clear plan for obtaining a good financial return. But I don’t think that should be the only goal. Instead you should be thinking about expanding your organization’s capabilities and synergies. You’re getting the people, the resources, tech, a new outlook and mindset for solving problems and generating ideas.
Intel – known for its pioneering silicon chip development which has underpinned the tech sector for decades – is also an active investor in innovative new businesses through its Intel Capital division, set up in 1991. Since its inception, Intel Capital has invested $12.3 billion in more than 1,500 businesses.
In the UK, a 150-year-old retail business is trying to position itself at the cutting edge of disruption via a division called JLabs, its innovation hothouse. Each year it runs a competition for startups to submit their innovative product and service ideas. There is mentoring, investment, sometimes involving the retailer taking a stake in the startup, and eventually the new company’s product goes on sale through the retailer’s network.
This is a great way for an established business to stay focused on what it does best, while actively championing innovation. Customers get great deals and the startup gets new customers. But holistically speaking, the benefits go so much further than that.
There is a tremendous energy and vision running through these startup ecosystems, which really impresses and inspires me. This inspiration is infectious. It drives us all to be the best we can be at everything we do.
One activity I’ve been excited about getting involved in has been our participation in New York University Abu Dhabi’s startAD program. It’s an entrepreneurship platform that supports startups in the UAE at every stage of their development. This forum offers the academic credibility of NYU and wide industry engagement.
Participants get mentorship, network introductions, and investment evaluation. And we get the opportunity to be involved in their Venture Launchpad programs spanning emerging technology domains, which I hope will stimulate adoption of these innovations in the region.
Our concerted focus of connecting and engaging with the startup ecosystem has exposed the wider company to innovation, experimentation and collaboration. It’s offered new perspectives on how we can respond to emerging opportunities.
It gives us access to a more vibrant and valuable ecosystem and fosters an internal belief in the importance of innovation. I think it is a great way for us to bring our vision and culture to life across Finablr through our actions. But I also think this is something the wider sector could learn from.
This article first appeared in bankinnovation.net.