Major companies ought to be engaging in collaborative ventures with entrepreneurs from anywhere in the world if they want to unlock new business models and keep innovating, says Tamara Giltsoff.

Disruptive Innovation “Nowadays Comes from the Crowd”

We caught up with the Sustainable Business Strategist on the sidelines of a  conferenceon the new-look company, hosted in London last week by innovation think tank PSFK.

L'Atelier:  In your work with major corporates, helping them towards innovative business models, you encourage them especially to work with startups from around the world. Why should they do that?

Tamara Giltsoff:  For a long time now, major corporate businesses have mainly been trying to innovate on the inside. But today they are for the most part no longer the ones who are coming up with really innovative models.  Nowadays innovation comes from ‘the crowd’, especially from startup companies. I’m talking about disruptive innovation of course, not the gradual kind.

What do the large corporations that you work with think of this idea?

Over the last three or four years we’ve seen a real move towards more open innovation. Companies are less hung up on the idea of intellectual property.  Some of them, such as Telefonica and IBM, believe that the future value of their company lies in outside opportunities, especially those to be found in emerging countries.  But this is still all very new and difficult. Corporations are like heavy machinery, which follows a well-established operating method.  What they need to do is actually to bring about a total shift in the way the company sees itself.  They need to learn how to unlock the value within the company.

So, how can they take these innovations on board? How can they capitalise on them?

First and foremost you mustn’t fall into the trap of thinking that there’s only one solution – one size that fits all.  Some corporations collaborate with smaller companies, as IBM does with Smarter Planet. The aim is to allow the company to develop its own projects, with branded solutions.  If this proves successful, they’ll pay dividends to IBM.  Other majors develop incubators. Telefonica, for instance, set up Wayrain Latin America.   From the outset, there was a dual goal:  to spot talent but then to keep it in the country of origin – i.e. to avoid a ‘brain drain’.   This has worked so well that other incubators have been launched in Europe – in Germany, Ireland and the UK.  Then there are the more traditional solutions – joint ventures, company takeovers, etc.

How should the corporates that decide to open up in this way go about it?

It should be integrated as a parallel approach, not as a new direction that you rush into. The company must stay true to its values and its products and little by little get involved in other avenues and incorporate them into its business.  Above all this shouldn’t just be about working on its image.  There must be commercial logic behind it, a real issue to resolve; it can’t be just a PR exercise.  And it must be part of a strategy, with real purpose, not a mere philanthropic gesture.