4 Strategies for Driving Corporate Innovation

When I think about how to create successful collaborations between brands and startups, Dave Knox is one of the first people to come to mind. As a strategist and business developer at a branded content studio within a global media company, I’m constantly working to balance the objectives of a large corporate entity with the need to innovate with the speed and resilience of a startup. Given the amount of research and discussion around the topic of corporate innovation (aka “intrapreneurialism” or “corporate entrepreneurialism”), I know I’m in good company.

Which is where Knox comes in. As a strategist, speaker, and author of Predicting the Turn: The High Stakes Game of Business Between Startups and Blue Chips—which he describes as a guide for how large companies can work with startups to forecast big industry big changes—Knox has proven himself to be an expert on digital transformation and corporate innovation. Since I first met him a couple of years ago at SXSW, his work has influenced how I approach building revenue generating, branded content partnerships between Viacom Velocity and digital startups.

I recently spoke with Knox to try to uncover what makes a successful corporate innovator and the strategies they can use to drive change within large organizations. His perspective is useful to those working within companies of all sizes.

The Innovator's Mindset

According to Knox, the first rule is to understand your company and its culture. “The best corporate innovators really grasp their company’s DNA. They accept what the company is great at alongside what it is not so great at and don’t try to fight against any of those things,” explains Knox. “The corporate DNA has often been built over 50 to 100 years and you can’t fight against that.”

The best corporate innovators really grasp their company's DNA.

Another defining trait of a corporate innovator is a “give-first mindset.” This means that someone is willing to invest in projects or ideas without focusing solely on what they’ll get out of it. “That takes a special type of person, to have that intuition for identifying great emerging business models combined with a desire to talk with entrepreneurs and small companies and then figuring out how to use their big company resources to help them grow,” says Knox. “That person also understands that relationships don’t form overnight and that a relationship might not be beneficial to you or your company today but could certainly have a major impact a few years down the line.”

And finally, says Knox, “they should have a child-like curiously for learning combined with a mindset of always evolving and changing.” Knox coined the term “continuous beta” to describe this mentality of always evolving, changing and seeing what’s around the corner. “The moment you start using pen instead of pencil,” Knox says, “you’re going to be in trouble.”

The 4 Types of Collaborative Relationships

It’s helpful to understand how those traits can come into play with real-world examples of successful collaborations between large corporate entities and smaller startups. Knox categorizes these efforts across four broad frameworks (which also, helpfully, offer a wayfinder for how mature companies and startups can work together).

1. Innovation-Driven Acquisition:

What it means: Purchasing smaller companies to move forward strategic goals of the big company in a new direction, rather than just acquiring more market share.

Examples: Performancewear brand UnderArmour’s purchase of three fitness trackers, MyFitnessPal, Runkeeper, and Endomondo. Retail behemoth Nordstrom’s purchase of TrunkClub, a clothing subscription box start-up.

2. Invest in Change:

What it means: Making a corporate or venture capital investment into a startup to further both strategic goals of learning about a new direction the industry is taking and to produce financial returns.

Example: Coca-Cola’s investment into Dirty Lemon, a brand of beverages with elixir-like promises of improving one’s everyday routine. “One of the fascinating things about Dirty Lemon is that it can only be bought through a single store in New York City or, more significantly, through text message,” says Knox. “Coca-Cola strategically invested in that business to understand the changing nature of how millennial consumers, who live in a world of messaging, approach commerce, and how messaging can be used to win in the new world of convenience rather than the old world of [coin operated] vending machines and 7-Elevens.”

3. Disrupt the Disruptors:

What it means: Building a competitive solution in-house, such as a new product or service, that is inspired by current startup innovators.

Example: Procter & Gamble launched Tide Spin, a laundry pickup and delivery service, which is a direct-to-consumer model intended that targets busy people in urban areas who prefer to outsource time consuming tasks.

4. Partners for Innovation:

What it means: Leveraging strategic business development and joint business planning to collaborate with small and large companies on new products and processes. The key to these types of relationships is to treat the startups and new companies as partners, rather than vendors. “Ultimately both sides need to have skin in the game which can take the form of the dollars being invested into the partnership or the people and resources that are being dedicated to an effort. But what it’s really about is both sides taking the partnership as seriously as the other,” Knox explains. “

Example: Chobani Incubator keeps America’s best selling Greek yogurt brand close to its startup roots and remains true the company’s mission of bringing better food to more people by providing socially responsible food entrepreneurs with an opportunity to grow their own brands. It has already launched successful food startups like Chloe’s Fruit, Kettle & Fire and Banza.

Knox on Content Entrepreneurship: "Leadership & Recognition Must Come from the Top"

I spoke with Knox about how Viacom CEO, Bob Bakish, began promoting a mindset of Content Entrepreneurship. I asked how those of us who are inspired to follow Bob’s call to action can work in harmony with colleagues who may feel less inclined to immediately disrupt familiar routines. “The key is the fact that leadership for change is coming from the top”, Knox says. The way to encourage adoption across the company is to understand that “people at any given company are looking to get ahead and will embrace change if the right incentive structures are put into place. To drive this mindset, you need to figure out how to make sure the people that embrace it early on, and do it the right way, receive recognition from the top.”

Knox mentions an example from his time as a marketing executive at Procter & Gamble. “When we launched the digital team, we knew it was going to face a problem of some people being eager to embrace change, and others who wouldn’t see the value resisting doing the extra work or taking the risks it entailed”, explains Knox. “To break the roadblocks, we decided to showcase that there would be big benefits for those who embraced digital. First, we needed a billion-dollar brand to support the behavior, because if the big brands weren’t on-board, then the rest wouldn’t follow. Second, we needed somebody to do it quickly. And third, we needed to promote the upside of embracing digital and that there was no downside. We ended up getting executives from Tide and Old Spice to embrace the team. As a result, all of the major awards those brands won that year were because of their willingness to take a chance and put in the extra work of collaborating with the digital team. After that, everybody in the company saw how the Old Spice and Tide folks publicly received recognition from our CEO, CMO, Wall Street and the industry at-large. They realized they needed to support the digital team as well, because the people who were doing that were having their careers accelerated. Ultimately, that’s what broke most of the roadblocks.”

“The special thing about an entrepreneur is, they get used to hearing people say ‘you can't’, but then they keep going anyway."

Our conversation concluded on the unique nature of entrepreneurs. “Being an entrepreneur is about putting it all on the line. An entrepreneur takes their company, their family, their mortgage, their life savings…and they put it all out there on the line for everyone to judge, because whatever they create is released to the wild. And they do it based on a vision of something, whether it’s a product or a piece of content, they believe the world needs”, Knox explains. “The special thing about an entrepreneur is, they get used to hearing people say ‘you can't’ but then keep going anyway. They’re going to hear ‘no’ 100 times but they keep going because it’s that 101st person who might say ‘yes’”. His parting words of advice are to remember, “you need to be a little stubborn in your belief that the world needs to change, and that it needs what you are trying to create. That’s the essence of entrepreneurship.”