Driving Corporate Innovation at BMW

How the automotive giant’s Innovation Lab is helping meet the challenges of 21st century business

DISRUPTIONHUB spoke to BMW Financial Services UK, about the benefits of Innovation Labs – for both the corporates who host them and the startups they support.

It’s an age old question: how can large, legacy corporates adapt for the modern age? The diffuse management structures and diverse operations of traditional businesses can make them ill suited to change, turning disruptive innovation into a hard nut to crack. This being said, a range of different strategies exist for corporates looking to innovate, from encouraging internal intrapreneurship to pursuing mergers and acquisitions.

Another popular avenue for corporate innovation is to invite fresh thinking into the heart of the business in the form of collaboration with startups. This was a step taken in 2016 by BMW Financial Services, a subsidiary of BMW Group in the UK. By working with corporate innovation specialist L Marks, they created an Innovation Lab with the aim of finding fresh new ways of doing business.


BMW’s Innovation Lab was conceived to help the business think differently. The company wanted new ways of innovating beyond the vehicle – whether that be improving customer services or their own internal operations. According to BMW, startups represent the perfect way of bringing in fresh ideas through an incubation process that is both simple and effective.

“Working with startups opened our minds to how we can be more agile, how we can be faster to market and how we can think just that little bit differently,” says Philip Kerry, Sales and Marketing Director, BMW Financial Services (GB) Ltd. “Startups wanting to bring their products and services to BMW first apply, then pitch for a place in the Lab. Five startups are selected to enter the programme, during which they develop their products over a 10 week period. Once the Innovation Lab finishes, the startups run demos of their offerings and present their proposal for future engagement with us.”

After a successful Lab in 2016 and one more in 2018, BMW now has relationships with seven of the 10 startups that went through the process. As well as helping BMW to innovate, for these young businesses this is a fantastic opportunity to receive guidance from corporate leaders. As Kerry states, there are three key benefits BMW gives to startups through the Innovation Lab.

“The first of these is mentorship from BMW Group UK’s senior leadership team,” he says. “We provide insight into our business and our industry, as well as guidance on how to work with us. Secondly, the Innovation Lab is actually a physical space, so we provide a collaborative work environment for the startups. This also means we can work directly with them on the proposition and pull in the right experts as and when needed to move quickly on development. Finally, also included in the Innovation Lab is a business education programme with links to a network of industry experts. We set this up because we want to ensure that the startups undertaking this journey with us can thrive.”

Wrisk – an insurance platform

Of the seven startup relationships BMW developed from its Innovation Lab, one – with insurance company Wrisk – has now become a partnership. This takes the shape of a brand new car insurance platform for BMW in the UK.

“Wrisk provide our answer to how we are transforming car insurance in the UK. When they came to the Lab, it’s fair to say neither side knew what to expect. But by looking at the problem together, we designed and developed a solution – a new digital platform for BMW and MINI Car Insurance. The platform introduces flexibility in how people use and pay for insurance, so this is a great example of what can be achieved through collaboration.”

Along with the added convenience of a digital insurance platform, Wrisk also brings more tangible benefits to the consumer. With Wrisk, all new BMW and MINI Car Insurance customers receive seven days of complimentary car insurance. This means they can drive straight out of a retailer without having to commit to a plan, allowing them to consider their options for longer.

Such flexibility highlights the advantages of the platform model, which is increasingly becoming a feature of modern business. As legacy companies look to diversify their offerings and improve the customer experience, platform and as-a-service operations are a logical next step.

“One way or another,” Kerry notes, “many businesses are adopting a platform approach in certain aspects of what they do. As people demand digital first, we must respond to that need to stay relevant and close to the customer, especially as the automotive industry is set to change drastically in the next couple of decades.”

Just getting started

BMW’s Innovation Lab has proven that collaboration with startups is the most effective way of pursuing an agile, innovative business. It ties in with a focus on value creation, not only for the customer of today, but also as a way of securing the customer of tomorrow. This emphasis on future gazing is a reminder that no business can afford to rest on its laurels when it comes to innovation.

As for the challenges of running a successful Innovation Lab? Like all new innovations, it requires a journey into the unknown.

“When we first ran the Lab, we didn’t know exactly what to expect, so there was a learning curve from everyone who took part in it.”

“Other than that, the major challenges are around identifying the right startups and ensuring we bring those with the best chance of securing a long term business partnership with us. We had more than 270 young technology firms apply to be part of the 2016 and 2018 Labs from around the world – so being able to ensure we gave each firm the time it deserves was important.”

Picking potential

While selecting the right kinds of startup for a Lab will never be an easy task, hand picking relationships from a pool of almost 300 dynamic young businesses is an enviable position for any corporate to be in. Importantly, as BMW’s experience shows, the process has benefits for all parties involved. It’s also something that many legacy companies are capable of emulating.

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