Corporates should embrace the disruption within startups
A guest post by Jeremy Basset
What does the future of your business look like? Will it be here in 20 years? Will your corporate be a dominant force in the industry, stronger than it is today, or will it slowly become small and irrelevant? Will it be able to embrace disruption, or is it heading towards its own Kodak moment? Is your projection of the next decade an extrapolation of the past, or are you anticipating a systematic shift?
In today’s environment, it’s impossible to know the answer to this question – but it’s important to spend time considering the scenarios and experimenting with the options, because the only guarantee is that the future of your organisation will look vastly different to what it does today, and experimentation is how you will find out.
Like many of life’s questions, Hollywood might hold the key to some of the answers. Let’s rewind the clock to the 1940s where Hollywood operated under a very different model.
Pre-1940s, virtually all Hollywood movies were created by the large studios who took vertical integration to new heights. At its peak, some studios were producing over 350 films every year. These factories for movies owned everything from cameras to lighting equipment. Actors, directors, set decorators, camera operators and others were all on the payroll.
Enter TV and federal antitrust violations, and studios started to decline in the late 1940s. What happened next was interesting: many studios downsized to skeleton organisations who pulled in a variety of independent and ad-hoc companies who simultaneously arose. These independents became the “on-demand” capability for each new production, and today we still see this in the 20 pages of credits that end each movie.
This ‘on-demand’ approach is often cited by freelancer platforms as an indication of the workforce of the future, however the ramifications are much more profound than that – Hollywood’s networked approach is an indication of how entire corporations might be structured, with the ‘nodes’ not simply being individual people, but adjacent organisations, startups and other partners. In the same way that Lego has built its business through collaborative growth, this same approach becomes a viable model of operation for other industries too.
Similar to the 1940s era of Hollywood, many corporates today are coming to terms with the challenge of diseconomies of scale. Within a corporate environment, it’s basically impossible to compete with the array and speed of innovation that is coming from startups. But corporates are increasingly realising they don’t need to.
For example, Unilever has realised it’s not about building their own Airbnb or Uber, but about embracing the disruption that already exists within startups. Here are two examples:
When it comes to oral care, the way we brush our teeth hasn’t really evolved significantly since the Chinese invention of the bristle brush in the 1500s. Every night I face the challenge of having to virtually headlock my 3 year old as part of our toothbrushing routine. Enter Playbrush, an Austrian startup that launched in 2014 with a mission to make brushing fun. Their device connects to manual toothbrushes and also has a bluetooth connection to an app on your phone which gamifies the brushing process. As one of the world’s largest oral care companies, Unilever has partnered with Playbrush via its Signal brand to launch a co-branded offering in France. Signal gets a fresh burst of innovation, a deeper connection to consumers and a new revenue stream. Playbrush gains the benefit of immediate scale via the endorsement of a global brand.
Similarly, Omo (known as Persil in the UK) in Brazil is a laundry brand which inspires playful development with the notion that ‘Dirt is Good’. Essentially, this global billion-euro brand sells detergents in boxes and bottles, and has done for decades. But the laundry market is changing with an array of on-demand offers that have your laundry picked up, cleaned and returned to your door within 24 or 48 hours. Where does that leave a brand like Omo? In November 2016, Unilever partnered with aLavadeira, a Brazilian startup to deliver a subscription laundry service. Again, Omo gains access to innovation and a business model that is difficult for corporates to replicate and manage, whilst for aLavadeira the partnership brings immediate credibility and scale to their business.
Like most industries, the FMCG sector is in the nascent stages of embracing collaborative growth opportunities, but these examples start to demonstrate how Hollywood’s evolution could also be the blueprint for other corporate structures. At the heart of this model you have an internal skeleton structure that offers the efficiencies and agility that today’s large businesses could only dream of. That is then supplemented with the capability to build partnerships and collaborative opportunities with ‘the outside’. The result is an agile powerhouse for scaling disruptive innovation – a guaranteed formula for a box office hit (at least on Wall Street).
Jeremy Basset is Founder & CEO of CO:CUBED Limited, a company which works with large corporates to help them define and execute their collaborative innovation capabilities. Prior to launching CO:CUBED, Jeremy spent 13 years at Unilever where he was responsible for launching and leading the Unilever Foundry.