What is the secret to making partnerships between start-ups and large companies work in Italy? According to a recent study conducted by McKinsey & Company in collaboration with B Heroes, collaborating to innovate is the right recipe.
The study analyses the characteristics of the European context and the state of the relationship between start-ups and large companies in our country through the point of view of over 80 Italian B2B and B2C start-ups active in various sectors and a relevant panel of managers of large national and international companies. It can be deduced that one of the factors that could help start-ups in Europe overcome the obstacles to growth is collaboration with large companies. Large companies can act as catalysts to accelerate access to investment and the end-user market. However, it is necessary to identify a path to success and to establish a model of interaction that is effective for both, that can be implemented on a large scale and that is sustainable over time.
Success factors for partnerships between companies and start-ups
The McKinsey survey identifies a number of success factors. In first place is the CEO's firm commitment to innovation and system building. The endorsement of the top management is an ingredient always present in the few cases of true open innovation in Italy. In the organisations of large companies, characterised by consolidated processes and formalised structures, the commitment made by the top management is the winning solution capable of overcoming internal resistance and the rigidity of the systems.
In addition to the role of leadership, it is also important that innovation becomes cross-functional and embedded in the working approach and corporate culture. However, not all innovations are destined for success, so an approach that allows for experimentation, testing and ongoing change is needed.
In addition, collaborations need to be developed quickly, with pathways created to scout and select the most promising ideas to meet business objectives. Finally, it is crucial to respect the identity of the start-up, managing innovation in such a way that the start-up responds to the specific needs of the company, but does not lose its value proposition and target market. Then come the involvement of the entire company, the willingness to experiment while accepting failure, the speed in making decisions that commit budgets and resources necessary for the partnership, and respect for the identity and culture of the start-up, which should not be integrated into the company but rather should contaminate the company.
Collaboration that works but not always
More than 80% of the start-ups surveyed by McKinsey say they are satisfied with their collaboration experiences with companies. A good result in a nascent market, but it doesn't cover the differences and critical issues on both sides of the relationship.
First of all, start-ups are not all the same. Those in their early stages are less motivated and look to the large company mainly as a financial partner, while more mature ones (turnover over 250,000 euros) consider partnerships to be a factor of fundamental importance to guarantee large-scale and sustainable business growth. These start-ups consider large companies not so much as a potential target from which to obtain funding, but rather as an operator with which to initiate a medium-long term collaboration.
The brakes that slow down possible collaborations between start-ups and large companies are well known: among others, the length of decision-making times, the complexity of governance and the cultural gap. These differences still make open innovation more of an expression of interest or declaration of good intentions than a productive activity. In fact, despite the fact that 70% of start-ups believe that it is not particularly complex to find a partner interested in their idea or business model, almost all of them state that most companies do not seem ready to enter into a relationship with small businesses.
In conclusion
Partnerships between companies and start-ups are beneficial for both parties, but it is necessary to work on cultural factors, promoting positive contaminations that recognise and respect the different identities: on the one hand, companies must align their organisational context, in terms of processes and timeframes, to work with start-ups; on the other hand, start-ups must learn to understand the language of the business and their interlocutors, decision-making processes and governance.