Business performance alone does not make a company competitive. Established corporations need to innovate constantly, adapting their solutions to keep step with the fast-changing demands of customers and top talent. To do that, one of the most effective methods is for bigger firms to immerse themselves in the startup ecosystem and draw inspiration from the culture of these upstart enterprises, which is often conducive to agility and creativity. Michel Coster, emlyon business school professor and founder of the school's incubator and accelerator, and Noémie Rondeau, accelerator program manager at emlyon business school, talk us through these win-win collaborations.

Innovation used to be focused on improving business performance. Now, it is tackling the challenges of sustainability as part of a new approach requiring agility and thoughtful consideration. Corporations need to keep in touch with the latest market developments and tech breakthroughs, especially in artificial intelligence. Startups are often at the forefront of change, and have the culture and operating agility needed to support innovation. So how can larger businesses connect with them and draw inspiration from their ability to innovate?

Lessons in agility: how startups are reshaping innovation

Innovation is the keystone that supports the development of fast-growth startups. They command limited human and financial resources to cope with their unique challenges and fend off competition from corporations of all sizes. As a result, their ability to innovate dictates their competitiveness.

Being agile, identifying weak signals, fostering creativity and risk-taking, tolerating failure, anticipating breakthroughs and challenges to business models – these qualities form the building blocks for a culture of innovation. “Innovative companies are often firms that encourage employees to get out of their comfort zone, while at the same time creating a climate of trust. So people with novel projects are less fearful of failure and have the confidence to go for it,” observes Noémie Rondeau. “By embracing an open innovation approach and engaging with this ecosystem, more established companies are able to draw inspiration from this philosophy as they seek to unlock their own innovation.” Michel Coster argues that a critical issue in company development is to accelerate the process through which innovation can emerge and consolidate, with a view to creating vital growth drivers.

“Firms need to be capable of setting up in-house labs or incubators to create spaces that foster the exchange of internal and external ideas, by widening the circle of innovation generators to include startups, research bodies, clients, suppliers and experts. This is open innovation within a startup ecosystem and environment. Likewise, firms can create an in-house accelerator that emphasizes an intrapreneurial approach in which employees with inventive projects are empowered to turn their ideas into business projects through a system of support, facilitation and challenge.”

Previously seen as a niche approach, open innovation has gone mainstream, with 72% of European companies embracing the approach in 2023. Sopra Steria's Open Innovation Report 2023 cites the example of DNB, a major Norwegian financial services group, which structured its collaboration with startups through an accelerator program. After six years of conducting this type of partnership, the group began harnessing startup culture to offer innovative products and accelerate its environmental transition.

Effective ways to collaborate with startups and unleash innovation

So, how do established companies go about working more closely with startups? Some major firms rely on dedicated corporate venture funds that take capital stakes in startups operating in areas that typically tie in with the firm's own activities. “This is a great way for bigger businesses to identify growth drivers, while startups get external investment to grow their capital,” explains Noémie Rondeau.

Another effective method is to collaborate with incubators, which provide backing and resources to support the development of projects or companies. The advantages go both ways: the corporate gets inspiration from the startups and can keep watch for weak market signals and tech developments, while the startup benefits from feedback from the larger company and may gain access to its customers. “Major groups that already have a broad roster of customers that are attractive to startups aiming to expand may also provide precious business expertise to these young companies, particularly in areas such as marketing, HR or R&D. It's a win-win relationship,” adds Noémie Rondeau.

innovation_et_strat-ups

A company can also opt to build its own incubation or acceleration program, giving its employees the opportunity to interact with startuppers, while also backing people within the organization with original ideas. Cegid, a provider of management solutions, went down this route. The firm created a masterclass program and integrated startups in its own incubator at Station F, a startup campus in Paris.

Another option is knowledge brokering, which consists in gathering and leveraging feedback from companies in different sectors or segments. It is an approach that can yield surprising but effective results. A bank struggling to open international subsidiaries might learn, for example, from a fast-food chain that has successfully expanded beyond its national borders.

Hospices civils de Lyon (HCL) and emlyon business school: a ground-breaking collaboration in healthcare innovation

Driven by its resolve to pursue a pioneering approach in hospital innovation, Hospices civils de Lyon (HCL) reached out to emlyon for support in building skills and providing entrepreneurship training for hospital practitioners proposing innovative projects. This tie-up resulted in a specially tailored Innovative project management (MPI) program, which was designed by the emlyon accelerator. Focused on raising awareness about the challenges of healthcare innovation and strengthening skills in running projects and management, the program was backed by a multidisciplinary approach blending academic theory, the hands-on expertise of health professionals and the experiences of medtech entrepreneurs. The mechanisms put in place provided support to a dozen health professionals, and in 2023 the MPI program was a prizewinner at the HR Innovation Awards organized by the French Hospital Federation. The collaboration has paved the way for new methods and solutions aimed at improving health journeys, making HCL a model for other healthcare institutions with an interest in open innovation. “The entrepreneurial momentum now set in motion will support the emergence and distribution of many medical solutions for the benefit of patients and the hospital sector,” says Michel Coster.

Innovation's impact on employer brand and talent retention

While innovation is acknowledged to improve competitiveness, it also acts as a positive externality by playing a key role in attracting and retaining talent (War for Talents – how perceived organizational innovativeness affects employer attractiveness – Luise Pauline Sommer, Sven Heidenreich and Matthias Handrich)

Prioritizing innovation generally goes hand in hand with a dynamic work environment in which employees are empowered to develop inspiring projects. This agility can also feed into other aspects such as quality of life at work, organizational flexibility or a carbon footprint reduction strategy. All of which can improve employee engagement, with knock-on benefits for productivity and promoting the employer brand. “It is an increasingly important differentiating factor, especially for Gen Z employees, who do not share the same expectations as their predecessors when it comes to the job market” says Noémie Rondeau.

By drawing inspiration from the agility inherent to startups, more established companies can harness innovation to adapt to market developments, but also to attract and retain the best employees. It represents an opportunity to work effectively on retaining the talented innovators who are going to drive the company's transformation, argues Michel Coster. In short, it is a way for firms to turn their ability to innovate into a sure-fire competitive advantage.

Leveraging the resources, know-how and network of the emlyon business school, the accelerator program fosters collaborative innovation and partnerships with startups, industry and academic partners. It proposes tailor-made programs to stimulate and accelerate innovation that create shared value for all program participants.

Find out more
News