Innovation: big companies have so much to learn from start-ups

By Patrice Caine / Arabian Business


SOURCE: Arabian Business - Innovation: big companies have so much to learn from start-ups

Start-ups' flexibility, adaptability, and their trial-and-error culture could prove beneficial for big companies to further advance their operations, writes Patrice Caine, chairman and CEO, Thales

Large companies have to be able to innovate constantly if they want to stay ahead of the game. How can they make sure that they remain open to new ideas and work methods?

Innovating, for a large company means one thing: being humble.

Yes, you may have the capacity to invest massively in research and development (R&D) to hire the best engineers in your field. At Thales, we have 25,000 people working in R&D out of 65,000 – that’s a lot, and we know how essential it is to remain at the forefront of technology.

But it is not enough, for one simple, statistical reason: there will always be more groundbreakers outside of your company than within. And the idea that start-ups won’t be able to access the space, defence, security, transportation or aerospace industries because of their high entry costs is simply false: every day we see small companies come up with cutting-edge innovation, as recent examples have shown in the field of satellite imagery.

It is therefore a matter of survival for larger companies to continually challenge their own methods, to take risks, to detect innovative ideas wherever they are, very early on. This means seeking out the start-ups that bring new technology, new work methods, new enthusiasm to the table – working with them, but also being inspired by them. As one of the most innovative regions in the world, the Middle East provides a unique and brilliant opportunity for all stakeholders to get together and make innovation a reality.

There are two main ways in which large companies can benefit from start-ups’ driving force for innovation and transformation.

Learning from start-ups’ work methods

The first is being inspired and learning from their flexibility, their adaptability, from their trial-and-error culture. With their lean structures and ability to make decisions in a heartbeat, start-ups tend to be more and more responsive to passing opportunities compared to large companies with their demanding, but somewhat painstaking, approval procedures.

Rather than completely overhauling the way they work – a process that, in itself, takes time – companies have the option of incubating internal start-ups, preferably with a degree of liberty towards the central hierarchical structure.

These can work either on customer projects or on the digital transformation of the company itself, through specific programmes or employee training courses for example. That is the spirit of the Thales Digital Factory, located in the WeWork office building in Paris.

Learning from start-ups’ flexibility also means picking-up on their beta – or Minimum Viable Product (MVP) – culture. Instead of spending a lot of time developing a perfect product, the idea is to deliver a rough draft quickly, that can then be improved with the client and/or end users.

One example of this – even though Google can hardly qualify as a start-up – was Google maps: the first version was just a map, which gradually started incorporating information such as traffic, stores, restaurants, customer opinions, etc. This evolution is interesting because it is part of a global cultural change, with more and more appetite for testing, experimenting, but also for outside insight and collective intelligence.

Working with start-ups

Being inspired is one way larger companies can learn from start-ups. The other is of course partnering: identifying the most promising start-ups in your field and finding new, interesting ways to work with them.

The ‘identifying’ part can be more challenging than it sounds, with over 300,000 start-ups created in the world every year. How do you find the 10, 100, 1,000 start-ups that have something new to bring to your industry? Numerous government-led initiatives, accelerators and incubators exist in the Middle East to foster the growth of start-ups. It is really up to every company to find the hidden gems where they are, in the Middle East and in the rest of the world… and then to enter into creative partnerships with them.

That is the idea behind Starburst, a start-up accelerator with a focus on aerospace and defence technologies. We also lead the cybersecurity programme at Station F, where we coach eleven carefully selected start-ups.

The success of these new types of partnerships shows how useful they are for all parties: the benefit is obvious for large companies, who can keep their pulse on the latest market evolutions, but also for start-ups, who can test their technologies, be mentored by professionals and acquire new credibility in their field. We thus make sure that each Station F start-up focusing on cybersecurity has a team of experts available to help them develop their technologies.

The achievement of this programme so far and the amount of international applications we receive demonstrate how strong our attractiveness is to entrepreneurs in digital fields.

Earlier this year, we also established the Thales Cyber Hub to service the UAE and wider Middle East, which will see us partnering with local start-ups and leading academics, to share best practices for customers and businesses in the region.

With a long-standing presence of over 50 years in the region, we are committed to creating more fruitful cooperation between companies of all sizes and supporting the Middle East’s regional visions and drive for innovation.