Driving Innovation During a Pandemic: Stay Nimble, Seek Partners
When innovation meets scalability
At a time of unprecedented economic uncertainty and widespread layoffs, many business leaders — no matter their company size — are asking themselves the same question: How do we stay relevant (and profitable) in a rapidly changing marketplace?
During a June 2020 virtual roundtable that I attended, leaders from three Fortune 500 companies — each in business for more than 150 years — discussed challenges and opportunities in the “new normal.”
The focus: innovation during a pandemic. How to find it? How to scale it?
How Legacy Companies Are Racing to Meet the Demand for Change
For 177 years, Western Union has been a trusted brand for sending and receiving money. With 550,000 retail stores in more than 70 countries, the company has faced recent headwinds as store closures due to COVID-19 have meant more reliance on digital payments.
That’s something the company’s global customer base wasn’t ready for, according to Western Union’s chief strategy and development officer, Jeff Hochstadt.
“People are used to going to locations to either send money, work, or receive money. And those locations are not open because of the pandemic — you know, how are they going to get their money?”
Hochstadt says Western Union has made it a top priority to accelerate its digital payment offerings, helping customers navigate mobile apps and access deposits made directly to their bank accounts. That’s required a high degree of agility, ramped-up customer service, and intense company focus. Here’s how they did it.
“We set up six rally teams. ‘How do we make this happen and how can we make it happen now? It’s imperative now,’ Hochstadt recounts. ”I think it did ramp up some of the ideas that we’ve had in the past…We were able to focus different parts of the organization…to get through the pipeline a lot faster than they would have.”
Smart Partnerships: Forging Alliances between Large and Small
One of the strategies large companies such as Western Union are pursuing is expanding partnerships with startups, either on their own or through accelerator programs like the one run by Western Union and Colorado-based Techstars.
During the roundtable, facilitated by Techstars, Terry Luciani, vice president of enterprise innovation at 152-year-old insurer MetLife, provided insights on the rationale of melding legacy companies with startups, especially in the current environment. MetLife is a Techstars partner in a North Carolina–based InsurTech accelerator.
“We do have the brands and we do have the legacy, and there’s a trust that we build up. We try to build stuff, we could build it, but it takes a long time and a lot of resources and money.”
Enter the nimble startup.
“There’s a lot of ways we can drive value for customers much quicker through these partnerships with really bright, driven founders that are working on very new and different solutions,” Luciani says.
The Winning Startups: Those That Can Pivot Fast
Take the example of the alliance between diversified industrial behemoth Stanley Black & Decker — founded in 1843 — and product-design startup NV Earth. Stanley Black & Decker’s relationship with the Houston-based startup began during the older firm’s accelerator collaboration with Techstars. Since then, NV Earth has gained significant market traction by expanding its focus on bio-based lubricants and degreasers to also include a critical defense against COVID-19.
Marty Guay is vice president of business development at Stanley Black & Decker.
“We invested in the company after the accelerator, the beginning of the year. When COVID hit,” Guay says, “They called us and said, ‘You know, we can make hand sanitizer.’ We actually work with them on the supply chain and gave them an order that grew their company, I don’t know, five times with two orders in the last 45 days? Now they’re licensing, through all of our brands, hand sanitizer — through our channels. So this company is really going to move quickly.”
Message to Startups: Go Wide and Deep
The insights shared by Guay and Luciani track with my experience as a Techstars mentor at the MetLife Digital Accelerator Powered by Techstars Accelerator. The InsurTech startup teams I worked closely with expended considerable effort determining where their offerings met market need, and frequently iterated.
Guay says successful startup founders know how to spot market opportunities and continue pivoting until they reach product-market fit.
He points out that a key factor that’s made the partnership with NV Earth a success is its founders’ strong understanding of Stanley Black & Decker’s culture and process.
His advice for startups looking to pitch corporates on potential partnerships? Do your homework. That means careful due diligence, a keen understanding of P&L drivers, and an objective determination of whether there’s business alignment — before you even reach out.
“Read the first 10–15 pages of the annual report. You’ll know exactly what the CEO wants, Guay advises. “You’ll know what the board has approved. And you’ll know the words that the organization uses to describe things. So you want to speak in the language of the customer… And if your solution doesn’t save money, make money, or create value, then you haven’t earned the right to continue the discussion.”
Digital Transformation on Fast Forward
Each of the roundtable leaders predicts that digital transformation will continue at an accelerated pace. Laila Partridge, the Techstars managing director who works closely with startups through the STANLEY + Techstars Accelerator, says digital is a winning trifecta: for startups, companies, and customers.
“Someone who knows one expertise is trying to communicate something to someone that doesn’t. Those are all areas where you can improve. And the way you’re going to improve is digital, right? You’re going to communicate better; you’re going to have better collaboration tools. You’re going to be able to document things better digitally…Then, once you have the data, you can analyze it. You can go to AI and machine learning and go from predictive to prescriptive [AI], and things get really exciting after that,” Partridge says.
With COVID-19’s impact on business and the economy expected to be measured in years, being agile, adaptable, and perhaps even more patient could become the new currency, especially when in-person communications aren’t possible.
“The implication for our startups is that people are going to be more forgiving if you’re remote,” Guay predicts. When I used to be on a Zoom call, you know — a month or three months ago, a year ago, I’d hear a dog barking in the background. I would just get frustrated and think to myself, that’s pretty unprofessional. Now I want to know what the dog’s name is, right?”
A barking dog may not guarantee that your startup lands any business, but at least you’ll know your prospects are listening.
Watch the full virtual roundtable: https://bit.ly/3isC45Y
For more on leading effectively during a pandemic, explore these articles:
CEO Communications During COVID-19: Bring the Real You: Perspective from CEOs @Accenture @Verizon @Celanese https://bit.ly/MediumCEO
Leading Organizations and Managing Yourself in Next Phase COVID-19: Insights from Marshall Goldsmith and Sydney Finkelstein https://bit.ly/LeadingMedium
