Start-ups and large corporations: how to make it a real win-win situation

I recently spoke about Henkel’s collaboration with start-ups at the Digital Demo Day in Düsseldorf. This topic is close to my heart because I see it as an important source for innovation –and something that is and definitely should be of great strategic importance for many companies.

When I talk about our collaboration with start-ups, people always ask me about the challenges. About the reasons why a collaboration might fail. It’s important that we talk about that, because of course it happens. We, too, have already ended investments or stopped joint projects. But experience shows that, in most cases, collaboration between start-ups and large corporations are intense, fruitful and innovative. What does it take to succeed? In a nutshell: strategic fit, cooperation at eye level and the willingness to change.?

Strategic fit

Through strategically planned collaborations with start-ups, companies are expanding their innovative power – especially in those areas where they need impulses, expertise, and experience from external. For Henkel, such collaborations are an integral part of the digitalization strategy. We use them to strengthen our growth and competitiveness. In innovation projects, we systematically scan the market to decide whether we want to develop a solution ourselves, whether there are already exciting start-ups with adaptable solutions, or whether we could develop something together in a partnership. When large companies invest or collaborate with start-ups, they should always follow a strategic objective: are the industries interesting? How can the existing portfolio be expanded? Which customer needs do we want to address? What are we pursuing?

Henkel’s product portfolio of consumer goods and industrial solutions is very diverse, this is one of our strengths. As a result, we work with start-ups in different ways. We have been active in the B2B sector for a long time and work primarily with young companies from the materials science sector. This doesn’t always just involve product innovation, but also, for example, more sustainable production. We are also taking big steps with external partners in the consumer business. Here, it’s less about concrete materials and more about digital platforms and technologies. For example, we are working more and more on D2C solutions that allow our products to be developed and sold completely digitally. Speed and agility are crucial in the development of new business models. That’s why our internal teams are also working more like entrepreneurs within the company. And at the same time, we are benefiting from integrating solutions of start-ups.

Cooperation at eye level?

There are many different types of cooperation – from open innovation, joint projects and temporary collaboration to investments and long-term shareholdings. The right approach always depends on the situation.

In any case, cooperation should take place at eye level. If we successfully combine the best of both worlds, it’s a win-win situation for both sides.

Start-ups often need access to markets as well as resources, established structures and entrepreneurial know-how to be able to implement their ideas. Large corporations benefit from the focus, agility and dynamics of the founders. They receive important impulses and new food for thought – not only in terms of products and solutions, but also in terms of culture. New opportunities can arise from these differences. I am convinced that diverse teams are more creative, more innovative, and ultimately more successful. This involves a diversity of mindsets, different experiences, attitudes, and approaches. The requirement for successful cooperation is therefore the willingness to be open to new ideas and to adjust outdated structures. Both sides must approach each other, take each other seriously and respect each other. And I really do mean both sides. After all, it is not only the established companies that should be open to the new. Vice versa, start-ups also gain valuable insights and impulses from the collaboration. And when taking a closer look, it often becomes clear that the cultural differences that are often postulated are becoming smaller and smaller. The working styles in large corporations are also changing. That is also the case at Henkel. Which brings me to my third point.

Willingness to change

Despite all the cultural differences, the image of the large corporation moving at a glacial pace is a cliché. Big companies are increasingly using methods and structures that one might rather expect to find at start-ups. Henkel has deeply anchored its entrepreneurial spirit in its Purpose: “Pioneers at heart for the good of generations” ultimately also means being able to constantly reinvent oneself. We are well aware that digital transformation plays an important role in our ability to compete in the future. That is why we have created a dedicated unit for digital innovation,?Henkel dx.

In 2020, we also opened the first Henkel dx Hub in Berlin and built a dedicated team in Asia. In addition, we have set up incubator teams in our three business units. Our goal is clear: we want to be part of the digital ecosystem.

Even beyond our specific business activities, we are committed to the start-up community in Germany, for example with the?Xathon, an idea hackathon specifically for female founders (who are unfortunately still significantly underrepresented). Only when we support and promote ideas and the bright minds behind, we will create an innovation-friendly environment!

Collaboration with start-ups can be really enriching. But it does not substitute our own innovation strength and culture which we will continue to strengthen. In doing so, we are building on a great foundation: the pioneering and entrepreneurial spirit of our 50,000 employees worldwide, their customer and market expertise, and their great knowledge of technologies and trends. But above all, we are building on their commitment and willingness to explore new paths. This way, we will continue to drive our purposeful growth agenda – also in partnerships with start-ups.