Image Credit: canadastock/Shutterstock
It’s time for corporate boards to add “startup engagement” to their CEOs’ job descriptions.
CEOs know it’s important to engage with startups, but startlingly few seem to do it themselves. Too often this critical responsibility is shrugged off to other company departments, including innovation, business development, marketing, and PR. This is just not enough.
Startup engagement needs to be taken seriously at the very highest levels of every corporate organization.
Why corporates need to collaborate with startups
Engaging with tech startups is no longer an optional nicety for corporates – if it ever has been. It is literally a case of work with tech startups or die.
Many CEOs will say they are already engaging – and the figures, at first blush, bear this out. The number of non-tech corporates buying up tech companies is rising fast. The total value of transactions of non-tech companies acquiring tech companies more than doubled from $54 billion in 2015 to $108 billion in 2016, according to EY.
In addition, according to a survey by MassChallenge, four in 10 corporates say they use resources for accelerator or incubator space for startup interactions. One in two say they use staff to interact with startups.
But, look a little closer and you’ll see that much of this is PR veneer. The statistics show that, shockingly, only one in 10 corporations say their senior executive team has any explicit responsibility for startup interactions.
More often than not the responsibility for talking and engaging with startups is farmed out to innovation, R&D, technology, strategy, business development, and marketing departments. It is, of course, critically important that these departments also play a role in startup engagement – but this cannot be to the exception of the company’s leadership.
Why it needs to come from the top
It is not enough for startup engagement to remain siloed in technology departments for a number of reasons.
- First, we know that tech, innovation, and R&D departments themselves do not have enough exposure to the top team. In fact, only 34 percent of CIOs report directly to the CEO, according to the latest survey from Harvey Nash/KPMG.
- Secondly, the real value of startup engagement is that it gives the leadership team of an organization some visibility into what the future holds for their industry. It gives them a snapshot of…