What’s the one thing companies have that startups don’t? Customers. Access to customers is indispensable to learn if new business ideas have the potential to become solid growth engines. So why is it so difficult for corporate innovation teams to connect with a company’s existing customers?
This is a topic that frequently comes up when we work with teams who need access to customers for corporate innovation programs. You would assume that innovation teams and companies have access to customers, but they often don’t. Why? Customers (especially key accounts) are managed and very protected by the sales team of the existing business.
The fear? The sales team might think the innovation team will mess with their bonus structure or raise customer expectations for a new product. The marketing team might think that testing low fidelity experimental ideas will mess with the brand. The legal team might think business experiments could create liabilities. It’s a cultural issue that needs to change. I believe there are solutions that can address the issue. In this post we outline three of them:
1. Create and leverage the Chief Internal Ambassador role.
In our “org chart for 21st century companies” I call for the creation of the Chief Internal Ambassador. This role can be a bridge between the existing business and innovation teams if it’s powerful enough and has the backing of the CEO. The Chief Internal Ambassador can manage the co-operation between business and innovation and help make clear why innovation teams need access to customers to test ideas. The Chief Internal Ambassador knows everything that’s going on and understands everybody’s agenda in the company. He or she can help build compromises that allow innovators to test their ideas without negatively impacting business as usual.
2. Get legal on board.
Companies also have a fear of badly handled experiments: what if the tests run into legal liabilities that damage the brand? Can the company be sued? Innovation teams have to get buy-in from the organization’s legal team to help assess and design customer experiments without putting the company at risk. If the experiments are managed well, the result will be more loyal customers who are often interested in participating if it benefits them as well. Customers love to be engaged in product development. Innovation teams need to see the legal department as an ally and hire one of them into the team. Compliance is a reality and innovators need to work together with legal to creatively design experiments that don’t endanger the company.
3. Sales quotas.
Finally, the sales team and innovation team need to be aligned. Some companies are starting to understand that. DSM, a Dutch chemicals company, has created a quota where a percentage of sales has to come from new and innovative products. This encourages the sales team to give innovation teams and product managers a chance to experiment and understand existing customers because the sales bonus will depend on it.
4. Use your customers to attract interesting startups.
BMW has taken a completely different angle to the problem. They used their existing customers to attract early-stage startups, rather than “just” give their internal teams access to customers. BMW’s venture capital arm developed the concept of “Venture Client” and “BMW Startup Garage”. The Startup garage offers the best early-stage startups access to their customer base in return for access to their innovations. This allows BMW to compete against the best VCs out there.
The biggest mistake a corporation can make is barring innovation teams’ access to customers. Innovators that don’t have access to customers can’t test their ideas properly. Innovators that do have easy access to customers are able to systematically decrease the risk of new business ideas. So figure out how to best give your innovation team access to customers. Your corporation’s survival--along with future growth and preventing disruption of your organization--depends on it.