Innovation ecosystems and corporate-startup partnerships – in conversation with Shameen Prashantham, author of ‘Gorillas Can Dance’

Shameen Prashantham is a Professor of International Business and Strategy, and Associate Dean (MBA), at China Europe International Business School (CEIBS) in Shanghai, China. He earlier taught at Nottingham University Business School (NUBS) in Ningbo, China and the University of Glasgow. He is the author of Gorillas Can Dance: Lessons from Microsoft and Other Corporations on Partnering with Startups (see my book review here).

See also YourStory’s Book Review section with takeaways from over 330 titles on creativity, entrepreneurship, innovation, social enterprise, and digital transformation.

In this conversation, Shameen shares his views of innovation journeys, risks of failure, and the power of corporate-startup collaborations.

Edited excerpts from the interview:

YourStory [YS]: What is your current field of research in corporate innovation?

Shameen Prashantham [SP]: For now, it remains corporate-startup partnering. A major driver of the collaboration that I’ve studied (and which the book is based upon) was digitalisation; going forward, I am seeing sustainability potentially playing a similar role.

An important facet of my work is its global outlook, and this is especially important in relation to corporate innovation for combating climate change, one of the most important of the Sustainable Development Goals (SDGs).

[YS]: How big a role does academics play in innovation? Can innovation really be formally taught?

[SP]: In addition to the impact of academics in technological and scientific domains to fostering innovation, business schools also have a vital role to play.

At China Europe International Business School (CEIBS), I have found that my classroom input on corporate innovation and entrepreneurship has stimulated the thinking of executive audiences – and has also helped me refine my own ideas.

Furthermore, top schools like CEIBS often have some entrepreneurship support programmes or centres that further facilitate the practice of innovation. A short while ago, I was invited to briefly share some core ideas from my book at the demo day of a corporate accelerator programme that had been run in partnership with IIM Bangalore’s NS Raghavan Centre for Entrepreneurial Learning (NSRCEL).

That’s further evidence of the possible synergies between academic institutions and corporate innovation activity.

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[YS]: How was your book received? What were some of the unusual responses and reactions you got?

[SP]: It has been gratifying to receive a lot of positive feedback. Particularly satisfying is that the core messages of the book seem to have been coming across clearly.

For instance, a piece in Forbes states: “As Prashantham points out, all the companies that have taken start-up partnering seriously have a collaborative mindset.” That’s spot on. Also, the piece in YourStory about my book is an incredibly good summary of its core ideas!

In addition, over the past three months, I’ve been invited to a number of events and podcasts which gives me the sense that the topic of corporate-startup partnering seems to be timely.

As for an unusual response, someone told me that they found my description about the “paradox of asymmetry” – the idea that the very differences that make corporations and startups attractive partners also make it challenging to collaborate – also applies to marriage!

Finally, it’s been fun to receive pictures from people holding the book from around the world, which has resulted in this little video.

[YS]: In the time since your book was published, what are some notable new examples of innovation partnerships you have come across?

[SP]: One of the examples I mention in the book, Cisco LaunchPad, is one that I have continued to follow, and so while it’s not exactly a new example, I have followed more recent developments since the book was written.

I think Sruthi Kannan and her team have done a splendid job of taking the programme online since covid struck, as also to work closely with alumni startups to enhance their impact during the pandemic.

As one example, Bangalore-based Cloud Physician which proves remote technology services to hospitals’ intensive care units (ICUs) was able to partner with Cisco to make an important difference when India’s deadly covid wave struck, especially in smaller cities and towns.

The next edition of Exploring Strategy, Europe’s leading textbook on strategic management will include a case on Cisco LaunchPad that I’ve coauthored with Sruthi.

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[YS]: Corporate intrapreneurs play a big role in accelerator partnerships, but their role is often misunderstood or underestimated. How should companies improve their ‘intrapreneur quotient’?

[SP]: Many examples in the book feature intrapreneurs – such as Gregor Gimmy at BMW and Zack Weisfeld at Microsoft – who, in certain instances, chose to seek forgiveness rather than permission, at least to get going with startup partner programmes.

So my first observation is that would-be intrapreneurs shouldn’t necessarily wait to be “properly” understood or appreciated to begin, if they truly believe in bringing about the change they are interested in.

That being said, it is of course important for companies to “improve their ‘intrapreneur quotient,’” as you put it. For this, top leaders have an important role to play in legitimising the notion of intrapreneurship.

A case I refer to in the book, Intel’s GrowthX, could make steady progress under Kapil Kane because it had the blessing of the company’s leadership, and today is poised to play an even bigger role in the company as a result of the positive impact it has had.

[YS]: Most of the case studies in your book feature big companies. What kinds of partnerships are possible between SMEs (small/medium enterprises) and startups? Any good examples you can cite here?

[SP]: I have primarily been studying partnering between large corporations and startups.

However, for small- and medium-sized enterprises (SMEs) – especially those that are M rather than S – that have strong innovation fundamentals and business strengths, there is no reason why they can’t engage effectively with startups.

For instance, innovative SMEs in Germany – referred to as the Mittlestand – have begun to engage with startups, notably from Israel, as indicated by an initiative called the German Israeli Network of Startups and Mittlestand (GINSUM).

Alternatively, it may make sense for some SMEs to spin-off promising new ideas into startups that could then partner with large corporations.

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[YS]: What are some good practices you have come across in how corporate accelerators work alongside CSR and CVC (corporate venture capital)? How can the three be better aligned?

[SP]: My sense is that it is still a work in progress for companies to integrate corporate accelerators, CSR and CVC. Part of the challenge is that some corporate accelerators focus on relatively early-stage startups (series A or earlier) whereas their CVC counterparts focus on more mature startups (series B or later). Over time, this distinction may begin to blur, and we may a more joined-up approach across these forms of startup engagement.

In terms of CSR intersecting with startup partnering, my research in Africa has identified some promising possibilities. Microsoft introduced a global social enterprise programme, which initially catered to ventures from Africa.

In Ghana (where the Africa campus of my institution, CEIBS, is based), I came across an NGO called Reach for Change connecting social enterprises with large corporations that supported the former’s innovation (e.g. developing edtech solutions for less privileged children) using their CSR funds.

Another startup I came across called Kusini makes water filters using clever frugal innovation. They partnered with DHL, leveraging that corporation’s CSR, to set up water filters in numerous hard-to-reach locations in South Africa.

[YS]: The innovation journey often faces setbacks and failures. How should innovators interpret and bounce back from failure?

[SP]: A quality that has become widely discussed as a result of the covid pandemic is “resilience” – and I suppose this is at the core of what all innovators need. But it’s not easy to be resilient.

On the part of individuals, what I have seen in resilient people is that they typically combine realism with optimism, develop work-life balance and demonstrate tenacity as well as self-awareness and mindfulness.

In terms of organisations, they should anticipate that there will be many instances of failure, and provide intrapreneurs and innovators with a career path that includes options if an initiative does not work out. Importantly, the organisational culture needs to not merely tolerate but encourage proactiveness, innovativeness and (calculated) risk-taking – and help managers feel safe to try and fail.

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[YS]: How should innovators evaluate weak signals and anecdotal evidence which seem to contradict quantitative market trends?

[SP]: Great question! And a very tricky one – because things become extremely clear in hindsight, and extremely difficult to evaluate at the time. The only suggestion I have is to keep exploring multiple low-cost probes.

And for large corporations, this is precisely what startup partnering offers. When weak signals emanate from startup innovations, and if these become triangulated from more than one source, that’s probably an indication that more attention should be paid to this.

Incidentally, one of the challenges for large companies is that weak signals get picked up by different parts of the organisation – that don’t speak to each other. To reduce the chances of this happening, it’s important to cultivate entrepreneurial boundary-spanners who engage with different parts of the organisation, at least informally.

And again, here, the people leading the startup partnering initiatives might be well placed to play this role.

[YS]: What are the key policy enablers for governments to support corporate-startup partnerships?

[SP]: In my chapter on Partnering with Startups around the World, I highlight a couple of instances in which local policymakers themselves have exhibited entrepreneurial behaviour to facilitate corporate-startup partnering.

For instance, in one example the policymakers essentially combined their agendas for attracting foreign investment and fostering entrepreneurship by setting up a year-long partner programme that acted as an “honest broker” to connect the subsidiaries of multinationals (like IBM) with local startups.

In another case, government officials in a smart city programme were able to use that initiative (rather than have to create a separate partner programme (to bring together large corporations with local startups. Creative and dynamic policymakers are thus relevant not only at the national level but also at a local level (e.g. in states, districts and cities).

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[YS]: What is your next book going to be about?

[SP]: If all goes to plan, the next book will extend the idea of collaboration among non-traditional and very different allies to the Sustainable Development Goals (SDGs) that deal with areas of sustainability and social impact (including climate change).

In a sense, it will be an expansion of the book’s final theme of partnering as a force for good.

[YS]: What is your parting message to the startups and corporate innovators in our audience?

[SP]: Keep trying – and use each experience as a stepping stone to improved efforts at corporate-startup collaboration!

[YS]: Any other comments or remarks?

[SP]: I am pleased to be able to share ideas from my book, Gorillas can Dance, with your readers given that India has played an important role in my research journey, and many of the examples in the book involve India and Indians in other parts of the world.

I hope YourStory readers will find the book useful in their own pursuits as entrepreneurs, intrapreneurs and innovators!