Occupier_Edge_Ed5

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DISRUPTION

DISRUPT OR BE DISRUPTED

American business guru Clayton M. Christensen coined

the term disruptive innovation during the late 1990s. Since

then, there has been a demise of industry incumbents who

have been outmanoeuvred by new technology and business

models. Corporations are focused on avoiding the mistakes

that killed giants such as Kodak and Blockbuster to ensure

they are not pushed out by innovators like Uber and Airbnb.

Christensen also identified the ‘Innovator’s Dilemma,’ a

problem that many large and established companies face.

When making healthy profits today, the incentives are

stacked against adopting new technologies or business

models that could disrupt the established business. The

result is that scale and embedded risk aversion can prevent

agility to changing markets and competitors. Whilst

investment in research and development can achieve

incremental change, it is essential to have an awareness of

disruptive threats and the right organisational structure in

place to respond to fundamental innovations in the market.

IF YOU CAN’T BEAT THEM, JOIN THEM

Outside the corporate environment, we are seeing the

entrepreneurialism of startup ecosystems producing the

fastest pace of innovation. A growing number of major

corporations are looking to harness that potential by creating

corporate incubator programmes and innovation spaces.

These spaces can be used to identify and develop new

opportunities outside an organisation’s existing operational

structures. In such, an ‘ambidextrous organisation,’ find

successful ideas from experimentation.

For incumbent organisations, the incubator should focus on

the organisation's area of business – i.e. banking group DBS

running a FinTech accelerator. The corporate incubator can

then leverage the resources of the organisation and harness

the agility, technology, and creativity of startups in order to

future proof the business strategy by gaining access to new

competitive advantages.

There is a compelling proposition for startups

too.

By working with a large corporation, the startup

gains access to domain expertise, networks,

distribution channels, customers, mentoring

from employees, physical workspace, and

possibly also investment and capital.

Unsurprisingly then, the range of industries

where corporations have initiated their own

incubator scheme is hugely diverse. It ranges

from the traditional technology company,

IBM; to the aircraft manufacturer, Airbus; to the healthcare

provider, BUPA; as well as the telecommunications operator

Telefónica – to name just a few.

A SPACE FOR INNOVATION

Every organisation has different goals for their corporate

incubator programme and these will feed into the approach

that is adopted for delivering the programme.

For smaller incubator programmes, the sponsor may either

bring the startup teams into their offices directly – perhaps

designating an area for those on the programme – or provide

rented space within a co-working facility with embedded

corporate employees there as mentors.

Where a larger or permanent incubator programme is

planned, corporations have invested in creating designated

incubator spaces, often within major offices or HQs.

Partnering with a delivery operator is common, utilising their

expertise to run the space and provide events and networks.

The incubators often utilise a co-working style, with open-

plan as well as private rooms having proven popular to foster

collaboration. As corporate incubators focus on a particular

market segment, the benefits of sector agglomeration in

a single space is key for driving innovation based on the

‘random collision’ theory.

However leaders in this field recommend avoiding ‘innovation

theatre,’ shunning the decorations associated with some

startup work spaces (bean bags, indoor slides, and football

tables) for a practical workplace to nurture collaboration. The

corporate incubator space needs to be flexible to different

configurations and agile methodologies, whilst having high

quality amenities and excellent connectivity.

A NEW CHALLENGE FOR CORPORATE

REAL ESTATE

The appetite for corporate incubators seems to show no

sign of slowing. When a corporate incubator is proposed,

corporate real estate leaders need to be highly engaged

with the business in order to enable the right space and

management to be implemented.

Re-configurations of existing

offices may be necessary, or

the acquisition of new space –

ideally in proximity to current

office hubs. Partnerships are

likely to be required with

the operator and refitting

of existing offices is usually

needed to create a suitable

workplace. Access to and

from the incubator will need

controls - without preventing

the intended permeability

of staff into the space -

and IT should balance easy-of-use with data security by

maintaining corporate network access for employees but

providing a separate network for incubator companies.

BY PROVIDING THE RIGHT

WORKSPACE TO AID

COLLABORATION BETWEEN

THE CORPORATION AND

STARTUPS, CORPORATE

REAL ESTATE CAN ADDRESS

DISRUPTIVE INNOVATION

AND HARNESS IT TO POWER

FUTURE GROWTH.