Co-innovating with startups: 5 steps for success

Startups can help your organization kick-start innovation. Here’s how CIOs can hone their approach to courting fledgling vendors of emerging technologies while reducing risk.

Few IT leaders have the in-house talent to build the bleeding-edge technologies that many digital initiatives require. To fill this gap, CIOs are increasingly looking to startups to help fuel innovation around blockchain, internet of things (IoT), AI-infused analytics and cybersecurity software.

But working with startups courts risk. Most startups rarely last 10 years, as acquisitions and flame-outs challenge the long-term direction of even the most promising vendors. Then there is the culture issue, which is often a bridge too far for CIOs beholden to big company bureaucracies. New companies just operate differently than enterprises. 

Even so, CIOs can’t afford to ignore the newcomers when seeking strategic partners, and many enterprises have formal programs in place to work with startups. Ninety-five percent of large organizations with a structural innovation program invest in tech incubators, while 90 percent work with startups or niche vendors directly, according to Gartner research. And 84 percent of organizations acquire startups to bolster innovation.

In the market for innovation

Startups are a big part of the operating model for Johnson Controls CIO Nancy Berce, who works with big tech companies and startups as part of a “big bet, no regret” approach to innovation. The company, which develops smart technology that helps manage fire and alarm systems in buildings, is currently working with Google on cloud software to manage data it collects from call monitoring systems, and is building a proof-of-concept with a video surveillance startup.

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