9th May 2024

Early, innovative ‘scale-up’ companies and large, established corporates are like chalk and cheese.

Large companies are built to protect and maintain a successful, (usually) profitable position built up over decades.

Scale ups are built to move quickly, respond quickly to client requests and market changes. And, fundamentally, disrupt the status quo.

The Challenge of Collaboration

How can such organisations work well together when their purpose, setup and culture are so different?

Historically, attempts at collaboration between corporates and scale-ups have been riddled with failures, from faltering corporate venturing programmes to complaints about corporate treatment of start-ups.

Finding Common Ground

At their core, people in both corporates and scale-ups strive to excel, drive growth, and deliver outstanding service to customers. When harnessed effectively, the complementary strengths of corporates and scale-ups can yield substantial benefits for both parties. These benefits may include cost savings through innovative technologies, the creation of compelling customer propositions, and the amalgamation of corporate stability with scale-up agility and innovation.

When done well, combining the best strengths of corporates and scale-ups can result in huge benefits for both sides. This can include:

• Cost savings by applying novel technologies and ways of working to outdated operations
• Forming a compelling proposition to customers, which is greater than the sum of the parts
• Combining the balance sheet, professionalism, long standing success, and reputation of the corporate, with the customer focus, innovative tech, and drive of the scale-up

Forming a Partnership

We have spent years’ helping to form these partnerships. Here is our 9 step methodology to get it right…

1. Instil Great Partnership Behaviours

Attitude and people are key to partnerships. As with personal relationships, partnerships are complex and rely on goodwill and good behaviour from both sides.

Build a partnership on solid foundations – trust, regular communication, a positive attitude, and desire to see both sides succeed. This will set you up for success more than anything else.

2. Cultivate a Blended Culture

Focus on fostering the benefits of scale-up customer focus, and corporate professionalism. Corporates can benefit hugely from absorbing some of the agility, pace, impatience, and customer focus from scale-ups. Scale-ups can often benefit from absorbing some of the professionalism of a corporate.

You need the right people on both sides to make this work. We’ve all had these colleagues at work – people with a ‘can do’ attitude that seem to know how to get things done.

3. Find a First Use Case

This is perhaps the most important step. Once you have proven the joint proposition or business case for working together, everything else seems to drop into place. The onus is on the corporate here – by definition they will have a larger operation and more financial resource to enable the first joint case study.

The scale-up’s role is often ensuring great delivery. Not everything will go perfectly – but how they react and adapt to ensure success will go a long way to proving the new proposition will be a success.

4. Develop a Joint Business Plan

Write a joint plan of what you can achieve together. Be clear what is in in for both parties. Sometimes a scale-up can have a proposition which disrupts the corporate’s core business. If this is the case, be clear on the areas of the market that the two parties will disrupt together, and what is off limits.

This is key to ensuring trust.

5. Set Ambitious yet Realistic Goals

You can achieve great things together, but don’t expect a silver bullet. In our experience business is never a perfect upwards curve, but rather a bumpy process of growth. Be realistic; if you are growing (even if it’s not quite on plan) then keeping sighting of the bigger picture that this is still a successful endeavour.

6. Clarify Roles and Responsibilities

Be clear on the split of responsibilities between the parties. Who is responsible for winning business and different aspects of delivery? Who will manage the relationship with the end client? How will they interact with the other party? How will the partnership be marketed and promoted?

Defining clear divisions of labour and communication channels work to streamline operations and avoid conflicts.

7. Establish Mutually Successful Commercial Arrangements

Again, this is a fundamental to success. There needs to be enough to motivate both parties. Different factors can disproportionately motivate each party, and taking this into account can be key. For example, it is harder to scale-up (with scarce resources) to work ‘for free’ at the start of the partnership, so an investment/payment from the corporate will have a big positive impact.

Conversely, the corporate in order to ‘move the needle’, so the long-term revenue may need to disproportionately benefit them.

8. Celebrate Success

It’s hard to get right, but if you do have a ‘win’ together celebrate it as one team. This fosters a sense of unity and shared success, reinforcing the collaborative spirit of the partnership.

9. Fine-Tuning and Scaling Success

Once you have proven use cases, continuously iterate, refine, replicate successful outcomes, focussing on exceptional execution. Our most successful partnership delivered 15 joint customers in a 24- month period, underpinned by excellent execution on the part of both the corporate and the scale- up. This included the largest contract win in the corporate’s history, and the scale-up multiplying its valuation by 4x in this period.

The prize is there, and Form1 can help you achieve these results. We work with corporate partners to help them work with scale-ups, and with scale-up partners to help them scale and work with corporates.

If you want to scale your business in a sustainable way, get in touch to find out more.