“It is imperative for the larger organisations to partner effectively with the more nimble startups to help create a better world for all.”
—Paul Polman, former CEO, Unilever
Countries globally have a steep uphill climb to meet the United Nations’ (UN) 17 Sustainable Development Goals (SDGs) by 2030. This urgency has only increased with the debilitating social and economic effects of the Covid-19 pandemic, combined with the adoption of digitalisation which has very obviously been accelerated—as Microsoft’s CEO Satya Nadella noted: “We’ve seen two years’ worth of digital transformation in two months.”
The 2020s—designated by the UN as the “Decade of Action”—will be a period when the pursuit of the SDGs is even more important, and challenging. In the wake of Covid-19 the SDGs take on even greater urgency, necessity, and salience—yet will be even more difficult to achieve.
In this context, corporate-startup partnering can be a force for tremendous good and part of the solution, when it comes to looking beyond narrow profit considerations. As I explain in my recent book, Gorillas Can Dance: Lessons from Microsoft and Other Corporations on Partnering with Startups, non-traditional allies with complementary capabilities—such as corporations and startups—are well placed to generate solutions that have both an economic payoff and social impact.
The potential of partnering
mPharma, a healthcare technology venture operating in Africa, illustrates the potential of corporate-startup partnering in being a force for good. Its founders came up with the idea in the US, participated in Microsoft’s accelerator in Israel which helped to strengthen its technical expertise, and launched the company in Ghana. It has since established partnerships with several large pharmaceutical companies such as Roche and Pfizer, as part of its mission to make medication more accessible and affordable.
During the pandemic, a board member with ties to Silicon Valley and networks around the world helped mPharma connect with a corporation in China that could provide affordable equipment to support its diagnostic efforts which proved to be extremely timely in meeting the large demand for Covid-19 testing. All of these partnerships between the startup and large corporate partners have enhanced its capacity to contribute to SDG 3 which pertains to health and well-being for all.
Key to realising the potential of corporate-startup partnering as a force for good is the recognition that making them work in reality is not straightforward. While on paper these highly disparate organisations have complementary capabilities—such as the large corporation’s scale and startup’s agility—in reality, the very differences that make these companies attractive to each other as partners also pose challenges. I refer to this as the paradox of asymmetry. Corporations that have been effective at startup partnering have found ways to to deal with this challenge by addressing three asymmetries.
First, they explicitly and clearly clarify the synergies that are possible, to deal with the asymmetry of goals. Second, they create interfaces—entities like BMW Startup Garage or Unilever Foundry—that give startups a clear port of call within the corporation, to overcome the asymmetry of structure. Third, they cultivate exemplars, success stories that give both parties an attention of what their collaboration might achieve, which helps mitigate the asymmetry of attention, which is the idea that highly dissimilar actors often find it difficult to figure out which partners to prioritise their attention to.
When the potential of these partnerships is realised, the benefits can be considerable—not just to the two partners, but to society more generally by contributing to the SDGs. This has been demonstrated by the incredible innovation that arose during the pandemic. With the upsurge of digitalisation came anecdotal evidence of the value of corporate-startup partnering in turbulent times.
Corporate-startup partnering in the pandemic
In many cases, collaborations with startups have been adept at addressing pain points arising due to the pandemic. For example the Startups Against Corona initiative established by the former co-founders of BMW Startup Garage used expertise in building interfaces between corporations and startups to make over 300 startups’ solutions available to over 50 corporations.
These included the Swiss cement multinational LafargeHolcim partnering with an Indian startup, Leena.AI, to address workforce management issues caused by the Covid-19 crisis in Latin America. Also, London-based ChargedUp, a mobile charging startup, pivoted to hand sanitiser stations (called CleanedUp) during the pandemic, partnered with Diageo to make its service available in pub while Shanghai-based Hinonou added a mask and hand sanitiser to its health monitoring kit for elders, converted it into an anti-Covid 19 kit, and found an interested client in the French multinational Saint-Gobain.
Corporate-startup partnerships such as these represent an approach to innovating that brings together non-traditional allies with complementary capabilities by overcoming the impediments posed by their interorganisational asymmetry to achieve win-win results. Indeed, the last of the Goals, SDG 17—partnerships for the goals—ought to be construed not merely as the collaboration of non-market actors such as government and civil society, but also, my research suggests, market actors including large corporations and smaller startups.
Corporate-startup partnering has enormous potential for making headway in achieving the UNs Sustainable Development Goals at a time when many parties are struggling. The more these kinds of valuable collaborations can be leveraged, the more likely it is that ESG and social impact considerations will make the headway urgently needed during the 2020s.
Shameen Prashantham is a professor of international business and strategy, and associate dean (MBA), at China Europe International Business School (CEIBS).