In a recent forum that brought together enterprise and start-up, the salient point that came across was openness for both enterprise and start-up; recognising when to embrace and when to mitigate risk.
According to Mark Dando, most recently Head of Online & Mobile at the Australian Broadcasting Corporation, start-ups and enterprises need one another equally to deliver the business outcomes expected in this new age of digital disruption.
One way both parties can mitigate risk effectively, is to establish symbolic relationships (rather than a parasitic ones); start-ups need to establish themselves as the suppliers and sell to enterprise. This has been particularly evident in recent years, with start-ups servicing large corporations such as Telstra, Westpac and Macquarie in-house.
The Mortgage and Finance Association of Australia (MFAA) is a great example of an enterprise that brought on a start-up, developed a partnership and created new strategies, resulting in significant benefits to the mortgage industry.
However the start-up ecosystem within Australia is no Israel or Silicon Valley; there are more enterprises than start-ups currently existing in Australia.
From the enterprise side, Adam Bird, Product Owner for Digital at Westpac, observed that enterprise need to analyse the overall cost of disruption and then work out how to mitigate this risk by funding start-ups.
Rather than fighting disruption, enterprise should be embracing the culture and harness the business potential that start-ups are generating. And that sweet spot is what start-ups are doing differently, and what the enterprise hasn’t necessarily thought of.
If enterprise invest in start-ups instead of ignoring the benefits to customers, enterprise will have a profitable and agile resource that can be absorbed into the business as a standalone service; unlike the current situation following the emergence of Uber and the Taxi Industry, and the development of Airbnb and the impact it’s having on the Hotel Industry.
The ability to mitigate risk while still delivering business outcomes for customers is always going to be a major factor for enterprise; just as the statistics of failure for start-ups are well known (such as 70% of tech start-ups will fail).
But the key learnings for enterprise are even harder to ignore. Mitigating the risk is all about agility and in this new era of disruption, enterprise (and government) need to embrace change, through the agility that start-ups provide, to meet their customers’ expectations and deliver business outcomes.
Ashley Howden is the CEO of software quality and risk mitigation specialist KJR.