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Start-up 1×1: What is ‘excubation’? Conplore dialogue with digital innovation expert Dr. Markus Anding

 In Deutschland, Digitalisierung, Europa, Köln, München, Start-up-Kooperation, Start-ups

Beitrag von: Dr. Markus Anding

Unternehmen: Excubate

Conplore Magazine:
Dr. Anding – What is ‘excubation’?

Dr. Markus Anding:

In a nutshell, excubation is a smart separation of corporate exploitation and exploration endeavors, where new ventures are given access to existing corporate assets (client base, etc.), while also being allowed to bypass the typical limitations of the corporate conventions and processes. The “smartness” of this approach lies in ensuring a cohesive, tight exchange between the in- and out-flow of innovation.

Conplore Magazine:
Many are talking about digital transformation and disruption – how strong do German companies perform when it comes to actual implementation?

Dr. Markus Anding:

With companies finally realizing that digital transformation needs to go beyond developing some fancy front-end apps and setting up a startup space in Berlin,
we currently see a second wave of digital transformation come up that focuses on delivering actual business impact. Eventually digital transformation needs to replace lost revenues or deliver new revenues as well as drive further process efficiencies. Looking at this broader extent of digital transformation, companies are not yet doing all that well. Most have understood this dilemma though and start to get serious about it by developing digital strategies and training the employee base.

When it comes to implementation though, we still see many German companies struggle with finding the right approach between sticking to current innovation processes and going too creative and too far away from the core business, not sufficiently connecting these two ways. What is missing is a better thought through middle ground, leveraging the best of both worlds, the execution and the exploration business. Especially German companies would be very well positions here, given their strong track record in quality and process efficiency.

Also, while most companies are used to invest significant funding in classical research and innovation activities, focused on incremental innovation and the next iteration of existing products, they don’t sufficiently direct funds into transformational and business model oriented innovation.

The reasons for that are primarily the incentive structures for corporate management, focused too much on protecting the existing business. American companies are doing better on that end, taking more risk and acting in a more entrepreneurial way.

Conplore Magazine:
Does the new corporate innovation lie in the organizational setup of start-ups? Why?

Dr. Markus Anding:

Both corporates and startups on their own lack important components that make an innovation successful, particularly in the digital space where innovations are increasingly software-based and speed-to-scale is ever more critical. While corporates can build upon existing assets, know-how, technology and client base, they lack the trial-and-error and risk-taking approach that is needed for speed-to-scale.

So, the “meta”-innovation lies in the smart combination of both, resulting in an organizational setup that resembles and allows a startup working mode, smartly combining strengths of both sides by giving enough freedom to act entrepreneurially but at the same time providing enough structure and access to corporate resources such that the startup can grow effectively.

Doing that, we believe corporate startups can be more effective, faster and more successful than “greenfield” startups.

Conplore Magazine:
What has to be taken special care of when building corporate incubators?

Dr. Markus Anding:

There are more than 7.500 corporate incubators worldwide. Most of them fail – at least when measuring their output against goals like new business, new revenues, significant bottom line impact.

Analyzing many of them, we found multiple reasons for these failures. Most incubators are either too much tied to internal processes (such as using the corporate IT or corporate finance processes) or set up too remotely to derive any benefits from being part of a corporate.

So, we suggest companies to consider three things when building corporate incubators, or rather “excubators”:

  • Provide just enough access to corporate resources and have the incubator and respective corporate startups decide which to use, don’t impose
  • Manage a balanced innovation portfolio of 10-15 substantial, not too small innovation projects, don’t go for unicorns or bunny hunting – ensure early and substantial business benefit
  • Staff the right teams onto innovation projects – it’s more about the team than about the idea and 60-70% of startups that failed, failed because the team was dysfunctional

Based on our research, excubate has defined seven rules for successful corporate entrepreneurship that provide more specific guidance on the points outlined above which can be reviewed at explained.excubate.de.

Conplore Magazine:
Mr. Anding, appreciations for your time and the profound insights!

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