• by Sean Hargrave , Staff Writer, May 16, 2016

The problem with innovation is that big brand "corporates" are spending all the money, and the result is usually nothing particularly disruptive. in fact, corporates are spending around ten times as much as start-ups on innovation, but take a look around. Who's doing the disrupting? Uber and Airbnb did not come from a large established cab company or a hotel chain.

So it's not surprising to see that L’Oréal is now working with an incubator to help it either discover the next big thing or, far more likely, find solutions to everyday business problems. That is certainly Unilever's approach, outlined at Adobe Summit last week in London. The vision is pretty simple. Rather than go out looking for a start-up with a great logo and tag line, they instead ask business managers what problems they are facing before scouting around for start-ups that are working on something that could be the solution. So far, 98 projects have been piloted and 47 taken forward to implementation.

In fact, if there was an unofficial theme behind many of the panels and speeches as last week's huge conference, it would have to be that partnering with start-ups is the best way forward. Accenture's aforementioned figures made the decision stark. Corporates face the uncomfortable truth that they are spending ten times more than start-ups on innovation, but the process is too slow and often disrupts little while the corporate faces the disruption of multiple start-ups disrupting its industry.

This doesn't necessarily have to be an Uber moment -- it can also be the cost of several start-ups nibbling at revenue lines -- the guys who do good installations of your product, or do better shipping or make it easier to take mobile payments -- all of the services around a corporation's core business are constantly being nibbled away at by small, lean start-ups.

So, just as L’Oréal is finding and Unilever found some time ago, there is a very good chance that the right solution to the problems a business is undergoing could already be under investigation at a start-up. Bringing that start-up into the fold -- or at least partnering with them on a project -- can make more sense than trying to solve the problem internally at great expense and a slower time scale.

Any brand that is still unconvinced would do well to look at the innovation coming out of a tech giant such as Google. It has been gobbling up start-ups for breakfast for the past few years, and nearly every new capability or service has come about through investment in a start-up. 

A word of warning, however. There is a potential for culture clashes when beanbags and ping-pong tables meet ties and accountants, and so that is why the smart operators such as Unilever invest the time in getting to know start-ups and run pilots to see that the technology on offer actually works and can scale. In so doing, both sides get a good feeling of how well they might work together on a fully fledged project.

So if you truly believe your industry's Uber moment will come from people from within your four walls, then you can rest easy. However, the realists out there are accepting that an Uber moment will hit their industry at some point -- and if they are not aware of an internal project that is about to cause that moment, it's time to get talking to start-ups.