Corporate venturing, collaboration between corporates and startups… we read and hear a lot about it on social media. But is it as simple as it seems?
From an anthropological point of view I will sketch some of the main corporate cultural differences.
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A Win-Win Collaboration
Startups need capital to grow and corporates need to reinvent or renew themselves through the arrival of new technologies, new values and needs, through disruptive models …
Pursuing a win / win situation is the best solution, but how do collaborations work? They have very different organizational cultures. Corporate culture is established for a long time, is organized into structures that work. The startup culture is embedded in a dynamic ecosystem.
What is corporate culture?
Culture has an all-embracing character and covers all aspects of human actions and thinking. This human action produces structures (cultural, social and psychological). These structures start to lead a life of their own. Those structures determine the situation in which people act and provide the resources they need for this.
Knowledge is important within culture.
Cultures provide frameworks of interpretation. This frameworks creates a collective mental program. It gives direction to actions within a certain society and /or group.
Culture is dynamic and creative.
An organization is a collaborative venture. It is consciously constructed by people on the basis of certain cultural models to achieve specific objectives. The actions are in many aspects the unintended consequence of intentional action. The corganization’s interaction structures produce the culture of the organization. Different conceptions of realities, values and codes of conduct related to work and the way it is socially organized define culture.
Corporate culture and startup culture
The corporate organizations see themselves as relatively autonomous. They aren’t necessarily active within an ecosystem. Their structure has developed in the various departments where people fulfill their role. The tasks of the individual actors are usually well defined.
Startups are part of the ecosystem and recognize their impact on the ecosystem. They take their place /role in the ecosystem to maintain the balance within. Some important startups ecosystem values are:
- pay – it – forward principle;
There are less actors within the startups. Usually each actor takes on different roles and tasks.
Another important difference is that the corporates tend to be more risk-averse. They strive for growth based on the mental models and culture they have had until now. Startups are more exploratory and are hungry for growth and creation. There is less fear of risk but often a big need for capital for creation and innovation. Startups work lean and agile, which requires a lot of flexibility and fast switching.
The actors who work together within corporates often have very different interests. Personal and group interests guide the corporate actors. Power, personal ambition, conflicts of interest, group identity lead to collaborations and competition. The cultural baggage from outside, is brought into the organization and determine it’s culture.
It is common that different subcultural variations exists within the organizational culture.
This is due to conflicting interests.
Friction also arise within the startups. But most of the time there are no conflicting interests. The group of actors is smaller, so that the general goal remains clearer. Most actors have contacts within the ecosystem, so that subcultural variations are smaller.
Common culture leads to communication
The conceptions of reality, values and norms of the particular culture retain their validity. They address each other in the context of everyday work within the organization. They are internalized in the rules and procedures that one follows. They are symbolically expressed in the rituals that one performs together.
After all, unlike the culture of a society, that of an organization is more or less connected to people who play an important role in that organization. Organizational culture is in this sense the dynamic of the collective learning processes. Insights and ideas, that are no longer useful or used in mutual communication, shift and eventually disappear. In collective learning processes, consensus and dissensus are linked to each other in a specific way. Being part of the same culture makes it possible to exchange ideas about these differences in terms of conceptions, values and norms. A shared culture is thus the consensus that makes it possible to continue to talk about dissensus.
This is exactly what is missing between the corporates and the startups. There is no common organizational culture and many values and rituals are contradictory. As mentioned earlier, the corporates with their management are more reserved. Besides, there are different subcultures within the corporates. Those are often linked to specific expertise and positions within the organization. Power and importance influence the communication processes that give the culture its dynamism. Before a final decision can be made, a consensus must first be sought internally. This procedure is much too slow for the dynamic Startups.
From the perspective of the startups, there are all kinds of contradictions, inconsistencies and contradictions in the cultural knowledge stock from which the corporates draw. All too often the result is confusion, uncertainty and mutual contradictions.
Develop a subculture within your corporate culture.
To counteract these uncertainties, it is important that there is already a subculture within the corporate that has contacts with the ecosystem. Are new organizational forms an answer? I’m not sure…
To equal partnerships, the cooperation must make sense and create value for both parties, otherwise the balance of power is not right and investments will no longer be made within the cooperation.
You ant to read more about corporate venturing? The book, “corporate venturing, Accelerate Growth through Collaboration with Startups” of Omar Mohout and Dado Van Peteghem is a good read.