How cooperating with start-ups can give your business wings

Cooperation between long-established companies and start-ups is often tested in this industry. However, the advantages of these cooperations often aren’t immediately visible - why should valuable company knowledge be shared with external newcomers? Here, young companies supply valuable input and break loose from fixed patterns of thought to bring in new ideas. Companies can obtain valuable information and improve their working processes.

Microrevolutions that improve working methods and processes significantly, optimise materials or elicit huge advancements with better digitalisation occur more and more frequently. Old paradigms are broken and solution-based approaches that were considered completely impossible, have suddenly become the new norm. An excellent example of this is the space rocket industry. Over half a century ago, only minimal improvements were made to rockets for space missions. Maximum performance was reached and status quo set in - it was accepted that a space mission would always cost above 300 million dollars.

Then a small team came onto the scene. They developed completely new rockets and managed their first flight into space in less than six years, and could land again - saving many hundreds of millions per launch in the process. Naturally, this team is SpaceX.

Advances in technology like this are only possible if you query each individual step in product development and examine every tiny detail with great precision. Established structures in which each little chat lasts weeks obstruct the development process. Whether you call it a blinkered attitude, a lack of self reflection or getting stuck in a rut, one thing is sure: Without innovation, your competition will probably get the edge on you very fast. That’s why it’s vital to ask for external input and also to value and implement it properly. The young start-ups come into play here: they don’t bring years of experience to the table. However, these upstarts do have a wealth of ideas and the pure will to effect change quickly, and without bureaucracy so that everyone can benefit from it on their side.

Digital twins, machine learning, augmented reality, artificial intelligence and the IoT are just a few of the buzzwords that start-ups use to market their innovations. At first, a lot of these sound like technical jargon. However, depending on the usage case, these forms of technology offer real counter value. This isn’t only measured in terms of financial gain but also by the level of employee satisfaction or in time savings, dependent on the company.

According to a study carried out by the VDMA, 71 percent of the machine engineering companies that have already cooperated with start-ups are happy or very happy with their joint work. In particular, the agile, fast working processes that dispense with hierarchies and rely on quick check-ins are highlighted here. The new knowledge is also an innovation driver. This means that the area that the start-ups are applied in doesn’t really matter.

While one young company may concentrate completely on software solutions and thus, in advance, creates exact digital copies of a production line to test the efficiency and work out the maximum output of the system before the first machine is even installed, another might be more interested in making maintenance quicker and easier - the key word here is predictive maintenance. Start-ups generally specialise in a small area and can thus extrapolate their knowledge far better here than, for example, your in-house IT department could.

Software isn’t the only trick that start-ups have up their sleeve. Machine engineers and product developers are tired of established structures and prefer to choose a path that enables them to evolve personally. Start-ups offer aid when introducing additive manufacturing, new materials and creating experimental manufacturing systems.

How innovation looks within companies varies on a case-by-case basis. Thus, there are start-up divisions and companies that fall back on knowledge obtained by several start-ups. Think tanks collect feedback from many geniuses that think out of the box. The gap between the start-up and the group ensures independence in the thinking and procurement processes. Simultaneously, they are perceived as just another external service provider that does not have great value, in some cases.

Other companies build up their knowledge themselves with in-house start-ups. The SMS Group, for example, decided to do just this. This ensures a constant flow of innovation and ensures good employee loyalty, which means that the innovation boost doesn’t end after a short cooperation. Nevertheless, this requires a lot of patience and a big pot of money. Finally, companies reach out to all types of experts that have decided against corporate structures, and for good reasons.

The most important element in ensuring a successful cooperation is, ultimately, supporting fresh blood which can and must shake up the processes. If there is no desire to change within a company, it will go through many of these cooperations without obtaining any impact.

The relevant cooperations with the start-ups also have to be accepted and, in the best case scenario, supported by the board of management and all employees involved alike. New ideas must not be blocked internally; otherwise, success will remain elusive.