Large multinational companies are in a very unique situation. They have reached maturity and have scaled their operations to derive considerable profit and return for their shareholders. Some have crossed the 100 year mark. And some may be facing decline and irrelevance.
Corporate management teams should rightly be thinking about innovation. But within this challenge is an opportunity to create a new connection with consumers and to serve society.
In order for large companies to stay relevant they need to think about the wider social context, their global footprint and how they can protect and sustain the resources they use. Take two hypothetical examples:
When a consumer goods company decides to become a supplier of recycled plastic, it experiments with new materials and processes, it creates scale in the market, which lowers the price of recycled material for everyone, and ultimately attracts more customers to its eco-friendly product.
When a logistics company decides to supply medicine and food to disease-vulnerable and malnourished populations in certain frontier markets, it creates jobs for local messengers, builds new networks and ultimately creates access into a new region.
Both examples create new services or products for untapped markets. Moreover, they also re-invigorate the corporate image. Brands can have a new voice and become symbols for positive impact in society.
This is not a corporate social responsibility campaign, but a very different approach to innovation. Large companies have a larger role to play in society, because only they have the scale and assets to create meaningful impact. But they need new ideas that may be completely unrelated to their core business. Working together with startups, corporations can discover new opportunities.
Enter the accelerator model, widely used by seed stage venture capitalists and approximately 70 large companies to gain exposure to innovative ideas and invest in them.
Large companies can launch accelerators which tackle specific societal problems. Companies can work with non-profits and social entrepreneurs to experiment with multiple ideas. As part of an accelerator program, corporations can support entrepreneurs with public relations coaching, marketing assistance, additional workforce and financial grants. Large companies are uniquely positioned to do this because they have global presence, strong buying power, and distributed execution capabilities which most governments, NGOs and startups lack.
Large corporations, if they want to stay relevant to future generations, must invest in society. When today’s mega cap corporations were just starting out, their founders had an opportunity to build entirely new industries. They took that chance and built much of the infrastructure that exists now. Large companies now have an opportunity to improve society and protect natural resources. They should take the chance and build a sustainable future for their businesses.
This article is the 3rd of a 3 part series. Click here for Part 1 and Part 2.
