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HOW BIG BUSINESSES CAN WORK WITH STARTUPS, NOT AGAINST THEM

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STARTUPS

By Nikolaus Suehr, CEO and Co-Founder of KASKO 

 

There is this old notion that large companies and startups are rivals, and that startups are trying to take the work from big businesses by showing customers how much more efficient and agile they are, or at least, that they offer products the user wants – not ones they are told they need by men in suits. This is partly true, startups, given their structure, can be more efficient and agile. At the same time, while this is something that large businesses might lack, it is something where they can complement each other. The same goes for the new breed of products, startups can help incumbents realise a different path.

More and more companies across sectors are realising that collaboration is more beneficial than they had previously thought. At KASKO, we are strong believers that it can be of tremendous help with growth if both parties are ready to set out on the collaboration journey.

 

STARTUPS

Nikolaus Suehr

The pitfalls of collaboration

Just like any other relationship, a working relationship is primarily about communication. It is, therefore, crucial to set the expectations clear from the very beginning because misunderstandings can kill your collaboration.

Problems between a startup and a large business can stem, especially from different cultures that they are likely to have. Corporates typically have processes in place focused on careful planning and long-term decision-making. For traditional industries, like insurance, this is something that large companies are very slowly giving up on. On the other hand, startups make decisions more easily as they are usually able to adapt quickly to new ideas. This can cause conflict between the two.

Collaboration is a key element for companies who want to think big, start small and scale fast. However, the collaboration needs to start small as well. Teams working together for the first time, should start with an initial engagement in a way that allows you to explore the collaboration and if it doesn’t work for both parties, you can easily go separate ways. An important aspect of that is risk-taking, which is something that large companies generally don’t like, while startups, sometimes, embrace it. Of course, a good startup will still operate with calculated risks, we won’t take them for the sake of it, but we are usually better placed to trial something, learn, and move forward.

Insurance is one of the most traditional industries and one of the slowest ones to adapt to change. It is therefore quite difficult for startups to break into the supply chain. At KASKO, we have created a platform that allows insurers to build, test and launch products a lot faster than traditionally possible, so we build them and use the channels they have spent decades putting together to sell through. Further down the line, we will be able to connect all the channels and create something of a global network – but that is one for a later date.

This whole idea leads me to one of the most important lessons I’ve learnt.

 

Don’t be afraid to pivot. 

You’re never going to know if your idea or business plan will work until you put them into practice. Same goes for collaborations. You won’t know until you try, but an important mindset is that you’re always able to change your directions and pivot. We did it, we thought that we could take on the old guard with our own products, building our own sales channels. Although we were getting there, the speed to market and user acquisition was too slow, so we pivoted to work with them, building modern solutions for their channels – that was the moment that KASKO as you see it, the founders of InsurTech as a Service, was born. Our task was to convince traditional insurers, and B2C InsurTechs that we can bring a lot more opportunities for them if they include us in their distribution channels.

 

So what should you know before you start collaborating? 

If you are a large business and consider working with startups, here are some of the benefits it can bring you. Startups can help corporates cut costs whilst adding flexibility, bring unrestricted new ways of thinking and access to talent, but also access to services and products outside the organisation. If you think you are ready to work with startups, make sure you really are, going in halfway talking the talk, but not being willing to learn, will end things as quickly as they started.

For corporates, the first step should be identifying pilots and proof of concepts, followed by establishing some ground rules. The focus should be on leading performance indicators rather than on trailing indicators. The reason for this is that new ideas and services take time to grow, so you cannot expect immediate results.

It’s also key to set a clear goal for the startup to work towards. In other words, both parties need to be on the same page. It is a huge opportunity for startups to start conversations with a large business, so in order not to kill this chance, both parties should try to be patient, fair and humble. If this collaboration will work, you will succeed.

Startups should be first of all open-minded. This can be a great learning experience and open many new doors, so staying curious is important. This ties in with listening to your customers as being part of a corporate can give you new insights for your business. Another thing that you as a startup might not be used to is that it’s probably going to take a while before everything starts moving and you’re going to start seeing results.

Collaboration can be a great way for both startups and large companies to change the way they work and grow more quickly than they would on their own. And that’s why big businesses should work with startups, not against them.

Business

HOW CAN BUSINESSES BREAK INTO MARKETS BEYOND THE EU?

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HOW CAN BUSINESSES BREAK INTO MARKETS BEYOND THE EU?

Atul Bhakta, CEO of One World Express

 

The build-up and aftermath of Brexit impeded the long-term plans of businesses both in the UK, and of EU businesses trading to the UK. The heavily protracted negotiations induced a culture of uncertainty in business, with few able to adequately prepare for all the future trading landscapes left on the table.

Once a deal was struck, with just one week before the Brexit deadline of 31st January 2020, organisations were then left scrambling to improvise new processes to translate their operations to the new systems and avoid spiralling costs, shipping delays, and various other disruptions.

As a result, businesses both here and in the EU saw a substantial trading slowdown in the months following Brexit, with new rules on customs checks, lengthy tailbacks at ports, denser and knottier administrative rules and new limitations on visas for the workforce all contributing to a tense trading relationship.

Indeed, the Office of National Statistics (ONS) figures revealed a precipitous drop in trading immediately after Brexit, with UK exports to the continent plummeting 40.7% year on year to January 2021.

This is a striking decline, given the historically close economic and cultural ties between the UK and EU. Inevitably, this caused a lull in long-term confidence amongst UK businesses. Indeed, a previous study conducted by One World Express in January 2021 found that 25% of UK companies doubted that they would last until the end of the year.

Atul Bhakta

Of course, Brexit is even now not a finalised issue – it will shift and evolve in significance and relevance as time passes and economies reshape; but the loss of confidence for businesses in UK-EU trade has been a tangible impact within the first year.

Accordingly, some organisations have begun exploring the scope for expansion into territories beyond the EU.

 

New opportunities attracting attention

As noted, the UK’s trade with the EU saw a sharp decline immediately following the formalisation of Brexit. While this decline has recovered steadily over the year, there has been an equally impressive parallel forming, as non-EU trade has remained mostly stable throughout.

Of course, UK imports from global markets have always remained at high levels, and when considering business growth and the economy as a whole, outward trade holds a heightened significance. On the export side of matters, ONS figures suggest that UK exports outside of the EU increased by 1.7% year-on-year to January 2021.

While a very modest increase, such figures indicate that international expansion could carry promise for business leaders, and hint at potentially lucrative opportunities within non-EU markets.

As 2021 progressed, it became evident that UK businesses’ appetite to explore opportunities further afield had grown. To take in the views of decision-makers, One World Express commissioned an independent survey of 752 business leaders in the UK, finding that 61% were either already operating abroad in some capacity, or had plans to expand into new territories over the coming year. More than six in ten (62%) reported Brexit as a key motivator in their decision to diversify beyond trading with the EU.

There was also some evidence that these plans were not solely in pursuit of the gains of modest uplifts in trade with non-EU countries. The survey found that more than two thirds (68%) of exporters had observed increased overseas demand for their products in the previous year, while 63% felt that markets outside of the EU were more willing to pay a premium for British-made goods.

The role of ‘Brand UK’ is significant here. For many years, products made in the UK have benefitted from the country’s reputation for high quality production and excellent service, which has driven a consistent rise in demand as emerging markets with high levels of consumer spending, such as India or China. In turn, UK businesses have found it easier than most to gain a foothold in new markets. Indeed, the majority (67%) of exporters reported their British brand had enhanced the reputation and demand for their goods and services when targeting international consumers.

Despite this innate – and highly welcome – competitive advantage, there are a number of factors UK firms must consider before diving in to unfamiliar markets.

 

The importance of planning

Many would be surprised to learn that a large number of businesses look to enter new markets with minimal planning in place. Notably, almost one third (32%) of exporters do not have such a strategy in place, which is likely to hamper the growth of British businesses abroad if left unaddressed. A crucial starting point for any international expansion plan lies in the research and relationship building.

Ascertaining the consumer preferences and audience behaviours in target markets, and forging appropriate connections with distributors, vendors, and ecommerce platforms, will allow firms to access consumers more easily, and in greater numbers, than marketing from scratch in unfamiliar territory. Encouragingly, according to One World Express’ research, 72% of exporters already include this in their plans.

UK organisations must also recognise the value of a robust and flexible logistics strategy. When products are being shipped to the furthest corners of the globe, there is a degree of risk if the finer details are not handled correctly. Delayed, missing, or damaged deliveries will erode consumer trust, and diminish the prospects of companies before they get off the ground. Accordingly, companies should ensure they have a transparent tracking system and efficient and user-friendly returns process. Investment in adopting the right software solutions to manage the shipping will create a streamlined and cost-effective process, affording firms the best chance at success.

Naturally, the EU will always be one of the UK’s most critical trading partners. However, as the dust settles on Brexit and the pandemic recedes into memory, the next few years present an interesting crossroads for the international prospects of UK businesses. With a tranche of new free trade agreements arriving in the near future, and international demand for Brand UK going from strength to strength, the scope for expansion into unfamiliar markets is growing apace. Provided business leaders get the finer details right, the rewards for bold investment in expansion could help charge a boom in the UK exports sector.

 

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WHAT FIREFIGHTERS CAN TEACH FINANCIAL INSTITUTIONS ABOUT DATA COLLABORATION

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Gabriele Albarosa, CEO, LiveDataset

 

Digital transformation can be difficult for any business, but in the financial services industry it can prove especially tricky. Replacing manual data processes is a big step, but in an industry so heavily regulated and audited, cohesive and comprehensive transformation is crucial.

Today, the challenge is no longer in convincing financial services organisations that they need to transform their processes and tasks; the vast majority understand the benefits of automating and streamlining their financial processes.

Instead, it’s about instilling the message that there is more to transformation than ripping out and replacing outdated technologies. A good financial transformation strategy must also take into account how these technologies are implemented, ensuring they integrate into an organisation’s culture, connect data and guarantee compliance, without completely demolishing the custom processes that employees want to use.

 

Little Fires Everywhere

While business transformation offers long-term benefits throughout an organisation, individual departments are often loathe to abandon the bespoke processes that facilitate day-to-day operations. Many organisations feel under pressure to transform quickly, and subsequently focus on how to get their employees onboard with a new solution rather than integrating every minute component of the old.

As a result, digital transformation efforts tend to bypass these disparate components, leaving small, potentially non-compliant hazards smouldering like little fires across an organisation.

These “little fires” don’t immediately represent a threat to business operations, but the lack of quality control, integration, and visibility of these manual workflows, means they’re inherently high-risk.

When a pressure situation hits the organisation, like a surprise audit, legal proceedings or new reporting demands, these processes become a highly combustible cocktail for non-compliance, lost data and human error.

 

Tackling the flames

Organisations need to tackle these little fires early on, rather than sitting back and hoping they will burn themselves out. But how can they be dealt with?

If you think of these small, unregistered processes as little fires, then your team needs to think like a firefighter — being fast, agile, flexible, and well-prepared for potential risks.

So how can CFOs, CXOs and Chief Transformation Officers bring this strategy to life?

 

  1. Be fast — don’t wait around for largescale digital transformation

There’s a common misconception amongst financial service organisations that before facing the issue, you need to wait until an overhaul of department processes or an in-depth audit. This could leave you waiting years for a solution that needs to be implemented in weeks, putting your department at risk.

Organisations must act with speed and address the issue head-on as soon as it has been spotted. Businesses don’t need to wait for largescale transformation; temporary or even permanent solutions do exist and can be tailored and installed immediately — targeting the issue before it becomes a bigger problem.

In my own business, we recommend a three 3-step approach to tackle these issue quickly: First, listening to an organisation’s business challenges to locate the most pressing fire. Second, build a working example for business leaders and decision-makers to evaluate. Finally, follow up with real-time collaboration to ensure that wider company processes don’t cause similar problems in future.

 

  1. Be agile and flexible — look for customisable solution that evolve over time

Organisations are ever-evolving, and so are the problems they face. However, some financial services organisations see the answer to these problems as a one-time, short-term fix. Working to put out these fires at speed shouldn’t stop organisations from considering how to prevent and deal with future ones. That’s why businesses run fire drills!

Financial organisations need forward-thinking systems that will work now and in the future, whenever they face their next data collaboration crisis. The ability to act in an agile way is fundamental to this sort of futureproofing.

Agile, flexible solutions will enable organisations to fight multiple fires, with the same systems, as time goes on. A one-size-fits-all approach won’t work here. Putting one fire to rest won’t prevent more from happening, and not all fires are the same (just try throwing water on a chip pan fire!) Every organisation has distinct needs and that means customised solutions.

 

  1. Be prepared — implement solutions before disruption occurs

To understand their weakness and subsequently prevent fires, financial service organisations must encourage employees across departments to hold an ethos of self-improvement. Preparation is key to success.

That means establishing a comprehensive understanding of the day-to-day routines of employees at all levels. It’s in habit and routine (one-off processes, keeping data on email, spreadsheets as systems, etc) where financial fire hazards thrive.

If new, more compliant technologies are to be installed, they cannot dismantle these existing routines. Flexible data collaboration solutions are needed that perfectly match the existing way of working. Achieving the goals of transformation without any of the disruption.

 

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