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To Be More Data Driven, Look for the Right Business Partner

Executive Summary

When it comes to building a more data-oriented organization, it can be smart to pool resources. A large, established business that partners with a nascent technology startup stands to benefit from collaborating with emerging technologies. In return, a startup could gain clout and support from its larger partner, while it continues to grow its brand and expand operations. One reason partnerships are so attractive is because they can offer the flexibility to walk away. The decades-old “fail-fast” mentality is still valid in the digital era and applies to business relationships as much as to new projects. Hunt for data-driven partnerships that fall outside your immediate universe. Be willing to walk away from a partnership that isn’t delivering the anticipated results, but be the first to give a non-obvious alliance a chance. The types of businesses that can benefit from an alliance are nearly endless. As with any relationship, it’s most important that the two organizations share a similar culture and values, as well as a common goal.

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Data-driven insights are essential for companies that want to optimize their operations or introduce a new product or service, like a tailored customer experience. However, some companies lack the tools to analyze their data, even though a rich supply is available. Other companies have the resources for analysis but lack the abundance of data needed for quality insights.

Even when both the data and the analytics exist, it can be smart to pool resources. A large company hoping to gain better insights from its data might acquire a tech startup as a way to deliver on its goals more quickly. Another viable option is to look at innovation partnerships. These can provide valuable access to technology and talent with few strings attached.

Innovation partnerships can be advantageous for both companies. A large, established business that partners with a nascent technology startup stands to benefit from collaborating with emerging technologies. In return, the startup gains clout and support from its larger partner, while it continues to grow its brand and expand operations.

Identify the right partner and goal

A legacy organization partnering with a startup is one obvious configuration, but the types of businesses that can benefit from an alliance are nearly endless. As with any relationship, it’s important that the two organizations share a similar culture and values, as well as a common goal.

The goal itself should be laser-focused on solutions that will benefit the end-user. For example, in 2017, IBM and the U.S. Tennis Association partnered to create the IBM SlamTracker application, giving fans a new way to visualize stats at Wimbledon and U.S. Open matches, while raising the profile of IBM technology. In 2014, Spotify and Uber partnered to develop an audio control for Uber’s consumer app in a move that improved the rider’s transit experience, while exposing Uber and Spotify to a wider pool of customers.

Insight Center

To replicate the success of these types of partnerships, a company should first look through its customers’ lens to identify the problem that needs solving. If both partners agree on the need and work together to solve it, the relationship will likely succeed. But, if the partnership is one-sided or exists only as a formality or a publicity stunt, it’s unlikely to yield meaningful results for either business.

Think big by thinking small

A partner doesn’t have to be a large enterprise with a huge pool of resources. At XPO, we typically pursue technology that will make a difference for our customers and employees through efficiency. Often, we’ll partner with very small technology companies that can add something specific to the supply chain. While, for example, a new kind of gripper for a robot hand may seem less significant than a complete robot, highly specialized partnerships have great potential to improve efficiency.

The ideal time to get involved with a small tech company is in its embryonic stage. Startups are often eager to work with established companies, and we’ve found that a good place to start is with a few pilot projects, which allow us to provide feedback to the startup and quickly evaluate whether the platform suits our goals and existing technologies.

Don’t be afraid to be first

Some partner opportunities will be obvious, while others may come from unexpected places. For example, XPO has partnered with MIT’s Industrial Liaison Program (ILP). A logistics company and a university may not seem like an obvious partnership, and in fact, MIT’s ILP had never partnered with a logistics company before, despite its highly respected supply chain management program.

This partnership has already connected the bright minds and research capabilities of MIT’s ILP with our technology team and the data we’ve accumulated over years of supply chain operations. It also adds an extra layer of credibility when we recruit employees or sell our services to prospective customers. Furthermore, we’re in the process of formalizing MIT tuition discounts for our employees, giving them access to MIT’s online curriculum. And students in MIT’s supply chain management program can gain valuable, real-world business experience working with XPO, preparing them for a successful career.

One reason partnerships are so attractive is because they can offer the flexibility to walk away. The decades-old “fail-fast” mentality is still valid in the digital era and applies to business relationships as much as to new projects. I encourage business leaders to hunt for data-driven partnerships that fall outside their universe. Be willing to walk away from a partnership that isn’t delivering the anticipated results, but be the first to give a non-obvious alliance a chance.

Source: HBR.org