In competitive environments, the pace of change, especially driven by many forms of new technologies, can overwhelm organizations of any size, from startups to enterprises. This is why building an innovation culture is critical in generating growth, managing risks, creating new opportunities, and future-proofing your business.

Building a culture of innovation doesn’t merely spring from a series of design thinking workshops, a company-wide innovation program, or even a widely acclaimed state-of-the-art product — although these things can spark or arise from it. Ultimately, it’s part of organizational culture resulting from a range of business decisions, especially in how an organization  deals with fresh ideas and creative approaches when solving problems.

In this guide, we’ll be defining innovation culture and identifying concrete steps and practices on how you can build it for your business.

How do we define an innovative culture

Innovation culture is an environment that fosters creative thinking to generate value for the organization. A culture of innovation within a business or any other type of organization encourages creativity and boldness in developing new products, improving or reinventing existing ones, reconfiguring processes and workflows, and taking new approaches in any part of the business.

As part of organizational culture, innovation requires structure, not merely lip service or intermittent boosts of creativity and energy. This requires a coherent strategy, investment, processes, and accountability. Employees who work in such environments easily recognize that innovation culture is second nature to their company or simply part of its DNA.

For organizations working to create a culture of innovation, they’ll have to build it through structured and formal initiatives piece by piece in a sustained manner. More importantly, it’s how organizations respond to solutions that any employee brings forward in order to cultivate that spirit of initiative, creativity, and openness.

What kind of innovations are we talking about? It can range from incremental innovations all the way to game changers. Incremental innovations could be new product features or process tweaks, while game changers could be breakthrough technologies or unique business models. A successful innovation culture breeds new ideas throughout this spectrum, tests them out to evaluate which ones can deliver meaningful value to the business, and facilitate  its implementation.

How Do You Encourage Innovation In Your Company: 6 Steps

Depending on your business and organizational priorities, there’s a range of actions you’ll need to take to seed a culture of innovation in your company. You’ll be on the right track in beginning with these six steps. 

Step 1 – Understand what you’re up against

When embarking on a drive to have an innovative culture, it’s critical to acknowledge that the barriers towards it are real. It’s not simply that the organization isn’t innovative or that the nature of the business doesn’t require it, but that there are identifiable and actionable factors that inhibit innovation. These may come in the form of aversion to risk, institutional inertia, insufficient support from top leadership, lack of capable talent, or misaligned strategies, among many others. For those championing a culture of innovation, you need to understand what you’re up against.

Similarly, expect resistance from shareholders, management, employees, and even some customers and external stakeholders. The journey to cultural transformation can be unsettling, and organizations should brace themselves for opposition along the way. Change, as well as its emotional and professional ramifications, is terrifying, and it’s natural for employees across the hierarchy to feel threatened.

This resistance, however, can be overcome. Mindsets will alter when you exhibit the organization’s willingness to adapt and explain how innovation benefits the business, its employees, and ultimately the customers. When it takes root, a successful innovative culture becomes reinforcing — employees will want to contribute to the transformation, and the business more easily lures in talent with the skills and enthusiasm for innovation.

Step 2 – Reform the leaders

Cultural shifts don’t happen overnight. It’s critical to secure commitment throughout the organization when introducing this cultural change. Company leaders — the board members, CEO, c-suite executives, senior and mid-level managers — must be role models and champions who will lay the foundation for this culture of innovation and follow through with sustained effort and resources. Leadership has the most consequential role in igniting cultural changes and enabling it to thrive over time.

One key characteristic of an innovative culture is that it welcomes creative solutions from anyone no matter their rank in the organization, even if their idea doesn’t directly deal with their area of responsibility. Bureaucracy and red tape can sap creativity and deter innovation. It’s vital to orient company leaders towards opening up spaces that allow fresh ideas to flow to whomever can best work on them. For enterprises and larger organizations, leaders have to institutionalize processes of how innovation can cross or flow through hierarchies and organizational divisions.

Furthermore, inherent to innovation is taking risks on ideas and approaches that have never been tried before. This can discourage and frighten anyone in the company but more so for the most senior executives and managers. For companies on a relatively stable path, it feels safer to maintain the status quo. For those truly committed to innovation, leaders must have some tolerance for seemingly promising ideas not working out. Set expectations with them that they have the space to learn from projects that underwhelm or fail entirely.

Step 3 – Act at all levels

After generating interest and commitment from leaders, they must make a genuine effort to engage employees at all levels. Those leading their firm’s innovation program shouldn’t contain it to mid to high-level management, or so-called strategists, or technology teams alone. While they may be the lead drivers, they must create spaces for all teams — and all team members of any rank — to be able to actively participate in creative thinking and execution of innovative ideas.

This begins by reorienting staff about the organization’s seriousness and intent towards building an innovation culture. Executives can follow this up by integrating topics on innovation to their professional training and development programs. This signals earnest effort from the company and also frames expectations among staff on how they can contribute to the company’s innovation initiatives.

To incentivize commitment, organizations should consider rewarding employees who deliver ideas worth exploring. This can come in the form of challenges that offer prizes for the best solution or a bounty for the employee who can solve a particular long-standing problem. The rewards may or may not be monetary, but if employees don’t see personal incentives for out-of-the box thinking or extra effort, then they may not feel invested into the firm’s newfound pivot towards innovation.

Step 4 – Focus on the goal

It’s worth emphasizing that setting out to have an innovative culture isn’t an end in itself. This occurs within the broader context of a business with its priority metrics and outcomes. To achieve them, whatever these targets may be at any point in time (e.g. number of users, gross merchandising value, customer satisfaction, profitability, etc.), leaders have to direct their innovation initiatives towards their organizational goals.

Innovation exercises and fresh ideas can sometimes be a scattershot. This can be helpful when businesses are imagining new opportunities or in the mood for radical change. However, when the goals are clear and the business is in a period of execution, clear targets will focus the work at hand. While employees continue to innovate and offer fresh ideas on the product or service, its features, the company’s workflows, or ways of reaching out to customers, the business goals are clear and everyone knows they’re working towards achieving them.

Furthermore, while the business objectives are clear to employees, an innovative culture also allows people a certain degree of autonomy on how to achieve them. Successful innovation also comes from a strong sense of empowerment allowing employees to try out and combine different ideas, perspectives, technologies, and approaches. Even if a certain role has been done a certain way successfully before, managers should allow (and encourage) employees to apply new methods or even personal styles to see if these can yield positive results.

Step 5 – Talk, repeat yourself, explain what successful innovation is

Communicate your commitment to change. For organizations beginning their journey towards an innovative culture, this will evidently feel as a new thing to employees. It’s important to convey to your team that this new thing is a culture of innovation. At the beginning, this new shift will sound and feel ambiguous to them. So articulate this new direction clearly. Explain what you expect from them and what they can expect from you. Convey that this isn’t just a new slogan or a vague target but one that’s supported by new processes, funding, training, and accountabilities.

After introducing this shift, remember to follow up and follow through. One announcement won’t be enough. Even with a sustained program of innovation, continuously remind your teams why you’ve embarked on this journey. Reemphasize why you want them to innovate and reinforce that by acting on their ideas and proposals.

This endeavor will be new to your fellow executives and managers as well. Have an open line of communication that takes feedback from anyone on how your company can enhance its systems and programs for innovation.

Step 6 – Analyze, check, learn lessons and make changes

An innovation culture simply won’t happen just by deciding on it and urging managers and employees to become more innovative and creative in their day-to-day work. Organizations have to build it with concrete action — and this is where strategies will acceptably differ.

Companies can begin with some form of discovery or problem scoping to zero in on priority areas. Some can also start with an open call for proposals or conduct hackathons and “ideathons”. It’s also not uncommon for organizations to appoint a Head of Innovation to integrate all existing initiatives. Whatever the foundational steps that a business will take, what’s important is to take them and actually walk the talk. While there are case studies and best practices out there on how organizations can build their innovation programs, there’s no one size fits all.

The key action is for businesses to continuously analyze, learn lessons, adapt, and make changes when necessary. This is how they can turn their formal programs, practices, and processes on innovation into organizational culture, one that’s second nature to all employees throughout the company.

Innovative Cultures: Best Practices In Fully Successful Companies

In addition to these first few steps that you’ll have to take, here are some best practices that you can integrate within them or include as a follow through.

• Create a system for idea validation: With a rush of energy and enthusiasm coming from employees, it’s worth remembering that not all ideas will be viable and successful. To screen for ideas that can make a meaningful impact to the organization, you’ll have to set up a system for idea validation that utilizes research, testing, prototyping, testing, and other methods.

• Set up familiar processes and workflows: At the earliest days of introducing changes, employees must understand what you expect of them even if the final output of a project or an innovation initiative isn’t clear yet. Articulate problem statements you wish to begin with. Provide team structures, timetables, knowledge resources, and budgets. If possible, build an innovation management system and other digital tools that facilitate collaboration, knowledge sharing, and project development.

• Carve out time and spaces for training, creative work, experience sharing, and collaboration: Employees will feel that they’re already working to full capacity and that new endeavors, especially those that are creative in nature, require additional mental space. Organizations need to carve out time and spaces to accommodate this. This includes a new round of training to build capacity, workshops and creative sessions to openly explore new ideas, forums that facilitate sharing of experiences across departments, and other forms of collaboration.

• Use benchmarks and metrics but be flexible to future opportunities: It’s common practice to target KPIs or look at the competition as benchmarks. These help businesses focus on the priorities that matter to them on a monthly, quarterly, or yearly basis. However, organizations must recognize that benchmarking can sometimes limit creativity and innovation. There must be a certain level of adaptability and flexibility to allow teams to experiment and try out new ideas, which could generate opportunities unseen today.

• Address low-hanging fruits: Every business has a few small issues they’ve been itching to address but haven’t because of some mundane reason. It could be testing out that interesting feature somebody suggested, or hiring an extra hand to get a new project going, or switching on a trial back-office system. To get things rolling, start with low-hanging fruits first to signal your commitment to try new things, no matter how small they are. Do this before jumping onto this new app idea, or exploring this supposedly groundbreaking business model, or studying this unfamiliar market segment. When employees have bought into this new thrust of being more open to trying fresh approaches, then you can start getting into the bigger innovations.

Innovation Culture: Summary

Innovation is typically associated with moonshots — those game changing innovations that wow customers and the world at large. While moonshots can be part of a firm’s identity as an innovator, innovation culture isn’t just about taking moonshots. In certain cases, focusing only on that one big innovation can impair a sustained culture of creativity, openness, and experimentation over the long run. This is oftentimes the case for one-hit wonders.

Businesses that deliver consistently are those capable of adapting to relentless competition, changing customer expectations, and the rapid pace of technology. To respond to these challenges, organizations must be willing to draw out the best ideas whomever they may come from, test them out, and execute them well. Businesses marked by a culture of innovation have the structures and systems that make this a seamless and natural process so that they can adapt to market changes and disruptions whatever they may be.

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Innovation is on everybody’s lips until the moment one has to take risks or change things up. Embarking on an innovation process can be intimidating when getting started. Employees can be skeptical especially when everyone is used to how they do their work. However, when innovation is spoken of, it’s probably because of subtle signs that the business already needs to change course in some regard. 

Case studies abound on how companies without appetite and strategy for innovation have succumbed to stagnation, if not outright decline. Companies averse to fresh and creative approaches tend to rest on their laurels, giving way to outdated product features, degrading customer experiences, dissatisfied employees, and novel approaches from competitors, which can ultimately constrain growth.

To mitigate these risks, businesses can innovate, which entails challenging themselves to outgrow (but build on) past and existing successes of solving customer problems. Because this is a long-term endeavor, organizations can jumpstart a culture of innovation by embarking on high priority innovation initiatives. In this guide, we’ll discuss the 10 steps your business needs to take when initiating an innovation process.

What is an Innovation Process?

An innovation process is a set of strategic steps — marked by taking creative and fresh approaches — designed to achieve a set of organizational goals within a specific timeline. It’s a deliberate intervention to try out new ideas in solving concrete business problems.

Innovation processes, when new to an organization, can arise from, among others, persistent issues wherein previous solutions haven’t worked out as planned. These problems could relate to declining growth, product stagnation, organizational bureaucracy, customer dissatisfaction, and many others with varying magnitude. These typically drag on and create new other problems despite attempts at solving them to the point that company leaders decide to take a step back and recognize that they need to approach it in a radically different fashion.

Innovative Idea Generation: Easy to Say, But How to Execute?

Taking concrete steps to become a more innovative company isn’t an end in itself. It shouldn’t be done for self-gratification just to be able to say that we belong to an innovative organization. In fact, this can paralyze companies from starting innovation initiatives, obsession over the question: How can we be more innovative?

To begin this journey, managers simply have to look at their business priorities. It’s always an imperative to introduce and integrate innovation processes within the broader context of desired business outcomes. Start exploring creative solutions either for the biggest and most pressing problems or low-hanging fruits that you can more easily address (or both).

Running a successful innovation process in 10 steps

There’s no single roadmap to achieve success for an innovation program. Building any type of organizational culture is complex and dynamic and there isn’t any silver bullet. You’ll need to adapt interventions based on the problems you wish to solve and the resources that you have. Consider these ten steps as a guide to jumpstart your innovation journey.

Step 1: Define innovation

For businesses new to a serious pivot towards becoming more innovative, this process will seem and feel ambiguous. If not introduced properly, it’ll come across as if company leadership is adopting a mere jargon or slogan. It’s vital to communicate that you’ll be embarking on a strategic process to take on creative, bold, and fresh ideas with strong potential to deliver meaningful results to the firm.

Convey that this is a new direction that will be backed by resources, structure, training, and real support from company leadership. Follow up by continuously emphasizing your new set of expectations from your entire company and the innovation team you’ll be putting together.

Reinforce this shift by taking initial steps on novel ideas that your employees have proposed before but have never been acted on. To get the ball rolling, illustrate to them what kind of fresh approaches you’re looking for. Make it clear that as you introduce this new innovation process, that everyone can contribute and shape it no matter their role in the company.

Step 2: Define the goals

Innovation processes often do not produce positive results when they are not aligned with business goals and priorities. While anyone might engage in an innovative undertaking merely for the sake of innovation, businesses and organizations naturally must prioritize resources and direct them to real and pressing problems.

Further, even as innovation initiatives have to support broader corporate metrics (e.g. user growth, revenue, profitability), innovation processes typically deal with targeted problems. They could be about reinventing a specific product feature, breaking into a new customer segment, or speeding up turnaround times for a particular workflow.

Whatever the persisting issues are, managers must break them down to specific problem statements that their designated teams can solve. With clarity comes better oversight over the innovation process. Those working on them can design better strategies, pick the right methods, and filter all creative ideas towards a shared understanding of the problems at hand.

Step 3: Assemble your team

When designing and implementing an innovation initiative, it’s critical to assemble a team that’s committed to new, creative, and innovative approaches across all levels, from the most senior executives to the specialists. Because an innovation process is inherently in the business of trying out fresh and out-of-the box ideas, company leaders have to exercise judgment on deploying individuals who have been working on the same problem for quite some time. 

You may stick with an existing team, pull in individuals from other departments, or create an entirely new group. Whatever the approach may be on manpower, the more important factors are the availability of the required skills (e.g. technical, managerial) and commitment to creativity.

Furthermore, the spirit of innovation requires openness. This means that you need to choose team leaders who have innate abilities that open up spaces for creativity and for fresh ideas to flourish whomever they come from. Reorient managers to give team members space to pitch ideas and try them out.

To seed the right mindset from team members, consider giving them autonomy over some of their proposals. Build an environment where they can properly see that their own work could have a meaningful impact to the business and its customers. You can also explore providing incentives to those who are able to solve enduring problems. They will always be a slice of any workforce that won’t feel invested in any new endeavor unless there’s a reward for extra work, especially if it’s creative in nature.

Step 4: Secure the budget

What’s the use of initiating an innovation program if your business won’t fund its most promising ideas? To get it off the ground, you need to prove to your staff that you’re serious in trying out the creativity you’re asking from them. Do this by soliciting inputs on how to reallocate the budget when beginning an innovation process.

To be fair, the right ideas might not be there yet in the early stages. Have funding necessary to put structures in place such as crafting an innovation strategy, setting up collaboration tools, organizing workshops, and upskilling team members. This also includes processes and initial resources to analyze and test ideas. When the right idea comes, then the team can produce a detailed financial proposal that you can more easily evaluate to trigger the appropriate funding for implementation.

Furthermore, don’t assume that innovation and creativity come easily to everyone just because they’re given the space for it. In this regard, consider building capacity through training and exposure to external practices. Invest in upskilling your teams. Integrate topics on innovation to your professional development program.

Step 5: Create diverse teams

Most people recognize that organizations benefit in a number of ways from having a diverse workforce. Facilitating innovation is one of these benefits. Having an innovative culture entails being welcoming of a broad range of ideas wherever or whomever they come from. Greater diversity within innovation teams empowers them to draw from a wider range of ideas and how to implement them.

For instance, inherent diversity (e.g. ethnicity, gender) enables companies to be more sensitive to a broader range of customer experiences. Acquired diversity (e.g. work experience) can give teams transposable ideas based on how things are done in other industries or countries.

Diverse innovation teams can also reduce blind spots. Team members of diverse teams tend to be more open and willing to share out-of-the-box ideas because they’re exposed to a variety of attitudes and backgrounds, creating a laboratory for creation unhindered by monolithic thinking.

Step 6: Select collaboration tools

To set up innovation teams for success, organizational leaders must create an environment of collaboration, communication, and trust. This could come in the form of dedicated time and physical spaces that enable experimentation and exchange of ideas. To begin with (and at the very least), companies must provide them with the proper collaboration tools to get the innovation process going.

Enterprises and bigger organizations have the advantage of deploying tools that they already have. Employees should already be familiar with them, which reduces the friction of starting new projects. If necessary, companies may also explore building their own custom tools if the project they’re working on requires it.

Technology should play an invaluable role not only in collaboration but throughout the innovation process, from discovery, research, analysis, testing, prototyping, all the way to product development and implementation. The key factor here is for the work to be done collaboratively, not in silos, which is often a symptom or cause of the problems that necessitate innovation reforms in the first place.

Step 7: Don’t be afraid to take risks

High level organizational leaders, especially shareholders, board members, the CEO, and c-suite executives must recognize that not all seemingly innovative ideas are viable or will be successful. Because some of them may feel that way in the beginning, leaders mustn’t be naive that all outputs of their innovative processes will be successful.

While no one sets out to fail, companies shouldn’t be averse to taking risks which is inherent to the nature of innovation. Furthermore, companies must give their teams space to learn from innovation projects that don’t work out as intended.

One way to manage this risk is to build a strong system for validating ideas. To filter for ideas that have a strong chance of delivering value to the company, teams should establish methodologies for idea validation by deploying rigorous research, analysis, testing, and experimentation, among other methods.

Step 8: Implement incrementally

While fresh and creative ideas fuel innovation, these ideas don’t run on their own. Recognizing the risks of a new project, innovation teams simply have to get on with it despite fears of failure. Build (or rebuild) that new product, test that new business model, or experiment with that new internal workflow.

One risk to innovation initiatives is that they’re put aside as a research or ideation project because of company resistance, risk aversion, lack of financing, or it’s too far out there. Whether your innovation team is working on an incremental innovation or a game changer, trust that they’ve done their homework (because you’ve asked them to) and allow them to build and implement their idea.

Execution of innovation projects isn’t necessarily a scattershot. Just like conventional product development, innovation isn’t random or accidental but a methodical process that goes through iterative bouts of proofs-of-concept, prototyping, user testing, and experimentation until the team has relative confidence that when launched, the output can generate meaningful value to the business.

Step 9: Evaluate and improve

While the innovation process is marked by experimentation of new approaches, it’s still helpful to use metrics and benchmarks. Don’t be averse to setting KPIs or looking at competitors for benchmarks while recognizing that you may uncover other forms of value that you may not account for in the beginning. Setting targets and indicators helps you evaluate whether your innovation project can be viable for the firm.

Even when a novel idea doesn’t work out, take the time to evaluate why that is. Take underwhelming results as opportunities to learn and improve your structures and systems for innovation so you can narrow your focus to projects that have a better chance of success. Treat each failure as an opportunity to improve your overall innovation strategy and process.

When an innovation initiative bears fruit, understand the factors for success to help you replicate them for other projects. Even when the results are promising, you can always iterate and improve further to double down on your success.

Step 10: Work on your culture of innovation

Rather than treating an innovation initiative as a special project, consider making it part of your organizational culture. Taking risks on creative approaches should be an integral part of business planning, product conceptualization and engineering, reconfiguring internal workflows, brand development, and in any other part of the business.

Building an innovation culture entails creating an environment that fosters creative thinking to generate value for the organization. A culture of innovation isn’t just a one-time thing where organizations partition one activity or one part of the business that deals in innovation while the rest of the company carries on as usual. This necessitates leadership, strategy, investment, structure, capacity-building, and accountability among other formal and deliberate interventions.

Those who work in innovative environments recognize that innovation is simply part of their workplace culture. They don’t have to rely on or wait for directives from managers or a special innovation team. It’s simply part of how things work and how they do their work. While this type of ecosystem is one that you’ll need to build for the long term, the barriers are low to get it started.

Innovation Projects Require Courage to Try

The road to cultural transformation will be difficult. Those championing innovation should brace themselves for opposition along the way. Recognize that this is natural and perhaps even necessary. Consider that those who oppose it could be seeing ramifications to their careers and roles within the organization. By communicating and demonstrating that everyone can contribute and be involved, you can overcome this resistance.

If you’re still wary about the risks of taking a pivot towards game changing innovations, you can always start with low-hanging fruits first to demonstrate your willingness to try new approaches. When you see more and more employees buying into this new direction, then you can more comfortably take a crack at the more substantive business problems.

There’s no single way to win hearts and minds but when your team sees your resolve and courage in taking a chance at their very own ideas, no matter how small, you’re already taking the right first steps towards becoming a more innovative company.

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However, we do not live off of just the MIT EF CEE Acceleration Program alone. 2021 marked a number of additional initiatives to better meet the needs of today’s startups. This includes an intense development of our Alumni Club, enabling the possibility of peer-to-peer mentoring, all of which have proven particularly helpful in the post-pandemic reality.

Startup acceleration

The statistics strongly show that the demand for acceleration at the highest levels is not weakening in the CEE region. As testament to this, this year’s editions of our flagship program received a combined total of over 500 applications! More than half were submitted by startups from outside Poland, including Estonia, Latvia, Ukraine, Romania, Hungary and more. We are proud to have repeated the success we achieved in Poland and continue developing our well-established position in the startup ecosystem of Central and Eastern Europe. Thanks to this, we have the opportunity to create various groups during our workshops, which further enable the exchange of knowledge and experience, alongside the opportunities for building international contacts.

In total, as part of the Spring and Autumn edition of the program, we accelerated 30 startups. They all took advantage of 110 hours of workshops and the practical support of 74 mentors from all over the world. This year, as many as 19 start-ups got the chance to undertake pilot implementation activities in a partner organization. This is an extremely valuable opportunity to verify ideas in practice, introduce possible improvements and thus shorten the path to market entry. 2021 also brought us 10 commercial implementations from startups accelerated in earlier editions of the program, in cooperation with corporate partners such as Coca-Cola HBC, TVN Discovery, Elzab, Klinika Ambroziak, Archicom and Allmedica.

Startups of 2021!

In 2021, we focused on searching for startups in areas such as health, renewable energy, industry 4.0, financial and insurance technologies, sustainable development, marketing technologies and smart cities. This selection of thematic areas was not accidental. It is in response to both global challenges and the individual needs of our corporate partners. This year, the latter included Adamed, Coca-Cola HBC, MCX, and PZU. Many companies also joined us for the first time in 2021, most notably Anwil SA, JD Group, and Żabka Polska.

As mentioned earlier, we receive more and more startup applications with each edition of the program. Nevertheless, we’re also very pleased with the growing number of partners, too. This is a sure sign of progress in opening up large companies to both work with and mentor startups. It further confirms our belief that what we do matters and we are happy with each and every pilot implementation that grows from such cooperation. It is an experience that both parties can draw on: the startup gains knowledge that can shorten their way to the market, and the corporate partner gains a new way to solve a given problem!

In accordance with our programs established formula, at the end of the Spring edition, we chose 5 companies that will go to Boston present themselves to the US audience, and thus prepare for the globalization of their business.Those first startups are:

• MakeGrowLab, who are aiming to solve the problem of pollution caused, among others, by leather, cotton and petroleum products.
• Uvera, who offer an ecological and natural UV protector, safe for people and the environment.
• WindTak, who provide technology for increasing the energy efficiency of wind turbines and reducing their maintenance costs.
• Billon Group, who are focused on ensuring trust in business processes thanks to blockchain technology.
• IQ Biozoom, who have a solution designed to significantly increase the quality of life for people with diabetes.

The winners of the Fall edition, who will join this group, will be announced on January 12 at the upcoming DemoDay. There’s still time to sign up here!

Acceleration is not everything!

In addition to continuing our flagship acceleration program, we also introduced some new ideas and initiatives. As MIT EF CEE, our additional activities have included helping startups from abroad obtain grants under the Poland Prize and the organization of a brand new edition of our program, the Business Acceleration Bootcamp, which was focused strictly on pilot implementations.

We have also successively developed the Alumni Club, which currently includes over 200 startups! We have to admit that the Alumni Club plays a unique role in our strategy. At the beginning of a startup’s operations, the support of an experienced mentor, whether in the area of sales or obtaining financing, is invaluable. Over time, however, peer-to-peer mentoring begins to play an increasingly important role. That is why we care about building a community of entrepreneurs who face similar challenges on a daily basis and can share their experience and even implement joint initiatives.

On the other hand, limiting product’s life cycle costs – meaning reducing negative environmental impacts in the entire life cycle of the product, including its very beginning – may bring certain economic benefits to the company. As part of the Alumni Club, we’ve held regular meetings for graduates, as well as meetings with the founders of various successful companies. The likes of Karolina Pelc, CEO of BeyondPlay and Damian Sałkowski, CEO of Senuto, have shared their experiences this way. In total, we organized 40 meetings for our Alumni Club in 2021 alone.

What will 2022 bring?

The next year promises to be no less intense. We like to surprise, so we will not reveal all the details now ☺ However, we can assure you that there will be plenty of interesting events, initiatives and programs aimed at measurable benefits for startups, corporations and investors!

Due to the huge continued interest, we will continue our acceleration program, of course taking into account some new elements and adapting to the current needs of startups and corporations. The submission period for our Spring edition will start in January.

The best startups will once again go to Boston, where they will undergo an intensive training program with the participation of representatives of the local ecosystem, including mentors, business angels, investors and potential business partners. Experience has proven this to be a great opportunity for building international contacts that are worth their weight in gold when it comes to scaling up and going abroad.

For our alumni, in addition to regular meetings, we will introduce international bootcamps that will foster development, grow competences and build the relationships necessary for effectively scaling to new markets.

We also plan to launch a completely new initiative – ESG Innovation HUB – aimed at addressing different challenges, ranging from climate change to social imbalance. This hub, which will be the first of its type in Poland and the wider CEE region, is intended to educate leaders and provide companies with a practical tool for self-assessment in the ESG area, thus increasing their level of innovation and market competitiveness. The initiative is prepared in cooperation with a long-term mentor of startups in our accelerator, ESG expert Joanna Pydo, and other strategic partners. In line with our assumptions, the hub will act as a platform for enabling the exchange of knowledge and the development of activities that will respond to extremely dynamic changes in the environment, as well as the expectations of stakeholders.

In fact, you can get an early taste of this in an upcoming webinar. Joanna Pydo herself will be hosting a discussion on fast-tracking your environmental and social journey on January 18th at 4 PM. You can reserve your spot here.

We believe that the challenges facing our planet and society will ensure that no company will remain unchanged. Those that will act the fastest have a chance to introduce real changes and become leaders. Next year, we want to find and support these companies. Keep your fingers crossed for us!

This article was created by MIT Enterprise Forum CEE. Want to know more about the MIT EF CEE Startup Accelerator? Check out how our program can help your startup grow!

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After all, there are many factors to consider and, when it comes to the overall footprint and environmental impact, any and all angles need to be considered. 

Whether you’re checking a new design before production or you’re looking to improve an older, existing product, there are many ways to measure its sustainability and globally significant impacts.

1. Assess All Raw Material Sources

Let’s start with one of the easiest and most influential factors in product sustainability. A sustainable product should use raw materials that come from as environmentally social or harmless sources as possible.

The materials used at the start will highly influence the overall sustainability of the product throughout the life cycle. Are organic or otherwise harmless options available? If we use limited resources like plastic, are we using post-industrial grade materials? Products that fail to consider these criteria will simply never be sustainable.

2. Check It’s Recyclability

Alongside the choice of raw materials, we also need to consider the environmental impact that happens at the end of life of the product. By undertaking an entire life cycle assessment, we can better determine the overall product sustainability. We must remember that the consumer’s actions form part of the product life cycle.

In this case, using recyclable and environmentally friendly materials will make a big change. Such materials ensure consumers are able to make more eco-friendly choices to protect natural resources. Question every non-recyclable material and not only ensure it is unavoidable, but that it is used at an absolute minimum.

3. Inspect the Manufacturing Process

How a product is created also has both environmental and social factors that need to be considered. This includes, for instance, the power sources used in manufacturing, as well the other materials that may be used during this process.

When using water in large amounts, for example, this can have numerous consequences on the surrounding area, thanks to the displacement of natural resources. A sustainable product would seek to minimize such impacts through controllable means, whether it’s limited manufacturing or creating additional actions to counter the damage. This often requires inspecting production sites and improving their own internal processes to reduce company’s environmental impact.

4. Assess The Supply Chain

Alongside the materials used in production, we must also consider the wider environmental impact of any product’s value chain, including supply chain, as the latter nonetheless forms a vital part of the product’s life cycle impacts.

Often, this is where businesses need to make key considerations throughout their delivery and manufacturing processes. They need to look at the environmental impacts of every additional company or service used. In today’s world, even just working with unsustainable companies during production is viewed very poorly on the market.

On the other hand, limiting product’s life cycle costs – meaning reducing negative environmental impacts in the entire life cycle of the product, including its very beginning – may bring certain economic benefits to the company. Especially in the developing countries, signs of undertaking sustainability efforts, such as reducing contribution to climate change, making constant, significant improvements to the products and ensuring sustainable development of the company are very often awarded by receiving global level third party certification, such as World Fair Trade Organisation certificate.

5. Measure It’s Transportability

Near the end of the manufacturing process, the product still needs to reach the consumer. Whether it’s sold directly or sent to stores, how easy something is to transport will help make it a more sustainable product.

For example, how many items can fit on a pallet? Can the packaging be reduced to make this even more efficient? Can we use more eco-friendly transport options? More than just material, excess wasted transport capabilities simply add to the more greenhouse gas emissions which your business will need to offset to ensure product sustainability.

6. Research Source Locations

While on the topic of supply chains, a product made of resources from locations further afield will naturally have a greater impact to the environment than one that favors closer or even locally sourced options.

Just as we assess the choice of every material, we must also consider where such resources are acquired from. As has already been stated, transportation has an environmental impact that adds to the sustainable product’s life cycle. Often, this is where organizations need to choose between the greater cost efficiency of distance locations or the greater product sustainability of local options. Even sustainable materials can be hard to justify if they need to be flown in from the other side of the globe.

Finding sources closer to home can often lower the environmental impact. When products hit new markets, for instance, businesses can further consider this factor: is it better to source locally in each market than transport from the existing source?

7. Ensure Compliance Is Checked

On the subject of source locations, supply chains and materials, a sustainable product only stays sustainable if the company continues to check and monitor its environmental impact. There are two key things that can be done here. In addition to simply checking the wider supply chain and product life cycle, we can also then look to educate all members of the supply chain, helping them gain certifications and ensure goals are kept.

The goal here is to identify the weakest links and, if they can’t be updated to ensure greater product sustainability, we can look to better alternatives.

8. Measure The Wastage

After a product is created, how much waste material is left over? This includes material leftover from the manufacturing process, but also the likes of left over stock. Since it’s not being used, it won’t end its life cycle as intended, but nonetheless has an environmental impact that hurts the wider sustainability of the product.

Investing in smarter production and product design can limit wastage. Likewise, smaller batches and further recycling options can ensure that what is created seldom goes to waste at all.

9. Conduct a Life Cycle Assessment to Reduce Life Cycle Costs

When taking in all the factors above, you will have a near complete view of the overall product sustainability. By taking this one more step further and conducting a full life cycle assessment, you will not only confirm the product’s current sustainability, but also identify more improvements to better remove environmental impacts.

Such assessments can be carried out in-house or by outside experts, but it’s an essential way to take the previously discussed elements into a final, quantifiable result. Naturally, a full assessment will take all the above factors into consideration. Proper life cycle orientation can significantly empower sustainable development of the product and the whole company.

10. Encourage Transparency

Finally, one of the key benefits of sustainable products design is that it enables companies to be transparent and open with their customers. After all, more and more consumers favor product sustainability when choosing between purchases and look for sustainability attributes.

Many leading companies are not only being transparent with their sustainable products, but they’re also seeking certifications to back up their claims. This can include compulsory government set certifications, but also additional goals that, while optional, help to highlight and confirm product sustainability for all. This is a trend many markets are moving towards: those openly and transparently showing their sustainability will fare better than those that don’t, at least in the eyes of the conscientious consumer.

Ensuring Product Sustainability & Sustainable Development

As you can see, sustainable products undergo numerous stages in their life cycle. Before the consumer even has a chance to consider a purchase, we have to:

• Assess all raw materials used in production to see if they can be replaced with less harmful alternatives, such as recycled materials.
• Check the recyclability of each material in the final product.
• Ensure minimal wastage and impact during the manufacturing process in whole value chain.
• Inspect the environmental impact of the entire supply chain and the companies involved.
• Find ways to improve the transportability – especially in regards to scale, to reduce greenhouse gas emissions.
• Determine where all materials are sourced from and determine if better alternatives are available.
• Ensure compliance with government laws, climate change policies and even optional schemes to validate product sustainability.
• Undertake a thorough life cycle assessment to both quantify existing efforts and find any remaining areas of improvement to reduce negative life cycle impacts.
• Finally, ensure full transparency for the consumer.

Every product is different, so the exact importance of each factor will of course vary, but all of the above are vital considerations for building product sustainability into any goods or business model.

This article was created by MIT Enterprise Forum CEE. Want to know more about the MIT EF CEE Startup Accelerator? Check out how our program can help your startup grow!

The post Is This Product Sustainable? 10 Tips on Ensuring Product Sustainability appeared first on StartSmart CEE.

For business startups, which typically navigate more challenging waters, the extra pair of hands can be a significant advantage – if used correctly.

Of course, not every business startup consultant is the same. Just as there are dedicated startup consultants, so too are there market research and business consulting firms with a range of services for new businesses. As a startup, you have a wealth of options – but the right selection of business startup consulting services, and knowing what to keep in-house, will be critical.

An Objective Stance

First and foremost, there’s one huge benefit to using external business consulting overall: as non-investors, they’re able to provide objective feedback. As a founder or owner, it’s difficult to have such a viewpoint from within the company itself. Whether it’s the financial plan, proposed product development or even just the marketing strategy, the best strategy and planning consultants tell you what you need to hear, not what you want to hear. After all, their interests lie in securing your success.

One additional benefit of such objective viewpoints is that business startup consultants can also provide moderation. Especially at the early stage, but even into the late term stages of product development, ideas can come from all corners and evaluating the best strategy is seldom easy. As moderators, whether actively in meetings or not, consultants can ensure all voices are heard, but still assist you in the non-biased filtering of valid proposals.

Challenge of Ideas

On the topic of objectivity, let’s be clear: not every business idea you have will be a stroke of genius. Each of the online business projects needs a way to challenge their ideas. Of course, before going public, this can be tricky for business startups to achieve, which is another benefit that experienced business consultants can provide.

Business consultants as a whole are used to offering the necessary ‘push back’ founders, owners and other leaders need to move forward efficiently. In addition to market research, discussed later, they can use their experience and knowledge to give you insights that you wouldn’t have otherwise had. While your internal team might think a new proposal is the way forward, it’s external business consultants that can explain why it might not be the best approach, drawn from experience, facts or simply a more objective point of view that’s more inline with the final consumer.

Management Guidance

We can broadly put startups into two categories: those that are founded by established, experienced individuals and those that are founded by relatively fresh and inexperienced leaders. In both cases, startup business consulting services can help guide the management direction.

Some might not like the idea of management consulting, but it’s critical for both groups. The inexperienced need a seasoned professional who can establish a managerial order designed to bring out innovation, pivot where necessary and ensure product development remains the key goal. Experienced individuals, likewise, need a business consultant to help establish a new system; it’s often necessary to ‘forget’ processes learned in previous companies.

Market Research

Before your product development or marketing strategy, you first need to test your business plan for a product/market fit. A lack of thorough market research can immediately guide a startup business in the wrong direction, costing both time and money.

What’s more, this is where startup consulting services can really shine. By being apart from your business, they can provide objective and clear market research. They can also provide detailed market analyses that you might otherwise simply not have the time or experience to conduct yourself.

Industry Knowledge

Every sector is unique, so the importance of understanding the current market and the unique challenges of your industry can not be understated. Who better to provide business startup assistance than someone with direct experience in such a sector – experienced consultants?

There are many consulting services dedicated to specific industries, and this is why. When using such companies, the business consultant assigned to you is typically someone with an established background. They know the ins and outs better than most. They can help avoid pitfalls that people new to the industry might not otherwise know, whether its legal issues, technical challenges or even the facets of business culture.

Long Term Strategy

With startup companies, it’s easy to focus on the early stage business goals such as the aforementioned market research, product development and investment. But startups, like any small business, need to focus on the long term goals; making the business financially sustainable, returning on investment and even marking areas of potential growth.

A business consulting expert – especially one with a background in running their own business – can provide this alternative perspective. They can help you set the right goals in order to maximise on resources and not over extend. For example, they know when to go through funding, when to expand product development and when to launch a marketing strategy. An experienced consultant will ensure you don’t invest too early, but also don’t invest too late.

Business Growth and Team Building

Speaking of the long term plan, business consulting services can also play an active role in your expansion. After all, when your company consists of a handful of people, recruiting the right experts is essential. Having someone in the recruitment process with their own experience (and, again, the ability to provide an objective stance) to filter out candidates will help your chances of finding the right people.

Better yet – when resources aren’t limitless, consultants can even recommend when to hire in-house, when to outsource on a temporary basis and when to otherwise wait. Growth is important, but expanding too fast also comes with its own risks and considerations.

A business startup consulting firm can also help with business structure development startups need to establish, legal formation assistance, managed marketing services & marketing campaigns (along with business branding), as well as proper sales strategies. So, all in all, for a new business venture, startup consulting can help to establish critical components of the business processes and help to shape a proper business model.

Express Concerns

Growing startup companies is never easy and certainly comes with more than it’s fair share of challenging questions. As the leader of such a small business, you will always have such hurdles, but not the people to discuss them with. Not everyone has the luxury of a co-owner or partner, but a consultant can again provide input on such issues.

A great business startup consultant doesn’t just answer questions. They review, research and come back with their own concerns. Here, you will find new challenges, issues and hurdles that you might not have otherwise seen. And once you know about them, they can be solved.

Yet expressing concerns is a two way process and the other way is just as vital. The objective position of consultants outside of the company means they can better advise on any issues that shouldn’t be discussed within the organization itself, but of course likewise shouldn’t be public. This can include your management style, potential investors, new directions for the company and even internal structure. As a confidential mentor, they can offer this often overlooked service.

Learn from Mistakes

Finally – at least when it comes to why you should consider startup consulting – is that you can learn from their mistakes. As the saying goes, those who fail to learn from history are condemned to repeat it. But that doesn’t mean you need to make the mistakes yourself.

If you choose a startup consultant with their own experience in running a business, or navigating the specific industry you’re in, you can learn not only what worked, but also what didn’t. Learning from and avoiding failures is just as important as repeating previous successes.

What Shouldn’t You Use Startup Consulting For?

From the very beginning, you need to be active with both potential investors and current shareholders. These are areas that can not be outsourced to anyone. External partners aren’t just evaluating your business or its product; they’re evaluating your potential as someone to do business with. Startup business consultant can guide and coach you on the finer points, but can not replace you.

Likewise, you can not rely on your startup consultant to share your passion; remember that business consulting is an objective service. As such, don’t expect your consultants to be a free source of marketing or exposure. They’re not investors, venture capitalists or incubators.

So, is Startup Consulting Necessary?

There’s no clear right or wrong here: startup consulting services have a lot to offer, but they can’t be used to manage your business for you. While many might still see a business consultant as extra expenditure at the early stages of a company or product, it’s better to view them as a form of insurance or risk mitigation.

For those new to this side of business, startup consultants can provide direct mentoring and development to you as the startup founder.

However, even seasoned veterans can respect that startup consultants provide knowledge where needed, objective feedback to challenge your misconceptions and a wider range of industry knowledge, market research and the overall startup and product development processes. Unless you have these qualities in equal spaces within the company already, some external guidance can go a long way.

In fact, this is one of the key benefits of accelerator programs – yes, like MIT EF CEE! Alongside financing, accelerators focus highly on education and mentorship. In other words, they typically include such startup consulting services on a more personal level.

Whether it’s part time or full time, a startup consultant can bring this added clarity into your internal business strategy. If you have access to such mentors or business consultants already, don’t let such knowledge and input go to waste. And if you don’t, then perhaps it’s time to bring someone on board with the experience and expertise to help you navigate?

This article was created by MIT Enterprise Forum CEE. Want to know more about the MIT EF CEE Startup Accelerator? Check out how our program can help your startup grow!

The post Can Startup Consulting Help Your Business Grow? appeared first on StartSmart CEE.

That said, a company’s internal organization can often be one of the largest challenges of innovation. A business that isn’t culturally, structurally or mangerially prepared for enablement will do the exact opposite: discourage and prevent. In other words, one of the biggest innovation problems in business can often be the business itself.

What are the challenges of innovation?

There are many innovation challenges in business, but we want to focus on the 7 most common: the biggest innovation management challenges you will find in most businesses struggling today.

1. Impatient Leadership

Innovation of all forms takes time. In many ways, it is an investment with long term returns. However, when a company’s leadership is eagerly prioritizing fast returns, some of the most important innovations can get overlooked or dismissed relatively quickly.

Such innovation problems are worsened when you consider the fact that the cheapest and quickest innovations sit relatively close to the current product or solution. And the closer they are to current practices, the less impactful they are, the quicker they become outdated, and the less worthy of the term “innovation” they end up.

In the long run, jumping from small innovation to small innovation can feel uncomfortably similar to an organization simply trying to keep up with the times. Meanwhile, competitors investing in key, strategic innovations that pay off much later are often ready to take advantage of the larger opportunities.

2. Lack of Innovation Culture

A rigid and traditional management model can also be one of the biggest challenges in innovation and creativity. After all, even if the company is willing to embrace and invest in new ideas, what good is it if the majority of the organization isn’t able to bring such ideas forward?

Many managers view new ideas with fear. Innovation is often seen as a distracting or otherwise removing resources from today’s pursuits of profits. As a result, time is prioritised to maximise current tasks as much as possible, with no space for innovative thinking or creative problem solving; management is based on current performance, so the future is always pushed back.

Worse yet, these key skills are often not encouraged at all. Fresh insights are an invaluable driver for innovative solutions, but many organizations will not invest in training or development. The most skilled engineers can’t create market-changing products overnight. Companies need to invest in a culture that both encourages and exercises these vital skills.

3. A Fear of Change

Being innovative means doing something different. With established companies with longer histories, this often meets strong resistance internally.

In such situations, innovation usually comes from the fringes: areas of the business that aren’t tied to the core model. Thus, while they have the freedom to be creative and to explore new spaces, such sidelined teams are not valued throughout the company, often dismissed as fanciful or extreme proposals.

This is where a fear of the new and different often takes hold. When the company holds firm to how things are normally done, how different such ideas are or, as discussed early, how the proposed investments move too far from the established model, such innovative teams can find themselves without support – and, in addition, without internal funding.

4. Lack of Ownership

One of the most pressing innovation challenges, for any business, is determining who is responsible. Without responsibility or ownership, there’s no impetus to succeed.

Here, however, we often face the duality of the business innovation challenge: while innovation cannot be exclusive to one department, there must nonetheless be an owner of innovation.

Just as the IT and digital technologies lead to the rising prominence of CTOs and CIOs, organizations also need people to own the concept of innovation. This is more so important for innovation; an owner needs to defend long term investments, or ideas that are still unproven, amidst the typical focus on short term profits and growth.

The ideal solution for this is to appoint a dedicated position; a role that works higher up in the structure, as a part of the management team, able to access all departments and ensure proper enablement (in turn, growing the previously mentioned innovation culture). Yet businesses with impatient leadership and a fear of change are, unfortunately, very unlikely to appoint such roles – such a position would be too much innovation in and of itself.

5. End-to-End Processes

Ideation is just the first step in the innovation process. After such ideas are established, there must be numerous stages of development, testing and refinement. Ideas need to be validated but not all will succeed. This is often viewed as a vast use of time and money, with no guarantee of success. And as we established earlier, the focus on profits and immediate goals means that more secure ROI strategies will often take priority.

Yet a great idea that lies undeveloped has no market potential. Likewise, skilled teams can’t build on new ideas if they aren’t developed. Innovation in this area is in many ways a form of research and development. Companies need to be willing to give the time and resources to ensure it happens, without implementing gates that rely too strictly on proven market results, being open to accept the fact that the new product or solution may never reach the global audience.

6. Inadequate Benchmarking

When focusing on the here and now, companies have a wealth of benchmarks to compare to. They can, for example, look to simply exceed this year’s KPIs, or even look to their competitors for a like-to-like comparison. All of these will ensure the organization stays competitive, but innovation is focused much more on the future and such benchmarks will fail projects before they’ve had a chance to succeed.

Sales and revenue metrics can often be one of the largest innovation challenges in business – every idea gets tested for market validity before the process even begins. More so, an organization-wide culture of chasing KPIs can prevent teams from even having ideas; solutions that that don’t have immediate KPI value will be dismissed, or not shared among their communities.

Before companies can assess its value, each idea must be weighed against the problems it’s trying to solve. Unique ideas require unique variables.

Of course, such variables need to be agreed on; even in innovation, it’s easy to chase vanity metrics. This is where the wider process of development and testing (see our previous point) alongside an owner of innovation (who can ensure such concepts are tested and assessed fairly within the company) are absolutely essential.

7. No Innovation Ecosystem

Finally, innovation is about new concepts, many of which often come around through the sharing of ideas and knowledge amongst different teams. Consequently, a silo-driven culture is a huge business innovation challenge. After all, a company that can not cooperate within itself can’t share new ideas.

Put this another way: when every team is isolated – or worse, pushed to compete internally – they will focus on many of the above problems: chasing their own KPIs, ensuring high performance to look good for the board and ultimately not bringing anything potentially controversial, new or risky to the table.

This is the very same reason startups and younger organizations favour hackathons and special ideation sessions. Organizational isolation is one of the biggest creativity and innovation challenges. An ecosystem ensures every department has a role to play. As a result, every department helps to secure funding and push new innovations forward to develop new ideas and solutions that can make a real change in the world.

How to Solve Innovation Challenges

There are many ways to solve the aforementioned innovation challenges, but there’s one clear theme throughout: enablement. When leadership is afraid or unwilling to invest resources and time, it denies a bottom-up culture where new ideas are free to be generated, tested and brought forward.

In the opinion of experts, the biggest problem is, as in many cases, the company’s management. People on top need to be innovation leaders to their communities that can implement the new approach to innovation challenge.

Especially this year, in the era of growing importance of digital economy due to the covid pandemic, organisations need to learn how to develop innovative, digital solutions that will be empowering them in this rapidly changing world. The challenge is to do it efficiently.

Repetition and complacency are the enemies of innovation. These changes can take time, but it all starts with a decision from the top to retain some resources and time for solving new, forward-facing or even unusual problems.

So, are innovation challenges easy to overcome? Probably not – in the opinion of experts, most companies still operate in an old-fashioned way and have a tendency to reject innovative ideas as too risky. But the world is changing and we just have to adapt – and the major step in this adaptation process should be the openness to innovation.

This article was created by MIT Enterprise Forum CEE. Want to know more about the MIT EF CEE Startup Accelerator? Check out how our program can help your startup grow!

The post Innovation Challenges – 7 Challenges Stopping Innovation in Your Organization appeared first on StartSmart CEE.

We could say they’re simply startups with a sense of privacy, but that isn’t doing the concept justice. So, let’s explore the stealth mode startup meaning, and it’s wider importance, in more detail.

What does stealth mode mean for startups?

A stealth mode startup refers to startups that keep their true agenda as private as possible through various legal means. While other startups seek the public limelight, startups in stealth mode do the very opposite and hide information about themselves, having only a general summary description of the company published.

How are stealth startups different?

Such companies don’t make public statements, disclose their products or services, or openly seek endorsement of any kind. For startups, this means acquiring investors and funding as discreetly as possible. This also means, similarly, that a stealth startup founder also follows a similar process; afterall, the owners connected to these companies can’t draw attention to themselves.

How to recognize a stealth mode startup

By their very nature, startups in stealth mode are not easy to identify, but there are always clues. If the website and public material is sparse in detail, yet there is plenty of funding and even some successful investors attached, that’s usually a strong indicator.

Stealth startup – how to find it?

Since stealth mode startups rarely seek funding publicly, approaching investors privately, they’re often found when looking at the latter’s portfolios. Venture Capitalists are often necessitated to disclose their investments. Here, you may find companies with few details but a long, blank history, or perhaps companies with obscure names and details that sound more like a decoy than anything else… these are all clear signs.

This also means, however, you likely won’t find such startups in new technology incubators or other groups where public activity is highly encouraged. A stealth mode company positions itself as far away from the limelight as possible and avoids public attention.

Benefits of startups in stealth mode

The main reason of growing popularity of companies in stealth mode is that they offer a bunch of advantages most entrepreneurs – especially small businesses owners – would find very appealing.

No early attention

The biggest benefit to a stealth mode startup is to avoid early attention before they launch publicly. This is the most common in technology startups that have a “disruptive” service. The uniqueness behind this USP is often the most valuable for investors, so startups often hide their new product to avoid a number of issues.

Surprised competitors

By going public as late as possible, the competition has the least available time to react. During this time, the startup can gain a foothold with the audience and the stealth startup founder can then secure even more funding and get more money to develop a new technology before they disclose funding.

Secured intellectual property

This is also vital for companies that haven’t secured their intellectual property from a legal point of view (e.g. haven’t registered trademark yet), or that the product is far from ready.

Drawbacks of startups in stealth mode

Of course, there are some disadvantages to stealth mode startups, otherwise it would be an established normal procedure.

Limited funding possibilities

The biggest disadvantage is the challenge in securing funding. When you can’t disclose your services or products publicly, you’re immediately losing a key part of the investors’ market and venture funding possibilities at the same time. This puts a lot of pressure on the stealth startup founder to seek private meetings, make excellent impressions and ultimately secure funding the manual, old fashioned way.

Limited customer feedback

Secondly, you’re also highly limited in customer feedback. When your business can’t interact with the public, how can you measure public responses or even secure the right market fit? This is a key challenge and one reason why stealth startups typically seek highly seasoned VCs with the experience to see past such hurdles.

Limited public attention

Finally, you also don’t gain from any “free” publicity. When a stealth mode company wants to go public, it needs to invest money into a big reveal or another equally large campaign. Public companies, however, can gather journalist’s attention, manage public image and build a reputation throughout the years of development.

So, are stealth startups good?

Most stealth startups are not without risk, but they can ultimately hold a lot of appeal. For investors that find those valuable diamonds, stealth startups represent unique opportunities to secure disruptive companies before they make waves, teasing more lucrative success as a result.

That being said, operating in the stealth mode requires some hard work, a founder with keen business acumen and investors with enough independent experience and insight to make the right calls. On the other hand, the end result of making a noteworthy impact on a competitive market is, in many VCs eyes, very much worth the additional risk.

Interested in more startup advice? Check out our article about startup consulting!

“What is a Stealth Startup?” article was created by MIT Enterprise Forum CEE. Want to know more about the MIT EF CEE Startup Accelerator? Check out how our program can help your startup grow!

The post What is a Stealth Startup? appeared first on StartSmart CEE.

Global air traffic, according to the International Air Transport Association (IATA), declined by 65.9 percent last year due to Covid-19. (compared to 2019), and European railroads lost more than 40 percent of their passenger segment revenue during the same period. This is the largest such decline in the history of transportation. According to IATA forecasts, the airline industry’s worldwide net loss last year totalled $118 billion, with another $38 billion expected to be lost in 2021.

European carriers have lost €26 billion in revenue between 2019 and 2020, due to the pandemic, according to a new report by the Community of European Railways and Rail Infrastructure Managers (CER). Passenger transport was by far the hardest hit, with a fall in passenger numbers resulting in a 41 percent year-on-year reduction in revenue. Rail freight fared better but its revenue also ultimately fell by 12 percent year-on-year.

With such a challenging situation, transportation industry is currently dominated by such trends as:

– better use of existing resources through multidimensional analysis of their consumption and machine learning algorithms,
– predictive maintenance with the use of sensor systems,
– generating savings through the use of IT tools such as artificial intelligence (e.g. automation of the help desk area).

Thanks to EAM class solutions (Enterprise Assets Management), efficient and safe infrastructure management is possible remotely and with participation from a much smaller number of employees. The further application of IoT (Internet of Things) technology allows companies to simplify many processes and, in this way, relieve employees, who can then take care of other tasks.

Internet of things and smart sensor systems

A very clear trend in the development of transportation companies is the use of the Internet of Things to collect information about equipment based on a system of sensors.

“It is very important that data comes from many sources and is analyzed immediately. On this basis, we can predict and anticipate possible failures, using so-called predictive maintenance” – explains Jarosław Łukasiewicz from Vetasi.

General Electric applies such solutions in its Boeing 787 – GenX aircraft. The devices built in the engines allow the organization collect and process information concerning conditions in the engine, operating parameters and the condition of its individual mechanical parts, among others During the flight, sensors in the aircraft engines can detect problems, such as by measuring the temperature of exhaust gases, and transmitting the information to both pilots and ground crew.

In addition to safety, such solutions also increase cost savings for companies. One aerospace solutions provider has developed a tool that measures fuel consumption and, based on analysis, gently adjusts control flaps to reduce unnecessary drag. Considering how much huge carriers spend on fuel, any saving in this area is worthy of attention.

Railroads are also using modern solutions. The British Rail Telecom network has decided to install sensors both on tracks and in their vicinity, so as to collect information on the need for maintenance of a given section. Additionally, the system is tasked with alerting the company about threats related to landslides or floods. Consequently, it is no longer necessary to send staff to carry out standard inspections. It is enough to analyze the regularly updated data sent via sensors.

Furthermore, such modern systems installed on tracks and trains can locate each vehicle more precisely than previous solutions. As a result, gaps between departing trains can be shorter.

Remote engineers in augmented reality

Another clear development trend in transportation industries is the use of augmented reality and virtual goggles. Thanks to such solutions, employees performing maintenance work can be shown detailed diagrams and instructions, which reduces the number of mistakes and increases work safety.

“Such an inspection can also be remotely monitored by a specialist in the service center, who will be able to suggest the best solution to a less skilled worker sent to the site of the failure. This is the answer to the problem with the availability of employees during the pandemic, but also to staff shortages that occur all the time, including those related to top-level specialists” explains Jarosław Łukasiewicz.

How can we make better use of the resources we have?

“Modern EAM systems allow companies to optimize the use of equipment and infrastructure on many levels, as well as increase the efficiency of their resources. This is possible thanks to the planning and realization of repair works, preventing possible failures and costly downtime. Vetasi specializes, among others, in the implementation of IBM’s Maximo tool, which additionally allows for the optimization of costs connected with the purchase and maintenance of enterprise resources” says Paweł Szczęsny – Business Development Manager in IBM Polska, responsible for IBM MAXIMO sales development.

A modern system of maintaining railroad infrastructure allows companies to manage and monitor transport resources in real time, which makes it possible to ensure up to 100% resource availability – from rolling stock, through signalling and power supply to communication. Modern solutions offer special software platforms that collect and analyze data on the technical condition of trains, signaling, barriers, power supply systems, tracks, etc. The collected technical data can be analyzed in conjunction with financial data, allowing for more accurate purchasing decisions.

“During the pandemic, everyone understood how important it is to be able to remotely and comprehensively analyze data on company resources. For various types of carriers, it has become crucial to respond to rapidly changing conditions, and the basis for such action is constantly updated knowledge about available trains or aircraft, and their technical status” – explains Jarosław Łukasiewicz.

Vetasi experts implemented EAM solutions in the Warsaw Fast Urban Railway (SKM). Thanks to new tools, drivers and train managers may, for example, directly and immediately report a defect so that it reaches the appropriate department responsible for rolling stock maintenance. Faster ordering of spare parts and immediate summoning of specialists responsible for repairing a given vehicle element contribute to a reduction in the time needed to eliminate the problem.

Check how modern IT solutions can help in the development of your company too! Feel free to contact us: https://www.vetasi.com/pl.

The post Top trends in the transportation industry: Aerospace and rail technologies to watch out for in 2021 appeared first on StartSmart CEE.

Imagine a store which you enter, take products off the shelves and leave without having to stand in a queue, interact with the seller, take out cash or a payment card. Due to current retail tech trends, such solutions are no longer the sphere of the imagination, but a real solution called Żappka Store – a fully autonomous grocery store.

Covid-19 – change accelerator

The covid-19 pandemic has reshaped almost every aspect of our lives, and above all, the way we work, travel and shop. Technological innovations thought to be introduced in a few years are implemented and scaled up within a few months. Wherever there is direct contact, and thus there is a risk of transmission of the virus, service providers have been forced to reorganize daily business operations.  Retailers are now at a turning point in history and their ability to innovate quickly will not only have a huge impact on the industry landscape but also on their chances of surviving in the marketplace.

The retail industry began to develop e-commerce, offer home deliveries and contactless payment methods, and thus develop new technologies and rebuild the entire supply chain to be able to offer the same level of customer service in the new sales channel.

While the use of e-commerce channels in retail is increasing, there will always be a demand for brick-and-mortar stores. That is why Żabka decided to use the latest technology and provide customers with a shopping experience that meets the changing expectations in the new reality.

Autonomous retail stores market

According to Allied Market Research and PR Newswire reports, the retail store automation market is expected to reach over USD 23 billion worldwide in 2026, compared to approximately USD 11 billion in 2018 (with a cumulative annual growth rate of 9.6%). China itself, which is referred to as the precursor of automation and the introduction of autonomous stores, estimates its local market at USD 7.1 billion in 2020, assuming that by 2022 over 245 million users will become customers of a given type of store.

Fully autonomous grocery store – how it works?

At the beginning, join the Żappka Store in the Żappka application and connect card in Żappka Pay. The added card will be the default payment method in the Żappka Store. Approach the scanner located by the entrance door to the Żappka Store, scan the QR code generated in the application and start shopping! The door to the store unlocks automatically after scanning the QR code. 

One can enter the store with accompanying people, and each person’s purchases will be added to her/his bill. Take items off the shelf and pack them straight into a bag or backpack. Don’t have to scan them anywhere or wait in the checkout line. After successful shopping, transaction confirmation will be found in the application and a PDF invoice on the e-mail. The corresponding amount will also be taken from the previously added card. 

What are the consumer reactions? Better than we expected! Customers appreciate the fact that:

“No cashier nor cash register – I do not have to wait until he comes to the cash register”
„24/7 – round the clock, also open on Sundays”
„Modern, futuristic”
“It saves a lot of time. Shopping is done very quickly.”
“Clean, elegant and tidy”
„Quick shopping, on the way to/from work”

What technology trends in autonomous retail will come next?

Although the autonomous Żappka Store is distinguished by innovation, we are already considering what we can do more to give our customers an even better shopping experience. That is why we are looking at the main trends of autonomous retail technology.

Age detection

The ability to identify the age of the person making the purchase will allow to introduce to autonomous stores an offer available only for adults, such as alcoholic drinks or tobacco. Creating or using a digital ID card can be used to protect the store from theft by identifying the offender. The ability to identify the age will also allow the generation of useful data linking a given age group with the purchase of individual products. Thanks to this, it will be possible to offer a person entering the store a personalized promotion.

Contactless payments

According to the reports of Allied Market Research and Grandview Research, the value of the contactless payments market in 2019 and 2020 amounted to USD 1,168 billion and USD 1,340 billion, respectively. By 2027, this value is expected to reach USD 5,400 billion (with a cumulative annual growth rate of ~ 20%). 

The market is working on improving solutions ensuring the security of contactless payments (currently, having a card and making purchases for an amount below the limit, there is no verification whether the cardholder is the owner). The most promising technology in this field is the so-called “Face recognition” checking the identity based on the face and scanning the eye. The customer can be recognized (after one-time registration) and, on this basis, also admitted to autonomous stores.

Voice assistant

The global market of Voice Assistant applications is currently worth around USD 450 million, while reports include VynZ Research, Market Research Future, and MarketWatch predict the growth of the entire Voice Assistant market to USD 7.3 billion in 2025, with a cumulative annual growth rate (CAGR) of approximately 24.32%. 

The self-driving voice assistant can be used, among others, to provide information about store hours, inventory, prices, frequently asked questions and product availability. It can also prove useful in the context of comparisons and attributes of individual products. Voice assistant helps to find sought products in the store.

Multi-functional store

Despite the dynamic growth of the e-commerce trend and its worth of USD 9 trillion in 2019, its share in total sales of retail stores is approximately 11% . The above data indicate the key position of physical stores in the retail industry. This does not mean, however, that the given spaces should not undergo further modernization and optimization of customer experience.

 A study by Deloitte in the UK showed, among other things, that around 19% of respondents are dissatisfied with the availability of free Wi-Fi internet in cities, and 26% with insufficient parking spaces1. This creates an opportunity to increase customer satisfaction and the frequency of shopping in stores by delivering missing values in cities.  Autonomous stores can be integrated with solutions enriching city infrastructure – docking stations for micro-mobile means of transport, Wi-Fi points, delivery stations over even with bus stops and sharing with them energy coming from the self-sufficient shop. 

We are supported by MIT EF CEE

For many customers of the autonomous Żappka Store, it is the quintessence of the store of the future – safe, seamless and convenient. However, our ambition is to take advantage of the latest trends so that the consumer experience is even better. This is why we take part in the MIT EF CEE acceleration program to find the best solutions with the help of experienced partners.

The post Autonomous retail tech trends 2021 appeared first on StartSmart CEE.

Pharmaceutical supply chains are typically regarded as neither cost-effective nor flexible, especially when compared to those of other industries. [1]. Consequently, the pharma industry isn’t the best for finding examples of efficient supply chains, yet numerous best practices can be tracked in other sectors, such as the apparel, automotive and FMCG industries. 

This is interesting because, these days, some of these latter companies – whose value chains are perceived as highly competitive – are entering the pharmaceutical business in an attempt to move the pill both faster and more conveniently to the patient [2]. 

Two scenarios for the future are possible for the pharma supply chain management: 

1. Pharmaceutical companies implement some minor changes within their supply chains and watch as newcomers, with agile and innovative strategies, gain their share in the pharmaceutical business. 
2. Pharmaceutical companies reinvent their supply chains and become more competitive. Digitalization and automation (incl. robotization) have prominent roles here. 

As far as scenario 2 is concerned, the following questions could be posed: is it possible to imagine a situation where real demand triggers the production of another batch of a medicine, and is it possible that said production is fully automated?

To answer the above questions, one needs to break down the elements of the supply chain into two pieces. Firstly, there is distribution, starting from the customer (patient) and going up to the manufacturer (incl. the pharmacy and wholesaler). Secondly, there are the areas of manufacturing and quality.

Digital pharma distribution channel

A lot has been said about customer experience recently. To gain extra profit, a company needs to exceed customer expectations. On the contrary, unsatisfied clients equate to losses and a shrinking business. According to KPMG research, brands with superior customer experience doubled their revenue growth between 2010-2015, according to figures from the UK FTSE 100 INDEX [3]. 

Nowadays, patients demand a greater choice of products, various delivery options and faster service. To provide a positive customer experience and an agile response to customer needs, companies cooperating within distribution channels have to implement more collaborative approaches and orchestrate flows of demand information up the channel. One of the best examples here is ZARA, which uses real demand data to make production and even design decisions [4].

Pharma companies can operate in the same manner, changing their mode of collaboration with distributors and wholesalers from transactional to truly integrated. Here, a real-time flow of demand and inventory data among the partners’ IT systems is necessary. Next, based on cloud computing (Amazon Web Services, Google Cloud Platform, Microsoft Azure) and using a multi-echelon inventory approach, the right production schedules could be delivered to the production site automatically.

Adamed has already started orchestrating pharmaceutical distribution channels throughout, with the centralization of inventory replenishment decision and the digitalization of demand data. In early 2000, Adamed started a VMI (Vendor Managed Inventory) project with its main distributors. To achieve the project goal, the IT systems of cooperating companies were integrated and the data on sales and current inventory were interchanged automatically on a daily basis. 

The second step was integration with pharmacies (there are more than 10 000 pharmacies in Poland). As a result, Adamed has full visibility on sales and inventory position through the distribution channel (including its warehouse, but also distributors and retailers). The above is a great basis for moving from an MTS (Make To Stock-based on-demand forecast) to MTO (Make To Order, which means real demand) replenishment strategy. 

Automated manufacturing in the pharmaceutical industry

As the signal from the distribution channel goes up the chain and reaches a manufacturing site, it is high time to process the production order. Here, so-called execution systems, like MES (Manufacturing Execution System), LIMS/LES (Laboratory Information Management System/ Laboratory Execution System) and WMS (Warehouse Management System) are harnessed. 

By using them all the production order is processed automatically, alongside batch documentation (paperless). But what about physical manufacturing? What level of manufacturing automation is possible?

This film shows that sky is the limit. In fact, all the subprocesses could be automated. In reality, various solutions (often referred to as the Industry 4.0 approach) are possible, and they should be aligned with the value chain strategy. 

Two years ago Adamed launched its Industry 4.0 transformation program. It has 3 pillars: 

1.  The digitalization of all main processes (currently 4 execution systems are being implemented / upgraded and integrated: MES, LIMS/LES, WMS, EDMS)
2.  Automation and robotization – the chosen processes are being automated and robotized. This includes, for example, internal logistics: packaging centre and distribution warehouse, inhaler packaging robots, dissolution robots, and palletizing robots.
3.  Competences – as more processes are automated, employees need to develop new competencies; hence various training programmes are being implemented. 

To recap, the digitalization and automatization of pharma value chains can provide a competitive edge. Diversified solutions and tools can be implemented, and pharma supply chains could, accordingly, become more innovative. Today, with the right mix of implemented technologies, it is possible to replenish the medicine based on real demand, with very limited human intervention. 

Yet in the real business world, it is not the sky but the budget that is the limit. While analyzing the costs and benefits steaming from value chain redesign one cannot boil down the financial calculations to just the costs of the workforce but should further extend analysis.

Adamed Pharma is a partner of MIT EF CEE Autumn 2021 acceleration program. Want to know more about them? Check out what are they looking for in the startup world.

[1] https://www.pwc.com/gx/en/pharma-life-sciences/pharma-2020/assets/pharma-2020-supplying-the-future.pdf

[2] https://www.cnbc.com/2020/11/17/amazon-pharmacy-free-prescription-delivery-for-prime-members.html

[3] https://assets.kpmg/content/dam/kpmg/pdf/2016/05/demand-driven-supply-chain-report.pdf

[4] http://idea-space.eu:19001/up/319cc877736053b53fe46efc79a29be6.pdf

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