Clearhouse
Innovation Competitions are a Unique Way for Companies to Foster Innovation and Diversity: Here's How
Publication Date: November 29, 2018

Jennifer Byrne is the co-founder and CEO of Quesnay Inc, an innovation consulting services firm that helps traditional firms and brands accelerate innovation by working with startups.

Legacy industries like insurance and banking continue to face the threat of disruption by new technologies and solutions. Many corporations are looking for proactive ways to catalyze innovation such as partnering with startups and influencing new ideas from within.

A survey by Accenture reports that over 85% of incumbent businesses from China, India, and the U.S. believe that collaborating with their smaller rivals will give them access to game-changing technologies that can help them thrive in technology-driven markets. The majority of companies surveyed view access to new technologies as the biggest opportunity of engaging with small high-tech firms in innovation initiatives. However, many companies don't know how to go about collaborating with startups and small tech companies—or don't go about it in the right ways.

A new way to approach collaborative innovation

That's where programs like innovation competitions come in. With the ability to be customized to any corporation's need, innovation competitions are essentially a form of business development that focuses on the creation and celebration of the best new ideas or solutions, crowdsourced from top innovators. Competitions typically run over the course of several months, during which companies are able to identify startups that can provide a different outlook on their industry and assess opportunities for long-term partnerships with them.

A corporation's objectives help determine the competition topic, question, and timeline. Once these factors are decided, recruitment for qualified startups takes place through numerous channels and industry experts judge the best solutions for the stated challenge. As an innovation consultancy, Quesnay Inc. has been running innovation competitions for over five years, helping clients to achieve their goals by introducing them to high-quality startups offering innovative solutions beyond their own industries, geographies, and demographics. Clients are encouraged to create relationships with these startups and often go on to have strong, mutually beneficial partnerships long after the competition ends.

The link between diversity and innovation

Whatever approach a company takes to collaborative innovation, there is one key element that should not be overlooked–the positive correlation between innovation and diversity.

A recent study by BCG shows that in both developing and mature economies, companies with an above-average diversity profile generated 45% of their total revenue from innovation versus just 26% for companies with below-average leadership diversity. In addition, organizations with diverse leadership reported better overall financial performance.

The research is clear, yet a lack of diversity persists in industries that are striving for innovation. A report by Mercer shows that when it comes to gender diversity in the financial services industry, as career level rises female representation severely declines. It shows the comparison of female to male employees at the manager level is 37% to 63%, at the senior manager level it 26% to 74%, and at the executive level, 15% to 85%.

Many corporations have created employee special interests groups and focused on diversity in their recruiting efforts to solve the problem, but they are also looking for new and actionable ways to move the needle. 

An innovative way to foster diversity

Here's how some organizations worked with Quesnay to structure innovation competitions to generate new ideas to help their business while fostering diversity.

Verizon Powerful Answers Award

When Verizon Communications Inc. (Nasdaq: VZ) was looking for new ways to expand into emerging areas of technology, they asked Quesnay to help design a program that allowed them to find and support innovative entrepreneurs. The result was the Verizon Powerful Answers Award, which provided more than $12 million in cash prizes to support the growth and development of new mobile-centric social enterprises around the world.  The award also opened up new integration and engagement pathways for startups across the Verizon organization, leading to multiple corporate venture investments, product partnerships and commercial relationships.

An example of this is Verizon's investment in Swiftmile, the leading provider of scalable turnkey eBike and eScooter transit systems, to support its growing internet of things (IoT) initiative. The relationship started with Swiftmile using Verizon's IoT-enabled Share Solutions platform as part of its electronic bike transit share system and continues today.

National Association of Broadcasters Pilot Innovation Challenge

The National Association of Broadcasters (NAB) chose to start their PILOT Innovation Challenge at the ideation stage. The competition awarded cash prizes for original ideas and innovative solutions to help broadcasters and media organizations better serve their local communities and audiences.

One of the winners was nēdl, an app that lets users search live radio as easily as they search the web and also start their own live broadcasts.  In addition to its $20,000 prize, nēdl received funding from Backstage Capital and Matter.vc, launched on Alexa, and was featured in the App Store. 

The NAB has continued to support the development of other winning teams through funding, mentorship, and introductions to key industry leaders with much success.

Quesnay's newest competition series, Female Founders in Tech (FFiT), works to not only support diversity of thought like the NAB PILOT and Verizon competitions discussed above, but places a special emphasis on gender diversity. Recent reports indicate that only 3% of venture capital dollars went to female founders.  Quesnay launched the FFiT to address the gap among women leaders in numerous industries with specific competitions for insurtech, fintech, and mediatech. This program recognizes and supports women-led startups and awards them with money, mentorship, education, and—perhaps most importantly—partnership opportunities with the companies sponsoring the program.

The 2017 FFiT winner, Goalsetter, is a goal-based savings and gifting platform. Goalsetter received investment from a competition sponsor, went on to raise $600,000, was selected to join Morgan Stanley's Multicultural Innovation Lab and was named a winner of JP Morgan Chase's Financial Solutions Lab competition.

The FFiT program is a powerful way for participating companies to increase staff engagement and actively promote an innovative culture, while also demonstrating their commitment to diversity and inclusion. Employees can directly impact women entrepreneurs through mentorship and coaching. In addition, workers at all levels can participate in evaluating the startup applicants and attending the pitch event.

The latest competition, Female Founders in FinTech presented by Wells Fargo, just launched on November 12 and is seeking innovative fintechs to change the game for financial services incumbents. The program's other sponsors and partners, Fidelity Investments, Shearman & Sterling LLP, and Royal Bank of Canada are supporting the program by providing mentorship and experts to evaluate the companies.  PayPal Holdings, Inc. (Nasdaq: PYPL) is also a strategic partner for FFiT's competition.   Louise Pentland, PayPal's Chief Business Affairs and Legal Officer, had this to say:

"Much like PayPal's mission to democratize financial services and create greater opportunities for consumers and merchants to participate – and in fact, thrive – in the global economy, Female Founders in Tech is designed to democratize access to capital, giving female entrepreneurs access to much needed resources. We are proud to serve as a strategic partner for FFiT's competition and look forward to hosting the final pitch event." 

To learn more about the current Female Founders in FinTech competition, visit www.quesnays.com/ffit2018fintech.

***

Whether corporations are looking to support women in tech from a diversity perspective, invest in strong, cutting-edge startups, or just get a better view on what startups are doing in their industry, an innovation competition is a compelling way to bring together and promote factors that can easily impact a corporation's future business success.

***

Quesnay is an innovation consulting services firm that helps traditional firms and brands accelerate innovation by working with startups. Quesnay achieves this by running innovation competitions and acceleration programs, as well as providing strategic partnership consulting services. Prior sponsors and clients include AARP, American Family Insurance, Condé Nast, CSAA Insurance Group, Farmers Insurance Group, Hearst Corporation, John Hancock, Liberty Mutual Group, MassMutual, National Association of Broadcasters, Prudential, QBE Insurance Group, RGAX Inc., Sterling National Bank, TD Bank, Thomson Reuters, and Verizon. For more information, follow us at @QuesnayInc or visit www.quesnays.com.

The views and opinions expressed herein are the views and opinions of the author at the time of publication and may not be updated. They do not necessarily reflect those of Nasdaq, Inc. The content does not attempt to examine all the facts and circumstances which may be relevant to any particular company, industry or security mentioned herein and nothing contained herein should be construed as legal or investment advice.