How Unilever Avoids Pilot Purgatory when Innovating with Startups

Collaborating with external partners—startups, scaleups, and entrepreneurs—is a best practice for large corporations aiming to infuse their innovation process with fresh ideas, greater agility, and a culture of rapid iteration. More than half of business executives in the United States report turning to startup partnerships and accelerator or incubator programs to help achieve their organization’s three-year growth objectives, according to KPMG’s Benchmarking Innovation Impact report.

There are plenty of precedents and numerous success stories, but that doesn’t mean forming a fruitful partner ecosystem is easy. In fact, in the same report, some top leaders share they’ve stopped working with startups as they often see progress stall in “pilot purgatory.” The reasons for this vary, though most can be traced back to a lack of alignment. And with misalignment come mismatched expectations, slow decision-making processes, and a failure to integrate innovative solutions into the broader corporate strategy.

Unilever, a global leader in consumer goods, has ingeniously overcome the challenges of collaborating with startups by ensuring alignment from the start, emphasizing action over ideation, and providing the necessary support and resources. Through Unilever’s multiple partner initiatives—Unilever Ventures, Foundry, TRANSFORM, and 100+ Accelerator, to name a few——it has cultivated a robust ecosystem that effectively bridges the gap between lean startups and internal structures, driving mutual growth and innovation.

As a guest on our Innovation Rockstars podcast, PJ Mistry, TRANSFORM Program Manager, Global Sustainability at Unilever, talks more about the common pitfalls of startup collaboration and how to overcome them to achieve mutually sustainable growth. Learn more about Unilever’s proven approach to avoiding pilot purgatory in this blog. Listen to the full podcast episode here.

Bridging cultural gaps

A clash of cultures is one of the most prevalent challenges large corporations face in innovating with external partners. Startups, in particular, thrive on agility, speed, and an experimental mindset. These are precisely the reasons why larger, often more risk-averse organizations want to work with them. However, integrating these agile approaches into a traditionally structured corporate environment can lead to friction and slow down innovation processes.

Unilever addresses this problem by fostering an environment where both entities can leverage their strengths without being bogged down by bureaucratic inertia. PJ Mistry emphasizes, “The real challenge is to find the sweet spot where these two cultures can work together.”

By creating clear frameworks and guidelines and defining shared goals, Unilever ensures that its partners and corporate teams can work together effectively. The company implements regular workshops, mentorship, joint projects, and an open innovation approach to facilitate the integration of both cultures.

This strategy leverages startups' agility and innovative spirit while harnessing Unilever’s vast resources and stability. Through digital support hubs, Unilever provides startups access to its resources and expertise. This enhances collaboration and ensures that innovative solutions are seamlessly integrated into Unilever’s broader corporate strategy.

Aligning on KPIs

Another significant hurdle is aligning key performance indicators (KPIs) between startups and corporates. Startups typically focus on rapid growth and innovation, whereas large corporations may prioritize long-term sustainability and risk management. Mistry points out the importance of finding a balance, “We’re looking at two different sets of what success looks like—aligning those KPIs and thinking about how you're going to measure them.”

To address KPI misalignment, Unilever works closely with startups to develop shared objectives and performance metrics that align with both parties' goals. The company sets up clear communication channels and regular check-ins to ensure ongoing alignment and adjustment of KPIs as needed. This proactive approach prevents misunderstandings and keeps both parties focused on common goals.

By involving stakeholders from both sides in the KPI development process, Unilever ensures that the metrics are mutually beneficial. Centralized platforms and dashboards allow for real-time tracking and reporting, ensuring transparency and accountability. This collaborative effort fosters a sense of shared ownership and commitment to the innovation projects.

Through continuous communication and feedback, Unilever ensures that startups' innovative momentum aligns with its strategic priorities. This alignment is crucial for transforming innovative ideas into scalable and sustainable solutions, ensuring that both startups and Unilever achieve their respective objectives.

Ensuring scalability

Scaling up successful innovations is often a significant challenge for large corporations and startups alike. Transitioning from a pilot project to a full-scale implementation requires substantial resources, robust processes, and strong management support. This phase can be particularly daunting due to the complexities involved in maintaining the quality and consistency of the innovation at a larger scale.

Unilever addresses this challenge by focusing on scalability from the very beginning. By working closely with startups, Unilever ensures that any innovative solution can be adapted to larger operational contexts. This involves rigorous testing and validation during the pilot phase to identify and resolve potential issues early on.

Access to Unilever’s extensive resources is a significant advantage for its startup partners. This includes not only financial support but also access to Unilever’s vast network of suppliers, distributors, and market channels. By leveraging these resources, startups can scale their innovations much more quickly and effectively than they could on their own.

Additionally, Unilever forms strategic partnerships with other industry players, government agencies, academic institutions, and investors to facilitate scaling. These collaborations provide additional support and open up new avenues for scaling innovations. By fostering a continuous improvement mindset, Unilever encourages startups to keep refining and enhancing their solutions even after scaling up.

By focusing on systematic scaling, Unilever avoids the dreaded pilot purgatory, turning promising startup collaborations into significant business impact.

How ITONICS supports successful startup collaboration

By harnessing the power of structured collaboration, strategic alignment, and robust innovation management tools like ITONICS Innovation OS, large corporates can successfully manage startup collaborations from scouting to scale-up. ITONICS provides a comprehensive platform supporting the entire innovation lifecycle, ensuring promising ideas transition smoothly from pilot to full-scale implementation.

With advanced tools for environmental scanning and automated monitoring, ITONICS enables companies to discover and engage with the most relevant startups, ensuring collaborations begin with a strong strategic fit. As a single source of truth, ITONICS establishes transparency and accountability with collaborative evaluation, real-time KPI tracking, dynamic dashboards, and agile phase-gate workflows. This enhances decision-making for effective project prioritization, resource allocation, and execution.

As Mistry points out, “There is not a lack of innovative ideas out there, but a lack of rolling up our sleeves and getting to work.” ITONICS empowers teams of any size to turn ideas into action by providing the tools needed for collaboration, strategic alignment, and seamless scalability. By leveraging ITONICS, companies can avoid pilot purgatory, ensuring that startup collaborations lead to significant business impact and sustainable growth.