Singapore-based DBS Bank is Southeast Asia’s largest bank by assets, but its leaders aren’t

taking continued prosperity for granted. Nor should they, knowing as they do that Asian banks may be even more vulnerable than their Western peers to near-term disruption by fintech startups.

To head off the threat, DBS has invested US$1.2 billion in digital initiatives. Incongruously, this includes extending a helping hand to Asian entrepreneurs, whilst simultaneously, and aggressively, answering challenges from the start-up world. DBS recently launched a Hong Kong-based mentoring program for start-ups in collaboration with a leading local incubator. This complements its pre-accelerator in Singapore offering participants S$25,000 in seed funding. The bank has also introduced reduced-fee accounts for entrepreneurs and released a mobile app for budding Singapore SMEs, among other goodies.

What’s more, in 2015 alone DBS has given 5,000 employees - nearly one-quarter of its total headcount - the chance to participate in hacking challenges and hybrid team projects involving startups.

Unlike a conventional venture capital (VC) or M&A relationship, there are no overarching strategic or financial objectives evident here. So what does DBS stand to gain from all this? Believe it or not, quite a lot. It can be difficult bordering on impossible for large organizations to teach themselves how to become

Corporates and start-ups: Engage or else!

Previously stationed in London, Douglas Cassidy was impressed with what he saw when he came

to Jakarta. “There is dynamism here that is quite striking, so I was instantly interested,” Douglas said. And it is the dynamism and energy of the city and its people that present ample opportunity for the consulting industry to grow.

The need for consultingCassidy has close to 20 years

of experience in an industry that requires accuracy in information, and indeed he said that a business could not succeed if it didn’t understand the market and its customers.

“Every company needs consulting services to help them in their expansion strategy, for example, so there is a big opportunity to expand,” he said, stating that Indonesia was seen as a sleeping giant because the opportunities are so great for businesses to expand in the country.

Cassidy was recently appointed as country head of business consulting at Ipsos Business Consulting; and this appointment

There have never been more ways for big companies and entrepreneurs to collaborate – and you’d be surprised at how common these unlikely pairings are becoming.

is seen as a strategic move taken by the company at the start of the ASEAN Economic Community (AEC).

With the launch of AEC, Ipsos sees an increase of foreign direct investment in Indonesia, which is expected to drive demand for research and business strategy consulting. Cassidy said that with the consulting group’s global presence, the company could reach across an entire global network to deliver to its clients. “My primary goal will be to play my part in making the Indonesia office the primary growth engine of Ipsos Business Consulting.”

He noted that clients always have specific targets in mind when they go to a consulting firm, and he stressed the importance of constant communication with the clients. “There should be a checkpoint to make sure we are on course. The clients also use the update in their decision-making, and if necessary, they can ask about something more in depth.”

Cassidy believes that enterprises, big or small, need to be able to navigate the threats to their respective industry. Many

innovation-driven. DBS’s hunch was that engaging closely with start-ups in many different ways would help the organization imbibe something of their creative, agile culture. And the bank is by no means an outlier: Many of the world’s most iconic companies are similarly seeking cultural contagion from start-ups, drawing on a broad spectrum of novel channels for engagement.

Less risky relationships with startups

For the first time, all the different ways incumbents are engaging with start-ups have been documented in a report, co-authored by INSEAD and the Silicon Valley venture-capital firm 500 Startups, “#500 Corporates: How do the World’s Biggest Companies Deal with the Startup Revolution”. The most well-known channel, and still the most popular, is corporate venture capital, (164 corporations of the Forbes Global 500), a sector that saw the number of deals rise by 30 percent between 2009 and 2013, in line with the soaring stock market. Indeed, the majority (61.7 percent) of The Wall Street Journal’s Billion Dollar Startup Club have received funding from at least one corporation (which doesn’t include investment firms like Goldman Sachs).

However, it goes without saying that VC is an expensive proposition, one that may be out of reach for smaller companies. Our report shares the good news that

if a company lacks the financial resources to invest, or isn’t quite ready to take the plunge, there are plenty of other ways to engage that are relatively low-cost and low-risk.

The same goes for companies in need of innovative talent that lack the cash flow to acquire, or acqui-hire, a company or team. Mingling with start-ups in a more open-ended way builds a bridge that some entrepreneurial talent may choose to cross – without jeopardizing the bottom line.

The ecosystem of engagementHere are a few of the more

common ways to engage, in descending order of popularity:

Start-up competitions – 76 corporations of the Forbes Global 500 have held competitions, which usually involve entrepreneurs pitching their start-up ideas as they vie for a cash prize. Comcast, for example, has Innovations for Entrepreneurs, Philips sponsors an Innovation Award, and Pernod Ricard runs a contest for social-impact startups called The Venture. Companies

can use competitions to engage a particular demographic (e.g. L’Oreal USA’s Women in Digital programme), and/or foster partnerships unlikely to come about otherwise (e.g. the Head Health Challenge, a joint endeavor of General Electric, Under Armour, NIST, and the National Football League).

Accelerators/Incubators – 64 corporations of the Forbes Global 500 have set up incubators and/or accelerators to aid the development of nascent companies. Some incumbents are using these programs as tools to facilitate networking and relationship-building. For example, an interesting model has been launched by Airbus Group with BizLab, where entrepreneurs and intrapreneurs (employees) are working under the same roof. In addition, Deutsche Telekom, Orange, Microsoft, and Coca-Cola are just some of the companies that have taken their accelerator programs international: the Coca-Cola Founders seed/start-up platform has set up in 11 countries, Microsoft and Microsoft Ventures Accelerator are in seven.

y Head of Business Consulting Indonesia (Nov. 2015 – present) y International investment product manager at Friends Provident

International, UK (July 2013 – Nov. 2015) y International investment manager at Standard Life, UK (Sept.

2011 – Sept. 2012) y Product development manager of Santander Asset Management,

UK (Oct. 2002 – Sept. 2011)

career highlights

Year of Birth

education y Bachelor of Arts (Hons) in music from Leeds University, UK

(1998) y Diploma in mathematics from Open University, UK (2012) y Master of Science in applied economics from the University

of Strathclyde (2013).

1974

at ease

priorities need to be chosen. And on such occasions people like to know they have strong leadership. It can be demotivating if people think that a decision won’t be made.”

He said a good leader should be able to consult, take advice, set the direction and decide. “I take advice from people whose opinion I respect and value, and it depends on the situation and the condition.”

Emilio Botin is a person he regards as a fine example of what a modern business leader should be. “Right from the start in the 1980’s, he was concerned with the long-term success of his business; he was not interested in short-term speculation. He was not interested in looking good next month if it is at the expense of looking good five years from now. And the wisdom of this is when the big crisis came along, his banking group, Santander Group, was almost untouched by the crisis,” Cassidy said.

Another person Cassidy said he admired is Lee Kuan Yew, the founding father of Singapore, who understood the importance of long-term planning and investment to ensure the peaceful development of a nation for the benefit of all citizens.

His leadership and management success, he said, was due to his willingness to believe in the people working in the company and to harness the power of the collective. “Also, knowing when to delegate, when to discuss and when to decide is another key,” he concluded. (Gandi Faisal)

Golf I have recently taken up

golf. So, as my family members haven’t joined me in the country, I have been coming to the driving range in J-town to practice my shots. I did some golfing in Glasgow, but I haven’t had the chance to try a golf course here.

Traveling I enjoy traveling, something

that I usually do with friends or family. I’ve visited Russia, and I like that country. I have also been to some countries in Eastern Europe. I’d like to try the Trans-Siberian route and,

of course, visit Asian countries, outside of work.

ReadingMy spare time also includes

reading as my frequent habit. I like reading, especially books on factual materials, such as history and international politics.

LanguagesMy other interest is learning

languages. One language I’ve been studying for years is Russian, and some Spanish and Cantonese in college. And now I am learning Indonesian with a tutor.

Startup programs – 57 corporations of the Forbes Global 500 provide packages of free corporate products and services to start-ups. For example, PayPal waives fees for transaction volume up to US$1.5 million. This is the most widely used way for regional banks to engage with start-ups (see above). Itaú Unibanco Holding (Brazil) and Garanti Bank (Turkey) are targeting women through their entrepreneur programs. Maybank with the New Entrepreneur Fund grants a start-up loan to enterprises under full Bumiputra (Malay ethnic group) ownership.

Factoring in corporate VC, 68 of the top 100 companies from the Forbes Global 500 are engaging with startups somehow.

Europe leads the pack While writing the report, we

were surprised to find that the epicenter of corporate/start-up engagement was actually Europe. France, in particular, stood out as the country where almost every corporation on the Forbes Global 500 is engaging with start-ups, and using 1.7 different channels to do it. Tied at a rather distant second place were Germany and Switzerland, while Japan at fourth place has the distinction of being the sole non-European country in the top five (but Japanese corporations are employing VC almost exclusively). The United Kingdom rounds out the top five.

It is too early in the game to hypothesize why Europe is out in front, but it is a notable trend nonetheless. For more detailed country and industry breakdowns, download the report.

Start small and lead decisivelyEven if you’re able to invest in or

acquire a start-up right away, there is something to be said for starting small, this could be by sponsoring an event or offering support

services. That way, you’ll have a better sense of how start-ups work before going all-in, and thus be more likely to avoid imposing big-company standards and KPIs where they don’t apply. Starting small also means not petitioning the biggest players right away; small start-ups make for easier collaborations.

No company we looked at followed exactly the same pattern of engagement. The key is to know your objectives, resources and timeframe before elaborating the right strategy to work with start-ups. The leadership team should be steering the initiative from the beginning with strong support as well as vision, budget, and a stable organizational environment for experimentation.

Perhaps the main takeaway from this report is that with these new lower-commitment channels, there’s little for start-ups and corporates to lose by engaging, especially compared with what both parties have to offer one another. The world of start-ups is such a hotbed of disruptive potential that established firms can ill-afford to have their backs to it. Meanwhile, entrepreneurs crave access to the bounty of resources big corporates enjoy – and since nine out of ten start-ups fail, engagement may be a matter of survival for them as well. As our report demonstrates, corporate/start-up collaboration will be an essential part of every company’s innovation portfolio going forward. (Serguei Netessine & Arnaud Bonzom)

Netessine is The Timken chaired professor of Global Technology and Innovation at INSEAD. Bonzom is

director of Corporate Innovation at 500 Startups.

Courtesy of Insead

18 | Management monday February 15, 2016

Photos: JP/Arief Suhardiman

DouGlAS CASSiDy

Believing in people’s spirit to grow, Douglas Cassidy encourages discussion

and a strong sense of purpose in an organization.

spurred by the spirit of the

country to help companies

expand

industries experienced pressure throughout 2015, but the year also saw the continued rise of the middle class.

“The rise of the middle class has created unprecedented market opportunities in many areas, not just in the products and services, but also in the entire supply chain. At the same time, growth can lead to consolidation, as small players become unable to compete or fail to create a viable niche. And this is where consulting services can be the key determinant, as companies that invest in understanding their market are more likely to succeed,” he explained.

The need for encouraging discussion

Cassidy is of the opinion that staff need to have their freedom and the environment to help them build their career. That is why he is always interested in hearing different viewpoints and in encouraging discussion and debate.

“I think people like to be in a discussion and debate, because you get to think about things and not just collect data and processing them. You then get the chance to explore business issues and business decisions as if you were the business leader yourself,” he noted.

He thinks that strongly directive management styles are generally not required in an organization filled with talented, highly educated and highly motivated people. “There are, of course, times when quick decisions are necessary or