Mentoring startups to create a culture of transformation

Inside XFactory: a hands-on model for cultural change 

Strategy matters, but culture defines the outcome of digital transformation. When large companies think and behave like startups, transformation initiatives are more likely to be successful. 

Recruiting senior executives to mentor startups is one way to encourage a culture of transformation within your organisation. Your senior executives have the experience to help startups to build strong foundations, scale their operations and expand into new markets. In return, mentors gain exposure to an innovation-led mindset, and all that comes with it. 

For the past two years, XFactory, a startup accelerator created by Forvis Mazars, has been creating mentoring partnerships with a wide range of startups. XFactory offers startups access to the firm's global network of experts, helping to refine business models, enter new markets and accelerate growth. 

In return, Florence Sardas, Chief Transformation Officer at Forvis Mazars and founder of XFactory, believes that the firm and its executives have benefitted in three areas: 

• Striking a new balance between control and innovation 

Typically, Sardas says, enterprises are structured around controls and process. By contrast, startups innovate by relying on trust, relationships and delegation. Exposure to startup culture allows executives from large companies to strike a new balance. As a result, they become more open to the potential of innovation 

• Appreciating the value of a questioning approach  

In large organisations, conventional wisdom tends to be persistent. Startups rethink their objectives and pivot on a regular basis. By working with startups, senior executives rediscover the value of asking fundamental questions. This creates the space to assess new opportunities for innovation. 

• Understanding the need for speed 

In a large enterprise, it may be perfectly fine to wait a week before answering an email requesting a meeting. For a startup, moving forward quickly is mission critical. Speeding up decision-making cycles in this way is essential if digital transformation is going to be successful in the enterprise. 

Selecting the right startups and the right mentors 

The startups that XFactory selects for inclusion must meet three basic requirements. They need to have a scalable business model, well-positioned for rapid growth. They must also have the potential to make a positive social or environmental impact.  

Finally, they must operate in markets that have nothing to do with Forvis Mazars' business. In this case, the aim is to create an environment that encourages maximum transparency between mentor and startup.  

XFactory's broad selection criteria mean that a wide range of startups have passed through its accelerator program, including companies in the food industry, retail, greentech and healthtech with for instance a startup seeking a cure for cancer. The variety of partnerships creates the potential to capture the attention of potential mentors. 

The framework is simple and flexible: XFactory matches in-house experts with startups for a six-month period. Because this is a relatively modest commitment in terms of time, the opportunity cost of poor fit between mentor and startup isn’t enormous. However, Forvis Mazars also offers mentors a degree of autonomy, allowing them to continue working with their startup partners beyond six months if they wish. 

Sardas argues that this flexibility reflects the fact that top-down approaches to innovation have become less effective. 

Initially, Forvis Mazars was keen to select mentors with a high profile on the basis that strong internal sponsorship and word-of-mouth recommendation would create momentum. However, this approach can also deter applicants if the mentors you select may come to be seen as members of a club with its own unwritten rules. To avoid the risk of such perceptions, XFactory makes concerted efforts to speak to the broadest possible audience internally. 

Impact: networks, influence and transformation 

During the initiative’s two-year lifespan, XFactory has facilitated around forty mentoring engagements. The evidence suggests that as many as eight out of 10 of mentors go on to become change agents in their own teams in one way or another. 

These success stories have generated benefits for the firm in two ways. 

The first centres on the firm’s profile, influence and revenues. Startups are typically run by a small core team that is highly connected to other startups, investors, clients and suppliers. Mentoring creates the opportunity for large companies to become embedded in these networks. 

Beginning the process may simply involve leveraging your organisation's in-house facilities to provide a venue for networking engagements. Contributing resources in this way also creates a way of getting to know startups that require mentoring. 

The second benefit involves enhancing your company's ability to transform and innovate. At Forvis Mazars, for example, one mentor working with a startup needing tax advice brought in a senior colleague to contribute to the discussion. The results included a follow-up conversation between these two employees about going to market with a new service to address the challenges highlighted by the startup.  

In the absence of a mentoring program, these two colleagues working in different teams probably wouldn't have identified this opportunity or reached this conclusion. New horizontal connections like this often encourage a deeper commitment to the wider firm. “After the startup experience, our managers become change agents in their own teams because they have permission to think differently,” Sardas says. 

“When you put them into the context of an internal hackathon or ideation workshop, the mentors typically make a major contribution. They are typically engaged everywhere in the firm where something bold or transformative is about to happen.”