When Innovation Outpaces Capacity
Compiled by Talia Reynolds
Business units are taking on a growing role in corporate innovation. As companies modernize operations and respond to technological change, identifying external solutions is increasingly becoming part of operating teams' responsibilities.
Consider the challenge presented with the rise of electric vehicles. Unlike combustion-engine vehicles, EVs cannot rely on waste heat from the engine to warm the cabin. Heating instead draws energy from the battery, reducing driving range. Seeking to improve passenger comfort while preserving range, Volkswagen connected with Voltcore, a Luxembourg-based startup developing nanotechnology-based heating solutions and sensors. Their technology is now on the roadmap for integration into Volkswagen vehicles.
The opportunity emerged from a practical engineering problem, the kind operating teams understand best. Business units are well positioned to identify where new technologies could make a difference and what those solutions need to deliver. But identifying the need is only the starting point.
Finding the right technology, assessing whether the startup can deliver, and moving toward commercial adoption require time and expertise that operating teams may not have readily available.
More Options, More Noise
Access to emerging technology has never been easier. Startup databases and AI-powered scouting tools can generate hundreds of potential partners in minutes, often producing more candidates than an operating team has time to investigate.
Meanwhile, AI is reshaping the startup landscape itself. According to CB Insights, AI companies attracted 48% of global venture funding in 2025. AI tools have also lowered barriers to building and demonstrating software, making it easier to present impressive capabilities before proving commercial viability.
For business units handed an innovation mandate without additional resources, this creates a practical problem. A shortlist of 50 companies still needs someone to assess technical claims, investigate commercial readiness, and identify which candidates merit further engagement.
A startup may promise predictive maintenance or automated quality control, but has its technology been tested under relevant operating conditions? Does its team have the expertise to deliver? Can it support an enterprise customer beyond an initial demonstration?
AI has made discovery cheaper. It has not made judgment free.
A Pilot Isn't the Finish Line
Narrowing the search is only the first challenge. The next is evaluating candidates with commercial deployment in mind.
Consider a manufacturer exploring automated inspection technology. A startup might demonstrate impressive results, only for integration requirements or ongoing maintenance costs to make broader deployment impractical.
Technical performance alone isn't enough. The startup's team must also be capable of navigating implementation challenges, adapting to customer requirements, and providing reliable support over time.
That changes the questions worth asking before a pilot begins. What would deployment across multiple facilities require? Could the startup meet long-term service expectations? What could prevent a successful pilot from becoming a commercial agreement?
Business units know their operating environments but may have less experience assessing early-stage suppliers. An external perspective can help challenge assumptions and identify risks before significant resources are committed.
A successful pilot is a milestone, not the business outcome. Evaluation should identify partners with a credible path from promising technology to sustained commercial use.
Extending the Business Unit's Reach
For companies pursuing external technologies regularly, dedicated scouting capabilities can make sense. Expertise accumulates, relationships deepen, and each engagement strengthens the next.
But when innovation needs are occasional, highly specialized, or extend beyond familiar markets, maintaining those capabilities internally may be difficult to justify.
External specialists can address both the workload of navigating a crowded market and the expertise needed to evaluate unfamiliar startups. Their value lies in ensuring that shortlisted candidates are assessed against the requirements of eventual deployment, not simply producing fewer names.
The most effective approach is collaborative. Business units define the challenge and contribute operational expertise, while external partners expand market coverage, evaluate candidates, and support commercial engagement.
At one industrial manufacturer, an engagement evolved from corporate venture scouting into direct support for a US business unit. As priorities shifted toward manufacturing partner identification and evaluation, Axis Innovation continued providing specialist support alongside the internal team, resulting in five pilots so far.
Expanding an innovation mandate need not mean building an entire innovation function around it.
The key is matching resources to the challenge: keeping essential operational knowledge and decision-making in-house while accessing additional capacity and expertise where it improves the quality and speed of technology adoption.
Axis Innovation helps corporate business units identify and evaluate emerging technologies, structure pilots, and advance commercial partnerships. If your team is exploring a specific operational challenge, we'd welcome a conversation about how to approach it. Contact talia@axisinnovation.com
