How innovation and smart risks are shaping tomorrow’s business
Innovation is critical for businesses to remain competitive, and the right balance of bold moves and smart risk-taking is key, writes Nkateko Mabunda, Chief Digital Officer at Nedbank CIB, and Luyanda Njilo, Analyst at Nedbank CIB Markets Research.
Innovation in today’s world is no longer a luxury; it’s a necessity for companies aiming to stay relevant and competitive. While startups are often perceived as being at the forefront of innovation due to their agility and bold risk-taking, large corporations possess unique strengths that position them to lead innovation on a much grander scale.
The challenge for these organisations lies in balancing bold moves with calculated risks – a process that, when done correctly, can yield remarkable returns while safeguarding the stability of a vast operation.
One of the key differentiators between startups and large corporations is how they approach problem-solving. Startups typically operate with a sharp focus on specific problems that they aim to solve, iterating and adapting quickly to find solutions that fit the market. This freedom allows them to take bolder risks as their smaller scale limits the potential fallout from failure.
For large corporations, however, the stakes are much higher. Innovation isn’t just aboutabout finding new solutions; it’s also about integrating those solutions into existing systems that have often existed for decades. While this can create inertia, it also presents a unique opportunity to evolve with the market, building on a solid foundation.
For instance, take Nedbank Corporate and Investment Banking (CIB) challenge with legacy systems . In the banking sector, these systems are deeply intertwined with both internal operations and the entire industry’s infrastructure.
Ripping out a legacy system overnight could cause widespread disruption, affecting millions of clients and entire transaction networks. For Nedbank CIB, the solution is called Managed Evolution. This process involves modernising the core banking systems incrementally – allowing the bank to maintain stability while simultaneously becoming more agile and digital.
But the lesson here is not just about technology; it’s about strategy. Any large corporation facing similar challenges can take away a critical insight: innovation doesn’t have to be disruptive to the point of destabilising the entire business.
Companies can approach innovation as an ongoing and evolving process. By gradually modernising critical systems and adopting new technologies over time, they can strike a balance between maintaining operational stability and staying ahead of market shifts.
Equally important is creating a culture of experimentation. Startups are often seen as the masters of this mindset, and for good reason. Their ability to test new ideas, fail fast, and refine quickly is an advantage. Larger corporations, however, tend to have a stronger aversion to failure; the risk of a failed innovation can seem catastrophic, given the scale of their operations.
Yet, large corporations have found ways to harness the startup mentality by creating smaller, autonomous teams within the organisation, such as agile domain squads. These squads operate like mini startups within the company, experimenting with new client solutions, technologies, and products while keeping the larger business insulated from undue risk.
This approach allows teams to take calculated risks in a controlled environment. Rather than betting the entire company on 1 big idea, Nedbank CIB encourages smaller, incremental innovations that can be scaled up once proven successful.
The broader lesson for corporations across industries is that risk doesn’t have to be all or nothing. By creating pockets of innovation within a company, organisations can manage risk while still supporting creativity and experimentation.
Another area where large corporations can draw from the startup playbook is in their approach to sustainable finance. Startups in sustainability often work on highly innovative projects but frequently lack the resources to scale.
Large corporations, on the other hand, have access to vast resources and the ability to drive real-world impact on a much larger scale. Nedbank CIB has embraced this opportunity head-on by developing new financing models for renewable energy and sustainable infrastructure projects.
This is not just about being green for the sake of corporate responsibility; it’s about recognising that sustainability is the future of business. By leveraging its capital and resources to support projects that drive environmental and social change, Nedbank CIB is positioning itself as a leader in sustainable finance.
The lesson for other corporations is clear: sustainability is not a passing trend but is quickly becoming a core part of any successful innovation strategy. The risks associated with entering new markets or investing in emerging technologies are real, but the potential rewards, both in terms of financial returns and brand value are immense.
When innovation is combined with a commitment to sustainability, companies unlock a unique way to differentiate themselves in crowded markets. For large corporations, this may mean rethinking traditional funding models, developing new partnerships, or even helping to build the infrastructure needed to support emerging industries. The key is to remain adaptable, open to new ideas, and willing to invest in long-term solutions that will shape the future.
Ultimately, the biggest takeaway for large corporations is this: don’t fear disruption – lead it. While startups may have the advantage of agility, larger organisations have the resources and influence to drive change on a much larger scale.
By creating a culture of experimentation, modernising legacy systems strategically, and using resources to push sustainability, large corporations can position themselves as innovators rather than react to change.
The future belongs to those willing to take risks, but the most successful organisations will be the ones that know how to manage those risks wisely. It’s not about jumping headfirst into every new trend; it’s about making calculated bets, learning from failure, and building an organisation that’s flexible enough to evolve with the times.
Large corporations are showing that it’s possible to innovate boldly while still safeguarding the core of the business, a lesson that any company in any industry can apply to their own journey of growth and transformation.
In the end, companies that successfully balance innovation and risk thrive in an unpredictable world. They are not just disrupting their industries; they are shaping the future of business. The question is: Will you be one of them?