Direct Line has been a key player in the insurance market for many years, however, threat of disruption is on the horizon meaning DL will need to reinvent its culture before analysing different approaches to working with start-ups. (Kemp, 2016) Working with a start-up will help shape the culture from the inside out, allowing employees to learn from an outside company providing new innovative solutions. This initial approach will reduce risks by using current resources such as employees to change the culture themselves to save a culture clash within the organisation. (Smalley, 2016) Furthermore, DL will save costs as they will save both time and resources with the help of another organisation, and current employees to shape their culture. (Simpson, 2014) Direct Line should first focus on a corporate accelerator programme which will allow a startup to receive first class mentorship and funding. A list of objectives along with a time-frame will need to be submitted to the startup so they can choose whether to accept DL’s proposal or not. Due to the fact that the accelerator will have a set time-frame, DL will be able to monitor progress efficiently and allow a lengthy process of business building to be cut down to just a few months.

(Forrest, 2014) The second approach Direct Line could take is a corporate venture capital (CVC). Direct Line will have less involvement with the startup as the CVC offers just funding rather than aligned goals and strategy. Thus, resulting in lack of direction for DL’s business goals. However, DL won’t have to invest on R, recruitment or training as the startup will have the responsibility to provide based on the nature of the relationship with DL. Thirdly, Direct Line could introduce a ‘Co-create collaborative model’; creating a platform which connects thinkers, entrepreneurs and engineers to share ideas and discuss them together as one community. This will not only connect DL’s internal resources but also allow external individuals to introduce ideas into DL.

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Direct Line must set incentives to encourage all parties to gain rewards from the scheme. This approach minimises risks by opening the challenge of innovation to a wider audience. If Direct Line can create a model that allows a number of entrepreneurs, innovators, and thinkers to collaborate, the likelihood that a strong innovative idea will surface from it is higher. Furthermore, with the platform being online based, DL does not need to factor in the time needed to organise meetings because everything is done over the web. Collaboration can occur from wherever and whenever the individuals please, thus reducing the need for DL to get people together in the same place at the same time.

The co-create collaborative model will maximise benefits by introducing a cost effective platform. Not only will DL save on costs, this platform will also allow them to monitor all ideas and innovations from start to finish, giving them control of the operation whilst also allowing the individuals involved to collaborate freely.