Is an Innovation Lab Right for Your Business?
Innovation labs can help organizations solve your most persistent issues, but they are not without challenges of their own. After all, if they were easy to build and operate, wouldn’t every company have one?
It can be difficult to convince stakeholders of the value of innovation when it may seem easier and less risky to choose tested and proven (or at least already existing) solutions instead. But if you are looking to make massive changes in culture or process—to break free of a traditional mindset, incubate new products, or create more collaborative workflows, for example—an innovation lab may already be on your radar.
Let’s take a look at a few of the issues you want to consider as you’re deciding whether to build an innovation lab.
What a Successful Innovation Lab Looks Like
Do you have a clear vision of what your innovation lab will look like? It is important to have a defined concept in mind as you broach the subject with your leadership team, as you’ll need holistic support to succeed. Stakeholders need to understand the lab’s purpose in order to buy into the products that will eventually come out of it. (The last thing you want is a political battle that kills your idea before it even gets off the ground, which sadly happens all too often.)
Successful innovation labs differ, but they typically have:
- Dedicated space that is usually separated from the core/“BAU” (Business as Usual) in some way. It may be a separate floor area, another wing, or even off-premises.
- Dedicated resources including time, people, and budget, in order to create and nurture ideas (although some successfully incorporate a rotation of employees from different departments and backgrounds).
- A defined focus on Horizon 2 or 3 innovations, which may include new capabilities and/or markets.
- A responsibility to execute across the entire innovation process/continuum (idea generation, validation, concept development, piloting), and the ability to communicate that value back to the business.
- Disconnection from the corporate network, with unique branding and a custom/distinct name.
Why Innovation Labs Fail
While there is any number of reasons an innovation lab may fail, often it is a failure to provide key supports that results in its downfall. Lacking a clearly articulated innovation purpose that provides direction on how and where to hunt for ideas, for example, you are destined for failure. Your innovation lab will need assured autonomy (or at least a long leash), as this helps drive a sense of ownership of ideas and creates intrinsic value for those in the lab.
Of course, lacking a feasible operating budget and mechanism for additional exploration funds typically spells disaster. You will need dedicated resources and/or a defined plan to leverage team members from across the enterprise—ideally, this team should be multidisciplinary or cross-functional, as well. And your innovation lab will fail without defined, communicated, and agreed-upon processes including toll-gates and accepted failure rate (hint – strive for 100%).
How to Set Up an Innovation Lab Destined for Success
Your first major consideration is whether you can physically position your innovation lab for success. Physically being away in some sense helps the innovation lab stay philosophically away; accepted process, core business, and current state are more readily suspended when you are not right next to them. This can help prevent your innovation team from falling into the typical ways of doing things. Try to get space off-site, or at least partitioned away from business-as-usual.
In this newly defined location, you can begin to bring disparate, siloed parts of the organization together under one roof with the shared goal of generating ideas that are risky or disruptive to the current state. You can nurture a culture where a healthy mix of strategic goals and seeder ideas is welcome and encouraged. This approach enables innovation team members from different departments and disciplines to grow ideas together, so the idea belongs to the company rather than one department or another.
Give your innovation lab the freedom to generate ideas outside of identified subjects, take ideas through the process, and test their validity. This dedicated lab team will be able to execute on prototypes faster as they are unencumbered by traditional aspects of the organization.
Finally, empower them to quickly speak to customers and validate ideas. Talking to customers earlier is a valuable attribute that should be shared across the organization (and if it isn’t in your current state, perhaps your lab can be the grounds to do this).
4 Questions to Ask When Planning an Innovation Lab
Make sure you ask yourself these four important questions as you consider your innovation lab building options:
- What is our ideal outcome of the innovation effort? Do we want to achieve cost savings and make gains in efficiency? Develop new products or differentiate our existing line? Develop a new business model?
- What is our current innovation ecosystem? How will the lab fit into this? What will communication across those areas look like?
- How should our innovation lab be staffed? Will we use a rotation of employees? Do we need new staff? Should we find an innovation partner?
- How much time do we have to commit to the innovation effort? When do we expect we’ll have a tangible business value associated with an innovation effort?
Is building an innovation lab the best way for your organization to solve its greatest challenges and prepare for the opportunities of the future? Contact Method today to see how we can help your team meet your business goals.