Innovation labs are popping up all over the world. A recent report noted that 88 innovation labs opened their doors globally between March 2016 and October 2016. That is over ten new innovation labs launching each month during that period. The rate at which these labs are opening is not showing any signs of letting up either.
More recently, innovation labs have been launched across industries such as hospitality (Marriott), financial services (DBS) and insurance (IAG). Even the NBA is jumping (pardon the pun) onboard with the Philadelphia 76ers launching their own innovation lab. You won’t struggle to find an article about the launch of a new innovation lab, however you will struggle to find one detailing the success or failure after launch.
For every innovation lab that succeeds in achieving positive outcomes, there are many that suffer an all too different fate, usually amounting to nothing more than glorified meeting rooms. To the outside world, these labs are hubs of creativity and inspiration, internally, they can often become a place where people get away from their desks to lodge expense reports and read magazines.
So why are these innovation labs failing?
1. Lack of Vision and Objectives
Identifying the need to invest in innovation is a first step in the right direction. However, it is imperative to develop a clear and compelling vision and objectives prior to establishing an innovation lab.
Why is the lab being created? Are you looking to use it as a tool to collaborate with clients? Is the lab going to be focused on digital technologies, acquiring new resources and expertise or testing new business models? Will it be a combination of different objectives? Answer questions like these before proceeding.
2. Succumbing to Innovation Theatre
Bean bags, ping pong tables, huge screens, colourful walls - all great but they don’t make an organisation innovative. Going to work in jeans and a t-shirt doesn’t make you innovative either. Spend less time mimicking startup culture and focus on getting the job done, or as said startups would say, getting sh*t done. Everything short of moving the needle on innovation is just theatre.
3. Picking the Wrong Team
An innovation lab is only as good as the team working in it. Try and avoid selecting someone internally to head up the lab. Hire externally to bring in a new perspective and someone who is not tied down to the current workings of the larger organisation. By putting someone in charge who has a proven track record, they will hire wisely and ensure diversity in the people joining the team.
At no point should you select someone to head up the lab who already has a full time role in the organisation. This needs to be a full time role, not a novelty title one can talk about in their annual performance review (which by the way, should be an ongoing process but that’s an altogether different story).
4. Failing to Track Success
Like anything else in life, if you don’t set targets or KPIs then there is nothing to aim for. Innovation labs are no different. It is common to see innovation labs progress without measurable or meaningful KPIs. Look to assign non-traditional KPIs, for example, the number of experiments run, the number of new business models explored or the percentage of failure. In true startup style, continue to iterate and make adjustments based on learnings.
Click here for a full suite of success metrics for corporate innovation programs and teams.
5. Excluding the Rest of the Organisation
It is common for a divide to be formed between innovation team members and the rest of the organisation. When the wider organisation is excluded from the innovation journey, the result is not only discouraged employees but also starves the innovation team of valuable employee insights. Educate the organisation on the vision of the lab and how it will be used. Run initiatives and events for the wider organisation to give every employee an opportunity to participate.
With the demise of power brands such as Blockbuster, Kodak and Nokia, organisations are identifying the need to do something different. Innovation labs are often seen as a silver-bullet solution. Opening up an innovation lab will not guarantee protection from disruptive startups, but if executed correctly can radically increase your likelihood of success.
Shay is the GM of Customer Strategy at Collective Campus. Shay has launched several startups and helped drive customer experience and innovation across large organisations in industries including retail, utilities, financial services and legal services.