What is the role of innovation labs in enabling real disruption within an organization? Digital Transformation has increased the pressure on organizations to be innovative, but threaten to create new organizational silos. How do you incorporate cross-departmental innovation?
Innovation. Often cited as one of the most misused terms in business, this evasive concept now has a new name. While companies are still chasing the golden goose in their freshly painted “Innovation Labs”, they do so under the premise of disruption. To what extent are these new areas really producing competitive advantages for large companies threatened by start-ups?
Let’s start from the beginning. Most misused terms come about because people don’t actually understand what they mean. Let’s do a quick review. According to the Oxford English Dictionary:
- Innovation (v. Innovate) : Make changes in something established, especially by introducing new methods, ideas, or products.
- Lab (n. laboratory) : A room or building equipped for scientific experiments, research, or teaching, or for the manufacture of drugs or chemicals.
- Disruptive : Innovative or groundbreaking.
Essentially, we are talking about challenging the status quo from a space that has adequate resources to produce groundbreaking results, whether they be visible (customer based) or invisible (internal, procedural).
Do not miss the goals
Unfortunately, most companies parade their innovation labs like fashion companies display their haute couture collections on the runway: it’s a great way to get press coverage and reinforce aspirational branding, but everyone knows that real profits come from licensed perfume lines.
If you really want to be disruptive, don’t build another silo within your organization: create a rebel mindset. It’s no wonder that Innovation Labs are often dubbed “hipster money pits”. The rush to tackle Digital Transformation by acquiring tech start-ups or opening such workshops filled with new digital native employees is missing the point, and in no way a guarantee of google-esq success.
Investment in R+D has long been linked to innovation. Business and design schools are teaming with impressive sounding degrees in Innovation, supposedly to produce future Chief Innovation Officers who will be responsible for creating new Category Kings. We are not going to debate what innovation is, but we would like to open a debate on how to incorporate it within your company and whether or not opening an Innovation Lab is the right solution for you.
5 things to consider:
- Why do you want one? Is there a real business challenge that you will resolve with this new lab?
- What are the expected results? How will it be reflected in your P&L?
- Who will participate and lead these initiatives?
- Where shall it reside? Is there a roadmap for the integration of new ideas, processes and methods within the greater organization?
- How will it operate? What resources are required and what autonomy will it enjoy?
At Good Rebels, problem solving starts with understanding the why before going into what or how. If we keep in mind the above definition of innovation – making change, we have to ask ourselves: what is it exactly that we want to change and why do we need it?
Out-ovation: keep it in mind
Harvard’s Innovation lab defines itself as a resource for students interested in entrepreneurship. The ideas that come out of them should respond to a real need or insight that the organization wants to solve. This comes from being connected to the end-customer as well as to the co-workers who interact with them on a daily basis, while keeping a pulse on what is happening in other industries.
Using a Human Centered Organization framework, companies can define a corporate strategy that travels between the Consumer, Coworker and Citizen Journeys, maximising the impact at each stage. In the end, Innovation with a capital “I” is, at its heart, both a strategic and cultural imperative.
I digress. Let’s go back to this idea of an Innovation Lab as a resource, it works for Harvard and it works to support the following point: an innovation lab should be an open resource for those who want to test ideas, improve existing systems, create new products, drive change, etc.
The most appropriate force behind truly disruptive companies today is really the concept of out-ovation, and while unfortunately the word has yet to be recognized by Oxford or Merriam-Webster, it’s slowly gaining traction. Out, as in out-of-the-box thinking, as in open sourcing or open minded. The idea that disruption has to be contained within an internal organization or department is not innovative within itself.
To accelerate change, companies must embrace new business models and integrate innovation within the structure. As Dr.Carsten Sørensen, from the London School of Economics Enterprise suggests, the popularity of innovation labs in the past decade was a response to the need for organizations to be ambidextrous or bi-modal. Innovation departments or labs emerged as a structural solution to help executives understand new market and technology opportunities and guide them on how to bring them into the organization. However, this model is now under question as the digital context matures, and Sørensen’s research explores the concepts of a new contextual ambidexterity:
The main challenge is the speed by which existing business models can become outdated and new ones require to be mastered. For organisations to rapidly turn around and meet new requirements, they need to engage not only smart innovation lab people, but just about everyone.
We could not agree more with the suggestion that a new model is needed through which to incorporate innovation within the organization, and within all teams. In fact, the rise of Human Centred Design Thinking has also given way to myriad companies specializing in new services focused on creating internal synergies within organizations.
To put it simply, if we want to deliver liquid omni-channel experiences to our clients, we must think of innovation itself as a transversal capability and build disruptive organizations from within. To drive this change, we must enable ideas across the board and break innovation out of its hipster- warehouse shell.
Are you with us?