I want to add some nuance to the now common bashing of Innovation Labs, claiming that 'Innovation Labs just don’t work'.
Indeed, it appears some innovation labs are being closed down, but is that ratio significantly higher than the shutdown of departments or other corporate (sub-) structures? Or is it that the closure of an innovation lab tends to come with higher media coverage and exposure?
Beyond that bias, I’d like to offer potential explanations of why innovation labs are actually failing.
Building and successfully running a corporate innovation lab is not an easy endeavor. I know this because I’ve built and consulted corporate innovation labs in Europe, the US, New Zealand, and Africa.
Why is building and running a Corporate Innovation Lab so difficult?
Innovation labs face strong opposing forces that they must navigate and withstand. Some of these forces require them to choose a side, while others present genuine dilemmas to navigate. While there is no ‘right solution’ to a dilemma, some options are usually better than others. Sometimes, innovation labs find themselves pulled in different directions at the same time, requiring them to juggle multiple priorities.
Those dimensions and distinctions are fundamental when designing or operating an innovation lab. It’s a tool to think strategically about innovation and finding the right balance for your organization and its relative market position.
Let me explain by taking this a step further:
If innovation labs are external and have a high degree of autonomy, they pull towards the right of the above dimensions. This makes it likely that the core organization either rejects the innovation lab as something that is ‘foreign’, or even treats it as a threat. Or the core organization ignores it and doesn’t learn much from ‘its’ innovation lab.
If innovation labs are internal and highly dependent on the core organization, they are pulled towards the left side of the above dimensions. Over time that can lead to cultural assimilation. Being no different than the rest of the business (units) comes with the duty to secure profits today, and not in some distant future. As a result, the lab risks losing its reason for being.
How can you navigate and withstand those conflicting forces?
It depends on your organization, the market you operate in, and your relative position in it.
For example:
If you need to catch up on your competition - shift your lab to the right, but not too much, or you risk losing connection with your core organization.
If your innovation lab is getting too much cultural backlash from the corporate immune system of the core organization, risking successful cooperation - shift a bit to the left. But not too much, or you diminish the impact on your core organization.
If your core organization is operating in crisis mode and budgets are tight, you’re better off if you shift to the left for now and help out. To do this well, I recommend following a balanced portfolio approach, which I’ll write about in a separate post.
There’s no recipe, no one-size-fits-all, but you can use the above dimensions as a strategic tool to help reflect and navigate your options.
