Innovation Labs are becoming increasingly popular. Nowadays, every self-respecting organisation appears to have established an Innovation Lab in order to accelerate and manage innovation in their field. But do they actually work? Do they help to explore new technologies and start-up ideas, or are they just a myth, a hyperbole that outweighs reality?
Let’s find out!
But first – what exactly is an Innovation Lab?
Innovation Lab is a work space designed to optimise innovation. You can think about it as a unique environment for creativity and information sharing, building new knowledge, creating alignment, and developing comprehensive solutions. And, while innovation labs, or centres as some people call them, are traditionally associated with technological companies, they are being embraced by companies across all industries, in an effort to pick up some of the start-up spirit that has been the main motivator and driver behind the latest technology advances.
So, the ultimate aim of an Innovation Lab is quite simple: to create new revenue streams or bolster existing ones by improving productivity or speed. But apart from that, there is much more to consider when talking about Innovation Labs. Many of the methods of encouraging innovation within your business represent both means and an end. For example, a new culture of working may be beneficial for productivity and as a result increase its speed, but improved working culture can also make workforce much more comfortable and happy.
Here are some of the common aims of the Innovation Lab:
- Incubating a new culture
- Talent replenishment
- Emphasising long term revenue
Do They Work?
Innovation Labs, although in theory should work perfectly, bring few major challenges to those who decide to implement them.
The first one is so called ‘Innovation Theatre’. So, what is the problem? Essentially, firms are creating Innovation Labs for the wrong reasons. Team of employees assigned to Innovation Lab take all fancy things like canvases, sticky notes, and whiteboards thinking that it’s all they need to start the innovation in the company. Well, unfortunately, they can’t be more wrong… Usually, in this kind of scenario, team starts its innovative brainstorming on new and cool products and services that are going to change everything. But they do it without thinking about business models that underline these products or services. And this usually leads to failure, and as a result discourages innovation within the company. It might seem that for some companies, Innovation Labs are just a simple answer to questions like: ‘Are you an innovative company?’, ‘What are you doing about innovation in your business?’
And here we can talk about British Airways, which announced its Innovation Lab 'UnGrounded' in March 2013. After being named the first innovation lab in the sky, last UnGrounded article on the British Airways website was posted in June 2013, only months after UnGrounded was announced. UnGrounded hasn’t been mentioned since then, the website has been vanished and domain is for sale, and that’s how great UnGrounded Innovation Lab fell apart.
The second one, ever greater problem of an Innovation Lab is that corporate leaders don’t understand its purpose, and more often, they don’t even support innovation. Just think about it: you’ve got a team of great, hard working, dilligent people who know exactly how to use all tools and apply lean start-up models. They create a great product or a service, but at the same time they don’t neglect business models. However, when these products or services are just ready to scale, they don’t, because they face rejection from the top management. So, what does it do? It frustrates and confuses employees. Why spend time and money on creating an Innovation Lab which aims to come up with the new idea and then reject this idea?
Well, it seems that these companies lack the right strategy. Leaders often wait for 'one big project' that will save the company, but there are two challenges they will face:
- Waiting for this ‘big win’ might take ages! People will lose their patience, and it will contribute to the unjustified sense that Innovation Labs are irrelevant and don’t work. Sometimes it's better to focus on 'small and easy wins'.
- Or even worse, leaders will fail to recognise a good project that might save their company when they see it!
The latter can be caused by the lack of proper framework for managing innovation, meaning that most companies do not have a method for tracking and measuring innovation success. They don’t know how to take an idea of a product from the Innovation Lab and make it happen in real life, they might also not be prepared for managing the challenge of the success as it happens. Also, some leaders might feel that the new product might threaten or cannibalise other successful products in the company, in this case, they will always try to protect those traditional revenues by resisting the new ones.
So, to keep it short – what is the answer to our initial question? Do Innovation Labs Actually Work? Yes, but you need to know the purpose of creating this kind of lab, and be fully prepared for what it might bring you. If you’re not, better don’t waste your resources and time!
B60 is a global leader in delivering Digital Transformation and Technology Development and works with ambitious firms in the U.K. Europe and USA across multiple sectors. Since 2012 B60 has been embracing digital change by utilising our unique operating models, frameworks and methodologies to truly drive innovation and change from within our clients businesses.
If you’d like to discuss with one of our experts on how you could successfully deploy Digital Transformation and Technology Development in your business drop us an email at firstname.lastname@example.org or alternatively call us on 0121 405 0270.