Some corporate innovation labs never seem to get rid of the image that they're just there for PR purposes, or as nicely decorated conference rooms.

Yet some are effective, and have an important role in realizing their organization's innovation agenda. The key? They are not set up and managed as standalone entities, without any real ties into the business at all levels- they are actively collaborating with business lines and functions across the organization.

Don't go on your own - that was the key advice Michael Cohen shared on stage during Intrapreneurship Conference Toronto last November. As the General Manager for Zero Gravity Labs, the offsite innovation arm of LoyaltyOne, he and his team are one hundred percent focused on what’s coming for retail, banking, and customer experience. Their startup-like space is dedicated to investigating the implications of and opportunities in technologies like IoT, augmented reality, and blockchain.

One year in, Cohen and his team have learned a lot about how to set up and run an effective innovation lab. At the conference, he shared their biggest lessons.

Be an owner, not a renter

Renters care most about tasks and goals that are immediately important to them; owners, on the other hand, care about all aspects of the business. Cohen advises you approach your lab like it’s your own personal venture, especially if you’re the one leading it.

“I don’t own Zero Gravity Labs. I don’t have equity. It’s 100% a corporate-owned entity. But I feel like the owner - I came up with the name, the branding, and they gave me license to basically own this. So, I act like an entrepreneur, like I own the company. I spend the money like it’s my money. I pour myself into it like it’s mine.”

You should also look to fill your lab or group with people who share that same owner mentality.

“There’s a lot of ambiguity in what we do, a lot of times you’re going to hear ‘no’, a lot of running uphill. You need people on your team who truly want to be owners, who want to own what they’re doing.”

Set a governance model upfront

Now that you’ve stepped into the owner role, you need to know where your boundaries are. What do you control? What do you need to seek permission for? Who will be part of the decisions that get made at the lab, and how will those decisions be made?

Cohen chose to have a board of directors and steering committee. “I didn’t want us to have a singular point of control because ultimately, then you’re only as good as that one person. Innovation happens when you have different people sitting around the table - if they all look and speak and think like you, you’re not going to get very far.”

Cohen stresses the importance of going further than just the c-suite. “We had great buy-in from our CEO and CTO, so they are part of the board and make up part of the steering committee. But it’s important to have some outsiders. You need some people who are real entrepreneurs, who will look your executive team in the face and say ‘you think you’re moving fast, and it’s uncomfortable...but really, you’re not moving nearly fast enough.’”

Get your own space

Where will your lab be? You need a base of operations, and Cohen recommends staking out a dedicated space of your own. For his lab, going offsite was important.

“Going offsite was key for us. It gave us the opportunity to build something that is just ours. We have our own culture, our own way of doing things - we can even run our own events, which have become recruiting vehicles for us. The main company cares about what we’re doing, but because we’re offsite they can’t really lean in or investigate how we’re doing it.”

If going offsite isn’t an option, advocate for your own, dedicated space - preferably, one with keycard access. This helps keep everyone focused, and guard against what Cohen refers to as ‘shoulder-tap moments.’

“When you’re working in innovation, shoulder-tap moments are killers. If I’m asking my team to imagine it’s 2020, and the way we all access websites now isn’t on a computer but through Alexa or Google Home, and then someone else taps them on the shoulder and says hey, can you help me fix something on the website? Those two mindsets, present and future, immediately collide, and it becomes very difficult to shift back into the future mindset.”

Create a shared internal vernacular

It doesn’t matter how you talk about innovation, but it does matter how you - your team, your board, your internal and external partners - talk about innovation. The frameworks or models you use don’t matter as much as having a common language around innovation that everyone uses and understands.

“Innovation is an enormous spectrum. A 1% improvement every day? That’s innovation. A huge leap, a zero to one moment? That’s innovation. So everyone needs to know exactly what we’re talking about when we talk about innovation - is it something highly disruptive three years from now, or a mobile app improvement that benefits us in six months?”

Cohen and his team decided to ground themselves in McKinsey’s Three Horizons model. “For us, something like blockchain is in the 3rd horizon, where something like how to work loyalty into mobile payments is 2nd horizon. Now I hear my business partners using that vernacular, so it’s easy for me to pull them into the right headspace and ground them in what we’re about to talk about.”

Extend your team with internal partners

Whether you go offsite or just hunker down in a room of your own, it’s easy to become isolated from the rest of the organization. Cohen stresses the importance of not trying to do everything on your own - something he learned from experience - and instead reaching out to the people around you in order to extend your team and fill the gaps.

“One of the mistakes I made at the beginning was I just tried to plow through everything, and I didn’t lean in to figure out who might be able to help me.

You have to figure out who your partners are, and make them a part of what you’re doing. Talk to them about what your objectives are, bring them to your events, make them feel a part of your team.”

Cohen knew his team needed HR and PR support, but couldn’t afford to hire dedicated staff. Instead, he reached out and found enthusiastic partners within the corporate business, and brought them into the fold. The trick is knowing where, on the core business side, your lab has the most support.

“There are areas of the business where I don’t feel I have that level of support yet, or where they just don’t understand what we’re doing. Those are the parts we do ourselves.”

Seek mentors inside and outside your business

Once you’ve extended your team, Cohen says it’s important to find mentors - both inside and outside of the business. Internal mentors are helpful because they know the main players, and understand the nuances of the business. But seeking external mentors is equally, if not more, important.

“You need the counsel of external entrepreneurs and intrapreneurs. Not only do they validate you and help you, but they are also the type of people who are a better circle, better network for you than most of your co-workers who are not on your innovation team.”

Failure must be an option

It is key, Cohen says, to create the psychological safety for failure right from the get-go. “When we do onboarding within our innovation team this is the first thing we say: if you don’t have failure as an option, you’re never going to innovate.”

Creating that safety isn’t just important within the team . You also have to train your executive team and board to expect failure as par for the course, and is actually a positive thing. Cohen started that early on by figuring out where they had the least amount of information, and therefore where the company was most at risk of disruption.

“Early on, we brought our board a matrix of disruptive techs and moments that we care about in our business - but with nothing filled in as to what the impact would be. And what we said to them was ‘do you want our gut feeling, or do you want us to bring these types of thing into our lab, work with them, and then come back with facts?’

Ask for permission (usually), not for forgiveness

Finally, Cohen has found that while you do sometimes have to plow ahead and ignore company policy - and ask for forgiveness later - you tend to get the best results when you bring your internal stakeholders along with you. While it may take a little longer to get something moving than you would like, the trust you earn in return is invaluable.

“I let them know what we’re hoping to achieve, and why we feel the current ‘corporate’ system or policy doesn’t suit our needs. By sharing our desired solution with them, I’ve respected that my colleagues have both a job to do and expertise that I may not.

By bringing them my objectives and asking if we can collaborate to achieve those objectives, I’m empowering both of us to solution together. Sometimes I bring a solution to the table they didn’t know about and sometimes they do the same for me, but in the end, we meet the objectives I set out and we do so together.”


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