Many corporates started experimenting with in-house labs, incubators and accelerators for accelerating innovation. However, most aren’t delivering upon their promise (yet).
During our upcoming intrapreneurship summit in Amsterdam we’re going to address why most of these programs are struggling to get results, and how they can be improved. We sat down with five speakers to get their best piece of advice for success.
Involve Others
For me, the key elements to a corporate innovation lab are great people and concrete goals – but it has to be bit of a playground.
An in-house lab is a theater of dreams with a mission. The right actors and actresses in your theatre are closely connected to their audience, work with customer feedback & visit other theaters to see what happens around them. They can mix all that knowledge and their insights to come up with great ideas, mockups and prototypes.
Of course, success doesn’t come easy- it’s hard work.
I think three things are important for these programs to yield results.
Firstly, make sure you connect your inhouse-lab to your operations organization. Someone has to transform ideas and prototypes into concrete results. Secondly, start delivering or prototyping bit by bit to improve on the fly. Not everything at once.
Thirdly, involve a few crucial people from other business units who are willing to change their current business models.
Involve just enough to make a next step but not too many so you can focus on execution of the ideas.
Break free
In my experience in-house labs are not yet living up to their promise. The ROI strongly depends on whether the lab is seen as a part of the company, or if the entrepreneurs in the lab get the ultimate freedom to compete with the mother organization.
In the latter case there are plenty of success stories (for example at Google). Most companies like to see innovation as part of their own DNA, but in reality, virtually all large organizations are naturally dampening innovation.
I think the majority of failed corporate labs and incubators have suffered from the inability to break free of the mother organization.
Belief
There is no simple answer nor a single solution to how to improve these types of processes. It is often a complex puzzle of context and people.
The difference between ’business as usual’ and defining radically new endeavors is that the number of possibile outcomes of the latter are often far greater, and harder to obtain.
People involved in creating new ventures have to deal with high degrees of uncertainty- it takes a solid believe that you actually can make a difference.
Let’s focus on this human factor. Can you name two things that you achieved of which you are most proud of? Did the goals prior to these actions fit you as a person? Did they fit your values?
Back then, did you solidly believe you could make a difference, and did you think this difference would have impact or be appreciated? Most likely the answer to these questions is yes. You deeply wanted it to succeed.
I do not claim that every single person on a team should have this sense of belief, but at least a part of the team should. Then they are the ones to persuade and inspire the rest of the carefully balanced team to get things done.
Governance
In-house labs mainly have a quick cultural effect. If you look at actual product development, the impact of these kinds of labs is often overrated. On the one hand because the people in the labs are often under-skilled in an entrepreneurial sense, and on the other hand because the labs are often organized apart from business-critical environments in the company.
The are different types of innovation. Product innovation, Marketing innovation, Process innovation and Radical innovation are the most important ones. It is impossible to organize the first three separate from the business. They 'are' the business, which implicates that the complete governance should be adjusted in order to fuel innovation. The fourth type of innovation needs so much space that distance thus separation is a critical factor to succeed.
Having a lab can be very useful, especially in the first stage of the turn-around of a company. But most of the labs I see are just windowdressing.
Scale
Some in-house labss are successful, most are not. Some are just repacked skunkworks and some don't even have a metric for success.
Most problematic is that many operate at such a small scale that success is mathematically improbable.
If only one in a hundred companies (at best) becomes a unicorn, then how can an in-house lab with only 10 innovation projects per year hope to hit that target?
Silicon Valley succeeds in part because of the sheer number of entrepreneurs. Of course the ecosystem has many significant advantages, some of which corporations can adapt and use. However, innovation needs to happen at scale.
Large enterprises operating tiny labs without scale is borderline foolish.