The Role of Innovation Labs in Forward-Thinking Management

Innovative companies often employ innovation labs to find unconventional solutions to business issues. These so-called beacon projects “at the edge of the strategic portfolio” may carry greater risks but could ultimately yield great returns on investment.

Maintaining separate creativity centers within an organization helps maintain productivity. However, teams in these labs must include diverse individuals both in terms of skillsets and mindset.

1. Increased productivity

Implementing an innovation lab into your company is an excellent way to boost productivity. Employees can work on innovative projects without being distracted by day-to-day business operations, which helps employees to focus on what matters while decreasing chances of losing sight of goals and company objectives. Furthermore, innovation labs may produce products which delight customers while simultaneously increasing revenue for the business.

At the core of every successful innovation lab lies having an ideal team. According to Scott Kirsner, leader of Innovation Leader, having diverse members ensure that innovative ideas generated within the lab will be more creative. Furthermore, planning is also vitally important as an aspect of successful innovation labs; ideas generated should eventually make their way into company products and vice versa.

Innovation labs must not be seen as temporary trends; real results and value accruing from an innovation lab take time to develop and manifest themselves on the market. Yet the long-term advantages outweigh initial time investments.

One of the primary challenges faced by innovation labs is that they rarely provide clear metrics to assess success or failure, or identify their scope. This may be caused by either insufficient leadership support, or simply an unwillingness of employees to embrace innovation in their departments. To combat this situation, leaders must ensure their lab is filled with talented yet trustworthy employees who will act as advocates for change within their departments.

2. Increased creativity

Innovation labs provide an environment conducive to creative thought, free from the constraints of daily business operations. Teams can experiment freely with new ideas without fear of financial fallout; thus fostering creativity and productivity within any given company.

Not all innovation labs are equal – some may simply be passing trends that fail to produce tangible results, while others can transform companies by providing innovative solutions that boost current business processes and enhance performance. To be effective, however, teams within an innovation lab must be strategically organized so as to be successful.

As an example, it should be kept distinct from the core/”BAU” in some way–for instance a different floor area, wing, or offsite location might help–so as not to be influenced by accepted processes, corporate cultures and status quos that influence daily work processes and results in innovative solutions being generated by your team. Doing this helps keep them focused on their goals while generating original solutions.

Recruiing team members with the appropriate set of skillset is also key in innovation labs, and should include individuals from technical and non-technical backgrounds such as data scientists, designers, anthropologists and psychologists to achieve maximum impactful solutions from innovation labs.

Innovation labs must create their own metrics to gauge success. Traditional innovation teams rely heavily on output metrics like revenue generated from innovations; however, these may stifle creativity by failing to take into account time and effort spent creating them as well as potential growth potential. Instead, innovation labs may use input and development metrics instead to monitor their progress and build trust among managers about the long-term impacts of initiatives undertaken.

3. Increased revenue

Innovation labs must facilitate close relationships between end users or customers who could benefit from these ideas and innovation labs, which in turn contributes to revenue growth for a company. Innovators need to be able to tell an engaging tale about their ideas so as to get support.

To do this successfully, the team must be diverse, drawing together individuals from various departments and professions. Furthermore, members should possess T-shaped interests and capabilities with depth on specific topics – this allows the team to quickly pivot on project focus/purpose/methodologies/technologies.

The top labs also foster an environment of experimentation and failure, encouraging blue-sky thinking with processes like horizon scanning, foresight scenarios, strategic planning and emergent signal analysis (sLab). Some labs may utilize a “design lab approach” involving multidisciplinary dialogue, collaborative technologies to generate solutions (InSTEDD iLabs) or aim at “rethinking systems and transforming entire industries” (MaRS Solutions Lab).

Finally, an effective Steering Committee is essential to a thriving innovation lab. This group should review and assess the lab’s work, identify challenges that arise during proof of concepts projects, as well as ensure it has access to adequate resources and budget for its efforts – failure of which would damage a company’s reputation as an innovator, leading to diminished employee trust and morale.

4. Reduced risk

Innovation labs are intended to help companies move away from traditional business as usual by signaling to employees that the organization is dedicated to changing for the future, which helps attract top talent while building positive morale. Innovation labs may also increase revenue as new products or services tend to excite customers into purchasing them – thus growing company revenues.

Innovative labs often operate outside the corporate network of their parent company with distinctive branding and an individual name to allow for increased focus and creativity when devising solutions without fear of being limited by existing company culture or team member autonomy issues. This process makes for successful innovation processes.

Innovative labs must include both internal and external personnel to ensure they possess the diverse skill sets and real-world experience required for success. Furthermore, innovation teams should be capable of quickly recognizing trends before they fade, which will avoid wasting resources or time on short-lived fads that could eventually fizzle out over time.

Innovative labs should also be situated in environments with the appropriate innovation ecosystem. While Silicon Valley may be the go-to location, other alternatives exist that offer just as much. Ideal locations should contain startup incubators, industry associations, academic institutions and government offices that can supply ideas, technology or IP to help speed the innovation process and gain a competitive edge. Furthermore, innovation labs should focus on testing different approaches rather than settling on one solution – for instance in smart city projects, this means testing both sensor based and camera based solutions before selecting which is most effective – for instance testing both sensor based and camera based systems so as to understand which will best address the issue at hand.

5. Increased morale

An innovative lab can do wonders for company morale. Employees involved can often enjoy working on projects outside their regular responsibilities, which allows them to focus on developing and bringing new ideas to fruition – ultimately becoming key players in the industry. When successful labs operate successfully, their impact can be felt throughout the company and inspire other to explore innovative possibilities.

Innovation labs can improve morale by offering employees a safe place to test new ideas and concepts that may be too risky to implement in their primary business. Employees can reduce risks by setting clear goals, creating an inclusive atmosphere, and employing processes which enable quick failure so they can move onto other projects quickly. By encouraging creativity within an organisation’s workforce and inspiring them to innovate, companies can see real results when it comes to performance improvements.

An innovation lab should provide a space where your company’s most creative people can come together and brainstorm new ideas to enhance existing products or create entirely new ones. Operating independently from the main office and being flexible yet agile so employees can concentrate without distraction, it should also have an established leader who has led innovative ventures and promoted collaboration cultures; additionally there should be an allocated budget for exploration as well as clear processes with toll gates and an accepted failure rate.

Diversity is at the core of every successful innovation lab. A good lab should bring together people from various departments, industries, and professions in order to foster creativity by exploring problems from different angles while coming up with unconventional solutions. Furthermore, employees who can critically review their own ideas while challenging assumptions will help the lab reach innovative solutions more quickly.