Great coffee, crappy innovation.

Your innovation lab isn’t working, here’s how to fix it.

Iain Montgomery
Dec 19, 2016 · 7 min read

‘Innovation’. ‘Labs’. 2 of the quick picks in any game of bullshit bingo. See also; exposed brick, ping pong tables, motivation quotes on the walls by Messrs. Jobs & Zuckerberg, bearded hipsters hacking away, third wave coffee, a beer keg, bean bags and someone who likes to say ‘pivot’ frequently.

Apologies for the cynical start to this piece but it kinda needs to be said. A single one of these clichés doesn’t kill an innovation lab, you can still have exposed brick, sip posh coffee and make innovation happen, but it doesn’t happen because of it!

I’ve lost count of the number of labs I’ve visited over the last year but it’s a big number and if some of you who run labs read this, I’m not picking on you. Honest.

Labs first started appearing a few years ago, and now we’re starting to see some close. Here’s a few reasons why that’s happening and what you can do about it.

You’re too disconnected.

You’ve got a cool space staffed with talented strategists, designers and developers. You’re always creating great prototypes for new and improved products but they’re not being launched by the business.

Many an innovation lab experiences this. While it’s important to not get suffocated by the corporate machine, labs often don’t have the links back into the business. Corporates aren’t startups. Corporate structures are often as hard to navigate as an ice hockey players nose, the lab staff are often external hires and don’t know how to make things happen in the business.

You need a sponsor that can create those connections and spends time in key locations with the right people. While your lab needs space to breath, if its members can’t host impromptu workshops or have coffee chats with the marketing, finance, operations, compliance, strategy or tech folk. They won’t make things happen.

Tip. Locate your lab within a 10 minute walk of these people. Easier said than done for a big business that has offices all over the country or world but put it near an office.

Your ideas are not developed enough

Many people think innovation labs just come up with ideas. An idea on a Post-It note, is not innovation. Innovation is taking those ideas, iterating and developing them over a period of time so they can actually be launched. Having the idea is easy, making it real is hard.

To make your idea real, you need to bring it to life, co-create it with customers, prototype it, iterate, prototype it again in more detail and then go test it in the real world with customers who spend their cold hard cash on it. An idea is only a good idea when it’s been validated. So post pretty pictures of post it notes to your heart’s content but until you can show further progress, your lab is failing.

Your lab lead doesn’t understand either startups or the corporate world.

Many a person in charge of the innovation lab lacks the experience of a corporate environment or a startup ecosystem. That’s because it’s hard to find people with both types of experience.

I’ve said it time and time again. Corporates are not start ups. Corporates are designed to minimize risk while maximizing profits. Startups are often focused on their valuation and therefore led by adoption or PR, and not the bottom line because they believe the money will follow. See Twitter for the classic example.

Lab leads from the startup world often don’t understand how corporates work — how they make their decisions, complicated org structures, a focus on historical products and a fear of failure. There are pitfalls at every turn.

Likewise, lab leads from the corporate world often don’t understand startups. They are either cynical about the startup world and how they can help a corporate, or don’t realize that is much easier said than done. Investing $1m in a startup that has cool tech ain’t gonna be a silver bullet to solve your problem. Working with startups takes a lot of effort!

Last year I read this great piece on the FinTech industry and how it’s become a zoo. Big financial institutions think they can just go look at startups and the ideas into their business. Others think they can just throw money at them and think it will all work out. If you don’t invest the time in working with your new startup, you may as well take that cash a throw it out the window of your ivory tower.

Solution? Work in pairs. Find someone positive, optimistic and who knows all the skeletons in the closet. Pair them with someone who’s been in the startup world and knows what makes them tick. If you’ve got one person who knows both sides, hold on to them! They’re like gold dust.

You chose interior design over governance & infrastructure.

The first $250k you spent went on an interior design consultancy who gave you some rather beautiful, but uncomfortable chairs. Then you got all the senior execs and gave them tours of your new space so they could play with an Oculus Rift that replicates your current experience.

12 months later, the same execs are questioning why you have nothing new in the market to back up their investment. You’re probably about to get fired too…

To launch anything in a corporate is hard. You’ve got to jump through a lot of hoops. You don’t go from idea to prototype to full scale launch overnight. Labs need simple governance structures, a leader with a mandate to change something, a clear strategy of what you want to achieve, some indicative KPIs and a short approval process. Think concept, prototype, market test, soft launch before you shout it from the rooftops.

Many things struggle to get to market because going from throw away prototype to something customers can actually use and spend money on is really hard! Especially in risk averse or regulated businesses. You need a sandbox that allows you to, well, fuck up.

Sadly, that’s easier said than done. Also, ‘sandbox’ can be added to the bullshit bingo card. A sandbox is anything that allows you to test something safely, it can be an all singing, all dancing tech solution that anyone can plug into or it could be a simple way of testing concepts on a temporary basis. If you make it easy to test a concept, get customer feedback and show it to the CEO and say ‘look how awesome this is, 83% of customers used it on a frequent basis’, you’re gonna get a lot of momentum. Alternatively, you may end up saying ‘well customers didn’t like the sign up process, but we only tested it with just 50 of them and learned how to make it better’ … then you probably won’t get fired.

When it comes to governance, you might have to report to multiple people who struggle to make decisions. Innovation labs succeed when they have a mandate from a senior executive, typically the CEO. If you’re having to appease a committee, your work is getting watered down and won’t be loved by those it matters to most, your customers.

Without good governance and infrastructure, you’re gonna piss a lot of people off, burn yourself out fighting too many fires or not get anything done.

You’re led by technology, not customers.

You’ve got a lab with 10 people. You’ve got 7 developers, a few visual designers but no product owners, strategists or insight specialists.

I’m amazed by how many companies in this day and age, still don’t think about their customers and instead try and force their products onto alternative technology. Newsflash, most customers couldn’t give a monkeys about your new Apple Watch app that picks your stocks based on your heartbeat.

Innovation is not R&D. Corporate innovation is the combination of bringing great ideas that customers (not you!) love together with a business model that will have sustainable benefits to the business — e.g. winning new customers, reducing the cost to serve, increasing revenue etc. If you’ve spent too much time on a wacky idea that nobody wants, you don’t get corporate innovation.

So while you want to play around with new tech, and you should by the way, you still need to focus on customers. If at this point you’re saying ‘well Henry Ford didn’t do that, if he listened to customers then he’d have made a faster horse’, you don’t get it. He recognized customers wanted to get from A to B faster, more reliably and with streets that weren’t covered in horse crap.

Go speak to your customers. Not in focus groups. Don’t rely on 3rd party agencies who come back to you with a report that gathers dust. Actually go in to their homes, places of work, shopping malls, bank branches etc. and speak to them. Ask them about their day, the products they buy, their ambitions, hopes and frustrations. Ask nicely if you can film them so it can be shared with others in your business. From this, I guarantee you’ll have so many more ideas than playing around with the latest tech toy. By merging the two things, you’ll probably create a killer idea that will disrupt (BINGO!!) your industry.

So what? You’ve thrown shade at half the innovation community.

I’m sorry. I’m not trying to slag off the innovation lab as a concept. When they work well, they’re bloody brilliant but I just don’t want to let them be a flash in the pan and see them disappear as quickly as they sprung up. Innovation isn’t easy, if it was, then we wouldn’t talk about it so much.

But we do need to look in the mirror and recognize when we’re talking bullshit (says the innovation consultant). Let’s get our innovation labs in order so that in a couple of years’ time we can point to hundreds of great new ideas impacting people’s lives that were born in that lab with the beautiful furniture and great coffee.

If you’re pissed off with me or want to talk more about innovation labs, say hey — @iain_monty

Iain Montgomery

Written by

Innovation Consultant. Former Market Gravity & Deloitte Digital. It’s Now or Never.

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