Better out than in? The problem with internal design labs.

The most significant distinction between internal and external design labs is: Who is working on it. Knowing what type of lab to invest in–and when–could make or break the evolution of your business.

Working in the tech space, we know how fast things change. Whether that’s a new tech stack available or industry disruptors becoming the disrupted, the speed of the industry can leave you and your business behind if you’re not keeping one eye on the future.

How do you keep one eye on what’s happening outside the business while maintaining the day-to-day running of your company? The truth is, it’s hard. We’ve seen many companies faced with the same dilemma resort to age-old thinking because of it. At RIVAL, we’ve found that companies can best navigate the problem by leaning on us as their design lab to address it.

What is a design lab?

Design labs go by many names, such as innovation labs, accelerators and incubators. Regardless of the term, a design lab is usually a group of dedicated people focusing on creating meaningful change. That could be generating ideas for a new venture or applying design thinking to challenge internal processes and systems.

As well as names, design labs can have different structures and setups. Most commonly, they fall into one of two categories:

• Internal design labs are a collective of employees.
• External design labs are usually external partners and are separate from the business. For example, as an external partner, RIVAL becomes an extension to the companies we work with and can function as an additional business division.

When should you work with a design lab?

Obvious yet underestimated: Businesses that do not continuously innovate will, eventually, face troubled times. As the saying goes, ‘innovate or die’. However, being confronted with the challenges that come with speed and risk can make businesses more inclined to act on short-term thinking: “we need to focus on today”, “we’re scaling up, and our main priority is to hire, quickly” or the most short-sighted of all, “what we’ve built has got us here, and will continue to work in the future”.

While they’re all valid points, the factors that help you know when to innovate are generally out of your control. Instead, timing can be dictated by changes in the market, competition, regulation changes, or your customers’ needs and appetite for change. These are the key markers that can help with deciding what is best for you and your business:

• Impacted by shifts in the industry. Significant industry shift has meant your business has gone from being at the forefront of change to now being at risk of falling behind.
• Unclear on how to move forward. There are problems and challenges that your business is facing that are clearly defined, making it difficult to know what the next step is or how the future looks.
• Significant change ahead. The business has had to pivot its offering or has gained investment to scale and grow.

What are the benefits of working with a design lab?

At RIVAL, we’ve seen the impact of how a design structure can positively change and grow a business. The ripple effect of partnering with a design lab can immediately affect the business in clarifying its problems and finding a way to move forward, a change that can quickly start to be felt across the company.

You are reducing risk to your core business.

By working with a design lab, you’re creating a safe space to understand the problems your business is facing. Whether that’s internal issues around company structure or identifying the problems and pain points your users face. By having a design lab set apart from your core business, you’re allowing the company to continue as usual while maintaining the momentum of investigative and innovative work.

External teams turn speed from your enemy to your best asset.

We’ve already spoken about how a fast-paced and changeable industry can negatively affect your business. However, it’s possible to harness speed as an advantage through a design lab. Sometimes companies become their blocker in making progress due to concrete ways of working or internal politics that make change difficult. Partnering with a design lab means that their time is focused elsewhere, and the blockers that could affect the project had it been an internal one are gone.

Access to a specialist team for specific problems.

If a company wants to create a design lab internally, the instinct is to put your best people on the job. It makes sense. However, you have the dilemma of removing trusted and impactful employees from what they do best. The result? Slowing projects down or having them fall by the wayside as daily work takes priority.

Having an independent team that work on innovation projects allows for consistency in progress–a key component to the most successful projects. For us, being a small team means we can use our agility to find the right people for the task at hand for every project.

You indicate to your company that you are committed to the future.

When the industry is changing at lightning speed, it doesn’t take long before employees start looking around to ask, “are we getting left behind?” Those on the ground are often aware of the changes around them before senior management is. By taking a proactive approach, you’re demonstrating to employees your commitment to them and the future of the business.

Lastly, collaboration and setting up rituals with the existing teams is critical when investing to partner with a design lab. The knowledge and industry awareness of the internal team is fundamental to an innovation project and its success, even more so when the design output is delivered externally.

Key Takeaways

• There are two types of design labs: internal and external. Both focus on creating meaningful change through innovation, design thinking and challenging internal processes. It’s who delivers on it that’s different.
• Take regular temperature checks on industry shifts, consumer demand, and the sense of clarity within the business. An imbalance in one, or all three, is a key marker of when to consider investing in a design lab.
• Partnering with an external design lab means progress on innovation projects is consistent. As a result, you keep your best people doing what they do best, one eye focused on the future and the other on the business’s day-to-day running smoothly.