Innovation Labs & Collaboration Zones: from Cradle to Grave

What patterns do we observe in the life-cycle of those capabilities designed to change organisations from the inside?

A few weeks ago, and for the 3rd consecutive year, I co-hosted with Brett Holland from Creative HQ a collaborative session for owners and operators or Innovation Labs and Collaboration Zones around the world. Our purpose with these sessions is to create a space for peer-to-peer sharing and learning across public and private sectors, and across countries.

In the past years, we discussed topics such as governance, value proposition, value measurement or competency models for those capabilities. Unsurprisingly in 2020, one of the most recurrent challenges was the integration of digital in the mindset and practices of the capabilities that largely relied on physical collaboration until Covid-19 hit. The second one however came more as a surprise and prompted me to write this post: What is the life cycle of an internal innovation/collaboration capability and What are the key success factors at each stage?

The cycle of life, By Svetlana Prokhorova

This article is a combination of insights from this conversation and from my observations in a number of other organisations and countries. As a way of framing the context, I start by outlining frameworks about the different types of capabilities and the different stages of their life-cycle. I then highlight 3 of the recurrent patterns we observed across the board.

The different types of capabilities

Let’s start by defining what we mean by Innovation Labs and Collaboration Zones and why we decided to group them for the purpose of these yearly ‘get togethers’.

• We defined the Innovation labs as internal capabilities developed to facilitate innovation by introducing new tools, methods and ways of working, and by facilitating their adoption. Different labs will focus on different areas of innovation such a product, business model, customer/user experience, internal processes, etc.
• The Collaboration Zones are primarily aiming to support collaboration and decision-making on complex issues and embed co-design in organisation by designing and facilitating workshops or processes that deliver better outcomes, usually faster. Different zones will focus on different areas of the organisation’s value chain such as project delivery, learning, service or process design, etc.

Those capabilities are more similar than they seem, and they have a lot in common. In most cases, they are internal capabilities, they require different skills and mindset than those of the organisation they aim to serve, and they operate on the fringe of the mainstream day-to-day grind. They emerge and thrive thanks to the leadership of a limited number of internal disruptors that usually have to fight some significant internal resistance — passive or active — from the natural immune system of the organisation that protects status quo and considers them as a distraction from ‘the real work’.

Considering the dozens of labs and zones that I have studied or contributed to in some way, I came to the conclusion that they all belonged to one of the following three categories:

1. Factories: The capability has a clear value proposition, based on a defined set of tools and methodologies, and its goal is to industrialise the delivery. The required skill set is specific and easy to source. The engagement model for internal clients is straightforward with a clear list of services (eg. innovation sprint, decision-making workshops, etc.). The outcomes and cost of delivery are predictable and proportional to the capacity. Internal sponsorship usually lays at the level of department heads.
2. Project enablers: The capability is created as an enabler of a large project and its value proposition is designed in service of the project objectives. The list of services and priorities is established upfront, but it can bend to accommodate the project needs. The focus remains to facilitate some of the most traditional project challenges such as developing innovative solutions, driving alignment and commitment, solving problems, making complex decisions, dealing with crisis, etc. The outcomes are measured in terms of contribution to the project achievements and the funding comes from the project budget. Internal sponsorship usually lays at the project or program director level.
3. Transformation drivers: The capability is deployed to support an open-ended and holistic transformational intent seeking to achieve a deep and sustainable shift in the organisation’s paradigm. The service catalogue becomes secondary compared to the ability to detect specific needs and to design and facilitate bespoke interventions at the right time and the right way. Interventions may vary greatly in scale and complexity and cover all the vantage points from vision to execution. In consequence, the capability requires a broader and deeper skill set, supported by a flexible and scalable delivery capacity. Internal sponsorship usually lays at transformation program director or executive team level.

Main steps of the life cycle

Stages of an Enterprise model — MG Taylor — Visual from The Collaboration Code: Models, published By Rob Evans and Matt Taylor.

The Stages of an Enterprise model, from the MG Taylor system of tools and methods, helps us structure our thinking in terms of life cycle. In a nutshell and in the absence of unexpected forces, the more traditional cycle for an enterprise is to go from Conception to Success, to Maturity and eventually to Death. Some of the most common pitfalls is to keep looping in the conception phase and to never take off, or to be so successful — so fast — that you can’t sustain your enterprise and go in overshoot and collapse.

The biggest opportunity is to know when and how to push the entrepreneurial button to re-frame your enterprise and put it on a new trajectory of success. Doing this requires leadership, foresight and agility. Even when you miss the opportunity to push the button, there is usually space for turnaround before your enterprise naturally and irreversibly heads to its natural death (or graceful failure if all your attempts to turnaround are unsuccessful).

This model is particularly useful to consider the life cycle of the hubs, labs, zones and other similar capabilities. Here are some insights that emerged from our discussions.

The natural cycles

The stages of an enterprise model suggest that all the internal capabilities are on a natural trajectory towards obsolescence. In our context, obsolescence is driven by two main trends:

• Losing the candour: the initial driver for opening a lab, hub or zone is to create a space for different ways of thinking and working. With that in mind, they are resourced with atypical profiles — from inside or outside the organisation — that have the ability to introduce some form of disruption. Too often though, this ability to think differently is not nurtured and over time, it is the team in charge that surreptitiously adopts the patterns of the mainstream organisation — by the multiplication of tiny compromises — instead of the other way around.
• Newness is short-lived: When it launches, the capability is always perceived as the ‘cool new thing’. Yet, the pace of change around us is such that the next cool new thing is always around the corner and the novelty quickly wears out (quicker than most organisations are willing to admit in an understandable attempt to amortise their investment). As more and more people are exposed to the practice of the capability, they also internalise some of them in their day-to-day practice and become less reliant on external help.

The combined effect of those two trends can quickly challenge the relevance of the capability; it usually happens within a maximum of 2 years. The need for continuous improvements and for regular game changing shifts is even more important at this level than it is organisation-wide and yet, the most common tendency is to invest upfront in setting up the capability and then under-invest in the learning and re-invention mechanisms.

The natural trajectory towards obsolescence must be recognised and anticipated from the early stages of design of the capability. In all cases but even more so in the factory model because of its industrialisation imperative, you need to design upfront the resourcing models, learning mechanisms, and spaces for re-invention, sanctuaries investments to support them, and keep an eye on the stages of your enterprise.

The right sponsorship

The earlier stages of conception and launch always require some powerful internal sponsorship. It is critical to ensure the congruence between the ambition / value proposition of the capability and the level & legitimacy of its sponsorship. Until it can provide tangible evidence of value creation, the capability will be challenged in multiple ways by those who feel threatened by it and/or believe that the resources — often limited — would be better used elsewhere. The sponsor(s) need to have enough seniority and leadership to create and hold the space for the capability to prove its worth and grip the “real work”.

Sometimes, the leadership emerges bottom up and the teams end up looking for internal sponsorship amongst senior managers or executives in the organisation. This pathway is more uncertain and riskier because the ownership of the idea is less deeply rooted.

As an example, one of our participants described how he spent months securing the right sponsorship, distributed across agencies and up to Prime Minister level, before opening several labs aiming to fundamentally transform the policy-making process in Malaysia.

All the success stories start with a bold leader envisioning how such a capability will enable an ambitious strategic goal of their organisation. And inversely, the lack of appropriate sponsorship is the primary cause of premature death of the capability with a stamp of ‘failed experiment’.

Knowing when to pull the plug

One of the decisions that many organisations struggle most to make is to… stop doing things. In our session, many participants asked how they could re-invent their capability but what if the right thing to do was to enact its obsolescence and accelerate its death? This is particularly true in the context of a capability that was initially created to support a specific organisational goal like a project or program. In his Stages of Group Development model model, Bruce Tuckman describes the critical step of adjourning — where you acknowledge success, consolidate learning, and plan for transition to other activities — and recognizes this phase is often overlooked.

As an example, a government agency in New Zealand had set up a collaboration zone to support a large-scale transformation program. When the program ended, the organisation was reluctant to close the capability that had largely demonstrated its value and decided to re-purpose it for service design. By shifting from a project enabler model to a factory model by default rather than by design, they inadvertently blurred the identity of the capability that started a slow decline. It would have been cleaner to celebrate the success and closure of the first capability, and to design a new one with a sponsorship, an identity and a value proposition fit for its purpose.

A hub, lab or zone is a means to an end. If the business purpose it was meant to serve disappears or is achieved, the capability’s mission is accomplished and it’s OK to let it go.

My conclusion from this conversation and from the many cases I have studied or directly contributed to is that the two most critical considerations to bear in mind when you start considering developing in an internal innovation /collaboration capability are the following:

1. Have a clear understanding of the strategic organisational goal that you are serving and how the capability contributes to it.
2. Be mindful of and prepare for the different stages of your capability’s life cycle.

This thinking was triggered by a peer-to-peer conversation and I would welcome your thoughts as an extension of that conversation.