On Innovation Labs

Innovation labs have become increasingly popular in large corporations over the past decade. These dedicated spaces and teams are meant to foster creativity, drive innovation, and help companies stay competitive in rapidly evolving markets. However, their effectiveness and value proposition deserve careful scrutiny.

The Promise

Innovation labs promise to be the answer to disruption - a way for large companies to maintain their competitive edge by creating a space where:

  • New ideas can flourish without bureaucratic constraints
  • Rapid prototyping and experimentation is encouraged
  • Cross-functional teams can collaborate freely
  • “Startup mentality” can be fostered within a corporate environment

The Reality

In practice, innovation labs often struggle to deliver on these promises. The fundamental challenges include:

Cultural Isolation

While innovation labs are designed to be different from the parent organization, this separation often becomes problematic. The lab develops its own culture, language, and practices that don’t translate well back to the main organization. This cultural divide can make it difficult to implement successful innovations across the broader company.

Metrics and Expectations

Innovation labs frequently face a paradox in measurement: they’re expected to produce measurable results while working on inherently uncertain and experimental projects. This tension often leads to:

  • Pressure to show quick wins
  • Focus on incremental rather than transformative innovation
  • Difficulty justifying long-term, high-risk projects

Integration Challenges

Even when innovation labs successfully develop new ideas or technologies, integrating these innovations back into the parent organization proves challenging. The “not invented here” syndrome and organizational resistance to change can prevent promising innovations from gaining traction.

A Better Approach

Rather than creating isolated innovation labs, organizations might be better served by:

  1. Embedding innovation capabilities throughout the organization
  2. Creating clear pathways for ideas to move from concept to implementation
  3. Developing metrics that balance short-term results with long-term potential
  4. Fostering a company-wide culture that embraces experimentation and learning from failure

Conclusion

Innovation labs aren’t inherently flawed, but they’re often implemented in ways that limit their effectiveness. Success requires careful attention to integration, metrics, and cultural alignment. Organizations might find more value in building innovation capabilities across their entire structure rather than isolating them in a dedicated lab.

The key is to remember that innovation isn’t something that can be outsourced to a separate unit - it needs to be woven into the fabric of the organization itself.