How to deliver value from your innovation lab
All the cool corporate kids seem to have an innovation lab these days. It is now de rigeur for CEOs to have at least one.
But do they deliver any value?
Here are 5 ways you can head off that “What exactly have you delivered?” moment.
From what we see, innovation labs target buzzy tech like AI, machine learning, VR, IoT, blockchain,
Labs focused on customers or users are an updated version of the traditional R&D unit, and the output they create is focused on need, rather than ways of using whizzy new technology. Admittedly, learning about how new technology operates is of value but it isn’t the end game.
However, it always takes about a year before a CEO starts to question the value an innovation lab is delivering. Innovation is tough. You sometimes have to kiss a lot of virtual frogs before they manifest into a tangible benefit, and I would bet that most of these labs report a whole heap of activity to justify their existence but little in the way of value.
So to help head off that “What exactly have you delivered?” moment, here are some tips to help get the best out of any innovation lab :
1) Focus on the good stuff
You’ve got a bunch of ideas, post it notes and colourful walls. Figure out which ideas will deliver the biggest bang for your buck by assessing them against your business objectives.
We have developed a scoring methodology inspired by IDEO’s viability, feasibility and desirability matrix. We call it the VFD Score and it provides a framework to help the team to surface the good ideas and bring the best ones to the top. The process we developed is collaborative and visual.
2) Be ruthless
How do you know if your idea is crap? There is no way of knowing for certain what makes a good idea because sometimes the value is in the eye of the beholder. But (and it’s a big ‘but’) we learned there are three questions used by money men to help place ideas on the bullshit spectrum:
– What is the problem?
– How do people solve it now?
– What is the solution?
Those who cannot answer these questions with a convincing level of detail need to go away and do their homework.
3) Get out of your bubble
Find people to help you build prototypes and experiments to test your hypotheses. There is no way any company does this well in-house, because we cannot see some of the basic assumptions we work within. An outside perspective helps us to get out of our bubble and see the full context our ideas are rooted in.
4) Nothing beats live testing
Wherever possible, validate prototypes in the market. Testing something in the market to see real traction is worth a lot. Some large companies struggle with live testing because of brand issues, regulatory challenges, or just plain organisational dysfunction. One person we’ve spoken to recently shared that their directors change so frequently that they just can’t get approval.
Working with external partners can de-risk live validation exercises by using their own channels and spinning up sites that won’t impact on the day-to-day running of the business.
5) Communication, communication, communication
It is fact of life that innovation labs constantly have to justify their existence. So, my last tip is to report learning against business objectives at every stage, and include senior sponsors in the decisions about next steps. The more involved they are, the more likely they are to have a vested interest in your success.
Good luck creating value!