I wanted to write in this post about the leaders and the people who work in Innovation Labs. Yet, as many of my arguments need prior explanations, I anticipate this post. If you are familiar with my book - Future Value Generation - you will find the integrative logic ofthe present/future and innovation/foresight/strategy in how I set-up Innovation Labs. If you are new to the idea you can get a quick overview in this Pulse.
In my first post “I believe in the Innovation Labs” I argue, that it is important to integrate the present and the future. Innovation Labs should not be merely about “possible breakthroughs” but have to balance the desire with the organizational initial context and its velocity of change. Even when decentralized, an Innovation Lab borrows assets and resources from the organization. Political influence does exist, the structure is part of the organizational strategy and ecosystem. Any organization crises in the present are also felt in the Lab… which is why Innovation Lab cannot be only about the future.
The Double-Loop Innovation Lab
When I setup Innovation Labs I follow a double-loop structure, where the present "organizational needs" (efficiency, crisis management, etc.) and the "future focus" are both present. It is this polarity that enriches the Innovation Lab, reduces organizational friction and integrate the line managers more proactively. The double-loop - present and future - acknowledges that the lab is part of the organization and that it has two strategies: exploring new“breakthrough” and preparing the organization.
To proactively create the future we need assets, alignment, mobilization and even "solve problems". The present creates value so that the future can exist... and the future offers a strategic north and new possible opportunities. Where the two-loops overlap, we see aspace ofalignment. In this "twilight zone" the present and the future exist at the same time, meaning, we contextualize, integrate and align the overallvalue generation process.
The "Present Needs" and the "Future Value" can have different interpretations for organizations and labs. In this post I willhighlight four functions that in my understanding are critical to connect the present and the future. Those are: a reduced backlog, exponential efficiency, a new crisis management processand the search for the breakthrough in the "future focus".
Each organization has a backlog of projects and initiatives. Repeatedly started, re-validated and postponed... it seems that the organization discusses the same ideas year after year (and often it does). The problem is that the backlog consumes a high level of assets, resources and executive attention. In such a situation, the organization looses itself in the past and political, having difficulties to embrace new future challenges.
Therefore, when we set up an Innovation Lab we acknowledge the backlog and set a strategy to reduce it. There exists no single solution, but we can:
Eliminate or postpone (for +18 months) ideas kept due to political correctness, or which make little sense.
Transfer ideas to the Innovation Lab if they align with the working themes... without letting the present taking over the future.
Establish Venture Teams or projects sprint to get to the next stage to define a stop or go.
Transfer projects to open innovation initiatives (Open Innovation etc.) to access the crowd... and gain agility.
Scan the international start-up horizon for alpha or beta solutions similar to organizational projects and if relevant, seed or acquire.
Reducing a backlog is about decision making and strategic prioritization. Only when we cleared the already existing innovation agenda, can executives embrace the desired"future focus".
The future does not exist by its own. It need the present its sponsorship, investment and people that implement. I argue, that future-oriented organizations need to increase their present efficiency to finance better the future.
A pure future focus isn’t sustainable... efficiency, cutting down on the clutter and streamlining processes is just as important. Efficiency works well in stable environments, yet if we induce constant change, the logic easily pushes organizations to their limits… so we have to create new solutions thatintegrate change and exponential technological development into the process. Salim Ismail's book Exponential Organizations is a very interesting starting point to apply the ExO thinking to efficiency.
With more shifts occurring, it is critical that organizations develop a capacity to respond to the challenges they’re facing. Countering change doesn’t mean learning from hindsight. We need to increase the level of preparedness by having access to strategic alternatives, solving problems without negative implications for the future.
A traditional process of innovation is no longer adequate in our reality of constant shifts. It simply requires too much time to set up the project, argue its need, assemble the team and create solutions. Even if you built an emergency team—spread across the globe and work 24/7—to solve the challenge, it would take weeks or months to find solutions… time that, during crises, we don’t have.
A better Crises Management process demands innovation as a process, creating new options that contribute to the organization’s resiliency. For Innovation Labs this means the structure should not just focus on the disruptive ideas, but to create new ideas (options) that the organization can access if external changes occur (crises).
Future Focus (aka “the search for breakthroughs”)
Finally, we come to the delivery that most people desire from Innovation Labs: disruptive products, services, brands or business logics. By focusing on Breakthroughs, we don’t work with problems, but with opportunities and strategic themes. Innovation Labs in that sense represent a continuous process of innovation.
Double-Loop Innovation Labs connect the desire with the organizational reality. The four mentioned functions - reduced backlog, exponential efficiency, new crisis management, future focus - facilitate this process. These processes, reduce the pressure from line managers to change the Lab's agenda towards pure problem solving... and creates more freedom (protection) to explore disruptive ideas.
For me the Innovation Lab is about integration of innovation, the future and strategy