I believe in...a different...Innovation Lab

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.

Douple Loop Innovation

 

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".

 

Functions Innovation Lab

Reduced Backlog

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".

Exponential Efficiency

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.

Crises Management

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

New competencies for an uncertain world

We live in an age of competencies. Not a job description, not anymore the mechanization of elementary task defines us. Progressing technology allows each time more to be human again, avoiding the simplified reduction of behavior, installed during the rise of the early machines. New challenges will raise not just about organizations and their business logic. Each individual has to adapt to futures realities that are increasingly technological progressive and human centered.

I call out to increase our competences to:

  • lead with agility balanced with purpose
  • integrate information and define meaningful questions
  • adapt and create constantly options
  • experiment in an environment that knows its limits

 

Those four characteristics relate to VUCA, an acronym for a reality in dramatic change. It stands for volatility, uncertainty, complexity, and ambiguity. Those four words describe an environment with decisions in uncertainty where constant challenges drive organizations actions. And we know this challenges already too well today.

Nathan Bennett and James Lemoine presented in their HBR 2014 article four counter-actions to balance VUCA. Those are agility, information, adaptation and experimentation and blending them with the Future Value Generation is very insightful. (Please visit my Slidedeck to explore further, how VUCA integrates with the Future Value Framework: http://bit.ly/1Ig1d8A).

 

Each uncertainty is an opportunity.

 

Agility is a key response to volatility. We should act faster; compensate our existing organizational parts with new solutions that are lighter and faster, blended. Startups express such a freedom so is the new rising gig/stint economy. Yet we need to balance velocity with much stronger bonds (purpose) than pure mobilization towards a "vision". Emotion driven inspiration is not enough. We have to boost our purpose as strategic asset as well as fundamental bond with internal/external stakeholders. Purpose has the power to balance velocity and uncertainty.

We reduce uncertainty by incorporating new levels of information. Big data and Design (in its variation) come into play. Both allow us to understand the reality from different perspectives. The concepts provide a base for a new decision-making, humanized and more holistic. Yet it is not enough to have access to information. We need to reduce our biases and to step back and define new meaningful questions. In a reality where the intangible and tangible blend into shorter and shorter “interactions” of consumption each decision has to generate positive value.

Adaptation helps to transform complexity into opportunity. We need to let go, learn new topics and generate new solutions each time faster. To respond to the changes and exploit opportunities as they come we have to have many options accessible. We shall be prepared and constantly create. This is where innovation comes into play. Not as problem solving initiative but as a continuous process to generate options aligned to key strategic orientations. By doing so, we increase the strategic buffer allowing fast tactical decisions aligned to our future value position.

Experimentation is key to manage ambiguity. To do so, we need to create a profound awareness of the strategic competencies and limits of the organization and its individuals. We should reduce unnecessary risk exposure of people/organization in a balancing act allowing leaders to lead and innovation to flourish.

Agility, new source of information, adaption and experimentation are critical pillars for the new value generation. Yet before defining what competency to pursue, organizations need to understand their originality, limits and velocity of change.

 

Thank you for reading my post. Please spread the word and your point of view in the comments. Here are the other recent posts I have written: