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

An introduction to...Future Value Generation

Now available for pre-order:  http://www.amazon.com/dp/B01E25ZXFK/   Innovation, foresight and strategy have to be about sense-making. No longer should they stand alone, but generate benefits through integration. Finding synergies is the key to creating an agile organization that balances the present with the future, and external changes with the internal value offering.  When we innovate, we transform, tackle problems of the past, find solutions for today’s challenges, and design new opportunities.

Now available for pre-order: http://www.amazon.com/dp/B01E25ZXFK/

Innovation, foresight and strategy have to be about sense-making. No longer should they stand alone, but generate benefits through integration. Finding synergies is the key to creating an agile organization that balances the present with the future, and external changes with the internal value offering.

When we innovate, we transform, tackle problems of the past, find solutions for today’s challenges, and design new opportunities.

Yet any solution whatsoever will be implemented in the future, in a reality different from ours. That is why we need to understand what this new future will look like, what will be important to people, what technologies are possible, and if the solution we design in the present will still generate value when implemented. We need to use foresight and transform the understanding of the ongoing shifts into present insights. Integrating insights and foresight: innovation and foresight.

I can assure that your Strategic Capabilities will be different, as well. Some we can adjust, others we need to create. Knowing what will change and how to adapt your business abilities means to connect the present with the future: strategy and foresight.

Finally, with constant change, we must react swiftly, be prepared, and have access to alternatives—options that allow us to manage crises in the present, explore new opportunities, and implement the changes necessary in our Strategic Capabilities to generate future value. We need an integration of strategy, innovation and foresight.

This integration of innovation, foresight and strategy generates synergies and defines the Building Blocks and the overall logic of the Future Value Framework. This integration brings with it certain benefits:

New business logics

Human-centered organization

Higher level of preparedness for external surprises

Strategic Capabilities aligned with future goals

Organizational flexibility and faster decision making

Crisis management with fewer negative future implications

Continuous process of innovation

 

A brief summary of the 7 Building Blocks

Present Value Proposition: For whom and when do we generate value? What value flows? The Present Value Proposition describes which value is exchanged. The flow must be sustainable for all parts involved. It is where the Value Generator (organization) and the Value Perceiver (people) meet. This connection defined the “why” of existence and how the organization adds extra value for clients.

Portfolio of Changes: What are the relevant Attractors and Drivers? Do we prioritize opportunities or risks? The Portfolio is a choice of Driving Forces (faster changes) and Attractors (slower accumulating changes) relevant to the organizational context. It establishes a strategic focus for practical implementation. Integrated with the other Building Blocks, it increases awareness of shifts and facilitates agile decision making. The Portfolio improves strategic alignment between the present and the future.

Futures Context: What drives future societies? What do people value? The Futures Context describes techno-human future logic. “People of the Future” play a central part in this setting. Their preferences define how the organization can offer and be relevant in the new context. The interplay of the individual, society and technology allows the identification of new opportunities and risks.

Vision: What is the reason we will exist? What is our purpose? Vision is an energetic commitment, balanced with what is possible for the organization. It integrates the desires, purpose, the present/future Strategic Capability and sense-making to internal and external stakeholders. The vision mobilizes and sets a workable strategic north.

Future Value Proposition: Why will people choose us in the future?What value will we add? The Future Value Proposition describes what value the organization adds to people, and the possible exchange of value. We identify new opportunities, and determine what business logics and Strategic Capabilities are necessary to generate future value.

Value Polices: What new Strategic Capabilities do we need to generate future value? What is our strategy of change? Value Policies lay a course of action and define an approach for agile decision making. Policies define the change necessary to create new value. They connect the future with the present, and external changes with the internal organizational context. Each Value Policy allows a controlled implementation of short-term tactics aligned to the set strategic north, adjusting the Strategic Capabilities.

Options Portfolio: What options do we have/need to implement the change? How can we generate new options? The Options Portfolio is a combination of alternatives aligned to the organizational boundaries. Pre-validated against the Value Policies, it offers a buffer of choices to be accessed when needed. The Portfolio facilitates decision making when a fast response is necessary, and increases alignment with the Vision and Future Value Proposition. It integrates a process of innovation aligned with strategy.

 

Thank you for reading my post.  Are you interested in generating new future VALUE? If yes, please check out my book: Future Value Generation.

Here are the other recent posts I wrote:

I believe in Innovation Labs!

Please stop! Millennials will not save your organization – at least not alone

Polymaths, management and the future

Does your Vision Statement Really generate Value?