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

In my first post, “I believe in the Innovation Labs,” I argue that it is essential to integrate the present and the future. Innovation Labs should not be solely about “possible breakthroughs.” Still, they must balance this desire with the organization’s initial context and its velocity of change. Even when decentralized, an Innovation Lab borrows assets and resources from the organization. Political influence exists, and the structure is part of the organizational strategy and ecosystem. Any corporate crisis in the present is also felt in the Lab, which is why Innovation Labs cannot be only about the future.

The Double-Loop Innovation Lab

When I set up Innovation Labs, I follow a double-loop structure, where the present "organizational needs" (efficiency, crisis management, etc.) and the "future focus" are both present. This polarity enriches the Innovation Lab, reduces organizational friction, and integrates 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 “breakthroughs” and preparing the organization.

To proactively create the future, we need assets, alignment, mobilization, and even the ability to "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 a space of alignment. In this "twilight zone," the present and the future exist simultaneously, meaning we contextualize, integrate, and align the overall value generation process.

The "Present Needs" and the "Future Value" can have different interpretations for organizations and labs. In this post, I will highlight four functions that, in my understanding, are critical to connecting the present and the future. Those are: a reduced backlog, exponential efficiency, a new crisis management process, and the search for breakthroughs in the "future focus."

Functions of the 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 many assets, resources, and executive attention. In such a situation, the organization loses itself in the past and politics, having difficulties embracing new future challenges.

Therefore, when we set up an Innovation Lab, we acknowledge the backlog and set a strategy to reduce it. There is 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 take over the future.

• Establish Venture Teams or project sprints 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. When we have cleared the existing innovation agenda, executives can embrace the desired “future focus.”

Exponential Efficiency

The future does not exist on its own. It needs the present for sponsorship, investment, and people to implement. I argue that future-oriented organizations need to increase their efficiency to better finance the future.

A pure future focus isn’t sustainable; efficiency, cutting down on the clutter, and streamlining processes are just as important. Efficiency works well in stable environments, but if we induce constant change, the logic quickly pushes organizations to their limits. So, we must create new solutions that integrate change and exponential technological development. Salim IsIsmail’s book Exponential Organizations is an excellent starting point to apply ExO thinking to efficiency.

Crisis Management

With more shifts occurring, organizations must develop a capacity to respond to their challenges. Countering change doesn’t mean learning from hindsight. Instead, we need to increase the level of preparedness by having access to strategic alternatives and solving problems without negative implications for the future.

A traditional innovation process 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 working 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 Crisis Management process demands innovation, creating new options to contribute to the organization’s resiliency. For Innovation Labs, the structure should not just focus on disruptive ideas but 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 logic. 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, and future focus - facilitate this process. These processes reduce the pressure on line managers to change the Lab’s agenda towards pure problem-solving and create more freedom (protection) to explore disruptive ideas.

The Innovation Lab is about integrating innovation, the future, and strategy. By incorporating the double-loop system, focusing on present needs and future value, organizations can balance their current challenges with their aspirations for future growth and transformation. This approach ensures the Innovation Lab remains relevant and beneficial to the organization, fostering a culture of continuous improvement and strategic innovation.