Vip Vyas and Diego Nannicini of Distinctive Performance have written an interesting blog post titled, "Is Your Innovation Process a Corporate Illusion?" for INSEAD's Knowledge website. The authors examine why some companies have shut down their innovation labs, after achieving less-than-desirable results. Vyas and Nannicini offer several different explanations for the underperformance of these labs, but I find one explanation particularly compelling. They argue that the leaders at the lab often lack credibility with the managers in the core business. Here's an excerpt:
In their efforts to promote a culture of creativity, companies may establish unintended physical and psychological distances between their main business operations and the innovation lab’s activities.
Setting up the lab as a free-thinking island, or tasking it with forwarding critical initiatives, is a key strategic decision. Without a clear pathway for connecting to the core business units, the innovation lab can find itself generating orphan products that fall into no man’s land. Even worse, the lab becomes nothing more than an expensive showcase, running public tours and hosting product demo kiosks.
The takeaway: An innovation lab needs solid executive sponsorship and advocates from mid-level management to effectively integrate solutions into the existing organisation.
To accomplish this feat, one has to insure that the leaders of the both the lab and the core understand one another. After all, they often speak different languages, use different metrics, and have very different risk tolerance levels. They also use quite different methodologies for making decisions. Fostering understanding and appreciation of each other's methods, processes, and mindsets is essential for effective cooperation. Otherwise, innovative ideas will wither on the vine.