Today innovation is a game changer, just to do things the way we have always done in the hyper competitive market doesn’t quite make it. For businesses to thrive in this space, they need to have ways of innovating in a low risk environment, which they can do efficiently. That’s the niche where Innovation Labs for Business fits.
Innovation labs or Business Innovation Spaces are innovative ways of how businesses can create a culture of innovation.
What Is a Business Innovation Lab
A Business Innovation Lab refers to the space within a business that uses teamwork and innovation to experiment and produce new ideas and concepts for products, services or business models in an isolated setting. An Innovation Lab consists of the following: innovative diverse teams, comprising employees from different parts of a business like human resources, marketing, engineering.
IT operations and sales, who come together to come up with innovative ideas for business products and services. A unique experimental workspace, which could be anything from a standalone room, a whole floor, or even an entire building in the business, where employees have an open space to brainstorm and work on new innovative projects freely. Psychological safety, where an Innovation Lab must foster an environment that embraces a team that is willing to experiment and even take risks for the sake of business innovation, without repercussions of failure. And future focused business goals, where Innovation Labs focus on future growth of the business as opposed to immediate returns, focusing on opportunities to discover new markets and introduce innovative new product/business ventures.
Why Would a Firm Want an Innovation Lab
In today’s fast-paced, dynamic business environment, most businesses want an innovation lab for the following reasons. It’s a competitive necessity . when you’re facing a competitor that has innovated, having an innovation lab would enable you to adapt quickly by creating your own innovative solution.
It helps build an experimental culture, as an innovation lab provides the ultimate safe space for creativity and encourages experimentation. It accelerates new product development – instead of a long process that involves many levels and many approvals, products developed from innovation labs move faster through the system and go to market faster.
And it aids talent acquisition and retention – high performers and innovators are drawn to companies that value innovative ways of working and push the envelope for new product and service innovation. The presence of an innovation lab indicates that a business is open to hiring individuals with innovative ideas.
Elements of Successful Business Innovation Lab
Businesses should be prepared to establish the most suitable Innovation lab to the culture of their organisation. Below is what is needed: strategy alignment – an innovation lab’s goals must align with the overall goals of the business. Sufficient funding .
it’s not unusual for a significant budget allocation to be provided for business innovation. A conducive innovation environment where psychological safety, experimentation and risk taking is acceptable. processes
Clearly defined while the space needs to allow for an innovative culture, a process to measure the success of an idea is necessary for business innovation. And strong communication links – there needs to be clear and easy communication channels from the lab back to the main business so they can take their innovative findings and integrate it into the core product or service.
Business Innovation Labs Typical Process
Ideation is where most if not all innovative ideas come to play – new business concepts are brainstormed, written and developed. Prototyping is where a potentially successful innovative idea is materialized into a physical form or a basic version of the product/service that can be tested.
Customer testing is when this innovative product prototype is then taken to the end-consumer for their feedback and observations. And iteration is when, based on the customer feedback, adjustments are made and improved to the business concept until the optimal innovative product or service is delivered.
Pitfalls of Business Innovation Labs
Despite the undeniable value they bring, business innovation labs can face many hurdles. Some of the key challenges are failed integration with core business – one of the most common challenges, it occurs when innovation generated in labs doesn’t transition into the main company, largely due to lack of connection between the lab and core business team.
Lack of ROI – innovation and the outcomes of a business lab’s work cannot always be easily or quickly quantifiable. Insufficient funding or resources – given the nature of labs, a substantial funding is required for their existence, so failure to secure these can be a downfall.
Resistance from mainstream business – established departments can resist adopting innovative new products or services if they disrupt existing work processes. And lack of talented leadership or management – no matter how talented an employee may be, he still needs strong leadership and management to navigate the process successfully.
Real World Examples of Business Innovation Labs
The world’s best innovative organizations like Amazon (Lab 126), Google (X and Creative Lab), Microsoft, IBM, and Coca-Cola all have their own Innovation Labs which push the boundaries of product and business innovation.
Top Benefits of Business Innovation Labs
It’s time to create an innovative and high-performing team, here is why! It increases creativity – providing a unique workspace that allows employees to spark creative thinking. It fast tracks innovation – a concentrated work environment coupled with an agile methodology allows faster product development. It builds better teams – it helps individuals from diverse backgrounds connect better and work together on building their innovative ideas. It drives a unique competitive advantage innovation labs produce innovative products that can provide the company with an edge.
And it reduces risk it provides the safest possible place to test and validate innovations before massive deployment and scale up.
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