Why Innovation Labs Fail and 5 Ways to Deliver Meaningful Results

I’ve been wondering whether the innovation labs established by many large enterprises are doomed in this era when many companies are investing in gen AI capabilities and experimental cultures.  

At a recent Coffee with Digital Trailblazers, we discussed agile innovation and leading innovation labs from proof of concept (POC )to production. Thanks to my panelists, Martin Davis, Roman Dumiak, Joanne Friedman, John Patrick Luethe, and Liz Martinez, for their insights on how to make them more successful and deliver meaningful business results.  

Why do innovation labs fail

Labs were popularized in the mid-2000s when organizations experimented with web, mobile, social media, and analytics technology capabilities and had limited people with the skills to evaluate new technologies. The idea was to test innovations in the lab and then bring capabilities to the business teams to apply in their workflows, decision-making, and customer experiences.

Change management was a significant challenge then, as many business groups were either too busy, lacked incentives, or didn’t see the business value in the capabilities delivered by innovation labs. It was easy to adopt a not invented here response and become silent detractors, while innovation labs doubled down on their efforts to increase the wow factors.

I came into the Coffee Hour strongly believing that most innovation labs fail and that it might be time to move past this approach. Most businesses need every multi-disciplined agile team to dedicate time to developing innovations, demonstrating new capabilities, and delivering transformational results. Should organizations today skip the lab and spend more time training agile teams in applying design thinking, performing market research, experimenting with data science, and running POCs?

You can listen to the Coffee Hour recording by joining the StarCIO Digital Trailblazer Community.

At the Coffee Hour, my panelists turned around every innovation lab anti-pattern into a recommendation. Here are some of the panelists’ reasons why running innovation labs can fail to deliver results:

• Focus on things they can do versus things they should do – i.e., investing in innovation for innovation’s sake.
• Mistake innovation for invention – i.e., miss the opportunities to reuse solutions in the business context and target much more expensive and harder-to-deliver inventions.
• Fail to connect innovations with end-user needs – i.e., focusing too much on the technical capabilities and underinvesting in human-centric design.

These are all leadership challenges, and at the end of the Coffee Hour, we discussed the role Digital Trailblazers play in either leading innovation labs or partnering with them. Ramon Dumiak shared a maturity model for innovation labs and several common enterprise goals for forming them. Joanne Friedman suggested that Digital Trailblazers exhibit her 5-E traits of empathy, expertise, experience, entrepreneurship, and empowerment when focusing on innovation.

5 ways to improve innovation labs and deliver results

Below are some of their key recommendations on how innovation labs can deliver results.

1. Document the innovation lab’s vision, charter, and success criteria, and ensure the roles/responsibilities of business stakeholders are clearly and repetitively communicated. 
2. Staff the lab with skills in design thinking to understand customer needs/values, storytelling skills to find meaningful ways to share insights from data/analytics, and hands-on architecture skills to evaluate new technologies quickly.
3. Craft hybrid teams with a mix of business, IT, data science, and lab members to partner when developing and testing innovations.   
4. Avoid bimodal IT and other forms of parallel operations when testing and deploying innovations.
5. Plan for obsolescence by rotating people in/out of the lab, identifying a roadmap of lab-focused innovation capabilities, and rotating out mainstream innovations for business teams to manage.

One last recommendation: Perhaps it’s time to rebrand the “Innovation Lab”  to lose connotations of indefinite experimentation and isolated responsibilities from business teams. Use the lab’s vision to brainstorm a more meaningful and goal-oriented name.

You can download the StarCIO Vision Statement Template to use with your innovation lab and review the top competencies of StarCIO Digital Trailblazers.

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