Over the course of the last decade, we’ve been asked to work with the in-house innovation centres of many large organisations — we’ve worked alongside them, coached and troubleshot for them, advised on how to govern them, and designed innovation centres for our clients from scratch. We’ve seen (and set up) successful innovation centres with a track record of getting new products and services to market and delivering plenty of commercial impact. For every one of those, we can point to 3 innovation centres that have delivered little to no impact but are rich in practical insight for anyone tasked with setting one of these up properly.
With that in mind, we’ve distilled our learnings into 10 design principles to help you stack the odds for your innovation centre in your favour.
1. Be clear on the business impact you seek
Your innovation centre must support the strategic goals of your business in a clearly defined way. So be clear on its mission — is it there to seize tactical innovation opportunities in the market that are currently passing the business by, or is it there to identify and realise big new opportunities? Give it clear KPIs. Don’t fudge it with a loose agenda and subjective measures of success. And give it a clearly defined scope — focus on a maximum of few key areas valuable to the organisation. Don’t create a pet project receptacle.
Innovation centres that are not aligned to the business’s strategic goals and are not accountable against business impact measures usually fail within 24 months or, at the very least, become the focus of an infectious cynicism within the organisation.
2. Take a long-term outlook
This isn’t a ‘project’, it’s an organisational change so only embark on this journey if you’re willing and able to make a long-term commitment (think 5 years). Consider the business impact you want, and be committed to invest accordingly. Lofty ambitions and low-level resources do not sit happily. Likewise, an open cheque-book leads to inefficiency and a lack of creative endeavour.
3. Build ‘glass walls’, not a mystical fortress
Ringfence budget and resource but share and collaborate broadly. Successful innovation centres are able to plan and execute based on committed resources. Don’t treat the budget as discretionary — you’ll end up paying people to rework plans, rather than deliver real stuff to market.
Having some work separation from the day-to-day of the business is necessary too — that’s what allows an unconflicted focus on strategic goals beyond business as usual. That being said, it’s vital to maintain connectivity and communication with core business. Without this, you risk losing focus on the of the business units’ needs, miss out on expertise to solve presenting issues, and can disenfranchise the business making the ultimate aim of getting to market a battle within the organisation… when the battle should be outside.
We work with a consumer goods innovation centre for a global business who achieve this by the team having two desks — one at the innovation centre and one within the business at the organisation’s Head Office. As a result, the team have the distance they need to incubate, but remain known and in conversation with the business, allowing them to involve their business expert colleagues in proactively moving solutions forward.
4. Create senior accountability and minimise bureaucracy
Create a framework to enable innovation, not slow it down. Too many times we’ve been asked to diagnose why speed to market is too long, or to help unblock an innovation process. What we’ve invariably found is an innovation team spending the majority of their time managing internal politics, and approval processes. The solution is two-fold. Firstly, push decision-making down and manage risk by reporting. Secondly, make sure there’s genuine accountability and sponsorship at a senior level — teams without access and influence will always struggle to make meaningful progress.
5. Design for your organisation, not against it
That said, resist the temptation to build a ‘start-up culture’ your organisation will ultimately crush. Many innovation centres are set up in response to what leaders see as the organisations culture and constraints. And while putting some distance between the organisation and the innovation function may help move solutions in the short term, these teams can also operate under a false premise that those constraints aren’t waiting for them further down the road. Successful innovation centres embrace the reality of the organisation they are set up to serve, constraints and all, to create solutions that are fit to thrive within the scale and complexity of their host.
6. Hire masters of the ecosystem not lone geniuses
Successful innovation requires a variety of expertise and specialisms at different times — from design thinking experts and formulation experts, to business modelling analysts. Correspondingly, successful leaders of innovation centres know how to galvanise the right expertise at the right times. The leader of your innovation centre is likely have a track record of making innovation happen and is a master at assembling the right skills and orchestrating collaboration to get the job done. Don’t hire the person who thinks they can do everything themselves.
7. Develop or adopt agile innovation processes
Make sure you build the skills, tools and processes for fast and effective experimentation. If your processes are lengthy, expensive box ticking exercises, you’re wasting resource and hampering progress. TescoLabs has set up easy access to local consumers who are able to take a product one morning and feedback on it the next. This agile innovation methodology and behaviour serves to quickly turn their hypotheses into actionable knowledge. Don’t get all purist about process — it’s there as tool to help not to dictate. We were recently told of an internal design thinking team that had 6 prototyped high ideas destined for success but refused to move any of them forward because their process called for each idea to respond to single opportunity.
8. Invest in true strategic partnerships
Innovation is no longer a closed system confined to walls of the corporation. Progressive innovation centres forge partnerships — formal and informal outside their organisation. In HBR’s ongoing analysis of P&G’s innovation approach, it reports that over a third of all P&G products now have elements that originated externally, R&D productivity has increased by 60% and success rates have doubled while costs of development have fallen. Organisations we work with collaborate externally in different ways — from retail groups and academic institutions through to suppliers and individual experts. Remember, partnerships work by being valuable to both sides — be prepared to reciprocate.
9. Design physical space to enable the work
This principle deliberately comes late on in our list — too often organisations get stuck into first because it’s a visible and exciting manifestation of ‘innovation happening’. We and those we spoke to for this article (and no doubt yourself) have witnessed the building of ‘showrooms’ whose main purpose is hosting tours and making impressions on visitors. One of our clients went as far as to describe their first innovation centre as the ‘museum of innovation’, a place designed to make senior management feel innovative but did not have a single story of impact to share after three years.
First and foremeost, design your physical space to foster the type of working styles and behaviours you want to see in your team.
10. Engineer some quick wins
Success is not launching your innovation centre, it’s launching something strong to market. Build momentum and your ‘sales story’ by delivering and socialising some early success — it will help the organisation as a whole believe in and support the value of your innovation centre. Without this organisational support, the centre’s job will at best be harder, and ultimately become untenable.
On assuming a new role leading an innovation centre, one of our clients had us tackle a challenge for a business unit with a pressure to launch something in 18 months in a very active marketplace. The organization may not have ranked this opportunity number one, but his decision to tackle it first quickly delivered a new product to market with another on the way for a sizeable business unit. This allowed him to demonstrate immediate impact even when some larger projects were progressing along slower timelines in parts of the organization where he knew the nature of large teams would ultimately slow things down. This team is now four years old, growing in headcount and has proven itself to be a key engine of growth within the organisation.
So that’s it — our learnings and those of our clients on how to engineer your innovation centre for success (or as much as we can squeeze into a blog anyway). And, if you’re serious about this, the success is worth the effort — an unconflicted and uncompromised focus on strategic opportunities for the business, accelerated learning and confidence to launch to market, unparalleled consumer closeness and knowledge, the development of broader organisational capabilities, a magnet for attracting and retaining talent, a stronger proposition to valuable external collaborators… and, of course, a very meaningful contribution to your business goals.
If this has got you thinking, and it would be helpful to discuss developing the innovation capability of your own organisation, get in touch with us. We’re always happy to talk to people who are committed to making innovation happen and work better for their business.
Propellerfish is an innovation consulting firm with offices in London, New York and Singapore.
Our teams have helped build innovation centers for multinationals in the US, Europe and Asia.