Part 2: You're building or managing an innovation hub? This post is for you!

In 2017 I published 10 lessons learned when building or managing innovation hubs and the feedback was overwhelming. The article was viewed by more than 10.000 people and I received emails from all over the world. Requests came from the US Airforce, startups from Kenya and Nigeria, medical corporations from Switzerland, New Zealand Universities, public sector organisations in the UK, and banks in the Middle East. 

In the meantime innovation hubs are not the hot new topic anymore and many articles have been written on innovation hubs. By now most corporations have built one. Some innovation hubs are doing extremely well, but many are still falling short of expectations. People have come to realise that a fancy office space will not magically lead to innovation. Real innovation is not easy, there are many road blocks to look out for, but it is possible! Don’t take the path of least resistance and blindly fulfil the demands from your mother organisation, you risk becoming a fancier version of the internal IT-department building products no one really needs.

Time for part 2. Here are 5 more lessons for how to make important course corrections to navigate your innovation hub on the path to success.

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# 11: DON’T BE A TOURIST

Innovation hub tourism is now a thing. Senior leadership teams go on a start-up safaris (unfortunately that is a real term) to Cape Town, Berlin, the SF Bay Area and Tel Aviv to see how a new unicorn is born. Consulting firms serve as tour guides offering silicon valley package deals where C-level executives get an all-inclusive tour of the dominant tech players in 10 days - welcome drinks included. 

To do what exactly? Learn something I would guess!?

Exchange between organisations of different industries is a great thing and it could actually lead to insights if done right. For a robust learning experience to happen you need to be willing to learn and you need to be willing to look beyond the surface. Wouldn’t it be great to see what Airbnb, WeWork, or Uber is really struggling with? What are some of the problems they are facing? They can’t be getting everything right. Of course getting real insights is only possible if the organisations you visit allow you a peek behind the scenes. This requires trust, honesty and humility - on both sides. I doubt that you will get this by attending a staged all-inclusive tour. Without realising it you might find yourself looking mesmerised at actors performing innovation theatre with little meaningful for you to take home other than pictures on your smartphone. If you really want to learn from how innovation hubs function in other industries - agree on a mutual secondment where you exchange team members for at least 6 months. 

We love shiny things

#12. WE LOVE SHINY THINGS

Once you have found a physical space for the new innovation hub it’s time to go shopping and buy some cool gadgets from kickstarter, some drones, AR goggles, IoT devices, 3D printers, maybe even a robot. Wait what? Resist the temptation to turn the space into a technology showroom. It will backfire because of three reasons: 

  • First, todays latest technology will be outdated quickly meaning your once fancy showroom becomes a museum of old technology. Plus stocking your space with the latest gadgets costs a lot of money.

  • Second, it creates a lot of attention and many people will want to come and play with it. Why is this bad? It’s bad because it makes people focus on the wrong things. It created the impression that technology is the most important ingredient of the innovation formula. It is not. Technology can be a means to achieve a desired goal or to solve a problem in a faster or better way but it’s no means in itself.

  • Third, it distracts the people working in the innovation hub. Visitors will want to fly the drones, do AR painting, 3D-print a smartphone stand and talk to that cute robot. 

Why would you have all of these technology gadgets anyway? None of those were developed by you or your team? They are someone else's inventions and the creativity involved in creating them won’t rub off on you simply by purchasing. Don’t get me wrong if the problem you are trying to solve involves technology you need to get your hands on it and start experimenting. Don’t create use cases for the sake of having something to display. Ideally a use case is the by-product of a project you have completed or you deliberately designed a use case to convince a client to work with you.  

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#13: WHAT DO YOU DO AGAIN?

If no one knows what the innovation hub stands for you will struggle finding clients. Or even worse your clients will define for you what type of problems or challenges you will be working on. You don’t want that, so you need to communicate clearly what you do. This is your service offering. A good service offering allows you to differentiate, it describes what you do, what you don’t do and therefore gives direction and focus to your team. When defining your service offering keep three things in mind:

  • Describe the problem - not the solution. If you define your service offerings as solutions, e.g. chatbot or app development you risk being perceived as a supplier and not as a partner. As a supplier it will be hard for you to challenge a brief that doesn’t make much sense. It can also become a problem as your clients will want to pick and choose the solution they want as opposed to what they actually need. If you describe the problem or the ambitions your clients have e.g. wanting to create growth through new business models, increasing customer engagement through digital self-service options, becoming relevant to a new customer segment, etc. your chances of becoming a trusted partner are much higher. 

  • Don’t be too specific. A very specific and detailed service offering will limit the variety of challenges you will be working on. Repetition is the death of innovation. Innovation works best if challenges are big and messy, ill-defined and poorly understood. If that’s the case you can actually learn something new, change perspectives and build unique solutions.  

  • People don’t read anymore - tell a story. You have to keep it short, concise, and engaging. Don’t confuse storytelling with showing off. It’s not about the cool stuff you have built. It’s about what you have learned along the way, how you uncovered the underlying problem, how you course-corrected, how something unusual happened that led to a more radical solution. Good storytelling is about humility, wrong roads taken and unexpected twists in the plot.

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#14: MEASURE TO IMPROVE?

At least that’s what we learned, right? While this might work for sustaining innovation (improving something that satisfies people’s current needs) it is not true for disruptive innovation (designing something with an often lower performance that satisfies people’s future needs). How do you measure how long it should take to create something that is truly new? Something that no one has created before?

Don’t revert to what you know, don’t use traditional Key Performance Indicators (KPIs) for disruptive innovation. They are designed for well-understood, often repetitive work where the relationship between the input (action) and the output (result or effect) is not direct and/or not directly visible. Often because work is broken down into many small tasks that make up a process, e.g. in production or service delivery.

It’s important to keep in mind that a KPI is not an exact measure of performance, it merely indicates it. Think of a shadow indicating the size and shape of an object. Depending on the light and angle a shadow can give you an idea of the true dimensions of an object, but it can be skewed and distorted by a small change in perspective. The same is true for KPI’s. The effect of distortion gets even bigger when we aggregate different KPI’s into one number. We lose information and create vanity measures. Whenever possible look at the performance directly, observe the work that is being done, observe the quality of the result instead of looking at numbers that are prone to distortion or even manipulation. 

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#15: CONNECT AND PROTECT

If your early work has proven to be successful and you will have achieved some visibility inside your organisation it’s time to be on your toes. 

What often happens is that people from the main organisation will try to offload their slow moving projects to the innovation hub. This is not necessary a bad thing as long as the projects are a good match for the innovation hub. Don’t bite off more than you can chew and stay clear from politically loaded projects. Innovation only works if you can focus on one thing at a time, don’t fall into project management or multi-tasking mode.

The other aspect to look out for is if leaders from the main organisation are willing to let go of managing the project they handed over to the hub. This can be tricky as they are ultimately responsible for the project’s success and might feel the need to micromanage to ensure the project is on track. You can not allow this as it undermines the structures and processes you have set in place. Define clear roles for collaboration. For example let the person who is responsible for the project success be part of the sprint team. 

It’s a fine balance between being open to fulfil the needs of the main organisation and being a closed community with its own rules. A helpful analogy is a semi-permeable membrane. It lets specific elements that are beneficial inside and it blocks harmful elements from entering. The main form of exchange between the main organisation and the innovation hub is the input in the form of problems or challenges and the output in the form of innovative products, services, process improvements, business models and ventures. 

I have helped organisations in New Zealand and Europe build, manage, and operate innovation hubs and I’m here to help, get in touch and let’s talk through your innovation hub and how you can increase the productivity of your team.

Thanks for reading until the end. Let me know what you think. Check out my website for more posts on innovation and strategy www.innovate-strategy.com and get in touch sebastian@innovate-strategy.com.

Posted by Dr. Sebastian Vetter