by Jill Dyché

How to create a physical space for innovation

Aug 27, 2015

A look at how companies find unique ways to embrace innovation and invest in new ways of thinking.

In 1986, commenting on the internal problems plaguing his new parent company General Motors, Ross Perot took aim at the automaker’s entrenched culture and plodding delivery processes. At the time a new car took five years to design. “Heck, we won World War Two in four years,” he remarked to The Wall Street Journal. “This isn’t a moon shot, it’s just a car.”

Flash forward twenty years and everything’s a moon shot. In my book, The New IT: How Technology Leaders Enable Business Strategy in the Digital Age (McGraw-Hill, 2015), I outline how companies like Cisco, Comcast, Nordstrom, and even toymaker Lego have all invested in new thinking by launching innovation labs.

Every company embracing innovation does so in its own way. Johnson & Johnson, for instance, maintains several “innovation hubs” around the world, while Eli Lilly has endowed its own venture capital fund to fuel innovation efforts. The single quality these and other companies share is that they have created physical spaces in which to nurture new ideas. If innovation is the application of unorthodox thinking to business opportunities, the innovation lab is where that thinking evolves into new products, services, process efficiencies, partnerships, or business models.

The hallmark of the innovation lab is that it is a space set apart—sometimes even isolated—from the rest of the company. Many labs feature distinct furnishings (beanbag chairs have made a comeback), interactive screens, and unique floorplans. Insurance behemoth USAA’s innovation lab is enclosed in glass, showing passersby that the company is dedicating skills and resources to emerging technologies. By being prominently-placed, the labs convey prestige. At Toyota Financial Services, the lab is a room a few strides away from the office of Ron Guerrier, the company’s CIO. The lab is thus visible to both IT and business staff, who are encouraged to come and kick the tires of emerging technologies, and clearly executive-sanctioned. 

In essence, the lab becomes a symbol of a company’s commitment to fresh thinking, while at the same time reiterating its imperative to change and grow. Lego’s innovation board encourages ideas that are “Obviously Lego, but never seen before.”

Intent on accelerating innovation at their companies, some executives assume that the physical space and, as one executive called it, “some smart data scientists” are enough to kick off innovation. The notion is that simply clustering talent is the only way to reach those coveted Eureka! moments.

Launching a lab outright should never be step one in the process of realizing that elusive innovation culture. Executives should first decide how to democratize new ideas so that the innovation process welcomes everyone up and down the corporate hierarchy. Then they should decide on the communication strategy and rules of engagement for the lab, circumscribing how ideas are submitted, vetted, and realized.

Only then should an innovation lab become official, the manifestation of the mission and processes that have already been introduced. With these steps in place the company and its employees are ready to shoot for the moon!