Making Room For Innovation

One of the big challenges in these budget-crunching, resource-stretching times is finding the space to innovate. The idea of adopting a 70:20:10 approach creates some interesting possibilities for building innovation into the fabric of what you do, as does opening up the raw material (data, content, ideas) to third parties through APIs and customer interaction platforms. But it's all too easy for fragile ideas to be sacrificed at the alter of the latest quarterly target.

So I think it's interesting that when Walmart bought a small Silicon Valley start up called Kosmix last year, they chose to turn it into WalmartLabs - a unit designed to push Walmart’s capabilities in mobile and social R & D. For me, this approach has several benefits:

• It provides a route to bringing in new tech talent into a large organisation
• More than that, it protects the culture from being stifled by corporate-world and stops the talent from getting caught up in the system. In doing so it provides a better environment to attract other tech talent.
• Being unshackled from existing business cycles and processes means a better chance of increasing the speed of innovation
• Freedom to structure around small, nimble, non-hierarchical teams – like Amazon’s Two Pizza teams approach
• Facilitating the ease with which the organisation can work in flexible ways with third parties and external tech talent
• Giving you the space to create the future (Box 3 in Three-box thinking)

The downside of this I guess is the risk of compartmentalising innovation in ways that isolate it or worse, disenfranchise others. My hunch though is that done in the right way, the benefits of this approach (particularly for large organisations) far outweigh the drawbacks. Anyone agree/disagree?

HT to Tom for the Vijay Govindarajan link

Comments

[Tom F]

Hey Neil - nice post.

My experience of these 'hived off' innovation hubs is that they start out brilliantly with all the stuff you suggest, but with time, they lose the room/space to keep a focus on really new ideas.

And end up becoming the feeder machine for business as usual.

Most of it seems to comes down to the leadership of both

1. the host organisation in staying true to the vision, and creating the story that means the core business sees the benefit - by communicating that business model innovation is a priority for these 'labs' and

2. the embryonic 'hub' - in being focused on making stuff real to explore and develop new business models, genuine experimentation and learning with customers, and balancing being seen as the cool kids who 'get to play' with the need to give a 'return' back to the business (in inspiration, insight and ideas etc).

A big thing that seems to help is quite regular transfer of key (ie influential) people into and out of these units - making the bridges in concrete human relationships.

On the whole though, I do agree the benefits definitely outweigh the drawbacks.

Having experienced organisations who try to get managers running their core businesses doing this kind of work, you only ever see incremental improvement around an existing business model -vs the transformative, disruptive (and often messy) changes that lead to genuine new stuff.

[Joanna Pieters]

One problem is that the people 'allowed' into the hubs tend to be those who have established themselves as suitably competent in the corporate context. However, the most creative thinkers are not necessarily adept at or interested in the political game-playing that's needed to climb a hierarchy or be noticed by the execs deciding on who should be invited.

That doesn't mean that these innovation hubs can't come out with some good work. In fact, their output is likely to be fairly in tune with current corporate thinking, and so taken forwards. So for moderate innovation, it works reasonably well.

But to really think creatively, organisations need to find ways of identifying and freeing more off-beat talent. Among other things, this means recognising that corporate systems of appraisal and performance management are to some degree counter-productive.