As business leaders create innovation teams to develop new product ideas and better understand consumer buying trends, they should take a close look at how other companies have built successful innovation centers.
For example, in 2015 Lowe's Home Improvement created Lowe's Innovation Labs to help the home retailer tackle an ambitious challenge: define the future of the consumer retail experience. It uses prototypes of disruptive technologies, such as augmented reality and artificial intelligence, to reimagine retailing. Lowe's Innovation Labs consistently lives up to its name: Within its first year of existence, the self-described disruptive innovation hub had partnered with aerospace company Made in Space to launch a commercial 3D printer in space and was responsible for Lowe's recently testing an augmented reality app that shoppers use to navigate the vast inventory of products in Lowe's stores.
Lowe's is among many businesses that have set aside special teams that are tasked with finding ways to innovate. According to an Altimeter Group study, nearly 40% of the 200 largest companies have created these types of innovation teams to improve customer service and operations. But units such as Lowe's Innovation Labs don't happen by magic, and they don't succeed by happenstance.
In fact, innovation centers can crash-land quickly and produce disappointing results unless businesses manage them effectively. Based on my client experiences, I believe successful innovation teams have these five traits in common.
1. Realistic expectations: It's important that businesses create realistic charters for their in-house teams. An innovation team alone won't change the company, but it should ignite new ideas that the entire organization will own.
The Lowe's Innovation Labs and WalmartLabs make it clear that these companies are serious about improving their companies with breakthrough products and experiences. But innovation seldom originates with the team itself, per se, but rather through the implementation of well-tested ideas throughout the rest of the organization. Innovation may also result in partnerships with other businesses, such as technology accelerators and academic institutions.
2. Integration: Unless innovation teams are plugged into the rest of the organization, they'll develop ideas that die in isolation. Dedicated innovation teams do need their own space where they can focus on the business of exploring new ideas free from the distractions of the business. And yet an innovation team operating on its own can easily become disconnected from the very business it is supposed to support.
One way to mitigate against this risk is to develop a structure that requires innovation teams to partner with the sources of innovation within the organization itself. For instance, an innovation team attempting to improve patient care for a healthcare organization should collaborate regularly with physicians who are on the front lines of providing care to develop empathy for patients and physicians who serve them.
Giving a team its own space to explore new ideas is essential. But only through collaboration with the rest of the organization can a team remain relevant.
3. Credibility: Sometimes innovation teams face built-in credibility problems. A business can be susceptible to the belief that innovation just cannot originate from inside the four walls of the organization, never mind the fact that a dedicated team is supposed to act outside the strictures of the organization. Innovation teams need to constantly sell themselves to overcome the fear and skepticism that can easily permeate a company. I recommend that your team appoint an innovation champion who acts as chief ambassador for the rest of the organization—a senior-level executive who has the ear of your C-level team and understands how to evangelize throughout a company and outside the organization. Do what Lowe's does: Talk about your successes.
4. A strong process: Innovation needs a process for developing and executing new products. Processes provide repeatability. Moreover, teams need to develop processes for how they'll collaborate with a company's business units to tap into sources of innovation and develop them.
Many successful teams follow agreed-upon models, such as the Lean Startup method, a methodology that applies scientific methods for rapidly prototyping new ideas. I advocate incorporating design thinking and lean innovation methods to develop products that deliver on the needs of the business while being rooted in customer empathy.
5. A well-rounded team: A common stereotype about innovation teams is that they are stocked with brilliant creative minds who think differently than the rest of the organization. This stereotype is wrong.
Innovation teams need creative designers. But they also need people who represent the functional disciplines required for any business to succeed—people who possess specialty skills in areas such as finance and customer service. A complement of designers and functional specialists ensures that the team explores ideas that possess the holistic perspective needed for any new idea to become commercially viable.
Leadership Starts With You
Innovation teams define the road map to success. They help businesses avoid traveling down the linear path of doom. But innovation teams will travel down the path of doom without leadership.
As we've discussed, innovation teams are on the firing line to prove themselves, and yet they are in the best position to effect real, long-lasting change in an organization. Only a leader with the patience of a saint, the collaborative skills of a diplomat, and the vision of a change agent can make an innovation center succeed. You might be running a center, thinking of launching one, or more informally operating a team charged with innovative product development. To make your team succeed, take ownership of the challenges and opportunities that innovation teams and centers bring. Leadership starts with you.