Even as major companies and health systems such as Starbucks, Walmart, Mount Sinai and Emory Healthcare launch lavish accelerators, incubators and research centers, experts estimate that up to 90 percent of these innovation hubs fail before achieving any real transformation.
A new article from the Harvard Business Review outlines why innovation labs are so prone to failure, and what organizations can do to ensure their success. First, why they fail:
1. Lack of alignment with business: All too often, organizations launch innovation centers just for show, without establishing a clear-cut strategy for the center. As a result, per HBR, "the curtain comes down quickly, either because ideas from these labs are disconnected from real customer needs or because no one is on the hook to carry the ideas through to implementation."
2. Lack of metrics to track success: While these hubs have different financial considerations than more traditional aspects of an organization, they still require clear goals regarding their expected returns. Without specific metrics to monitor, it is impossible to show what is at stake for investors and executives, nor what an innovation lab can do for an organization.
3. Lack of balance on the team: Staffing a lab with only internal industry stalwarts can prevent forward-thinking transformation, while a team comprised solely of external entrepreneurs and innovation experts is often unable to navigate an industry's traditions and quirks. A successful hub, therefore, is staffed by a combination of experts from both groups.
As for how to prevent this failure, beyond ensuring a hub's strategy aligns with that of the organization, implementing specific metrics to track success and building a team of both industry and entrepreneurial pros, HBR suggests a handful of other tips:
- Establish a clear vision for the team, preferably using "from/to" statements that demonstrate progress, such as "We want to go from placing big innovation bets to trying many small experiments and rapid prototyping."
- To encourage further growth, determine where ideas born in the innovation hub will go as they continue to expand. According to HBR, "Potentially disruptive innovations may go somewhere outside of the core organization, where they can be further developed while being protected from corporate antibodies and business-as-usual fingerprints."
- Above all, prioritize the people involved at every stage of innovation, from the entrepreneurs brainstorming and executing transformative new ideas to the individuals who those ideas are designed to help.