Strategic Innovation Labs

MANY ORGANIZATIONS ARE struggling with two challenges – how to discover innovative solutions to complex situations and how to engage their top talent. “Complex situations” are characterized by many parts, including interactions not immediately decipherable and predictable. They are not consistent from one situation to another, and the ambiguous patterns and feedback make predicting complex phenomena very difficult and expertise nearly impossible to develop.¹

Complex situations often emerge when executives engage in strategic thinking and anticipate new eventualities. Here are some complex examples I’ve encountered as a facilitator for organizations:

• A non-profit plastics organization was concerned about how they would respond to new regulations that would increase their accountability for recycling.
• An insurance company selling automotive insurance believed that the probability that customers would prefer to bypass a broker left them wondering how they would survive without the intermediary.
• An association believed their products were not attractive to younger potential members, which might compromise the viability of their future association.

These kinds of issues led each organization into a deep reflection process to gain insight and discover innovative solutions.

At the same time, organizations are finding that their top talent might be disengaged or seeking opportunities elsewhere. They need to uncover ways to engage their top talent by giving them stimulating opportunities to grow and contribute to their organizations. They also need to expose the top talent to cross-functional collaborative relationships to prepare them for a more senior role, enabling them to lead a part of the organization with a wider, cross-functional mandate.

We have found that implementing strategic innovation labs enables organizations to respond well to both of these challenges. Our definition of the word “innovation” in organizations is “creativity with purpose.” Innovation is not creativity for its own sake. It focuses on a compelling complex situation that requires a deep dive to gain insights and a deliberate path forward. A strategic innovation lab consists of a mid-level diverse group of top talent who collaborate over a three-month timeframe (a half-day per week) to take that deep dive into the complex organizational problem or opportunity. The strategic innovation lab team is expected to gain insight into the complex situation and generate an innovative solution to be presented to the executives at the conclusion of the process.

This article presents the facilitation process we use for strategic innovative labs based on our research and experiences facilitating numerous innovation labs. The theoretical framework is derived from the pioneering work in my coauthored book, Innovative Intelligence,² and my subsequent research and writings.

The Strategic Innovation Lab Facilitation Process

Our facilitation process for strategic innovation labs has been tested in industries and in the non-profit and public sectors. It has consistently delivered actionable innovative recommendations and high engagement from the participants. It involves a three-phase facilitation process:

Phase 1: Executives specify the complex situation for the innovation lab and select the diverse team

The important first step in this process is to define the complex situation for the strategic innovation lab. In my article “Discovering the Enterprise Innovation Question,”³ I presented the process for an organization to define their innovation question as part of strategic planning, an approach that could result in an ideal complex situation for the innovation lab.

However, if a strategic innovation question does not occur, a survey of the executives can be implemented to identify the complex situation. At the same time, the executives can nominate two people who report to them to be participants in the innovation lab. The survey input could be expanded to previous participants in innovation labs (for organizations that have had multiple innovation labs) and from the participants in the current innovation lab.

Typically, after the long list of complex situations is identified, then the executives review all the situations and choose the one they prefer for the strategic innovation lab. One organization used predefined criteria to select the preferred complex situation. The criteria included: it should be of strategic importance to the organization; it should not have people working on the complex situation already; it should be big enough to warrant three months of part-time work; and it should be a complex situation that no single area of technical expertise would be able to solve and that a non-expert would be able to contribute to it meaningfully.

The participants in the strategic innovation lab are usually selected by the executive team as well. These individuals are often top talent who are representatives from different functions in the organization, are of different backgrounds and genders, and people who can allocate the time to participate actively in the innovation lab. Typically, a strategic innovation lab has between 9 to 12 members. We often recommend that the content experts associated with the complex situation should not be members of the innovation lab but rather those individuals should be expert resources for the innovation lab. For example, one organization wanted to explore how to expand their services into insurance. They positioned their experts on insurance as resources to the innovation lab rather than as members.

We also recommend that the executives choose one or two executives as “mentor sponsors” for each innovation lab. These executives function as mentors for the leadership development of the innovation lab members and sponsors of the work on the complex situation. They also update the executive team on the innovation lab’s progress, identify the boundaries for the complex situation and coach and give feedback (rather than tell the innovation lab what to do). They also host the strategic innovation lab’s final presentation to the executive team and serve as champions of their final presentation.

Phase 2: The diverse team collaborates and proceeds through the 4 “I”s: Innovative thinking process of Inspire – Insights – Ideate – Iterate

The innovation lab members participate in an orientation meeting designed to create energy and excitement for this process. The facilitator and mentor sponsors share the objectives for the process: to both develop the leadership capacity of the participants and to discover an innovative solution to a complex situation for the organization. When the orientation is effective, the innovation lab participants emerge inspired to work on the complex situation.

We then facilitate the 4 “I”s innovative thinking process shown in Figure 1.

Step 1: Inspire

The first step is to engage the team emotionally with the complex situation, both during the orientation and in the initial innovation lab meetings. A sense of urgency needs to be communicated about the importance of the complex situation for the organization. We use several ways to heighten the team’s emotional commitment to the innovation lab by making clear that:

• They are working on a complex situation: The complex situation itself needs to be a purposeful and compelling challenge that becomes an emotional driver for the innovation lab. Also, the lab members often feel honored to be part of the innovation lab, and they are keen to participate meaningfully. It also helps that the executives ask them to focus on it.
• They have each other: The members of the innovation lab often do not know each other well, and they find it exciting to collaborate with new people from diverse backgrounds and responsibilities. We also introduce a “sunset clause,” which means the project will end after their presentation to the executive team. This gives the innovation lab team comfort that the project will not go on forever.
• They are supported throughout the process: The mentor sponsors add to the sense of importance of the innovation lab. Also, typically there is an internal design team that helps set up the innovation lab, giving the team access to the needed resources. Finally, the facilitator of the innovation lab brings additional credibility and expert facilitation that inspires the team.

Step 2: Insights

One of the major characteristics of innovative thinking for complex situations is that the question that needs insight is often ambiguous and needs to be articulated. Innovation lab teams need to spend about half their time working on the first two steps of the innovation process – Inspire and Insights – to surface the most meaningful “How might we?” question for the complex situation. We show innovation labs how to apply an “outside-in” approach to complex situations. This means the lab team starts the Insights step by talking to external customers, clients, users, partners, etc., to hear how they view the complex situation and to identify “pain points.” The pain points then become essential inputs to define the focused question to work on. The innovation lab team researches the facts within the organization and within the industry. They also surface many assumptions and test them to determine if they are acceptable or not. At the conclusion of this Step 2: Insights, the innovation lab develops a purposeful and focused innovation question for which they will develop ideas in Step 3: Ideate.

Step 3: Ideate

Now that the innovation lab has a focused question, they can proceed to ideate. Typically, the innovation lab works in subgroups to explore the question from a variety of perspectives. For example, one subgroup might conduct focus groups of users to solicit their ideas about solutions to their innovation question. Another subgroup might explore ideas from competitors (or comparators), and yet another subgroup might explore what organizations outside their area of specialty have done with this innovation question. They also ideate by brainstorming their own ideas for the innovation question. Although we set clear boundaries, during this step we go beyond boundaries to push the potential solutions. We do this with the confidence that we can weed out the ideas beyond the boundaries once we have developed options for consideration.

The subgroups then convene to share all their ideas (even the far-out or unconventional ideas) and they start to develop potential options for consideration. Subsequently, the innovation lab refines the options to ensure they are within the boundaries, or they might check in with their mentor sponsors to see if the boundaries have any flexibility and are somewhat permeable.

Step 4: Iterate

Another characteristic of innovative thinking for complex situations is that there are often no best practices or research to guide the selection of a solution. Instead, the lab relies on the user pain points that are usually inconsistent, imprecise and ambiguous. As a result, the innovation lab needs to iterate when considering options. Iteration is a repetitive “show-ask-refine” process whereby the innovation lab shows a prototype to users, asks for user reactions and feedback, and refines the option for another round of iteration. Through this rapid iteration process, the users help the innovation lab refine the option until it progresses to a workable innovative solution.

Phase 3: The strategic innovation lab team prepares and presents their insights and innovative solution to the executives and then the innovation lab’s formal role in the process concludes

The innovation lab needs to converge their ideas into a formal presentation to the executive team. The presentation focuses on the “why” of the complex situation based on the Inspire and Insights steps, and the “what” of the complex situation based on the Ideation and Iteration steps. Essentially, the innovation lab is asking the executive team for concept adopt approval of the recommended option and then they hand off the innovation solution to another group of experts to determine “how” to build and implement the innovation solution to the complex situation.

The actual presentation to the executive team uses a relatively formal process. Some features we recommend include the following:

• The facilitator sets the stage that the innovation lab will present their insights and concept but not how the innovation would be implemented. The facilitator also requests that the presentation by the innovation lab be made without interruption. The mentor sponsors then offer comments and introduce the innovation lab members.
• Each innovation lab member gives a portion of the presentation. This enables each team member to be showcased and the executives to hear from all the members of the lab. The innovation lab concludes the presentation with a final slide describing the major learnings from this entire innovation lab process.
• After the presentation the executives engage in a Q&A with the lab members, and subsequently they provide feedback to the innovation lab on their concept, how the lab members handled the Q&A, and the effectiveness of their presentation.
• Often, the process concludes with an innovation lab celebration, recognition from the mentor sponsors and the executive team, and an evaluation of the entire process.

The innovation lab work is then done (what we refer to as the “sunset clause”). If the executives would like to do further work on the innovative solution, they then assign the innovative solution to technical specialists to test and refine the recommendations and prepare the innovation solution for implementation.

We also recommend that the organization circle back to the innovation lab members to let them know what the executive team decided to do with the innovation solution and why they chose that direction. In one innovation lab, the executive decision was to proceed to implementation. In another, the executives asked a team of experts to test the solution and refine it. In yet another situation, the executives decided to put the innovation solution on a high priority waitlist. In each situation it is important to let the innovation lab members know the outcomes of their work.

Conclusion

An innovation lab is an exciting process that helps organizations generate innovative solutions to complex situations and at the same time orchestrate a highly engaging developmental process for top talent. Consistently, the executives hear innovative solutions that either they did not consider or that they are now hearing at a different level of specificity. The executives also get to see their top talent in action, which is often very helpful when they consider these individuals for executive positions. Finally, the top talent appreciates the investment into their development and the opportunity to make a difference for the organization.

Dr. David Weiss is President of Weiss International Ltd., a firm specializing in Innovation, Leadership, and HR Consulting. He wrote seven books, including the bestseller Innovative Intelligence and he has written 60 articles (including 10 additional articles about innovation) that are available as free downloads at his firm’s website www.weissinternational.ca. David is a Ph.D. Organizational Psychologist, a Certified Executive Coach, and Affiliate Faculty at two universities. Previously, he was the Chief Innovation Officer of a multinational consulting firm and an Affiliate Professor at the Rotman School of Management. Follow David’s daily LinkedIn posts at https://www.linkedin.com/in/drdavidweiss along with his over 165,000 followers.

This article originally appeared in the Fall 2024 issue of Association™, the magazine of the Canadian Society of Association Executives.

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