Innovation hubs – the buzzword of buzzwords. Every organisation wants one, all the big names have one. The promise sounds great – a space that fosters innovation. But do they deliver? And what differentiates successful from underperforming innovation hubs?

I have helped organisations in New Zealand and Europe build, manage, and operate innovation hubs and my answer is: yes, some innovation hubs do really well. Learn from my #10 lessons learned and increase the productivity of your innovation hub. If you liked this post, have a look at part two: #11 - #15 five more lessons learned when building or managing innovation hubs.

#1: it’s not about the space. 

Organisations, especially corporates invest a lot of money into spaces that look like playgrounds. They tend to believe that bean bags and nerf guns create a great office culture and magically lead to innovation. Many open plan offices are designed to impress clients or internal stakeholders. Often they don’t support the type of work people do. A problem with open space offices is that it can get very loud and it’s hard for people to do focused individual work. This is true especially for introverted people. Start with the work and find out what people actually need in order to get the job done.

• What is the best process for doing the work?

• When do people need to work individually?

• When do they need to collaborate?

• How can we design an environment to support different ways of working?

• What tools, systems and processes do we need to have in place to support this?

#2: start small.

People think money speeds things up. That’s not true. Money slows things down. How? Money buys you options, literally. While options sound great they come with a caveat - options create choice and choosing takes time and effort. This is something called the choice paradoxon. The more choice people have the slower is their decision making. That’s one reason why start-ups are more focused and often faster in bringing products to the market. They don’t have much money.

For example, if you can spend hundreds of thousand of dollars for let’s say an advanced audio system you will have to engage with multiple (international) vendors to ensure you find the best solution. A start-up approach would be to buy a couple of connected bluetooth speakers. Deciding which speakers to buy and actually buying them can be done in half a day versus weeks or months in the corporate example. Yes, the sound quality won’t be as good but this ‘quick & dirty’ approach does not distract anyone from doing the work.

#3: corporate immune system.

The corporate immune system might be your biggest enemy when building an innovation hub. Every organism has some kind of immune system to protect it from invaders. In the human body, the immune system creates anti-bodies and white blood cells to defeat invasions. Organisations are not that different in their immune response. Note that the corporate immune system is not evil in nature, it is simply trying to protect the status quo, the current way of working. How can you deal with the corporate immune system?

1. Go to the top! Setting up an innovation hub requires leadership support. Someone on the C-suite has to own it. That person has to protect you against attacks from people within the organisation who are trying to protect the status quo.

2. Go stealth mode! In the beginning you’re better off starting small and stay quiet. Too much attention is distracting and potentially harmful, as it can easily get political. Don’t communicate too much. Just focus on building structures around the innovation hub to stabilise and protect it. The best time to communicate and promote the innovation hub is when you have your first success story to tell. Some organisations create a different legal entity with a separate budget just for the innovation hub to avoid the corporate immune system response.

3. Go and find allies! Building an innovation hub is a big task, too big for just one person or team. You need to find supporters, allies and friends in your organisation. Don’t worry they are there, you probably know them already.

4. Deal with push back! You will get to a point where you’ll experience push back and you might be under (political) attack. This is normal. You should expect this to happen. It’s even a good sign. It can mean you are poking at the right spot. For now it can be a good idea to stop poking, try a different angle or just wait a bit and try it again.

#4: start with easy problems.

Okay, this will sound counter-intuitive. With your early days innovation hub you should NOT start with innovation. Do NOT try to come up with the next big thing. YOU WILL FAIL. You will fail because your team isn’t used to working together, because you will face unforeseen obstacles, because starting is always the hardest part. The worst thing about this is that the innovation hub will get a bad reputation. People will say I knew it, this is not working in our organisation, we have to go back to the way we’ve done things in the past, etc.

So what should you start with? Start with solving existing problems. Start with easy problems. If you solve problems in your organisation, if you make the life of your colleagues easier, they will trust you and start believing in the new way of working. In the beginning what you need most are success stories. Forget ‘fail fast’. You want to pick a problem that you can solve easily. Even a project that is already underway can be a good candidate for your innovation hub. Help the project owner to bring it over the line quicker or better and share the praise.

#5: take risks. 

Once your structures have matured, the members of your team trust each other and know how to collaborate, you were able to present a few success stories and you have more and more supporters in your organisation it’s time to take on bigger projects. In general you should always have a good mix of projects that are quick wins that can be easily delivered and more complex and therefore more risky projects. Those are the projects methodologies like design thinking and sprints were developed for.

Tip: choose a project that is big and painful for someone senior in your organisation. If you’re helping her to solve it, you have won another powerful supporter to protect you in tough times.

#6: leadership involvement.

Leadership support is absolutely crucial for an innovation hub to succeed. It’s almost the number one requirement. If you don’t have it - walk away. There is no point of even starting.

Leadership support matters most when things go wrong and when times are tough. You need someone who steps in when politics and the corporate immune system strikes. Obviously mutual trust is important. The key is to involve a senior supporter from the beginning. I recommend running a positioning workshop to define the purpose, values, vision, and strategy of the innovation hub together. This give you a common ground to start from and creates a shared understanding of what you are actually doing and what the innovation hub stands for.

#7: a separate budget.

Innovation, especially when it’s about creating future options for your business can not be measured against traditional performance and return on investment metrics. There is no mathematical model to predict the success of something that might or might not be the next big thing in 3-5 years time.

You need a separate budget and you need to apply a different type of thinking. What is the risk if you don’t investigate future options for your business? If you don’t investigate options that make your current business obsolete - someone else will. A well-known but often misunderstood framework from McKinsey illustrates this. The ‘3 horizons of growth' (in short: defend, expand, disrupt) differentiates tactics for each horizon (superior execution, positional advantage, insight and foresight). Organisations think they have to defend first before they expand and that they have to expand first before they disrupt. The key is to play in all three horizons simultaneously. The 70 / 20 / 10 rule states the amount of effort and investment organisations should allocate to opportunities in each horizon. 10% doesn't sound like much - it's 25 working days per person per year. Most organisations focus on H1, maybe H2 and underinvest in H3. The answer is simple, in order to remain relevant organisations have to start creating viable options for the future today. 

#8: protect the space.

Defend and protect the new innovation hub. This is especially important once you’ve gained some momentum and people in your organisation want to work with you. The common threats are:

1. Noise. Open space offices have become the norm for innovation hubs. For no good reason, simply because they look cool. If you see lot’s of people working with their headphones on, it’s a bad sign. Don’t get me wrong, open spaces can work well if they are designed to support the way people work. Just putting desks in an open office space and waiting for innovation to strike is a silly idea. If distracted by a colleague asking a quick question or an annoying ringtone it takes people 30 minutes to get back into the zone. Therefore you need to balance open plan offices with distraction free quiet zones or one-person cabins. Then you have one space for shallow work and one space for deep work.

2. Too many visitors to the space. People visiting your space means they are interested, that’s good. Random pop-in visitors who just want to see what’s going on are not so good. They are distracting your team. An innovation hub is not a zoo. Pick an afternoon slot on a Friday and set someone up to show people around and answer questions in a kind of guided 30 minute tour.

3. Too many projects. While this might sound like a luxury problem, too many projects can distract your team and lead to failure. Innovative ways of working are designed to prevent multitasking and task switching. Design thinking and sprints are designed to get a team to focus on one problem at the time. You can’t sprint on two projects simultaneously. So make clear that the innovation hub has the right to cherry pick the projects they want to work on. Simply growing the team is not always the right approach to deal with high demand. A larger team means more structures, longer stand-up’s etc. The best team size is 7-10 people. It’s a better idea to create a new team and let people rotate between teams.

#9: mission control.

An often overlooked part of innovation hubs is mission control. Especially in a hub where multiple teams work on different initiatives at the same time. The word mission control is misleading. It’s not about controlling the progress teams are making – it’s about removing barriers and protecting teams from business as usual and the politics that come with it.

How does it work? On a Monday morning all teams have a weekly 30 minute mission control standup where they discuss and visualise barriers they are facing. They note down options how these barriers can be removed. On Monday afternoon the leadership steerco team meets in the mission control space. They decide who is responsible for removing the barrier. Removing a barrier can be as easy as making a decision on the spot. Sometimes it needs more investigation. This meeting is not about checking in on the progress the teams are making – it’s pure purpose is to deal with things flagged as barriers by the teams. The teams manage their progress autonomously, supported by a facilitator. One wall of the mission control room is dedicated to identifying new ideas, problems, or pain points that exist in the organisation. There is a separate monthly steerco meeting where senior leaders prioritise those ideas or pain points.

#10: the secret sauce.

The secret sauce of innovation hubs is often invisible. It’s the operating model. It’s about the process and a specific way of working that makes a difference. Dropping people from different parts of the business into a new space won’t change anything. Teams need a specific process for innovation and delivery.

From my experience facilitated weekly sprints do the job best. In just one week teams develop a shared understanding of the problem, they create as many different solutions as possible, a decider who has been part of the process from day one decides which concepts get tested. The team prototypes the concepts and tests them with actual users. That’s it. Fast and simple. No room for opinions, politics, meetings and reports.

If you liked this post, have a look at part two: #11 - #15 five more lessons learned when building or managing innovation hubs.

And of course, I’m here to help, get in touch and let’s talk through your innovation hub and how you can increase the productivity of your team.

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Check www.innovate-strategy.com for more information and get in touch sebastian@innovate-strategy.com.

Posted by Dr. Sebastian Vetter