It sounds seductively simple: create a pleasant working atmosphere that promotes creativity, bring employees together and the next innovation is ready to go. Reality regularly shows that the creation and successful operation of an innovation hub is considerably more complex. Here, labs and hubs, which are the figureheads and beacons of a company's future orientation in its external presentation, are either closed again or they work unsuccessfully without structure, goal and direction.
Full speed ahead towards the future
In order not to lose touch in the race towards the future, many large companies have already set up one or more innovation labs. Examples include Telekom's T-Labs, the Daimler Fleetboard Innovation Hub or the SAP Innovation Center Network. However, a study by HTW Berlin (2018)[1]shows that of the top 1000 German companies identified by turnover and number of employees as well as position on the stock exchange, over 600 do not engage in any targeted innovation activities, while some big players have several. At that time, 142 innovation hubs were among the activities mentioned. Pressing questions that arise are: Why not more? Why have an innovation hub at all? And what is so difficult about it?
Sense and purpose of the innovation hub
Anyone who thinks about the future of their own company will inevitably come across terms like new work, agility and digitalisation after a short time or Google search. These are disruptions that are imminent - through increasing networking and artificial intelligence, through changes in the way work is viewed by those who do it and through the enormous competitive pressure that many companies feel - not without good reason. Only those who impose adaptation and flexibility as their corporate credo can be successful and, above all, remain successful. Most companies, however, lack a viable short- and long-term vision for the future. Their own R&D department can improve products and processes, but it cannot "rethink" them - it is too caught up in the corporate structure and culture. The options for generating real innovation are therefore either the purchase of new ideas through external expertise, for example in the form of start-ups, or the establishment of an own innovation hub. The former option can work, but it itself brings with it some problems that have already been touched on (in a professional article). Building an innovation hub is not an easy path either, but it can be overcome, if potential challenges are addressed proactively.
Three steps to success
The first step is to create a suitable infrastructure. Using existing premises is the least expensive way, but they often need to be adapted to enable successful and creative teamwork. If none are available, it is possible to rent, buy or rebuild them, but this usually involves considerable costs and takes time. Co-working spaces, which are now available in almost every major city, are a good alternative in this respect. Here, premises that are already adapted to the requirements can be rented by the week or month. When creating the infrastructure, the desired equipment is also important. There is a lot of leeway here and few dogmatically defined rules: Post-its and flipchart, whiteboard, walls that can be written on - each company can decide for itself here and should consider several options, as not everyone can develop their optimal potential under the same conditions. In order for the employees of a hub to be able to really break away from ingrained thought patterns and structures and to prevent potential future solutions from being undermined by "business-as-usual", a spatial separation from the parent company is advisable.
The following process step, the composition of the team, is often underestimated and not systematically implemented. On the one hand, it is relevant here that internal employees come together with external experts from different fields. The resulting diversity ensures interdisciplinary exchange and enables different perspectives on the respective problem. An illustration makes clear what the problem of a too homogeneous team is: If you put ten blacksmiths to a problem, each one will work on it with a hammer. Ten computer scientists would write a programme, ten engineers would develop a functional product without first considering the human being with his or her needs. Therefore, heterogeneity and discussion are needed. As in any good organisation, the individuals who work together in the hub should also be assigned roles such as project manager, communication manager, network manager. This is often forgotten, sometimes deliberately, because at first glance it restricts the degrees of freedom of the individual employees. In reality, however, it is the allocation of roles and the setting of goals that enable agile and creative work without complete chaos and with results. The goals can be both material and immaterial and do not always have to correspond to economic outcomes. Activating entrepreneurship as part of the corporate culture or defining a mission statement for the future can also serve as milestones.
In the third step, the Innovation Hub is sustainably positioned for the future. This requires the targeted development of processes and structures, for example to maintain communication with the parent company and to be able to update objectives. Long-term support must also be guaranteed by the parent company, both financially and in terms of the use of infrastructure and the channels that the company has (for example, customer relationships in order to be able to test MVPs).
Patience and the American way
Even though America is often perceived negatively in recent times, the attitude of Americans in business life is still remarkable: they are not afraid to fail, they literally provoke it. This culture of mistakes must also be promoted in German companies and minds, because without mistakes there can be no progress. Among other things, an Innovation Hub thrives on a high tolerance for mistakes. The mistakes made are analysed and guide future actions and behaviour. In iterative loops, projects are revised again and again until they are ready for the market - or can be abandoned because they are going nowhere. This requires not only great latitude, which must be guaranteed to the hub, but also a lot of patience. Just as in Hollywood every blockbuster refinances many failed films, so too every successful spin-off from the Hub will compensate for many failed projects. You could visualise it as follows: An Innovation Hub is like a gigantic dome with many small greenhouses underneath. Even with systematic care, not all plants in each of the greenhouses will be able to develop their potential. Some die or have to be removed with a heavy heart. Some, however, grow and grow until even the dome is barely big enough to accommodate them. These are transplanted to a new environment to prove their worth.
Not every idea or innovation that emerges in the hub can help the company or stand as the basis for a corporate startup, and many will fail. Those who are prepared to go down this path in full awareness of this nevertheless demonstrate entrepreneurial spirit and an orientation towards the future. Those who don't are in danger of missing the future - without realising it before it is too late.
Co-Authors: Robert Bauer, Christian Wewezow
Sources
Picture: ©pixabay/jarmoluk
[1] https://www.ifaf-berlin.de/fileadmin/docs/Projekte__Dokumente_und_Bilder_/TransBo/Innovationsaktivitaeten_Top-1000_Deutschland_IFAF-Projekt_TransBo.pdf