Developing innovation through a lab

I recently provided feedback on the construction of a lab at the bank Crédit du Nord, which was an opportunity to share our expertise in the area of innovation. Innovation is now a core part of all corporate strategies.

As Gary Shapiro said at the last CES in Las Vegas, "every company today is, or needs to be a tech company", where innovation is a powerful performance driver in an increasingly competitive market.

What is innovation exactly?

Innovation has many definitions, concepts and approaches... I found one which speaks to me (I would encourage you to do the same and find your own definition) and, above all, helps me structure my thoughts.  

 

  Innovation is organised according to 4 types:

  • Incremental: pressure on projects/tasks/activities is so strong that the company turns to innovation as a priority to improve its teams' processes and productivity.
  • Adjacent: the company looks to save time and, therefore, directly integrates an existing product, service or technology into its offering via a buyout, partnership or recruitment.
  • Disruptive: this type of innovation destabilises the competition through the deployment of new technologies (very often produced by R&D) or new uses. It disrupts the market and makes the initiator the new standard setter.
  • Radical: this involves marketing a totally new product or service and, in doing so, creating a new market that does not address any existing problems or needs.

This division is of course very subjective and there are no clear boundaries between the different types of innovation. In terms of planning and impact in the field, the time required for these different types of innovation ranges from 1 to 5 years. In terms of the scope, the first two types (incremental and adjacent) are generally related to product or service innovation. Regarding disruptive innovation (the most sought after), the focus is more on technological innovation. Regarding the most radical and open type, the scope is extended to cover the global market (no more sector boundaries), and we speak of market innovation. Now that we've looked at some of the definitions of innovation, the question we need to ask ourselves is: What are we aiming to achieve through innovation? In order to be successful and create value, all innovation must contribute to the company's strategic objectives. This must be the starting point to build your innovation approach. It will guide you when choosing the type of innovation to pursue and the means to employ. In terms of means, you should identify or anticipate user needs, experiment with new technologies, uses and tools, in order to better understand them, and align everything to validate your innovation on a target market as early on as possible.  

 

 

This is where the three pillars of Design Thinking come in. This approach puts users at the centre of concerns, while making it possible to improve understanding of the usage context, expand the range of possibilities and rapidly test in real conditions. All of this contributes to the creation of a desirable, feasible and viable product!

A lab to give shape to your innovation approach!

Finally, to identify, experiment and validate, a lab is an excellent way to concretise your innovation approach. It promotes the development of ideas and concepts by providing the tools needed to put them into practice. It also encourages you to study the behaviours of users or consumers and find new solutions to get them to evolve. This naturally leads to the emergence of new markets to exploit. Finally, it makes it possible to jointly create innovations that are experimented directly with users. There are several types of lab available to you: This list is not exhaustive, but here are some of the labs I have had a chance to observe:  

R&D LABTest and validate emerging technologies E.g.: 'Le Lab by Cdiscount' FAB LABCreation of physical prototypes E.g.: The Leroy Merlin workshops
AGITATOR LABInternal facilitator, raising awareness of and acculturation to the innovation, and improving company processes E.g.: 'LeChaudron.io' (Crédit du Nord) DATA LABDevelop new products or services based on data collected and analysed E.g.: Airbus Skywise  
MONITORING LABTechnology & uses monitoring unit E.g.: 'L’Échangeur' (BNP Paribas) FORWARD-LOOKING LABFrom technology monitoring to prototyping to test uses E.g.: The SQLI Lab  

  The scope of these labs also varies:

  • Internal: a unit that brings together internal resources to stimulate innovation through synergy between the company's departments
  • External: integration of external skills/solutions (startups, partners, schools, etc.) to develop new products or services that will contribute to the company's objectives
  • Hybrid: a mix of internal and external profiles to both develop internal projects (entrepreneurship) and bring business skills to external stakeholders

  However, the same cross-cutting missions can be found in all of these various labs:

  • Give shape to an idea and turn it into a product
  • Speed up the maturation of an idea (often too cautiously for my taste)
  • Connect internal and external stakeholders
  • Acculturate employees to the innovation

 

And now, how do we build our lab?

There are no off-the-shelf solutions for this, but we should ask ourselves a few questions.

  • Design the lab's missions
    • What are the aims and target customers?
    • What is the right balance between technologies, uses and tools?
    • Which areas need to be researched?

Research areas are very important in order to scope activities related to monitoring and prototyping. This also affects budget and HR-related aspects when defining the skills and resources to be mobilised.

  • Define the organisational model
    • Which skills, work methods and governance approach to adopt?
    • How to mobilise the right resources?
    • How to ensure that the lab is integrated in the existing organisation?

Favour Agile & Lean-type work methods (Lean Startup, Design Sprint, etc.), which promote employee autonomy, learning through experimentation with users (Test & Learn), etc. Care should be taken when bringing the innovation into the existing organisation. The famous industrialisation phase should be integrated into the governance model very early on, as the full value of an innovation is realised only when it is deployed and activated.

  • Manage the investment
    • What kind of operational budget and roadmap?
    • Which management indicators?

Management indicators are essential in order to ensure that the clients trust the innovation and therefore adopt a long-term view in order to deliver the full potential value (2-3 years) By asking these questions, we can avoid some of the pitfalls and build on solid foundations, but should always remain vigilant. While they are set up in order to come up with disruptive solutions, labs often lose their essence because of hasty implementation, unclear objectives and the use of traditional management methods. To conclude, I would argue that a lab should be both an operational accelerator, for the construction of strategic roadmaps, and a means of stimulating innovative ideas and revealing their feasibility. Please don't hesitate to get in touch with us to discuss your Innovation Lab plans.  

I would like to thank Virginie Lacroix (Crédit du Nord) for giving us the opportunity (during the 'innovation meetings') to present our expertise and feedback on the construction of a lab. Thank you also to Julien Giraud (SQLI Managing Consultant) for organising this talk.