- Home Depot, IKEA, and Accenture are examples of major companies with innovation labs.
- The labs are designed to attract the brightest minds in technology, giving them a place to channel their entrepreneurial spirit with the security of working for an established organization.
- Companies benefit too, because they’re less likely to lose their top talent to the startup world.
- Alphabet, Google’s parent company, has a famous innovation lab called X.
“It’s like being an entrepreneur,” said Tomas Chamorro-Premuzic, “minus the risk.”
Chamorro-Premuzic, a psychology professor at Columbia University and the chief talent scientist at Manpower, was referring to “intrapreneurship.” It’s a general term for acting like a company founder, but within the confines of an established organization — typically in what’s called a corporate innovation lab. Think X,Alphabet’s research and development team that’s also been called a “moonshot factory.”
Across industries, intrapreneurial opportunities have grown relatively common. And while few are as glamorous as traditionalentrepreneurship can seem— you are, after all, working for The Man — there can be practical benefits for both individuals and organizations.
Specifically, Chamorro-Premuzic mentioned money. As a startup founder, you never know “if you’re going to be bankrupt in one or two years,” he said, adding, “The likely outcomes for founders or entrepreneurs are very bleak.” Working under the umbrella of a major corporation provides financial and job security, since you aren’t constantly hunting for funding.
The business case for intrapreneurship, according to Chamorro-Premuzic, is simply that companies aren’t losing their most driven and most talented people to the startup world. Instead, companies dangle the prospect of relative freedom and creativity and hope that aspiring entrepreneurs will snatch it up.
To be sure, intrapreneurship has its detractors. In 2017, Anderee Berngian listed on VentureBeat all the companies that have closed their innovation labs in the last few years, including Nordstrom, Microsoft, and Coca-Cola. One potential reason Berngian floats: “Google has millions to spare” on failed projects. “Most companies don’t.”
Business Insider took a look at three corporate innovation labs, the kinds of challenges they’re tackling, and the creatives they’re hoping to attract.
IKEA’s ‘global future living lab’ aims to head off impending disasters like food insecurity
One of the corporate innovation labs that’s received the most media attention is IKEA’s Space10. A “global future living lab” launched in Copenhagen in 2015, its creations include hydroponic farms and IKEA Place, an augmented-reality app that lets you see how furniture would look in your home.
“IKEA’s overall mission is to create a better everyday life,” said Simon Caspersen, cofounder of Space10. “We are basically set up to see how they can live up to that mission in new ways, that their current business is not delivering on.” That means tackling current and coming challenges such as food insecurity and loneliness in cities, Caspersen said.
Only 25 people have full-time jobs at Space10. The lab then hires project specialists for temporary stints, or “residencies,” as it calls them. Space10 also collaborates with different startups whose interests align with theirs.
Caspersen made the case for working at Space10 this way: “You are put together with some other incredible people that don’t necessarily share your background or expertise,” adding that “otherwise people often work in silos.” An engineer might be working alongside a farmer, for example.
Plus, there’s the exposure that a fledgling startup wouldn’t ordinarily receive. “We do a lot to really highlight and promote the people that are part of the journey,” Caspersen said.
Home Depot’s innovation lab is tapping into college students’ technological prowess
OrangeWorks is Home Depot’s innovation lab, located on the campus of the Georgia Institute of Technology in Atlanta. The goal is to evaluate emerging technologies that could change either the customer experience or corporate operations (the lab isn’t looking into products that would wind up on shelves).
The lab was launched in 2015, and since then it’s produced things like a virtual pallet stacker, which moves heavy items around the warehouse. Anthony Gregorio, a senior manager at the Innovation Center, described the technology that led to the pallet stacker as a “3D Tetris for shipping containers that allows us to be as efficient as we possibly can.”
Like Space10, OrangeWorks has a small core team: Just eight people, with varying technical skill sets, work there full time. About 60 Georgia Tech students also pitch in at OrangeWorks. Recently, Gregorio said, the team has been working on ways to use computer vision for inventory tracking and customer-service opportunities.
As for why someone would want to join OrangeWorks instead of starting something on their own, Gregorio said it’s all about the “size, scale, and resources that an enterprise like our own can provide.”
He used data as a prime example: “If somebody’s trying to do something in the data analytics space, readily available data that’ll help them build out their model isn’t always something that’s possible. … Something our size, we’re able to provide that.”
Accenture’s innovation hubs are helping their biggest clients avoid ‘disruption’ by getting creative
At Accenture, employees know that their clients — which include many Fortune 500 companies — are at constant risk of getting “disrupted” by new technology. That’s a major reason why Accenture is working on launching at least 14 innovation hubs in the US by 2020, putting some of the most creative minds in digital technology to work serving their clientele.
“One of the things our clients suffer from a little bit is they’re part of large corporations with a lot of cultural inertia,” said Bob Markham, managing director at Accenture Digital. “They don’t always get exposed to a lot of diversity of thought.”
Markham heads up the Chicago innovation hub, which was the first to launch, in 2016. It now has 600 full-time employees and is collaborating with four startups. But Markham said that it can be hard to attract top tech talent in the midwest.
What’s more, Markham said, “our large enterprises sometimes have a mentality that they have to do it themselves.” However, “oftentimes there are startups that have been thinking about the same problem.”
By collaborating with that startup, the organization can have a minimum viable product in four to eight weeks, as opposed to a year, and spend “hundreds of thousands of dollars less than if they were to try to do it on their own,” Markham said.
One example is the Washington, DC innovation hub’s work with Marriott, whose business has been disrupted by online booking agencies like Kayak and Expedia. Accenture invested in a venturing arm that could help Marriott find startups that were thinking bout “travel experiences,” such as a digital concierge.
In return, some startups receive mentoring, and all learn how to scale their product or service in a corporate environment.
Intrapreneurship isn’t for everyone
While a job at a corporate innovation lab might seem thrilling, Chamorro-Premuzic sounded a note of caution.
“Not everybody is well-suited for this. It’s really a minority of people who will thrive and enjoy and be good at this kind of job,” he said. “But I think there’s still an opportunity because many young people who decide to launch their own businesses could be employed by these largest corporations and basically do the same thing.”
This article was originally published on Business Insider. Copyright 2018.
4 ways to plan for the post-pandemic normal
When the crisis eases, we will have entered a new digital normal. Your strategies need to reflect this shift: Consider these factors as you plan for the longer term.
When I sat down to write this article, a follow-on to my previous article on common leadership oversights on the path to digital transformation, the coronavirus’s threat to global business had not reached the magnitude that we feel and see today. In a few short weeks, the pandemic has forced a new virtual work reality on businesses and entire operating models have been shifted – and in many cases, upended.
A business environment that is changing so dramatically and rapidly requires speed, innovation on the fly, and the need to scale thinking beyond anything we might have previously imagined. Now is not the time to back-burner digital initiatives but to ramp them up.
Now is not the time to back-burner digital initiatives but to ramp them up.
When the crisis eases, we will have entered a new digital normal. The strategies we use to run, change, and staff the business will need to reflect this shift. Consider the following factors as you plan for the longer term:
1. The right financials
Any business that isn’t digital by now likely won’t be a business for long. Learning to embrace and adjust is imperative. Continuing – or starting – a digital transformation will be more important than ever, and you’ll need to rethink your business’ capital allocation strategies for digital initiatives and the staffing that supports them.
To figure this out, become best friends with your finance team and think for both the short- and long-term. In the current climate, it can be easy to be either too short-sighted or too far-sighted, but you need to plan for the next week, month, quarter, year, three and five years.
Become best friends with your finance team and think for both the short- and long-term.
Consider how your company may bounce back from the pandemic when stay-at-home orders are lifted, kids go back to school, and consumers begin to mobilize again: We will have entered an entirely different digital world, with new digital expectations from consumers. Is there potential for a rapid and significant surge, followed by a normalization? Will you be facing a slow rise? Digital transformation funds need to be allocated to react appropriately to these various scenarios; staffing discussions should follow based on these decisions.
2. The right tools
It is likely that at least some of your employees will remain virtual, even when the majority can get back into the office. How will you support them? You may have sacrificed some tools or technologies in your move to quickly get employees out of your building and into their homes; you may have also overpaid for the sake of quick deployment.
You’ll need to rework your strategy for the long term. This could include better or more consistent access to networks and servers, the capacity to host formal business meetings online, new portable equipment, virtual collaboration and communication software, and more.
For many, this will require working with your corporate legal team to change their thinking. Where they may have once been risk-averse for the sake of the business, they will now need to take smart risks, also for the take of the business. State your case, find common ground, and move forward.
In some particularly dire situations, you may even need to become comfortable with making decisions first and asking for permission later.
3. The right staffing
You’ll need to continue to make smart staffing decisions – quickly. You likely have three types of talent available:
- Employees who are great at running the business
- Employees who are hungry for more
- New talent that may not yet exist in your business but needs to be brought in
Unfortunately, this global crisis may have created gaps in your workforce.
Identify the individuals in the first two groups and work with your talent management team to assess whether you need to advance digital investments previously planned for. Do these individuals have the right type of skills for their teams? Are they collaborative and communicative? IT cannot work in a silo, and team members need to be able to communicate what they are doing and why, and be clear on how their actions are aligned to larger goals.
When you’ve completed this review, identify the additional skills you will need for the future. This might include teams familiar with building out cloud deployments or working with microservices, etc. Push the rest of your leadership team to break through capital allocation constraints to bring in new employees who not only have the right experience but also can quickly teach your existing teams on new tools organically.
4. The right brand permission
As you work through your accelerated digital transformation, you’ll start to think about your business as a truly digital brand. In fact, you might already think so, simply because you’ve been able to get your staff up and running remotely.
But is this the perception all your stakeholders have? According to the Yale School of Management, “Brand permission defines the limits of customers’ willingness to accept a familiar brand name in new marketplace situations.” For example, you can’t simply say, “We are digital now, world!” and expect your market to immediately accept that if you haven’t been digital historically. You need to earn this right.
You can’t simply say, “We are digital now, world!” You need to earn this right.
Brand permission is something you and the rest of the company will need to work on – largely focused on delivering useful and impactful digital products and services – in order to attract the new talent you need. Start thinking about this now.
The global pandemic has thrown us into an entirely new world. Business leaders can no longer rest on their laurels and, certainly, can no longer put off or draw out a digital transformation. Making the right decisions now will help to ensure your business is positioned well when this crisis passes.
As Chief Digital Officer of Agero, Bernie Gracy brings more than 30 years of technology experience helping drive new product/platform introduction, client delivery, and the establishment of new software-enabled business models.
In his role, Gracy is responsible for all aspects of product and technology development, architecture, infrastructure, and innovation for a rapidly evolving ecosystem powered by digital, mobile, the cloud, location-based services, and IoT.
Five key trends shaping the application landscape
According to application services/application delivery company F5 Networks, 98% of organizations depend on applications to run or support their business — hardly surprising considering that most organizations have some version of a digital transformation plan.
In their new 2020 State of Application Services Report, F5 has found that most organizations have entered the second phase of DX, defined as the integration of automated tasks, “and taking advantage of cloud-native infrastructures to scale the process with orchestration.”
As Lori MacVittie, Principal Technical Evangelist, Office of the CTO at F5 Networks explains in a blog post about the rise of cloud-native architectures, the average enterprise app portfolio is now at 15% modern, microservices-based applications.
“That’s now more than the stalwart 11% of monolithic / mainframe-hosted applications,” she adds. “Considering reports of extreme backlogs for new applications in every industry, that modern apps have consumed such a significant percentage of the corporate portfolio is nothing short of impressive.”
Based on a global survey of nearly 2,600 senior leaders from various industries, company sizes, and roles, F5’s report outlines five key findings on the trends shaping the application landscape, “and how organizations around the world are transforming to meet the ever-changing demands of the digital economy.”
1. 80% of organizations are executing on digital transformation—with increasing emphasis on accelerating speed to market.
As organizations work to scale their DX efforts via a digital footprint with cloud, automation, and containers, “it is time to manage the application portfolio like the business asset it is.”
“Organizations able to harness the application (and API) data and insights generated will be rewarded with significant business value.”
2. 87% of organizations are multi-cloud and most still struggle with security.
27% of respondents reported that they will have more than half of their applications in the cloud by the end of 2020.
But despite the crucial importance of applications to business strategy, “organizations are much less confident in their ability to withstand an application-layer attack in the public cloud versus in an on-premises data center.”
When F5 asked how organizations decided which cloud is best for their applications, 41% responded that it was on a “case-by-case, per application” basis — an important strategy, given the uniqueness of each application and the purpose it serves for the business.
“It is imperative to have application services that span multiple architectures and multiple infrastructures,” outlines the report, “to ensure consistent (and cost-effective) performance, security, and operability across the application portfolio.”
3. 73% of organizations are automating network operations to boost efficiency.
Process optimization is a key motivation for DX efforts, which makes it unsurprising that most organizations are automating their network operations. The goal? Consistent automation across key pipeline components: app infrastructure, app services, network, and security.
“Despite the fact that network automation continues to rise, we are still a long way from the continuous deployment model necessary for business to really take advantage of digital transformation and expand beyond optimization of processes to competitive advantage in the marketplace.”
Respondents report that the most frequent obstacles to continuous deployment are “a lack of necessary skill sets, challenges integrating toolsets across vendors and devices, and budget for new tools.”
4. 69% of organizations are using 10 or more application services.
With the maturation and scaling of cloud-and container-native application architectures, “more organizations are deploying related app services, such as Ingress control and service discovery, both on premises and in the public cloud.”
One of the most widely deployed application services are those largely dealing with corporate and per-application security. “For the third year running, respondents told us by a wide margin (over 30 percentage points) that the worst thing they could do is deploy an app without security services,” details the report.
5. 63% of organizations still place primary responsibility for app services with IT operations, with more than half moving to DevOps-inspired teams.
“It’s also no surprise to find that as organizations transform from single-function to modern ops-oriented team structures,” adds the report, “responsibility begins to shift from IT operations and NetOps to SecOps and DevOps.”
One reason why? The shift of application services into modern architectures. “DevOps teams are intimately involved with the CI/CD pipeline, which, for cloud- and container-native apps, includes a growing portfolio of application services such as ingress control, service mesh, service discovery, and good old-fashioned load balancing.”
DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.
Digitized and digital: Two sides of the digital transformation coin
According to a research brief out of MIT, thriving in the digital age means undergoing two distinct transformations: Digitization, i.e. the incorporation of digital technology into core operations like accounting and invoicing, and becoming digital — “developing a digital platform for the company’s digital offerings.”
While both of these require companies to embrace emerging technologies, these present two distinct challenges, each with a differing set of rules and strategies. As explained by Sara Brown from the MIT Sloan School of Management, “Becoming digitized relies on traditional business methods. Becoming digital requires breaking old rules and embracing new thinking.”
Digitization relies on the company’s operational backbone, which supports core operations — i.e. how a company delivers goods and services, maintains its books of record, and completes essential back office processes, explains the research brief. Traditionally, base technologies for these were ERPs, CRMs, and core banking engines. Today, though, it’s likely software-as-a-service (SaaS).
At the same time, becoming digital means creating a digital platform — “a foundation for a company’s digital offerings and their rapid innovation.” Creating speed and innovation, “this platform, a combination of different software components that can link with partners and connect with customers, enables a company to quickly develop and add new digital offerings, and targets revenue growth,” explains Brown.
When it comes to managing both sides of this digital coin, decision-makers must manage leadership, operational, and cultural differences, Brown says:
Leadership: For digitization, leadership is firmly in place, making clear decisions, outlining processes and standards, and ensuring adoption success.
For a digital platform, however, top-down decision making stands in the way of success. Trusted teams are in the driver’s seat, innovating and implementing new ideas. It’s up to management to define an overall digital vision.
Operational: “Changes to the operational backbone can be planned and evaluated using traditional methods like metrics and customer satisfaction,” writes Brown. On the digital platform side, these methods only result in frustration.
Cultural: Digitization isn’t changing the fundamental place of the operational backbone, MIT’s research found. A digital platform, however, “means radical changes in how decisions are made and work gets done. This can be uncomfortable for people at every level.”
When it comes to actually managing these two different teams, MIT researchers suggest these three actions:
Keep ‘em separated: Simultaneous management of digitization and digital means clearly distinguishing their separate responsibilities, says the research brief. Examples of companies that have taken this approach include Schneider Electric, Royal Philips, and Toyota. In another example, one organization’s operational backbone was managed by the CIO, with a Chief Digital Officer taking the lead on the digital platform.
Funding should also be separate. As the researchers outline, “People responsible for digitization can better pursue operational excellence when the operational backbone receives consistent investment, year after year, at the enterprise level.” Meanwhile, funding for short-term digital innovation “experiments” can be easily upped or decreased, depending on outcomes.
It’s important, however, to keep the overall shared vision in mind, explains tech specialist and Tech Wire Asia editor Soumik Roy, for TechHQ. Leaders might feel that separate teams are a waste of resources, he writes, “because ultimately, the business needs its digital initiatives to converge — like its data, analytics, and platforms.” But in reality, separate teams can optimize DX efforts, but only if a shared vision of the organization’s future is kept top of mind: “Each team, working on their own side of improvements, can make contributions that help move closer to the end state. In practice, this is often more productive as well.”
Rule breaking: Inherent in digital innovation is breaking old rules and making new ones, the researchers found — from subverting budgets processes to guarantee resources to bypass CRM approaches, among other challenges.
Rule breaking ends up being manageable because it’s relatively contained to a small team that’s experimenting, though it’s crucial digital teams have sign-off and ongoing support from senior leadership.
New leadership: “Not all people who have successfully led traditional businesses are well-suited to digital business leadership,” says the brief. “The idea of breaking rules to identify what works may feel terribly unnerving for some— even when they have been encouraged to experiment.”
If someone in a leadership position isn’t comfortable with creating new rules, they explain, coaching could be implemented to help guide them in the right direction. Alternatively, there is likely plenty of new talent that is ready to implement a shift.
DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.