Innovation Center Best Practices

March 22, 2016

Contributor: Jo Bennett

Why a dedicated innovation center can be the optimal setting to generate ideas.

Fidelity Investments is one of the largest privately owned businesses in the U.S., but if you have the innovator’s DNA, what’s most likely to make you green with envy about the company is its sandbox.

Fidelity Labs has a dedicated innovation center, with its own space, goals and staff, all focused on developing the company’s next big pushes in digital business. This is the incubator from which industry-leading apps, cool visualization technologies and more than 100 U.S. patents have been created.

“A dedicated physical innovation center can focus time, attention and resources on generating impactful new ideas,” said Jackie Fenn, vice president and Gartner Fellow, “and provide a safe place for those ideas to be developed and evaluated apart from the bureaucracy and short-term pressures of mainstream business.” Organizations as diverse as Ford Motor Company, with its Ford Research & Innovation Center, and Westfield Corp., with Westfield Labs, have run with this concept to fuel focused collaboration and creativity.

Ford is opening the Research and Innovation Center Palo Alto, Calif. to accelerate its development of technologies and experiments in connectivity, mobility, autonomous vehicles, customer experience and big data.

Ford Research and Innovation Center is strategically located in the Palo Alto, CA tech hub. Courtesy Ford Motor Company.

If you’ve thought about creating an innovation center with its own distinct, physical space, here are some best practices to keep in mind:

Determine high-impact, strategic goals

An innovation center with assigned staff separate from day-to-day operations can be a big investment. Start with a three- to nine-page innovation charter in hand that clarifies sponsorship, and defines roles and success measures.

Most innovation centers focus on high-impact, strategic opportunities, said Ms. Fenn. “Goals such as local and incremental innovation, and driving a culture of innovation more broadly within the rest of the company, are not usually primary goals for an innovation center.”

Goals are typically focused around projects, relationships and the physical space itself. For example, a project goal might be accelerating innovation in mobile to drive revenue and competitive advantage — which is a big focus at both Ford Research & Innovation Center and Westfield Labs. A relationship goal might be creating open innovation relationships with nearby academic institutions or technology partners (Ford, for example, has partnered with home automation company Nest, located nearby in Palo Alto, CA). A physical space goal might be having a demo showcase for branding and marketing.

Select location based on access to talent and ecosystems

If you could locate your innovation center anywhere in the world, where would that be? Some companies opt for global networks of interconnected centers — an approach that offers multicultural perspectives and 24/7 speed.

Tech talent hubs, like California’s Silicon Valley, Toronto, Canada, and London, offer great pools of tech talent — although attracting and retaining talent in these areas can be difficult and expensive. You might want to also consider establishing a joint innovation center on a university campus, where academic expertise and student expertise can help fuel your efforts. A side (though significant) benefit of a dedicated site, said Ms. Fenn: “It’s harder to close when business conditions wane.”

An off-site or stand-alone innovation center might not be financially or culturally feasible for your business. The upside in this situation is that having an innovation center that’s close to the strategic decision makers ensures that higher-ups, investors and customers can stay engaged with the fruits of your labors.

Gartner Innovation Centers The Westfield Labs team is focused on ways to create innovative retail experiences. Courtesy Westfield Labs.

The Westfield Labs team focuses on ways to create innovative retail experiences. Courtesy Westfield Labs.

Clarify internal and external relationships

How frequently have you learned about an innovation project only when it’s well into the development stages? When you establish the center of innovation’s goals and charters, and even after it goes live, clarify your center’s relationship with other pockets of innovation that might exist on the business side.

External partnerships might also be a part of your innovation center — say, with universities, as mentioned earlier, investment companies or startups. Once you’ve stepped down that path, advised Ms. Fenn, “You need to pay close attention to intellectual property (IP) issues.”

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