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Breaking the mold with customer experience innovation labs

Posted October 8, 2019
 small people characters develop creative business idea. Isometric big light bulb as metaphor idea

Walmart has one, so does Wells Fargo, Verizon and the Mayo Clinic. Innovation labs (or ‘hubs’) are being adopted by companies across industries, and for good reason. In a marketplace that is rapidly changing, organizations need to stay ahead of the curve if they want to thrive, let alone survive. Innovation has become a key differentiator among leading organizations and labs are a way for companies to explore, test and launch new ideas and technologies.

More than just a physical workspace, the heart of an innovation lab is a dedicated team working to create new products, ideas, services and solutions. Labs reflect a corporate mindset and culture that prioritizes transformation and a willingness to dedicate resources for continuous evolution. “We’re always thinking in terms of what’s going to be the next big thing that’s going to happen,” says Mohiuddin Inamdar, lab director, TELUS International Digital Solutions.

It’s this pursuit of the ‘never been done before’ that really defines an innovation lab, but there are other factors that help ensure it’s a successful business endeavor that delivers on its ultimate promise of a better customer experience.

Why an innovation lab?

When you think about innovation, there are a number of companies that automatically come to mind — Google being one of them. The organization has been built upon a cultural foundation that prioritizes and cultivates new ideas and ways of thinking.

“We encourage our employees, in addition to their regular projects, to spend 20% of their time working on what they think will most benefit Google,” wrote Sergey Brin and Larry Page in their 2004 letter to potential investors. “This empowers them to be more creative and innovative. Many of our significant advances have happened in this manner.”

You can think of innovation labs as a more structured approach to Google’s 20% rule. The key difference being measurable accountability. Successful innovation labs require business alignment, strategic planning and KPIs. Without them, an innovation lab risks becoming a corporate gimmick instead of the birthplace of the next generation of products and services.

As Simone Bhan Ahuja puts it in an article for the Harvard Business Review: “Leaders need to think through the implications of opening a lab, decide how it will complement or disrupt current and future business, and do the difficult work of determining how new ideas will be executed.”

“Innovation cannot be sustained, however, without a holistic approach to metrics, one that includes focused organizational capabilities as well as leadership metrics that support the behaviors required to build a culture of innovation,” Ahuja goes on to say.

Innovation labs in action

When an innovation lab has the right structure and governance model in place, it can produce significant outcomes for the company.

Take for example, Aviva, the 320 year-old multinational insurance company. In an industry not typically known for digital disruption, Aviva’s innovation lab - known as the “Digital Garage” - has produced a number of new capabilities for the company. These include co-branded insurance products, a new quoting portal, a redesigned website and an Amazon Alexa skill with auto quotes and some standard questions answered through voice. Additionally, the Digital Garage has helped position Aviva as an employer of choice and serves as an attractive feature for potential partners.

Aviva is not alone in their innovation lab success. Have you ever wanted an exercise bike, right in your hotel room? Or the ability to charge your phone while drinking a margarita at the hotel bar? These are just a few of the ideas tested at Hilton’s Innovation Gallery.

Designed to showcase its ‘culture of creativity,’ Hilton’s Innovation Gallery serves as an incubator to help fast track improvements to the guest experience. In fact, the example of having an exercise bike right in your room has actually been rolled out in a handful of hotel rooms at Hilton’s McLean and Parc 55 locations, with more on the way. Dubbed ‘five feet to fitness,’ each specified room has an indoor bike, gym rack, weights, mats and access to 200 exercise tutorials.

Innovation as a service

Not all innovation labs are conducted in house, however. A culture shift towards prioritizing innovation can be challenging. Fortunately, working with a partner with an innovation lab can provide all the same benefits, without the heavy internal and organizational lift.

In fact, having an external perspective can be an added incentive to investing in this approach, bringing to light new ways of thinking. “Our clients often have their own preconceived thoughts and prejudices that can hinder the innovation process,” says TELUS International’s Inamdar. “We’re able to come at a problem with a fresh way of thinking and unique knowledge to apply.”

For example, a telecom client was experiencing errors in their cable program guide. A customer would see the Downton Abbey title, but the actual channel would be showing a Jim Carrey movie, resulting in frustrated viewers and PVR chaos. TELUS International Digital Solutions’ innovation lab was able to produce a custom solution to solve the metadata problem and ensure Dame Maggie Smith was never mistaken for Ace Ventura again.

In addition to solving problems, the innovation lab is continuously working to reimagine new technology solutions to improve the customer experience. “By experimenting in our own lab, we’re able to put the solution through the ringer, ensuring it’s tried and tested against multiple variables and possibilities,” says Inamdar. “The final self-sustaining solution is then ready for an effortless implementation by the client.”

Digital transformation must be a priority for companies looking to compete in the modern age. As the famous expression goes, organizations need to “evolve, or die.” With a focus on the new, the next and the never been done before, the benefits of an innovation lab - whether created internally or established with an external partner - can help ensure your business doesn’t go the way of the dinosaurs.

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