Why this twice-acquired entrepreneur says an innovation lab is a terrible idea if you actually want innovation (and what he does instead)
In a fast-paced world of change, many companies don’t know how to keep up or worry new innovations will push them out of business. In response, companies big and small created the idea of the innovation lab – a sandbox environment where brilliant minds can test new ideas that will, if successful, integrate into the core business offering. But that’s not a good idea if you actually want innovation, according to one entrepreneur that works with companies on innovation projects.
Paul Crowe’s company Intersect, formerly BNotions, got acquired twice. Along the way, Crow learned a thing or two about innovation. Symbility Solutions acquired his small development shop. CoreLogic then acquired Symbility and Intersect. Each time, Intersect retained some independence with clients but also became a center-of-excellence for the acquirer. Now, two acquisitions later and scaling Intersect’s innovation strategy, Crowe is convinced that creating an innovation lab – whether using a hired group of people or an acquired company’s employees – is a horrible idea if you actually want to create innovation.
The BNotions to Intersect story
Intersect started through division. BNotions, the initial company that became Intersect, spun out a startup that went on to raise some capital. Some partners from BNotions went to that startup while others, Crowe included, stayed focused on the services business BNotions had built up.
“With that kind of division of the leadership team, there was a good opportunity to put the business up for sale and sell it,” said Crowe. “We were looking for someone who valued us.”
The business sold in 2015 to Symbility, an insurance services company, that “very much needed” the services BNotions was offering. The company became Intersect, maintained some client autonomy, but also added Symbility as an internal client. This experience showed Crowe how to innovate publicly while building for an internal client, lessons that he would carry with him when he later founded the Intrapreneur Alliance.
CoreLogic, a global data analytics company, acquired Symbility in late 2018. Intersect maintained the same independence it had within the Symbility umbrella, but now counts CoreLogic as an internal client.
The accidental innovation lab
With Intersect’s history, Crowe sees his biggest challenge as keeping culture evolving. Not only is the company growing – merging three small offices to one big one and adding headcount – but the dynamics of the company have changed multiple times. Even Crowe himself faced the change from entrepreneur to intrapreneur when the company he founded got acquired.
“We were 38 people when we were acquired by Symbility,” explained Crowe. “And the culture that got us there isn’t the culture that’s going to get us to 200 or 500 [people]. I pay attention to the types of people that are adding a lot of value to our company and the people who we’re not attracting – I want to know why. Because as you get bigger, the easy way out is usually the bad way out.”
The easy way out, for Crowe, is finishing something quickly just to tick it off a list instead of doing it in the right way for your company’s ethos. He gave the example of copying a standard policy instead of crafting one that fits your work style perfectly, but another comparison links to the idea of corporate innovation labs.
He wants to hire other intrapreneurs just like him, but said that putting them in an innovation lab would get them nowhere.
Why an innovation lab is a bad idea
When it comes to cultivating intrapreneurship – bringing entrepreneurial creativity into a company – Crowe said that one of the worst things you can do is “segregating [creative people] into labs, factories, or whatever you call it.” Put bluntly, when you do segregate employees, “you’re setting them up for failure.”
He said that clients from Intersect often come to them after failing a few times. He noticed the failure is often when they are working with an ‘innovation lab’ or outside team.
Segregating the team, said Crowe, means that innovation can’t actually permeate the whole organization. When the innovation lab employees have a great product idea that senior leaders love, the CEO directs them to implement it. In theory, this is a good idea. The reality, though, is often that the new product is so unique that current corporate systems can’t handle it. The employees not in the ‘innovation lab’ end up pushing back with legitimate concerns. Suddenly, though, they make themselves look anti-innovation by accident. They become the ‘traditional’ ones who can’t innovate.
“You set up the rest of the organization to be the bad guy,” said Crowe. “You set up the rest of the organization to move slow.”
Intrapreneurs: the secret weapon for innovation without the innovation lab
Getting real innovation requires people. For Crowe, that means finding intrapreneurs.
“I think a true intrapreneur is someone who looks at all the [corporate] structure that exists and, instead of seeing it as an impediment, looks at how they can convince the company to move fast and take risks,” said Crowe. “If you’re separated in another office or another building, you’re not going to have that understanding.”
Thinking of an intrapreneur as someone with the skills to navigate corporate structure, Crowe believes that organizations can do a lot more to support innovation through intrapreneurship, no innovation lab required.
Connect intrapreneurs with the organization
“Take those intrapreneurs and drop them into the company,” said Crowe. “Position them in desks within the organization and give them access to all the other people versus separating them completely.”
This short-term frustration, where creative people have to learn to navigate old ways of doing things, is necessary for long-term gain, said Crowe. Thinking around obstacles instead of getting out of the building entirely may take a little more time, but it brings the entire organization along for the ride. That alone is worth the pain.
Support the best ideas
If you see someone with a fantastic idea that could change the organization, don’t recommend starting an innovation lab. Promote their ideas.
According to Crowe, the best way to do this is internal advocacy for the ideas.
“A good intrapreneur knows their weaknesses – they don’t try to do everything,” said Crowe. “They need to be part of the process. To utilize their strengths and find allies in every division of the company. If you’re outside the office, you’re not finding allies.”
When you advocate internally for an idea, it doesn’t mean you take control over it or executing the whole thing. You may play a part, or you may only find the right people then step back. The key is that advocacy brings the idea to life.
From intrapreneur to entrepreneur
Occasionally, someone will come with an idea that could transform the whole company. Other times, the ideas have a ton of potential but don’t quite fit with the corporate ethos. In the second case, Crowe said it’s better to spin out the idea into its own company.
“If something is truly transformational for the company, it’s not going to be easy to push forward,” Crowe continued. “That’s when you need to spin it out. Give the team some equity and treat it like a startup. Don’t sell it to the big company. You can separate them and incubate the team from intrapreneur to entrepreneur.”
Going from intrapreneur employee to entrepreneur is difficult, but it’s a pathway that offers more career benefits of intrapreneurship. Over time, these brilliant ideas-turned-startups become a magnet for top talent.
Intrapreneurs connect, innovation labs remove
After setting up the initial culture at Intersect, Crowe is looking at what’s next: speed and quality of projects and people. He’s thinking of how to attract top talent, build a fun work environment, and profit. For him, that means multiple cool projects with the right clients.
As he continues to build Intersect, he’s looking out for the same traits he hires for in clients. They are the people who bring great ideas to the table and know how to make innovation fit within corporate structure. Those people, for Crowe, are everyone he wants to work with.