Journal / Strategy
How an innovation factory scales product breakthroughs
It is a seductive thought that the grass is always greener on the other side. Startups want the resources of large companies. Large companies want the agility of startups. Design agencies wish their clients would get out of the way.
The innovation factory model
In several positions at design agencies and large organisations, I worked within what might be called an innovation factory model: a dedicated structure within a larger organisation specifically set up to generate and test new product ideas at speed.
The appeal is obvious. You get some of the cultural conditions of a startup — small teams, fast iteration, permission to try things that might not work — while still having access to the distribution, brand, and capital of a large company.
The challenge is that the parent organisation will eventually want to know what it is getting for its investment. That tension is where most innovation programmes founder.
What makes the model work
The organisations where this model works tend to share a few structural commitments:
Clear mandate and protected time. Innovation teams cannot function if they are constantly pulled into delivery work. The separation has to be real and defended by leadership.
A translation layer. Someone has to be able to take outputs from the innovation team and explain them to the core business in terms it understands — ROI, risk, roadmap fit. Without that translation, ideas stay in the lab.
A defined path to scale. What happens when something works? If there is no clear answer to that question, innovation outputs accumulate in decks and prototypes that never become products.
Making your grass green
The grass-is-greener instinct is understandable, but it is not useful. Every structure has constraints. Every structure also has affordances that a different structure lacks.
The job is to understand what your structure makes possible — and build the habits and processes to take full advantage of it. That, more than any organisational model, is what separates teams that produce lasting innovation from those that produce interesting presentations. (You can find the full article on Pendo)
