PropertyLab - Why innovation labs fall short and why property needs more of them
Innovation labs are a safe space for companies to iterate on projects. For regulatory compliance within housing and property, such a lab might be the only means to address rigid approaches and shift the paradigm. Having said that, it's very hard to get it right. Let's see why.
Why does innovation fall short?
A recent McKinsey poll states that while executives globally are pushing for more innovation in their strategic growth, 94% of them aren't satisfied with their companies' innovation performance. Capgemini will tell you the same. Take a closer look and you'll find this hasn't fazed the likes of Walmart, Facebook or Starbucks. Look even closer and they're sprouting everywhere - particularly in financial services and healthcare.
Most labs get plagued with lack of business alignment or a fundamental disconnect from real customer needs. Others simply because they don't nail down key metrics at the start and get their innovation team's balance all wrong.
Then there's 'innovation theatre' issue, which can quickly turn the values of an innovation lab into more style than substance. Sometimes, it can be as simple as losing your way - or facing disalingment - when adhering to the principles of design thinking (these are often integral in transitioning a lab from one stage to the next:
Source: Innovation Lab Brings Design Thinking. Kara Yorio, SLJ
The Harvard Business Review (HBR) confirms that companies typically only end up realising 60% of the proposed value of their strategies due to issues they encounter in planning and execution. You'll see what I mean once you give this a quick watch -
So why does property need more innovation?
Property is in a unique place as it's still undergoing a much wider disruption. You can shun all the theatrical aspects of an innovation lab and get straight to the good stuff. It's like purpose-built innovation. Think of how Kodak, Yahoo and Blockbuster, in their myopic attachment to a core product and revenue stream, overlooked massive (albeit risky) potential and then left the scene.
Proptech might potentially shield the housing sector from some of this danger but there's an imminent need to address safety and compliance in social housing, which frankly doesn't benefit from the sector's outlook on budgets and the need for quality and efficiency in tenant services. This is a crucial time to nail innovation - for the sake of tenant safety, rising costs and the sector's future.
Why we're in good company with PropertyLab.
The early success of PropertyLab is a testament to what we have in common with other successful innovation labs - as IDEO will tell you. It's not a secret sauce, it's not a silver bullet. It's a careful mix of honing our intent (we don't want incremental, we want transformational) and focusing on a specific area (automating regulatory compliance). We're working with a team of leaders who wield deep industry knowledge and are armed with a blue-sky outlook. This vastly improves the odds of success. Then there's our PropertyLab team, to which there's a science.
The science of putting an innovation team together.
Passion is integral to innovation - but we also understand the importance of diversity in background, function and cognitive style. It's a tough team balance to crack - there's healthy tension - but such a mix for us facilitates good ideas amidst challenges.
We're also careful not to exclude wider teams from the lab. In much the same way as our cohort gets frequent programme updates (like this one), everyone in the organisation is informed on the vision for PropertyLab and how it will be used.
Thoughts on what property companies can do.
We often get asked - how does it work? Can it work for other property companies? From our learnings, we find that a strategic, goal-focused unit and the right innovation leaders can pull it off - even when there's no physical co-location of the lab's members.
In the days to come, we'll be sharing learnings from our first digital session with our PropertyLab cohort and some of the tools we use to collaborate virtually. We hope you find them useful in any future initiatives of your own.
If you found these insights useful and want to learn more about the exciting innovation coming out of PropertyLab, join our mailing list at email@example.com.