Many of our companies are well versed in the so-called “Red Queen Effect”; namely, it is no longer sufficient to run as fast as in years gone by in order to remain competitive. In today’s new business landscape, we need to speed things up. In what you may ask? In understanding the real needs of our clients, in opening up new business opportunities, in developing and launching new products and services, in incorporating emerging technologies, as well as in our knowledge of new consumers and territories, etc.
So, then, what new tools have we available to us to accelerate innovation? One such cutting edge tool is the “Living Lab”, an ecosystem designed to accelerate business innovation. The concept emerged as a research methodology to test, validate, create prototypes and refine complex solutions in real environments. Today, having evolved and adapted, it can bring differential advantages to business innovation, including the following:
- First-hand knowledge of consumers and needs. The client or end user of our products and services becomes the protagonist. It is not just some slogan, but rather the central axis of the methodology: Do we really know our clients’ needs and preferences? For example, a well-known automobile manufacturer ran a survey of their consumers regarding their high-end 4WD vehicles. When questioned about how these cars are used the majority of respondents replied that the vehicles are for accessing steep terrain and mountain excursions. Unconvinced by these findings, the manufacturer changed their research method and began observing their clients in their day-to-day affairs. The ‘Eureka’ moment came when they realised that 80% of owners used their vehicle mainly to run their kids to and from school. In a “Living Lab”, the client is included, actively participating in all phases of the innovation process. It helps us to come up with new ideas and detect client needs by reliable means of observation techniques, among other tools, in the design and development of new solutions and their final validation.
- Meeting point: As H. Chesbrough states, “It’s always more complicated to make your R&D department the best in the world than to make the world your R&D department”. The core philosophy of the “Living Lab” concept is based on inviting relevant players to participate actively in our process of innovation. Our companies are becoming porous in order to grasp and transmit ideas, knowledge, capacities and technologies allowing us to develop new products and services. We are creating a transversal space of innovation where our clients, suppliers, partners, and even competitors all play an active role. As a result, the “established” walls of our organisations come crashing down.
- Acceleration of the innovation process: We cannot deny the evidence; innovation is expensive and it fails to work on a consistent basis. Equipping our company with a “Living Lab” ecosystem will allow us to structure and systemise our business processes of innovation with a view to better identifying the problems we wish to resolve (i.e. “why we innovate”). It also allows us to redefine our internal organisation for innovation (teams and roles); minimise risks and costs; select and finance innovation projects; design evaluation and learning systems based on trial and error, and validate new developments in real or simulated environments, etc.
The “Living Lab” is beginning to be a common tool of innovation acceleration in such sectors as ICTs, energy, consumer products, health or mobility. Nokia, IBM and Media Markt are examples of leading companies using this system. Could it be a new response to the competitive needs of the business world?