Unpacking the power of innovation centers
Innovation is usually inspired by a need to transform or change the way we do things. It’s why companies develop new products or aim to update an old process. Consequently, the need to stay relevant has propelled businesses to create innovation centers—a space for reinventing themselves so they stay ahead of the competition and at the leading edge of what their customers want.
To explore this concept further, Northeastern University thought leaders Dr. Raj Echambadi, Dunton Family Dean of the D’Amore-McKim School of Business, and Dr. Cheryl Richards, CEO and Regional Dean of the Charlotte campus, shared insights on the proliferation of innovation centers both globally and locally in Charlotte. Here are a few highlights from their Charlotte Business Journal podcast, “How Charlotte organizations use innovation centers to think differently.”
Can you conceptualize the concept of “innovation”? What are examples of innovation that we see in the world today?
Echambadi: Innovation is about executing ideas, not just being creative. When I think about innovation, it is not about generating new ideas alone. It could be about reconfiguring existing ideas in novel ways. For instance, think about Netflix. Netflix took what essentially was a DVD technology, that was not theirs, and coupled it with mail-order that we have been using in the U.S. for about 130 years. They combined the two in a novel business model that was completely different from rent a DVD that you had at a local store, which was popularized by Blockbuster.
How does that translate to the idea of “innovation centers” that are popping up in cities around the country?
Echambadi: Innovation happens to be the lifeblood of a company, so it is fairly important for them to be at the frontier. Since companies are fundamentally about executing their current business model successfully, one way companies become innovative is to utilize innovation centers. When you only focus on innovation, sometimes you can forget about the execution part. And sometimes innovation and execution coexisting together in the same building is also very difficult. So, for all these reasons, companies now try to use innovation centers as ways to push their innovations forward.
There are multiple types of innovation centers. You could have in-house innovation labs, where you carry out all operation functions from inception of an idea, to incubating the product, to prototyping in-house, etc. Everything is done internally within an organization. You could also partner with universities—we call this the “universities as anchors” model. You could run your own venture fund, providing startups with funding. Or you can do what I would call a consulting model, companies that help any other type of company with innovation or generating new ideas.
What are some of the benefits of having an innovation center within an organization?
Echambadi: For the corporate innovation center, sometimes known as innovation labs, companies use it to fundamentally reimagine the business. Think of a company like Amazon that started up as an e-retailer of books. They then became a retailer of all sorts of products, accommodating other merchants and sites. And now they’ve gone into Amazon Web Services, etc. They’ve had subsequent evolution in their business model that requires some sort of business re-imagination. What innovation centers do for companies is, instead of being locked into an execution mindset all the time and forget about innovation, it helps provide an outsider perspective.
Can you give us some examples of how organizations in the Charlotte area are utilizing innovation centers?
Richards: A recent case in point is Lowe’s Home Improvement and their announcement of locating their global technology center right in the heart of Charlotte. They selected a large metropolitan area for the reasons of attracting top talent. They know that young professionals are looking for other things outside of work. You also see Duke Energy’s innovation center in Optimist Park, which is right along a rail line. So access to transit, to get the workforce there, is important. And EY is really unique in particular. They opened up in South End about a year ago and put in what they call “wave space” with technology labs, so people can explore and innovate there. It has collaborative workspaces where individuals from different functional units can come together, and it has a design studio—an entire client experience center. And so, there’s opportunities to infuse innovation labs or centers regardless of the functional duties that individuals are performing. That’s actually where the value comes in—that cross-pollination of ideas and breaking down physical workspace barriers or formal organizational structures so that employees can really operate with more nimbleness and creativity.
In this podcast, our thought leaders offer additional observations on innovation, including new technology that is used to advance innovation and how to sustain innovation centers over the long term. You can listen to the full interview here.