Innovation Labs: disruption, and new business models (2/4)

Innovation labs or rapid innovation centers are developing at a fast pace. Hereafter, we prolongate the previous review of Innovation Labs, with an industry point of view.

Each archetype can inspire the managers in charge of creating an innovation lab, and arm them to compose their own recipe for success.

4 type of Innovation Labs from an industry perspective

Sharing the point of view from the man on the field with scholar research conducted by Pierre Foullon, an enlightened student at Dauphine and Telecom Paristech Master IREN, we’ve come across 4 types of innovation labs, sorted on specific target criteria:

1. Disruptive lab searchs for new business models;
2. Rapid innovation lab looks for agility, and speed;
3. Open innovation lab aims at cooperation;
4. Innovation culture lab propagates a culture of audacity across the company.

Building on the sharp paper completed by Pierre Foullon for his research, let’s dig in into this typology, with some illustrative corporates for each type:

1) Disruptive Labs

Disruption combines a breakthrough business model with a gap in knowledge: through revisited value proposition, and original “value network”,  it induces a change in use and consumption habits. One of the most famous breakthroughs is the iPhone which brought Apple company at the forefront of mobile market. Nespresso, Swatch, Sony radio transistors, Nitendo Wii, digital photography versus Kodak, are other famous examples.

A disruptive lab aims at snorting disruption, and bringing its company ahead of it, or  by anticipating disruptors threats as well. Thus it fights to avoid Christensen’s dilemma: “… many companies in the past have focused their attention on meeting customer needs in the present by focusing on “cash cow” products in the BCG matrix. By placing too much emphasis on the need to meet customers’ present requirements, they are not anticipating future needs and their presence is declining in the markets. One of the most striking and probably the most famous example remains Kodak and the arrival of digital photography.”

Disruptive innovation centers are therefore present in companies whose priority is to renew their markets, and position themselves as leaders with creative business models.

Below are some examples of disruptive innovation centers:

A) Kamet is a startups studio dedicated to the creation of disruptive insurance companies. This incubator was created by AXA Assurances in 2015. Its objective is “to imagine, initiate, launch, and escort several disruptive InsurTech projects”. This creation followed the arrival of the digital revolution and the processing of data, that threat to disrupt the insurance value chain.

Stéphane Guinet, Kamet’s founder, presents Kamet as a startup that builds startups. Kamet has developed a specific process to develop new business models: every 6 months, it unearths 40 ideas for new businesses, selects 8 of them, and staffs creative projects with seasoned entrepreneurs; following preliminary prototypes, 4 ventures are selected to be incubated over one year, benefitting from the agility of the studio, while having at their disposal AXA’s know-how and expertise throughout the world.

First Kamet seeds are:

1. Giving access to best French medical doctors to expats through videoconferencing (Qare);
2. Offering drivers to replace their tires, collecting their vehicle at the office (Fixter, the UBER of car maintenance, funded by AXA with m€ 6);
3. Reinventing occupational health-care with data (Padoa funded by AXA with m€ 5).

B) Created in 2012, Breakthrough Innovation Group (BIG) of Pernod Ricard is a team of 10 people based in Paris, and headed by Alain Dufossé, BIG’s Managing Founder and Director. The group’s objective is to shake up usage by developing new products and services that will radically change and improve the consumer experience: BIG would work at inventing conviviality’s future.

BIG disruptive innovation center is based on Blue Ocean strategy,  capturing new demand in an uncontested strategic space. BIG has scoped out 6 ‘opportunities platforms’, incorporating societal changes like feminization, end of traditional nuclear family, individuals living on their own, especially women, expenses for amazing entertainment, intense social life online and offline, and how it impacts Pernod’s activities: thus, the fact that women prefer wine to strong liquor, because of wine’s sophisticated smell and transparency, correlated to their growing position in society, is likely to result in a negative impact for Pernod-Ricard traditional alcohol business.

One of the first projects is the Gutenberg project, a 2.0 cocktail bar consisting of an elegant library of “container books”: each of them is holding a sealed bottle of spirits, all connected to a service platform which provides a whole range of tutorials about mixology (cocktail recipes, personalised offers, etc.), and automatically triggers refuel according to the container level.

C) Google X, the “Moonshot Factory”, is a center of breakthrough innovation, and more specifically breakthrough technologies. “The projects target huge problems, and invent and launch “moonshot” technologies with a view to make the world a radically better place.” explains Astro Teller, founder of Google X. X is a team of inventors and entrepreneurs from a wide variety of backgrounds. One of their most important principles is to run as fast as they can at all the hardest parts of a problem, and try to prove that something can’t be done: X actively embraces failure.

Among the projects graduated, we find the Self-Driving Car (Waymo), Smart Contact Lens, Loon project, Google Glass, Google Wing allowing delivery by drone.

D) The i-Lab is Air Liquide’s innovation laboratory. i-Lab has two main missions:

• Identifying disruptive innovations, representing threats or opportunities on core business, that challenge the ‘operational excellence’ mould; and then, refining market positioning accordingly, discussing strategic scenarios with business units;
• Detecting opportunities for new business, outside of mainstream activities, ‘the third horizon of innovation‘, involving completely new product/service and/or revisited business model.

Gregory Olocco, I-Lab founder at Air Liquide, explains how the i-Lab “combines a Think-Tank with a Corporate Garage approach”:

1. It maintains an active watch to identify and understand new usages. It evaluates the impact that key social trends may have on the future behavior of the end users and the associated value chains, and analyzes new organizational and technological trends;
2. The i-Lab brings together employees from diverse nationalities and educational backgrounds, ranking from anthropology and biology to design, science and other disciplines. Focusing on end-users usages, these intrapreneurs materialize ideas,  and carry out early-stage user tests with prototypes using cutting-edge equipment for 3D printing, laser cutting or digital modeling.

The i-Lab incubates the proofs of concept until maturity to validate the value created and then, supports their development outside the i-Lab by relying on the Group entities. Connected to innovation ecosystems, projects tackle issues like air quality, hand in hand with the Parisian incubator AirLab, or make medical oxygen accessible to small health posts and health centers in Africa with the Access Oxygen offering.

The place has its own rule and culture, a mix of:

• frugal innovation, and social innovation;
• entering the skin of a ‘big data’ start-up, and showing it could kill a current business;
• design skills, intrapreneur mindset, human dimension, cultural diversity;
• no fixed desks, a place to share, more than to work;
• going against the consensus view, speaking of usage and not IP, or tech.

Next episode