De-risking investment in innovation

In today’s competitive marketplace, firms are facing more short-term pressure than ever to maintain revenue parity, let alone demonstrate growth.

As a result, they are less willing to invest in fostering innovation. In fact, 80% of CEOs said they would decline to make an investment to fuel innovation if it meant missing one quarter of earnings results*. It is a common fear that focusing on innovation can lead to a lack of attention on current business activity and therefore have a detrimental effect on business as usual.

If we accept that innovation is inherently a good thing however, this is a paradox – organisations are too busy satisfying ever tougher day-to-day needs to invest in opening up the new opportunities that will provide the revenue and margin they need.

A key way to tackle this is to de-risk innovation investment by driving it from within the organisation. This ‘intrapreneurship’ is essentially a piece of alchemy - coming up with new ways of doing things, whether that be new products, new methods, or new experiences using existing resource and capability. As an added benefit, ideas from within often have a head start when navigating the internal processes required to move into implementation. There can be few better examples of this than at Google where employees are allotted up to 20% of their working time to focus on personal innovation projects. The approach has yielded a number of highly successful new products including Gmail, Google News and AdSense.

Nurturing innovation from within can also be a critical part of retention efforts. The employees most likely to be inspired by intrapreneurship opportunities are precisely those you need to drive growth and, ironically, are at the greatest risk of losing. These new paths to career fulfilment and opportunities to flex creative muscle have become a standard part of employee wish lists. Modern employers that recognise the importance of this and embrace the necessary shift will attract and retain the best talent. In a recent survey by IBM, 60% of CEOs agreed that creativity was the most important leadership skill in the workplace (above integrity and influence)*.

To cultivate innovation from within, organisations need to provide space and support for the generation, definition and development of ideas. One of the ways to do this is through the introduction of an intrapreneurial lab. At a basic level, this is the dedication of resource and capability to find creative solutions to agreed challenges from the workforce. A lab environment provides a business with the opportunity to identify and support innovators in nurturing and developing their ideas at pace, with rigour and guidance to ensure a progress to delivery.

With considered planning, it can also generate excitement among the participants and the wider audience to build enduring cultural change. An example of this is Microsoft Garage, where employees gather to work on projects that need not be related to their primary role. BMW has also been exploring this space with an intrapreneurial programme focused on identifying and delivering innovative customer engagement ideas.  

Of course, setting up a lab like this requires investment, but there are some fundamental steps that can ensure that investment offers the best chance of achieving desired outcomes. Moorhouse has developed a five-step approach to do this:

1. Set up 

To run an effective lab, dedicate time to establish a team and define scope and objectives. This involves integration with strategy, alignment to HR, detailed operating model design, role and responsibility definition, selection of subject matter experts and partners, planning, customer insight immersion and development of target challenges. Careful set up can help avoid what the Japanese call Chindogu (innovation that takes effort and attention but doesn’t solve a real problem). Alongside all this, engagement with senior leadership is essential to secure sponsorship and buy in, offering the best chance of success in the long term. 

After initial set up, the key task is to publicise the lab, letting everyone know what is going on through a bespoke engagement campaign. As this is the first impression many will have of the lab, it should be as compelling as possible. Context, background and how to get involved are all important content to cover, along with relevant timelines and expectations. A combination of physical and digital media activity that taps into intranet and collaboration tools is desirable. At this stage it’s also key to clarify any incentives available and to reinforce the fact that hierarchy doesn’t matter – a good idea doesn’t care who has it. In addition, multiple routes for participation should be established – it’s not just ideas, employees can input in other valuable ways, so communicate those too. 

2. Select and On-board

Selection metrics should relate back to the agreed business challenges and strategic objectives; for example, potential commercial opportunity or ability to realise. Selection can be done in a variety of ways but one robust and transparent method is a ‘pitch day’. Establish a panel with appropriate membership (considering the balance between internal representatives and external expertise), potential applicants can then pitch their ideas and the most promising selected for further development. Successful applicants should then receive a comprehensive induction and on-boarding to clarify ways of working and required commitment. From an engagement perspective, pitch days also offer a highly visible way to spread the word, creating key moments and content that can drive cultural change.

3. Incubation

This is about providing the internal and external support and stimulus to turn ideas into viable business propositions. Access to a network of innovators, ongoing coaching support for idea teams and inspiration sessions are all ways to maintain engagement and maximise outputs. Use of agile delivery is recommended to allow rapid movement from discovery and scoping to building out ideas through prototypes and testing. Specific checkpoints with sponsors and supporters are also encouraged. It’s important to keep pace at this stage, demo days and other stakeholder engagement can help to mitigate against loss of momentum.

4. Integration and Engagement 

The next step is the leadership review and selection of ideas to deliver to market. Ideally this would include recommendations on how to manage the anticipated change and detailed integration plans. Broad business support is critical to the success of lab outputs and this is where wider engagement pays dividends. Businesses where new ideas are visible and well supported by a network of champions provide a better environment to drive successful outcomes. Ensuring any incentives are delivered in a public way is also key to proving commitment.

5. Evaluation and Improvement

This step allows dedicated time to complete a review of lessons learnt and recommendations for the future of the lab (continuation and/or refinement). A handover and knowledge transfer should take place between existing and new lab members. It is very important that sufficient time is given to the evaluation of the intrapreneurial lab, to ensure it has delivered on the outcomes and objectives set out at the start.

In summary, if developed with rigour and commitment, intrapreneurial labs offer huge opportunity to deliver new value at reduced risk. They can provide a pipeline of exciting new products and experiences to attract and retain both customers and staff. In the rapid and dynamic markets most organisations deal with, this has become essential activity to drive new revenue and margin. If you don’t do it, someone else will. 

For more information on how to de-risk innovation investment and drive it from within your organisation, please contact James Easterbrook on or on +44 (0) 7802 698718.

* Rana Faroohar, Makers and Takers, pp.98


Media Enquiries
For more information please email


James Easterbrook Client Director