How to Make Innovation Labs Work

An app can look convincing until someone tries to use it on a construction site. Hans Lind points out a basic constraint: the intended user may be wearing gloves and unable to hold an iPhone while working. It is a small observation with large consequences for a team designing a service from a comfortable distance.

In this episode of Innovation Rockstars, Volvo Group's Director of Business Innovation and Foresight explains how his team connects exploration to customer operations and commercial development. The innovation lab needs more than good discovery methods. It needs internal partners, technical capabilities and a route from an early experiment into an existing business or a new venture. His account is especially useful for leaders trying to move beyond demonstrations that never become something customers can use.

Build the ability to test, and the relationships to continue

Lind describes the lab within Volvo Group Connected Solutions as combining business innovation, foresight and technical development. The team wanted its own capacity to build quickly, so it included capabilities such as architecture, user experience and software development alongside innovation managers and service designers.

Its people also came from different backgrounds. External recruits brought new perspectives and skills, while colleagues from inside Volvo contributed knowledge of the organization and relationships across its businesses. Lind sees both as necessary. A lab trying to introduce something new still needs to understand where that work could fit.

Connections to universities, accelerators and other partners added further perspectives. Yet the ability to look outward did not replace the need to spend time with internal business areas. Those conversations helped the lab understand their priorities and identify work they could undertake together.

Share the risk before asking someone to take ownership

The lab works through discovery, incubation and acceleration. Lind's emphasis is on what connects those stages. An internal discovery budget allows the team to explore areas the wider group may not yet have addressed.

As an opportunity develops, it looks for a business-area partner willing to join in. Lind describes a typical equal funding split: the lab reduces the partner's exposure, while the partner makes a real commitment. The work has support from both sides and an expectation that something useful will result.

Timing is important. Bringing a business into the conversation early gives it a chance to influence the direction. Presenting a developed concept and asking someone else to adopt it is a harder proposition.

“It's always a joint effort somehow.”

Some ideas also originate in the business areas through their own customer conversations. The relationship is therefore more productive than a lab continually arriving with suggestions for other people to fund. It can become a shared exploration of needs already visible in the market.

Let customer operations constrain the design

Lind says customer involvement starts in discovery, whether the setting is a road-construction site, quarry, warehouse or another operating environment. What people do, and the constraints around them, should shape the solution.

The gloves example makes that discipline tangible. It challenges a team to ask whether the interaction it has designed is possible in the actual job. The same applies to adding technology because it is interesting. Starting with a capability and searching for a use case can lead the team away from the value it needs to create.

For R&D leaders, this gives early customer work another purpose beyond confirming demand. It reveals conditions a prototype must survive. Those observations can also inform colleagues who do not regularly visit customers, giving the wider team a more realistic picture of what it is building for.

Plan the later stages while there is still room to choose

During incubation, the lab considers whether a solution belongs in an existing business or requires a new venture. Lind sees the full route to scale as an important part of making the lab work.

A venture introduces questions that an established business may already have answered: branding, market access, staffing and how to reward people taking on additional uncertainty. At the time of the interview, the lab had brought in a venture development manager and was putting more attention into these later stages.

Lind is also candid about portfolio measurement. He says the lab had tried different KPIs and did not then have a fixed target for future portfolio value. Its credibility came from developing services and solutions that generated revenue for the group. That experience helped build trust and interest in further work.

“You need to be ready to try a lot of things and also discard them on the way.”

The important result is not that every discovery reaches acceleration. It is that the organization learns which opportunities deserve further resources and has a practical way to develop them.

Sometimes the innovation is helping a customer run the business

Lind's proudest example predates the lab. A customer wanted to establish a trucking company but needed help operating it. He describes a small Volvo team helping with the business plan, recruitment of the chief executive, pricing, repairs and training for dispatchers and drivers.

In his account, that service work accompanied a deal involving more than a thousand trucks. The team created value by helping the customer make the whole operation possible, rather than concentrating only on the vehicles.

Lind calls it a rock-group moment rather than an individual rockstar achievement. The description fits his broader view of innovation: customer understanding, technical work and internal commitment have to come together. A lab earns its place when it can connect those contributions and keep the work moving toward something that functions outside the lab.