What You’ll Find This Week

Tell any innovator that you’re heading up a new innovation lab and their reaction is likely the same: a known smirk. Perhaps an eye-roll. A pat on the back with a stern “good luck.” We’ve seen lab after lab get shut down under the guise of bad leadership, mismatched culture, or whatever other excuse you can think of.

But the reality is far simpler. Most innovation labs are simply born default-dead. Here’s why…an how to build your lab so it isn’t a zombie from Day 1.

Here’s what you’ll find:

Don’t Miss Our Latest Podcast

This Week’s Article

An innovation lab starts as a peace treaty from day 1. The company wants a future, but it won't touch the operating system that produced the present. So it builds a separate room and puts the uncertainty in there.

That choice creates an uneven bargain. The core gets to keep certainty in the form of predictability, repeatable processes, clear metrics, and quarterly commitments that can’t be missed.

The lab gets assigned all of the uncertainty that makes the core business uncomfortable: unclear customer needs, an unproven business model, experiments that may fail, timelines that slip, and outcomes you can't forecast.

Everyone pretends this separation solves any potential conflict.

It doesn't. It just hides it.

The innovation lab is supposed to be the fastest-moving room in the building. It's not a place. It's an exception to the rules. It's where the company can put its best builders, give them air cover, and let them run experiments the core business can't justify yet.

The lab should be measured by learning. It should be given clearance to run tests, show evidence, kill bad bets, and move on. FAST.

But if the lab is forced to conform to the efficiency model that governs the rest of the business, it slows to a crawl. Because the moment the lab touches anything real, the core machinery wakes up. Spend triggers finance gates. Customer contact triggers legal and brand. New tools trigger security. Vendors trigger procurement. Integration triggers architecture review.

None of these are crazy individually. But together, they turn experimentation into a permission queue. Death by a thousand cuts.

The work is no longer experimentation leading to new ideas. It's internal choreography: write the narrative, win the meeting, wait for approval.

What was supposed to be one of the most engaging, fun, and independent jobs in the org is suddenly just another day on the front lines of office politics. The innovation lab becomes the place where builders go to be slowly decommissioned.

That's why the first sign a lab is failing isn't budget cuts. It's personnel churn.

The builders leave first. Word spreads quietly that the fun, fast-moving innovation lab isn't that at all. Over time, the lab fills up with people who tolerate process instead of those who want to push against its limits.

Then it becomes a meeting factory.
Then leadership announces the lab "didn't work."
The shutdown is just the last step in a downward spiral.

The exodus is the first.

Most companies frame the tension as efficiency vs experimentation. That’s familiar. It also keeps the conversation abstract.

The real tension is harsher and easier to verify. Operational excellence, applied to discovery, selects against builders. But not because builders are fragile.

Builders are the people who turn ideas into tests, get them in front of customers, and learn fast. They can handle hard problems.

They leave for a simpler reason…they get bored.

Not bored like they need a fun project. Bored because the work turns into waiting: waiting for approvals, waiting for alignment, waiting for a committee to feel safe, etc.

When that happens, there’s nothing to learn and nothing to build. Their interest drops. Their skills stall. They leave.

Operational excellence is built to reduce variability. Innovation needs variance. When you apply the same controls to both, the organization does what it was designed to do: it eliminates variance in favor of efficiency.

That’s why labs churn talent.

Most labs die in the same order…

The announcement goes out. Headcount gets approved. A quarterly "innovation update" gets put on the exec calendar.

Before the lab has even run a real experiment, it already has a steering deck template, a status cadence, and a comms plan. The lab's first deliverable is proof that it exists. And a press release to tell the world.

The team tries to run a test that touches reality. They need a new vendor tool, access to customer data, a pilot contract, or an integration with a production system.

That's when the intake forms appear: Vendor onboarding. Security questionnaire. Legal redlines. Procurement workflow. Architecture review. Risk register. Someone asks for a business case.

None of it is insane on its own. But together, it sets the bar for pace and process in a place where neither should exist. Experiments now move at the speed of approval, not the speed of learning.

Teams stop asking "what's the fastest test?"

They start asking "what's the safest thing to propose?"

The sharp experiment turns into a pilot plan. The pilot plan turns into a roadmap. The roadmap turns into milestones. The milestones turn into green boxes. The deck becomes the product, because the deck is what survives the meetings.

You still get activity. Workshops. Design sprints. Demo days. Concept videos. Internal pilots. None of which ever touch a real buying decision.

The lab can point to motion, but it can't point to learning. The work is optimized to be defensible, not decisive or actionable.

Builders don't rage quit. They watch the work turn into intake forms, risk logs, steering decks, and politics. The experiments don't fail. They never get to run. So builders disappear, quietly, and the lab keeps going without them.

The backfills are great at managing stakeholders, running ceremonies, and keeping the tracker clean. The lab becomes easier to govern, and worse at discovery. Meetings replace customer contact. Alignment replaces learning.

The post-mortem blames execution, market fit, or the lab leader.

The "fix" is predictable. More oversight. More gates. More certainty. More alignment.

But the outcome was set earlier, when the lab started shipping artifacts for internal review instead of evidence from the market.

Shutdown is the last step. The exodus was the first.

Operational excellence is how the core survives. It reduces variance, enforces predictability, and punishes surprises.

Discovery needs the opposite. It needs variance, fast loops, and permission to be wrong in public.

When you run discovery through the core's process stack, you don't get fewer failures. You get fewer experiments. The lab learns to optimize for approval, not evidence.

The next four failure modes predict builder churn. They're how you spot the problem before the exits show up.

These aren't "culture issues." They're operational flaws.

If ROI is required before a demand test, the team learns the real rule: Don't test. Sell.

So assumptions get buried, forecasts become weapons, and narratives replace truth. Builders won't stay in a system that rewards certainty over evidence.

If you grade the lab on predictability, roadmap completion, and utilization, you'll get safe output. You won't get learning.

The lab starts optimizing for green boxes. Activity goes up. Future value does not.

Builders leave when their job becomes "show output" instead of "create learning."

If a 30-day test needs the same approvals as a full-scale launch, the test won't even get off the ground. If approvals take longer than building the pilot, the work becomes the waiting.

Builders didn't sign up to spend their careers inside procurement tickets and security checklists.

Pilots exist. Nothing scales. There’s no named owner in the operating business to take it to scale. No integration budget. No committed team on the other side. The lab turns into a demo factory the core can applaud and then ignore.

Builders won't stay in a system with no path to impact.

If you're wondering whether your lab is heading for a shutdown, don't start with the roadmap.

Start with this…

If you score a 3 or higher on the scorecard, stop reorganizing the lab. Fix the operating model, or you'll keep bleeding builders until the lab becomes theater.

Labs don't have to fail. But they fail by default because in the corporate world, efficiency always wins. If you want a lab that survives, you need structural separation where it matters.

Core work gets efficiency metrics. Discovery work gets learning metrics:

If you force one yardstick, you just told discovery to behave like delivery.

Not chaos. A designed lane for small tests:

This is operational excellence applied to learning velocity.

Before funding a test:

If you can't do this, don't pretend the lab is building businesses. It's building exhibits.

If you want builders to stay, stop treating the lab like a rotation. Entrepreneurs take risk because they get ownership and upside when it works. Intrapreneurs won't take the same risk if the reward is a pat on the head and a "great job" in their next quarterly review.

Give them a real path to ownership:

If you can't offer ownership and upside, the lab becomes a tour of duty.

And soon it will become a vacancy.

Most companies shut down innovation labs because they "didn't deliver." That’s the story that’s written after the builders are already gone.

If you want to predict whether your innovation lab will fail, don't look at the roadmap. Look at who's leaving.

Or better yet, build it to encourage people to stay.

Share This