The Quiet Failure of Innovation Labs
“Fall and Recovery… Movement is living on an arc between stable balance and yielding to gravity” … Doris Humphrey, The Art of Making Dances.
No one shuts the lab down.
The space remains.
The branding survives.
The team stays active.
What changes is influence.
Decisions begin to happen elsewhere. Funding conversations move back into the core organization. Senior leaders stop asking, “What does the lab think?”
By the time this is noticed, nothing has failed. The lab has simply been bypassed.
A pattern leaders recognize
Across governments and large enterprises, innovation labs often follow the same arc. Early momentum. Visible activity. Strong narratives.
Then, gradually, relevance fades.
What is striking is that capability is rarely the issue. The people are capable. The work is thoughtful. The intent remains positive.
And yet, the lab no longer shapes outcomes.
A point of view worth sitting with
Most innovation labs are not designed to influence decisions.
They are designed to inform them.
That distinction matters more than it appears.
Much innovation activity is optimized for exploration, not commitment. Ideas are generated, scenarios explored, prototypes demonstrated. But when priorities are set, budgets allocated, or risks owned, those conversations happen elsewhere.
The lab produces options. The system produces decisions.
Why this keeps happening
Many labs are positioned adjacent to the organization. Close enough to observe. Far enough to remain safe.
This positioning protects experimentation, but it also insulates the lab from consequence. Insight is produced without authority. Learning accumulates without obligation.
Research across innovation and public sector reform consistently points to the same structural issue: when innovation units sit outside formal decision rights and funding mechanisms, their influence remains optional.
Optional capabilities rarely endure.
A different way to see the problem
The question is not whether a lab is productive, creative, or well-run.
It is whether innovation activity sits inside the organization’s decision system or merely alongside it.
If innovation does not change how priorities are set, how resources move, or how accountability is assigned, it will always struggle to matter.
The quiet failure of innovation labs is not a failure of creativity.
It is a failure of design.
(Informed by OECD research on public sector innovation, Strategyzer’s work on innovation portfolios, and Harvard Business Review perspectives on innovation governance.)