Podcast: What’s Changing About Innovation Spaces?

By Tyler Smith |  January 24, 2023

For this episode, we wanted to understand what exactly is an innovation space — and what’s changing about how companies use them. We sought perspective from Michelle Cohen, Director of the Innovation and Acceleration Lab at CME Group, a major operator of financial exchanges; Andy Miller, Senior Vice President of Innovation and Product Development at AARP, the Washington, DC-based nonprofit; and Michael Cross, Vice President of KeyString Labs at the utility Entergy.

In this episode, we’ll dive into four questions:

  1. What is an innovation space?
  2. What are the pros and cons of physical versus virtual spaces?
  3. What are the qualities great spaces possess?
  4. What common mistakes do people make in setting them up and running them?

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Tyler Smith:

Welcome! You’re listening to the Innovation Answered podcast. Innovation Answered is the podcast from InnoLead, the web’s most useful resource for corporate innovators, and if you haven’t yet subscribed to the podcast, we encourage you to do that, so you’ll catch all of our future episodes.

I’m Tyler Smith, and I’ll be your host for this bonus episode, a beginner’s guide to innovation spaces. We’re diving in at the 101 level, without jargon or complexity, assuming that you may be new to the job of making innovation and change happen inside a big organization. We want to make things crystal clear, so you can get down to business.

For this episode, we wanted to understand what exactly is an innovation space — and what’s changing about how companies use them. 

First, I want to share a couple data points we haven’t yet released, but which will be part of InnoLead’s Benchmarking Innovation Impact report this year. We asked more than 200 corporate innovators about innovation spaces, among other topics, and 64 percent told us they have at least one innovation space, and another 9 percent say they’re considering setting one up. Sixty three percent of those people who already have some kind of innovation space say they use it at least once per week, and 21 percent say they use it once a month. Just 16 percent say they use it only occasionally — or not at all. 

In this episode, we’ll dive into four questions: what is an innovation space? What are the pros and cons of physical versus virtual spaces, what are the qualities great spaces possess… and what common mistakes do people make in setting them up and running them.

The first person I reached out to was Michelle Cohen. She’s the Director of the Innovation and Acceleration Lab at CME Group. CME Group is based in Chicago, and it has been called the biggest financial exchange you’ve never heard of. CME Group was originally formed by the merger of the Chicago Mercantile Exchange and the Chicago Board of Trade, back in 2007, and they also own exchanges in New York, London, and Kansas City, among other places.

My first question for Michelle was, what is an innovation space?

Michelle Cohen:

I would say innovation spaces are any place where people can begin to do something different of value. And that could be a virtual space, it can be a physical space. It’s taken on a lot of new meaning over the last couple of years. But I would say it’s more about how you’re facilitating where people are coming together, than the physicality of it.

…Innovation spaces are any place where people can begin to do something different of value.

Tyler Smith:

So Michelle distills it to a place where people do something different than their day to day work— and create value for the organization. You might call it a lab, like CME Group does, or an innovation center, an incubator, or a collaboration hub. But whatever you call it, Michelle noted that there have been a lot of COVID-driven changes to innovation spaces.

The next expert I spoke with was Michael Cross, who serves as Vice President of Keystring Labs at Entergy, the integrated power distribution giant. His team at Keystring Labs began work in early 2020, just before the pandemic arrived, so they have definitely had to adapt to the new environment like Michelle noted. So I asked Michael, how did they navigate the pandemic, and balance the physical and virtual nature of workspaces today?

…We have some of our best days when we’re together.

Michael Cross:

It really pushed the envelope on our ability to try new tools. Obviously, we use tools like Slack, but a tool like Lucidchart — everybody talks about innovation labs, where you’re doing whiteboarding and sticky notes — well, we found ways to do that digitally. And so we ratcheted up those skills, which was great, because when you come back to the physical environment, you’re still dealing with sort of this hybrid nature where you know, not everyone is in every day. And so now with ratcheting up those skills, we’ve been able to sort of smooth out the hybrid type meetings, because those are the most challenging meetings. I think everybody grapples with those. And then, there’s certain meetings where we absolutely, you know, kind of lean in on the idea of everybody being in at the same time, and we do that quite a bit. And so I think it’s really created a really good balance, and I think Entergy across the board has really found a good balance with that, because it’s just the nature of things nowadays. You know, today, my office is outside. You sort of have to have that ability to be nimble. But I do think it’s critical to have that physical space where we do need to go in and be together, and we have some of our best days when we’re together.

Entergy’s KeyString Labs.

Tyler Smith:

So Michael makes the point that software like Slack and Lucidchart can help support virtual collaboration work, and create persistent online innovation spaces — but he also believes that physical innovation spaces are essential for creating the highest level of innovation and R&D.

Michelle Cohen also has some tools at her disposal to discuss that make innovation spaces great – tools that are used in both physical and virtual spaces.

Michelle Cohen:

Well, I’d say for a digital one, it’s really about having a good tool. We use one of the big tools that are out there. It’s called Mural. There are several versions of that tool. It is easy to use. It allows asynchronous collaboration. It is more usable and user-friendly than just about anything I’ve seen out there. And people can get on there. You have everything from, you know, young folks, who are right out of college all the way through people who are, you know, definitely at the bottom age of the boomer age, and everybody can get on there and use it equally… As for physical space, you want it to have a lot of light. You want it to have a lot of spaces where you can put information, and you want to have all of the minor things such as, you know, enough pens, enough Post-its. You need to have space. It’s really about space. So how do you make space to do that? And then you also, for all of these things, are underpinned by bringing in broad groups of people who push you out of your normal thinking, and take yourself on that journey of different thinking than you might have had before.

Tyler Smith:

Michelle makes some great points there. But what if your company doesn’t have a physical innovation space, and you want to set one up? We turned to Andy Miller, the senior vice president of Innovation and Product Development at AARP, the Washington-based nonprofit that focuses on issues that matter to people 50 years old and over. Andy oversees an innovation space at AARP, and before that, he set one up at Constant Contact, the provider of email marketing services. What’s his advice for getting started?

Andy Miller:

I try to understand what is the purpose behind it? What was the intention when it was built? Right? A lot of these spaces end up becoming again, I’ll say theater — and it’s not bad. [It’s more about] that culture of innovation than it does actually working. And that’ll tell you a lot about the company, by the way, how the company views the space. Someone like Fidelity — they do it all. it’s absolutely about bringing people in and just showcasing all the stuff they’re working on. They have rooms that project teams get together that are building new companies, and they live in these rooms just like a startup would live in at a WeWork. 

They’ll bring third parties in to showcase — what exactly are you doing in the space, that’s the most important thing to understand. And could probably get yourself in some trouble if you don’t, and you join a company and you’re like, “Oh, this is great. We got this space,” and all of a sudden you’re trying to like bring people in from the outside when that’s not what they do. Or vice versa. You’re not bringing people in from the outside, and the intent of the space was “No no, we want to host events, we want to showcase, you know, the thought leadership we have in the company,” and all that kind of thing. So you’re really just trying to understand, again, what the intention is or was behind the building of that space.

A chalkboard wall at AARP’s innovation lab in Washington, DC.

Tyler Smith:

So Andy focuses on getting clear about what your purpose is for having this innovation space, and whether it’s about collaborating with colleagues or bringing in external partners. Now, let’s hear again from Michelle, who talked to me about getting into different kinds of environments when you connect with colleagues — even if you don’t have an officially-designated, architect-designed innovation space.

Michelle Cohen:

I would say next time you have a discussion, just go take a walk. What you’re trying to do is create a situation by which you are at your most creative thinking. But essentially, you want to be in a different environment than your normal thinking. And how do you do that? Well, you can, while you’re talking, start using your non-dominant hand to do something else, just to keep your brain from ruminating, you can go for a walk, you can make yourself laugh. You can look at things that are inspirational. There’s a lot of different ways to get in that headspace, even if you’re sitting in a cubicle. But it’s really about making sure that you are thoughtful and mindful about what you’re trying to do. And to be in a place where you’re able to think more broadly than you might normally do.

Tyler Smith:

I love that idea from Michelle, that before you even start setting up a designated innovation space, go find a place where you can get more creative — especially if it’s outside the building. 

I also wanted to understand what the future is for physical innovation spaces. We’ll hear from Michael Cross in just a moment… but first…


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Tyler Smith:

And we’re back. Let’s hear from Michael Cross of Keystring Labs at Entergy.

Michael Cross:

We’re sort of looking to take it all to the next level, as far as the physical space goes. Another thing that you’ll find in a lot of innovation labs is where products are actually on display. So you’ll walk into our lab and you’ll definitely see a different feel from the corporate environment. But then I think people are actually looking for the physical aspects to things that we’re building And so we have products, that we have an ability to, to put on display. And we have a lot of future work that we’re looking into. And we want to be able to prototype things and actually make it a little bit more of an immersive experience. And we’re really excited about kind of taking it to the next level. So we sort of have a saying of always being on, right, and so when you’re nine to five in the office, you can physically see people… I think the the whole idea now, coming off of the pandemic is, you know, that always being on, it’s sort of like with the phone, you know, again, Slack, corporate emails integrated, our corporate tools that we use for online chat and online video chat, and all those kinds of things for meetings, there’s sort of an expectation. I think that kind of makes things better. Now, you know, agile is one of those words that gets thrown around, right. But the one thing I always like to point to the specific within agile is kind of accountability within the team. We’re accountable to one another…of course, we’re accountable to a timesheet, and we’re accountable to all the corporate policies and standards that we uphold. But from our day to day functional perspective, within the innovation lab, we’re accountable to one another. And that’s sort of that always-on piece I’m talking about. The pandemic sort of, I think, helped facilitate that. And then we’ve been able to carry that over into the return to work environment.

Tyler Smith:

Michelle, who we’ll hear from next, takes the conversation forward from there. She says that even though technology has become integrated into just about everything that we do, hybrid innovation processes can be tough to run — and that you should either go all-in on virtual or physical. But she also talks about stretching out ideation and refinement work over a period of weeks — rather than trying to cram it all into one day.

Michelle Cohen:

We have not nailed a hybrid environment. So my construct would be do it either virtually, or do it all in person. But the hybrid environment’s very difficult, because it’s very difficult to create an equality of experience, if everybody is not all physically there, or everybody is not virtually there. And I would say, I know that some schools are actually doing some of this, so that they might actually be at the forefront of it. I don’t necessarily have a preference. Being in person builds a certain amount of camaraderie, and collaboration, and connection, that takes some time to do during a virtual environment. But a virtual environment is really great, in the sense that you have this asynchronous piece of it. We used to think that you could drag everybody into a room; that you could brainstorm for the morning; in the afternoon, you’d shape your choices; and by the afternoon, you’d made a decision. And I think what we realize now is that the human brain does not actually work that well, that way. So the brainstorming then needs a break; then you shape your choices; then you make your decisions. And so the benefit of either one of these being in person or virtual is, is that the constructs that the brain can do all of those things all in a very short period of time, and do them well, and really think through things at a level of depth by which making hard decisions and working through complex problems… doesn’t really work. 

…The hybrid environment’s very difficult, because it’s very difficult to create an equality of experience, if everybody is not all physically there, or everybody is not virtually there.

We’re finding that breaking up problem solving over the course of a couple of weeks, is a lot more effective than dragging everybody into one room, and it fits into people’s calendars better. And it gives them time to really think about, “Hey, we brainstormed. Awesome. Now we’re gonna shape our choices. Awesome.” And there’s something about that time difference that’s good. I’m an extrovert. I like being around people. That energizes and charges me. Some people hope they never see another human being in person again. But I do think there’s something about the social aspect of creating cohesive teams that really gels in person. Companies need to realize that if they’re gonna bring people together for a couple of days, and one of the goals is that these people are more aligned in a social manner — just do something social with them. Trying to drag them through a problem-solving activity, and having no social time — I think we don’t live in that world anymore. Make sure that your business time is business, and your social time is social. 

Tyler Smith:

That social time can be so important for building trust — and trust is essential on an innovation team. Michelle also mentioned using escape rooms or other fun activities to help forge strong team connections.

The next topic we’ll touch on are the biggest mistakes related to innovation spaces, and how to avoid them. Let’s kick it back to Andy Miller at AARP.

Andy Miller:

It’s the same mistake that every entrepreneur makes, right? It’s the if the, “If I build it, they’ll show up.” Nope; they won’t show up. Just because you have a cool ass space, they’re not going to just say, “Oh, we heard that someone’s like just launched a space — let’s go see it.”

It’s work, right? It takes work. And again, going back to the intention. So whatever the focus was, when you built it, you gotta put the hours in to go then execute against that strategy you had. And that’s kind of the biggest thing we see all the time. People come in our space, and they go, “Well, where is everybody?” Yeah, we have 10,000 square feet, that there’s many days, there’s no one up there, or like, you know, someone will show up. And it’s like, what do I do with this space? It takes work to run a space, a space is not going to run itself. It’s not like, “set it and forget it. I just built it. And all of a sudden, it’s gonna run itself.” I have two people that run our space. That’s what they do. 

The other thing I’ll say is clutter. It sounds like a simple thing. A lot of these spaces tend to be big, open sort of shared space, a little WeWork-ish. There’s not a lot of storage space, it’s just really easy for the place to get really cluttered quickly.

And it’s one thing to be cluttered, like, you know, a scrappy, cool startup — there’s just stuff everywhere. And it’s another to be like, “Yeah, I’m not really sure what’s happening here, and why there’s a bunch of boxes here or stuff there.” And especially if you’re letting other people into the space, right, using the space for different things, very quickly, it can take a turn. And you didn’t think about it, because you didn’t think about it. 

And the last thing I’ll say is, if you’re going to have events there, really think through the small stuff. Sweat the small stuff, right? Okay, when people get off the elevator, where are they going to check in? How are we setting the space up, so it flows and it’s not disjointed? … Or noise like,  we got people checking in here, we got a bunch of people there, I got a bunch of over here, how do I make sure I’m structuring and using the space, where every single thing is competing with everything else in the space?

Tyler Smith:

Let’s go back to Michelle Cohen at CME Group to build on that same topic: mistakes. She chose to focus on some of the work that happens inside innovation spaces when teams actually get together, and the human dynamics.

…You can often take a naysayer and bring them along. But you can’t just put them on the spot in a room and think that’s gonna go well.

Michelle Cohen:

Problem definition, problem definition, problem definition. This is pivotal. The reason being is, is that if you move to shaping choices, before you have common understanding, you’re going to end up with a narrower set of choices than you thought. Almost always, if you go to a decision that falls apart, you can usually track it back to, did I not understand the world of my choices, and did I not actually create the alignment that I thought I needed to? So I think that there’s a little alchemy. And I think most innovators are pretty good at this. I’m always taking stock of what is the actual stated thing that I’m trying to do from a business standpoint. I’m trying to understand that layer of the people who are in the room. And I’m also trying to understand both the market environment, as well as the — I hate to use political environment — but there’s a political environment that’s in there. And therefore, what are people willing to do and willing to share in that conversation? And that’s also part of the reason why you plan so much, because you can often take a naysayer and bring them along. But you can’t just put them on the spot in a room and think that’s gonna go well. 

So it’s a little about understanding that alchemy of what needs to happen, versus how are people disposed positively or negatively or neutrally…? And if I have something that I need, where I still have to keep that those people who are negatively predisposed to it, how do I bring them along in a way that’s making them feel comfortable and safe? Because what I would say, to the whole thing is, everything everybody does is based on how they feel the most analytical person that you know, does that because it makes them feel comfortable. So I’m always thinking about, what are the levers that I have to make people feel safe around the environment. Sometimes that’s about having a lot of facts and figures, sometimes that’s about telling people a story. Sometimes thats about getting their feedback beforehand. And so it’s around understanding how to make people feel emotionally safe, which has become a very well-trodden phrase, but I’m not sure people really understand exactly what it takes to make people safe. But this is an innovation conversation, not a psychological conversation, which requires a nice cocktail.

Tyler Smith:

OK, before we get to cocktail hour to talk more about innovation psychology, let’s hear from Andy Miller about what makes an innovation space great. He says they should feel more immersive and hands-on than your typical buttoned-down office environment.

Andy Miller:

A display at Fidelity Labs in Boston.

The ones I think that I’ve enjoyed the most tend to have a Disney feel to them. There’s an allure to what’s there, and you want to just play and tinker, and like, this is really fun. They tend to be a little bit more hands-on. It’s not just like, case study one and case study two on a wall or something, or a video where [there are] more things you can play with. I keep alluding to Fidelity. But Fidelity to me is the single best company at this than I’ve ever seen. They have in their space, an interactive timeline. They have mounted basically like a 50-inch TV, on this wall, but it’s on this roller. Think of a ladder in a library, like an old-school library. They have this TV, and they have a wall and on the wall is the timeline. But they’ve built like — it looks like either AR or some sort of like just mechanism to know where you are —  and it brings it to life. So you can take this thing and be like, “Oh, the history of Fidelity or whatever it is,” and be like, “Oh, wow, 1972, this happened,” and on the screen that comes to life. So I love the experience aspect of it, and feeling like [it’s] kind of Disney-ish. They give so much thought to how you’re going to engage with this stuff. 

Tyler Smith:

Hey, if an innovation space looks and feels like Disney World, that’s a space that I would want to spend time in. I want to play around — I want to tinker with emerging tech and the like. So thank you, Andy, for painting that picture.

I learned a lot from these conversations on innovation spaces. If you want to learn more, visit and check out the topic page that focuses on innovation labs and spaces.

Thanks to my colleagues Meghan Hall and Scott Kirsner for their help on this episode, and to our interviewees: Michelle Cohen, Andy Miller, and Michael Cross. 

Look for our next episode in February, and don’t forget to subscribe to Innovation Answered on your podcast platform of choice. This is Tyler Smith — thanks for listening!