About five years ago, our data security company faced a situation no company ever wants to deal with: Some newly released products weren’t selling as well as forecast, and the pressure was on here at Rubrik to do better with other offerings going to market soon. 

What the company needed, we realized, was a more concerted effort to get a sharper read on what customers really wanted, rather than what we thought they wanted. After all, deep understanding of customer needs is the key to product-market fit and a massive competitive advantage. We decided we could do innovation  better.

So, the company assembled a dedicated incubation team, Rubrik X, to do just that. Its main mission: systematically engage with customers to better zero in on their problems and challenges and serve as a conduit to product teams and the organization as a whole to ensure those insights are vigorously addressed in future rollouts and company initiatives.

The result? The Rubrik X portfolio of four subsequent product releases, designed to help organizations be resilient in the face of cyberattacks, achieved the vaunted “triple triple double” of two years of threefold ACV increases followed by a twofold increase. 

I mention those numbers not to brag (though I’m certainly proud of Rubrik X’s work) but to illustrate the value that innovation or incubation teams can bring to any organization.

‘Innovate or die’

In today’s hypercompetitive business landscape, the old phrase “innovate or die” is more relevant than ever. Artificial intelligence and other emerging technologies are driving a need for more intense creativity and focus in developing products that meet evolving customer requirements. 

That’s especially true in the cybersecurity market, where companies, governments, hospitals, and schools are being targeted with more frequent and sophisticated attacks like ransomware.

It seems like every large technology company has a dedicated innovation lab. Some, like Microsoft Research, IBM Research, and Amazon Lab126, have become fairly well-known for advances ranging from quantum computing to smart speakers.

However, as our experience has shown, these groups also can be hugely beneficial within younger companies—startups within startups, if you will, that help keep the company’s entrepreneurial fires burning hot with new ideas to fuel or accelerate customer growth. 

Those ideas can range from new product features to customer support strategies to mergers and acquisitions. But the work goes beyond mere ideas. Our team serves on the front lines of formulating and iterating new product concepts with customers, fleshing out go-to-market strategies, winning the first millions of annual recurring revenue, and building repeatable playbooks of sales and marketing strategies, case studies, customer references, and anything else that advances the offering’s success. Nothing is off the table.

Every startup must confront what businessman and Harvard professor Clayton Christensen’s called the innovator’s dilemma—that is, the risk of seeming to do everything right but still run into trouble as new, unexpected competitors appear.

No matter the industry, as Christensen wrote in 1997 and is still so true today, a successful company with established products will eventually get out-innovated unless it understands how and when to abandon its traditional bread and butter and explore new paths or at least augment existing products with innovation that will keep the company ahead of the wave, not behind it.

That’s where innovation or incubation labs come in. Rubrik X is a team of 100 people within the 3,300-employee company—salespeople, engineers, developers, and others who love the challenge of working with customers to solve complex problems and explore new opportunities. These folks are natural trailblazers, pot stirrers, and glass breakers.

What goes into a successful lab? We have found these four things to be true:

You need people with the right stuff

Successful lab team members don’t just grow on trees, they must have certain indispensable qualities. Those include an entrepreneurial spirit, a desire to take risks, an ability to communicate and collaborate well with others, and, last but not least, a real passion for this kind of work.

People assigned to innovation labs also must understand, and not care, that the teams tend to be lean. It’s not a cushy job. Team members must roll up their sleeves and do all kinds of work—basic research, for example—to get the job done.

What we’ve found is that though the team may be small, if you have people with the right amount of vigor and conviction, and a willingness to “break things” within the bigger organization, the innovation lab can punch way above its weight in contributing to the company’s objectives.

Credibility is key 

It’s vital for the innovation lab to come across as credible experts to the rest of the organization. Let’s say the lab believes a particular acquisition would support the company’s business goals. It sure helps if you have team members with the bona fides to enter a meeting with the top company leadership and make the case.

This is why the average tenure of Rubrik X team members is higher than in the company at large. For example, I’m the 24^th Rubrik employee. Our lab is made up of people with a great deal of institutional knowledge and company-wide credibility.

Incubation labs need buy-in at the highest levels

While they’re all about thinking outside the box, labs nevertheless must be aligned with the strategic objectives and priorities of the broader organization. Labs can never operate in a vacuum—they must work closely with senior leaders to ensure that their initiatives contribute to the overall company mission and goals.

And that requires a two-way street. The C-suite must endorse the lab’s mission and, more than that, trust its insights. This can be critical in situations, typical in many companies, where everyone is focused on products and initiatives driving revenue now rather than what might be important two or five or 10 years down the line. Smart executive teams think of labs as guardians of the company’s future and support them accordingly.

It helps to have a thick skin

Because lab members are natural disruptors, they sometimes end up creating discomfort within the rest of the organization and can even be seen as persona non grata!

Team members can’t be bothered by this—in fact, they have to double down on their communications and consensus-building skills and enjoy the challenge of convincing others to their point of view.

As these four points show, creating an incubation or innovation lab isn’t easy. But our experience at Rubrik has shown that, with the right determination, outlook, and talent, labs can thrive and become enormous assets inside their companies.