Two recent LinkedIn pieces came out regarding corporate innovation and innovation labs. Eric Ries shared an excerpt from his book The Startup Way that discusses how the lean startup method of constant iteration and experimentation more often than not runs into the corporate inertia of execution vs. experimentation. But this is a good thing and not always an occasion to lament - entrepreneurial management should give way to general management in order to help an internal startup take root within a business unit and thrive off the resources that come with execution activities.
Another piece entitled "Innovation Labs Don't Work" actually focuses on the tenants of successful corporate innovation rather than debunking innovation labs. I agree that more often than not, innovation labs (and maybe corporate venture arms?) are not set up to succeed - but I do think that having a separate arm/division/group that has the space and freedom to focus on new problems, processes, and players, can be a beneficial way to bring innovation into a corporation. But work has to be done to integrate innovation and not keep it as a standalone prize. And for that the principles of the right team (though not always an external hire), commercial intent (though it's hard to project exact numbers for a truly innovative business), structure, external collaboration (I am a consultant, after all), and consumer insight (consumer needs should always be first) are keys to success. Add to that market timing and things get exciting.