Innovation's Need for ‘Safe Spaces'

To achieve this, Bezos moved the digital team, which was previously situated in a separate location, to sit with the rest of the organization in the same office. He also provided them plenty of money, and gave them five years to experiment, fail and learn.

The changes paid off. The Washington Post recorded an all-time high of almost 60 million unique visitors in September 2015, less than two years after Bezos had officially acquired the newspaper.

Ruth MacQuiddy, vice president of Deutsche Bank Labs, told this story at Waters USA, citing important lessons to be learned from Bezos strategy with The Washington Post. Safe, secure spaces that offer a low cost of failure when experimenting is something MacQuiddy said the Frankfurt-based bank tries to do at its innovation labs in Silicon Valley, London, Berlin and the soon-to-be-launched lab in New York, which will open in the first quarter of 2017.

"We can't do exactly what Jeff Bezos did, but we can do just a tiny version of it," MacQuiddy said. "Creating these safer spaces, which is a tiny version of this, will help jump start getting us into these disruptive technologies."

Separate or Together

Bill Murphy, CTO at Blackstone Group, said Bezos bringing The Washington Post's digital team into the fold was the most important lesson to take away from the story. While many firms pride themselves on their innovation labs, Murphy was critical of isolating that part of the organization, just as Bezos thought it was worthwhile to combine the digital team with the rest of the newspaper.

"It can't be separate. It has to be thoroughly part of the culture," said Murphy of innovation. "The people who say, ‘Well, I can get one cool space and hire people on hover boards and suddenly I'm going to be innovative,' are crazy. It needs to be every person at your organization, or at least the majority, in order to really build the culture and get people to think like that."

MacQuiddy said there still needs to be a little bit of separation to allow innovation to be fostered.

"Otherwise, we suffocate whatever innovation pocket we're trying to build inside," MacQuiddy said. "There needs to be a little bit of protection."

Murphy joked that in lieu of separation, a firm could have some oxygen tanks. He did say that it's an issue, but that it's up to senior-level executives to recognize innovation is being stifled internally.

"To really look at the organizations critically, it's how you lift that suffocation layer," Murphy said. "It's really hard, but I think it's up to the C-suite to do that, and there is no other way to do that."