Lab or factory?

Seth Godin had an insightful post contrasting the mindset of the laboratory and the factory. The laboratory is about experimentation and innovation, so there is an inevitable risk of failure. The factory, on the other hand, is about efficiency and incremental improvement. Failure is not an option. According to Godin, these two approaches, while not actually linked the the physical locations, are mutually exclusive:

Anyone who says failure is not an option has also ruled out innovation.

While I am sure there is something important here about research, it is also worth characterising almost any activity as needing 'lab' or 'factory' mode.