In the blink of an eye, it gets something bigger

Fahrenheit212 anhd CapgeminiSo in the past week or so we have seen the announcement that Capgemini has acquired Fahrenheit 212, at present for an undisclosed sum, now that one was a real surprise.

I have a friend when he is presented with something that stops him and makes him really have to think he would say “intriguing”. This joining forces is one of those ‘intriguing” moments for me.

Capgemini have been leading much within the transformation process around technology with all things digital, they have been pioneering and offering some significant advice around transitions. It seems they are ‘pulling’ in the innovation promise with this acquisition to add to their solution offerings.

I wrote about their Applied Innovation Exchange announcement recently and how I felt it was thin, a more “a tenuous toe in the water” and I finished the post with “I hear you Capgemini on the intent…but “there is a real need to put some ‘red meat’ on the bone here,” and that is what they seem to be doing in a “blink of an eye,” with this Fahrenheit 212 acquisition, or at least allow the tissues to be grafted on and take hold, so it can challenge where and how innovation transforms the business process.

David meets and marries a Goliath.

On first look at this acquisition you see a 180,000 people consulting firm, operating in 40 countries with nearly EUR12 billion in revenue, adding a 60 to 70 people innovation and design consultancy, operating in the US and less so in the UK and you wonder, what simply happens with such a move? Will one simply dwarf and overwhelm the other, will the small influence the big, in the positive ways both have as the initial intent of this deal? I hope so.

I was reading the press release of Capgemini, the usual corporate speak, released for shareholders and stakeholders, nicely reassuring, sufficient to appease and appraise the stakeholders. Then compared this with the wonderful open letter written by the Fahrenheit team. They tell much of the divide that somehow has to be bridged. Let me explain or illustrate in the words from these releases.

According to Capgemini’s press release “Fahrenheit 212 will contribute its specialized capabilities for innovation strategy and consumer-centric design to the broader offerings of Capgemini Consulting. The move opens growth opportunities for both companies through their combined capabilities”

Now lets see why Fahrenheit 212 was and hopefully still is a cut apart from the rest in innovation, through the open letter they wrote on their” boldest move yet”.

“Innovation moves forward….but in the same blink it’s something bigger”

The open letter just tells a real story of passion, intent, a mixture of hope and excitement. Of course, many ventures have been dashed on the rocks of despair but at this moment of time this is the sort of message I want to hear coming from the acquired and also explaining the potential course of the new journey ahead..

Let me pick out a few

“Innovation isn’t merely driving change. It is undergoing big changes of its own”

Fahrenheit paints the picture that I believe is absolutely right in its timing and assessment:

“ Not long ago, innovation was an under-the-radar business activity. Everyone applauded when serendipity served up an occasional breakthrough. But few businesses were relying on innovation to keep them relevant and growing.

That’s all changing. With breakneck speed, forces of disruption, shifts in consumer expectations, erosion of barriers to entry and a vibrant startup movement have propelled innovation from the background to a position as one of the most important activities for any growth-minded business to get right”

“The consequences are big. Innovation is simply too important to be random anymore”

Moving from the past to the future

In this they provide the background to the change being undertaken in innovation at the moment and then they go on to clarify the reason for the decision to be acquired and why they think it makes sense for both to make a move.

“But for the innovation discipline to be truly effective today, we must empower our creative impetus with new capabilities. Capabilities like robust software development, supply chain expertise, unique access to emerging technology and data analytics – things a few steps beyond what innovation firms are asked to do today – will soon become core requirements in the way innovation is conceived and driven to market”

“This all points to a bolder future and a new set of requirements for the business of innovation consulting. Where success isn’t measured in mere possibility, but in big strategies and breakthrough ideas made real”

Marriage of shared intent

“For Fahrenheit 212’s part, it represents a way to leapfrog our competitive set and bring an entirely unique combined force to market. Individually and in aggregate, our new capabilities will drive the realization of innovations as powerfully as we’ve ignited them at the front end.

Overnight we’ll gain access to new ability to turn big ideas into not just prototypes, but enterprise level solutions. We’ll also plug into Capgemini’s global network of Applied Innovation Exchanges – 30 workspaces around the world for exploring emerging-technology led transformation in areas like retail innovation, internet of things, virtual reality, and artificial intelligence.

For our partners at Capgemini, linking up with Fahrenheit 212 represents a step toward their vision of redefining the way the consulting industry thinks and works. Bringing their world-class consulting and implementation practices to future-state problem solving and design.

Together we share a belief that solving for the challenges our clients will face in the future is only possible through the kind of visionary forward thinking that opens opportunities that aren’t yet in sight”

The combination has real potential if it is given the freedom to evolve but will it?

The words of Todd Rovak, the Managing Partner and CEO of Fahrenheit 212 offered these insights that give us the ‘glimpse’ into the future:

  • Fahrenheit 212 fused design and development skills with a traditional management consultancy so they could assist clients well beyond identifying strong markets. By bringing creative and analytical capabilities together, Rovak said Fahrenheit can help clients unlock new spaces by identifying what existing assets to leverage and helping them design a brand strategy for the new market.
  • The deal will additionally allow Fahrenheit to plug into Capgemini’s Applied Innovation Exchanges, 30 workspaces around the world where companies can immerse themselves in emerging technologies in areas like retail innovation, the Internet of Things (IoT), virtual reality and artificial intelligence. The Exchanges are also intended to help firms address the business disruptions confronting their industries.
  • Fahrenheit 212 said the deal will enable the company to marry its creative impulse with an entirely new set of capabilities around robust software development, supply chain expertise, unique access to emerging technology and data analytics. “The ability to shape the future is only half the question,” Todd Rovak, Fahrenheit 212’s managing partner and CEO suggests “Being able to deliver the future in also vital.”
  • The ability to combine innovation strategy and transformational thinking with enterprise-level implementation on a global scale is now a client mandate. Capgemini’s deep technology capabilities, resources and client relationships will steepen its trajectory and acceleration that would have been at a slower pace for both separately.

“Together within this sharing of a belief that solving for the challenges our clients will face in the future is only possible through the kind of visionary forward thinking that opens opportunities that aren’t yet in sight”.

Future-state problem solving and design is needed around innovation through technology

Capgemini seems to have a vision of redefining the way consulting industry thinks and works. It is bringing in global scale, leading consulting practices and the continuous implementation practices that I feel Capgemini have been developing. The Applied Innovation Exchange, recently announced by Capgemini has a great contributor to deliver on its intent with this acquisition.

Together Capgemini with Fahrenheit 212, will bring additional value and innovation to the client base, current and future, so as to expand their innovation solutions into new industries that are undergoing digital disruption.

The intent is to start with some “visionary forward thinking that opens opportunities that aren’t yet in sight” and the combination clearly stated by Fahrenheit 212 again as:

“But for the innovation discipline to be truly effective today, we must empower our creative impetus with new capabilities. Capabilities like robust software development, supply chain expertise, unique access to emerging technology and data analytics – things a few steps beyond what innovation firms are asked to do today – will soon become core requirements in the way innovation is conceived and driven to market”

The future is often limited by the constraints imposed

Fahrenheit 212 will operate within the Capgemini North American operation, perhaps far too limiting in my opinion but as a freestanding brand and group, as it certainly does have such a unique culture, team and way of working but will it be allowed to continue? Or will it simply fuse and emerge differently from its past into something more scalable, full of the need for speed, broader innovation solutions fused with a heavier technology and digital backbone? Or simply fade away drained of its creative and responsive thinking?

This acquisition certainly needs handling with real care, sensitivity and attention otherwise it can go the way of others, in their need to offer innovation, it gets simply smothered, lost and the acquirers never learn its true design force and creative value as it does not fit the existing business model.

Time will tell, I wish all involved well, it is far more an internal challenge than an external one perhaps? I do hope the traditional models around innovation are broken and a new one emerges. Capgemini have real intent at least and that is good. Who else is waking up to this change going on in innovation I wonder?

Advertisements

4 thoughts on “In the blink of an eye, it gets something bigger

  1. I enjoy your blog but on this occasion you have it wrong… this was a fire sale. While both Fahrenheit & and Capgemini do a great job of spinning the situation… the truth is the innovation consulting space is in trouble.

    Not too long ago there were literally hundreds of firms (Fahrenheit212, WhatIf, Huge, Jump Associates, Inzenka, Clear, Cloverleaf, Futurethink, Doblin Group, Happen, PreHype, GravityTank, Innosight, Highnote Foundry, Kalypso, Innovaro, Market Gravity, Undercurrent, SY Partners, Vivaldi Partners, Sylvian Labs) – that’s just the few that I can think of. Many have either contracted, sold out, or have closed. Many others are in serious trouble. This is not because the firms do bad work or are badly managed.

    The market has changed. Clients no longer want “idea firms” who are creative nor do they want pure strategy shops that create great PowerPoints. They want results. Sadly most of the innovations these firms have produced created great press and hype, but have not delivered measurable financial results. The demand for these services has dried up. Getting acquired by a large firm with a stable roster of big clients is the only path forward.

    I predict you will see more acquisition news very soon.

    Like

    • Can’t disagree the market for “craft type” innovation consultants (cottage industry to small consulting) is going through the death of a thousand cuts. It is not just measurable results but the very nature of what this post was suggesting, that the market is changing, and changing rapidly and Fahrenheit felt these ‘winds of change’ and if they want to compete they had to think differently and Capgemini need some more innovation understanding to compliment their offerings. It suited both I think.

      Like

  2. Perhaps most interesting will be how the two cultures work together. These two shops couldn’t possible be more different. I remember when Capgemini acquired EY’s consulting biz, many EYers quit because they could not handle Cap’s politics and bureaucracy. When accountants chafe at a bureaucracy I can only imagine how young innovators will act. They claim F212 will operate independently but I will stake all my money on independence not lasting beyond three months.

    Like

    • Now handling the really different cultures is going to be the biggest problem. It will need all the creative juices and the full buy in of the eventual change that can take place in shifting the innovation focus to blend it, but it is possible. It needs a real focus, commitment careful handling and belief. The outcome of changing the innovation offering remains the goal and improved value to the clients.

      I equally doubt independence will last long, it simply can’t and should not. The very nature of the combined need means a clear “fusion” to take place, yet it can remain an independent brand as this evolves. It is the combined solutions, creative and analytical processes that are needed. Fahrenheit can fill out a number of innovation needs, apply some really different creative thinking into the technology, digital and change related issues that Capgemini clients are demanding. Can they simply depends on the intellectual grasp of the intent of the Applied Innovation Exchange as part of this equation.

      Sheer difference in outlook, understanding, approaches might ruin this but the ‘intent’ still has some real value but it will not be easy one, that is for sure.

      The acquisition is not ‘material’ to one, Capgemini but ‘highly material’ to the other if F212 really wants to emerge out of this in a different form, as suggested. Yet although the purchase might not be material to Capgemini in expense, the reputation, their abilities to offer innovation solutions becomes the really important material need. So we come back to vested interests might actually be mutual.

      Through this purchase and the AIE platforms they, Capgemini, have become significantly visible in the innovation space and no consulting company can afford in today’s world to ‘mess’ innovation up, in such a competitive market without a material impact with their clients. For Fahrenheit 212 they will really need to show they have the innovation “chops” to deliver into this digital, technology related world where product, service, ultimate business model design all mash together, often in highly radical ways, not just in new product design. That is tough work

      So there might be more ‘glue’ than you think.

      Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s