Reflecting on our innovation practices

reflecting-on-our-innovation-practicesInnovation has been rapidly changing and much of its basics have been swallowed up by some newly defining frameworks that have raced up to the top of the innovation agenda. They have driven much of our thinking and reacting. It is right that we all respond to these but we often forget much of the rest of what innovation needs to be built upon.

The problem or challenge with this focusing upon ‘breaking’ practices or new methodologies, are they can be so much harder to master and build them into established positions and practices, without the right amount of debate, understanding and assessing the implications and impact.

This often needs different perspectives to form the final position. We fail to constantly review and re-engineer the innovation process and tend to layer more upon it, without a consistent reassessing what we are trying to achieve.

The excitement of ‘breaking innovation’ is in the pioneering, experimenting, discovering, sharing and exchanging. If you are always open to this new thinking, it does enrich and advance innovation understanding and that makes it so valuable but so demanding.

Many of these for me have been utterly enjoyable to explore as they advance our understanding of the emerging management practice of innovation but you can’t ‘gloss over’ the basics of innovation. Continue reading

That sheer consulting muscle hopefully delivering global momentum

Pushing the world uphillHas consulting changed over the years? Certainly the business model behind them has, big time. I really do wonder where it is all going inside the business organization. Consulting has become a huge business dealing with our global and local organizations and governments.

Just take a peek around the board room doors, just who are all those strange faces, bulging muscles, huddled in meetings with the boss? Ready to take on the world.

Following on from my recent post on “the value of the visiting consultative fireman” this further post explores the external reliance on the consultant our organizations have become accustomed too. It got a little long, my apologies for that.

‘We’ seemingly can’t live without consultants.

Cant live without you 1They are now competing constantly for those semi-permanent, year-in, year-out relationships with companies willing enough to pay millions of annual fees for help and advice.

It is all about the repeating the consulting / client engagement across the entire business in as many different ways as possible.

Consultants are necessary or so it seems for any big decision in our global business organizations as the employment of consultants helps ‘sit behind’ the recommendations made, the often billions about to be spent, for them to validate, investigate, recommend and then rubber stamp your decision. Who will fire you for bringing in a respected global brand like McKinsey, a few perhaps but not many?

You wonder if the executive within our large corporations would be allowed to sneeze without the consultant stepping up with the handy handkerchief or latest prescribed medicine to easy his/her discomfort.

Consultants seem to underpin decisions everywhere and today are equally asked to execute on these, as the resources within our business organizations or government departments are ‘far too thin on the ground and busy just keeping what we have going”. Consultants are not just recommending the changes but being highly paid to make it happen.

Scale, scope and size are needed today to be a global consulting player

In the words of McKinsey on their website: “We strive for world-shaping client impact” where they then claim their “scale, scope and knowledge allows us to address problems that no one else can.”

They suggest “we bring out the capabilities of clients to fully participate in the process and lead the ongoing work”. Really I’m not sold on that one. At McKinsey they claim to “hire as many MDs, PhDs, MAs and JDs as MBAs” and well that just must be why business organizations fail without them isn’t it? Yawn.

The ever-growing big numbers of ‘boots on the ground’ to deliver solutions on client’s needs.

boots on the ground 1So much of McKinsey’s ability to ‘land’ work and secure ongoing work is due to McKinsey’s famous alumni network where more than 20,000 former colleagues connect with each other and with our firm.

It is a juggernaut in consulting support ‘within’ our organizations, highly interconnected into the very heart of our business organizations, to secure acceptance and validation of choice.

Of course, they still have to deliver otherwise next time it might get harder.

Today McKinsey has 17,000 employees and 9,000 of these are consultants. Others offering ‘pure’ consulting equally are sizeable organizations. BCG has 9,700 employees and 6,200 consultants, Bain & Co 6,000. A T Kerney have 3,200 with 2,300 consultants, PA Consulting with 2,150, Bearing Point with 3,350, Roland Berger with 2,700 consultants, Monitor Deliottes with 1,500 and the emergence from the combining of PwC’s consulting with Booz & Co into Strategy& with around 3,000 employees makes for a formidable array of business consultants to call upon, when in need. Let alone the countless smaller, more specialised ones below these global players.

Then you briefly look at the jaw-dropping numbers employed at PwC of 184,000 due to their tax and advisory services, Deloitte 203,000 employees, Ernst & Young have around 175,000 and making up the big four is KPMG with 155,000. These make up the ‘muscle’ within the International management consulting firms. Then as we move into technology we get Accenture with 280,000, CapGemini with 131,000 and we have IBM, Hitachi Consulting. It goes on and on.

Consulting is a huge, big business utterly dependent on generating repeating revenue

Big businessWe knew that, didn’t we? The combination of Credentials, Reputation and Size cultivated around the consulting brand has become intoxicating for business organizations.

They seem to simply not live without the consultant being ever-present. They can’t let go, surveys seem to be recently indicating the need to bring more consultants in to solve their problems.Consulting is an integrated big business, designed to extract the numbers, be indispensable.

Spending on consulting can rise (and fall) dramatically. For the large consultants their constant focus on communicating the value they add and differentiating themselves from competitors is vital.

While there is this ongoing pressure among businesses to keep head count low it is stimulating growth for consulting firms, the ones constantly providing the research of global volatility, uncertainty and the need for constant vigilance. The very consultants that argue for a lean approach to be flexible and ‘reactive’, ready to seize opportunities, with the consultants help.

No wonder head counts are kept low with the very ‘solution masters’ whispering in your ear all the possible doom and gloom from their latest research and global surveys. Even if businesses did relax the head-count restrictions it seems all the brightest, not necessary the best, are locked up in the consulting company, happily moving from one different challenge to another. Why would they join one firm and become part of the permanent furniture?

Moving down and across the consulting food chain is essential today for all involved.

To feed these large ‘fee guzzling consulting beasts’ the larger management consultant firm not just search for the ‘big whale’ projects that might have $20 million and upwards in price tags to complete post-merger activities, they often bring them to the board room table. With the recent merger frenzy re-entering the Pharmaceutical scene these fee’s if you land the ‘whale’ become huge.

The shift to combining strategy and technology, the challenge to redesign total system structures is requiring each consulting firm to make their own ever-increasing bets on where to focus. The growing shift is to more operational work, the move away from ‘pure’ strategy work, is redesigning the consultants into more ‘one-stop’ solution providers.

The lower end of fees, below half a million dollars for a piece of work is nothing today, this is becoming table stakes to play at the big consultants table. Consultants are charging $2+ million for a stand-alone study, constantly looking to turn this into the $15 to $20 million total system redesign. This requires having the infrastructure available internally for these more broadly based assignments. Fee’s are clearly on the rise as mega-mergers and risky projects drive the numbers up even more.

The ‘rub’ of repeating money

The RubThe ‘rub is’ that these designs have to be repeated and repeated, to earn the profit margins expected from the investment in those initial up front solutions designed for one customer. ‘Suddenly’ these are turned into global solutions that meet the ’emerging’ shifts in trends to make this a global movement of the many seeking the latest practice.

The solutions suddenly become the large ‘big tent templates’ for repeating revenue as many more clients are needed to be found where this ‘trending’ redesign will help meet this new business imperatives outlined by, oh yes, the same consultants as a must have.

The profit comes from as much as you can ‘repeat’ to ensure you don’t keep reoccurring those dreaded origination costs. The consulting business model requires this repeating even more today than in the past. It simply has too, with all the employees on the books made up of all those very bright “MDs, PhDs, MAs and JDs and countless MBAs” all expecting their bonus to be better than previous years.

I wonder if we are having the conflicts of vested interest in consulting as we have been witnessing in banking with the ‘dual’ chase for big bonuses driving our decisions?

The huge consulting bandwagon rolls on and on

Consulting bangwagonWithout doubt consulting companies are working exceptionally hard on their overall reputation, culling the consultants that don’t perform to prescribed formats and time lines, seeking to accelerate those that do constantly perform.

To support this consultant firms are investing in deepening experiences and exposures into different clients to wring out more projects and ‘drive’ the revenue they need.

They are working really hard on improving their tools/techniques, adding in thought leadership and innovative thinking, improving their reports/presentations into more visual feasts.

They are certainly highly conscious about the results they are delivering as just standing outside the door is the alternative consulting company, just itching to be let in.

Is hiring the outside consultant totally addictive?

I think the use of outside consultants is for ever growing. Consultants are operating up and down our business organizations today. As Organizations have shrunk their resources right down and are still certainly very reluctant to employ new people this will continue.

The pay-off is for whom? Call in the six-pack abs-solution man

Six pack absConsultants have a great advantage over their clients; they can provide their solutions with new understanding, they are the feeders of “best practice” that magical potion waved over you providing you engage me to ‘reveal all’. They are constantly working out to keep ‘in shape’ to help.

They have the equivalent of the six-pack abs as the good looking solutions.

Also they are not only ‘solution fit’ but they are provide the surgeons, doctors to nurse you back to health using their solutions for you to keep your body stable as long as you don’t go off their life support system. This allows you still the opportunity to be able to take on the physical challenges of everyday life in your stride focusing on the efficiencies and improving the effectiveness, moving the flab around, leaving the consultants with the real challenges, the heavy lifting as they bring in the ability to deliver on this.

The consultant offers the solutions to keep you lean and lacking in in-house resource

They provide the solutions to make sure any spare resource (or fat) is quickly eliminated so you can continue to gaze at the solution abs pack of the consultants, simply because you never had the time or real determination to get into the shape to manage these challenges yourself.

The leaner you are, the more dependent on the consulting supplements to keep you going. We are back to the semi-permanent dependence we crave for as ‘we’ simply don’t have the talent or resources to call upon whereas the consultant has plus the ‘revolving door’ experiences.

When the consultant leaves the building (if ever)

Left the buildingWith this prevalent “leave it to others” more often than not when their solution abs consultant leaves the premises, all you are left with is the left over pizza’s and flat cokes from all those late night burns the consultant put in to complete the required data crunches and show to you, their perfect solution.

Thank heavens they are only one phone-call away or is it simply one floor below-away, working on different problems you always seem to have, to adapt the business to the global forces at work?

Don’t tell me it can also be different- not possible

Sorry Mr Faithful employee, just get back to your everyday work. Innovation, oh forget that. We have no time for that; we are plotting the next big thing alongside our consultants. No, look, I mean there are no merger drama’s, complex wheeling and dealings, it is based on too many intangibles, innovation always seems to have long development processes or complex testing procedures, ending up with mixed results. It is best you stick to the incremental stuff and leave me and the big consultant to manage growth, we know best.

“We will simply buy in innovation success” Oh yeah really!

The ultimate key to successTalking of different innovation that can take place within their organizations (disruptive, radical, reverse engineered etc) makes many of those sitting at the top of our organizations have an uncomfortable feeling simply because the big consultants don’t also seem to have the answers to this innovation stuff. Surely if they don’t we can’t possibly!

Understanding the ability to field genuine experts that can be highly valued and focused, well there must be a catch in that surely?

Thankfully today that genuine expert still offers the ‘sweet spot’ for innovation. It is a place for the small, independent, highly focused consulting person or specialized teams that connect the many necessary ‘dots’. Yet getting top management’s attention or sign off is getting harder to achieve, when the big consultant likes to show his growing muscle mass, attempting to cover off the innovation bases as well.

Presently many of the bigger consultants still seem to have little true understanding of the underlying dynamics needed for internally generated innovation, those solutions than can equally lead the growth, if only they were given the same amount of attention at the top. Equally the time line for this can be long, solutions are often unique and much is often not repeatable, this goes against the business model mostly found in bigger consultants.

Thankfully innovation is one of those last frontiers that still mostly come from within, when it is given the chance and the limited external resource that can help facilitate this.

The value of the visiting consultative fireman

Keep calm I am the visiting firemanI was reflecting on the value and role of consultants and have written here, here and here on this. These thoughts have covered the topics of suggesting different consulting models, exploring the shifts taking place in consulting and where consulting can contribute. Then I offered a post late last year under the title of “client engagement- full of whipped cream and lumpy gravy?

So in this post I will reflect and look at the visiting fireman here, the ones I experienced in the corporate world. I still believe they are far from endangered species.

Consultants hold a specific fascination for me, they come in all shapes and sizes, offering a bewildering array of solutions for your business.

For many clients, consultants have become ‘totally essential’  yet for others a necessary evil. Today with far less resource within our business to call upon and coping with increasing pressure on time there is also this total reluctance to employ someone on the books, it is better to bring it in on an ‘as and when’ basis. Keep it lean and mean, charge it off against that years operating expenses, don’t bring it onto the longer-term books.

Mostly the consultants knowledge leaves when they do

What comes in and what leaves gives the value to you in you applying their knowledge not just the consultants solution. Often this knowledge understanding totally ‘fails’ to reside or be absorbed as ongoing learning. Partly it is not so easy to transfer, especially to those that are too busy to learn it!. We often miss this critical point of transference and we continually bring in consultants time and time again, actually for the majority of seemingly ongoing work, the repeating part we should be resourcing from inside but never seem to get around to recruiting or convincing others of the need.

We also never pick up the rhythm and real understanding how the external expert connected all the dots differently from you and we then fail to copy down the important notes to recreate the understanding. Many time I had to ‘catch myself’ on one particular slide, fascinated how that was put together, failing to hear the message behind it.

Have you also noticed how the outsiders always give us those ‘bells and whistles’ we fail to hear within our own immediate surrounding although it was there for us to see but we were too busy to find it, so we simply let others at potentially a higher end cost.

Experiencing the different visiting fireman

Experiencing the firemanIn this post I wanted to recall the visit of many visiting firemen when I was running various country operations in different parts of the world for a handful of global corporations. More than one organization called outside expertise “the visiting fireman”.

There to help fight the fires, hose down the areas of critical combustion, recommend the essential fire fighting equipment and escape drills you will need from their experience.

I had experienced three types of visiting fireman in corporate life.

Three types of firemanThere were three general types; the regional fireman, the corporate fireman and the outside consultant one. Can you relate to these and the mixed emotions they can give you?

Are visiting firemen important to your business?

Yes I expect they are, they can make the real difference between ‘dosing the fire early enough’ to bringing their expertise and resources to bear, helping in managing that crisis or difficult problem you would be unable to resolve without the outside perspective, contribution or support. Yet they all seem to leave one holy of holy messes. There is always some form of re-building to take place from these consultations.

Often I think we all need to ask questions on the value of consultants. Would ‘things’ fall apart without the required dose of consulting medicine? Do they come into the organization, create havoc and then move on? Or do you value them as essential, as you quiet simply do not have the time or resources and expertise ‘in-house’ and they help ensure the delivery alongside you on what is needed within your business?

There are three groups of ‘visiting fireman’ associated with large organizations.

Do these ring any bells with you? These were my experiences and maybe yours are somewhat different, managing in specific operating structures. I spent more of my corporate career tackling difficult operating conditions, often very thin on resources, battling volatile market conditions. Now that does seem like today’s operating world doesn’t it?

I tried to remember some of these ’emotions’ when I then became the visiting fireman myself, in all three different types I will mention here

The first firemen was coming from the regional support group

The first firefighter type 1These seemed to announce their pending arrival sometimes weeks in advanced to fit their crowded agenda of moving from one type of regional or global meeting to another. Or they were suddenly ‘dispatched’ to handle growing issues. That sudden crisis where they ‘must’ be seen to be on hand, Then we had the Sherpa type preparing future visits, fixing the lines and ropes for visitors from ‘on high’ trying to influence your agenda or shape your presentation.

Lastly arriving just a week or so before the key yearly strategic discussion meetings, so as they could be better prepared to fully participate in the discussions to catch up and ‘form’ their opinion. You had to watch the hose on this one, its power and potential disruptive force coming from multiple sources based on latest ‘Intel’ gleaned on these simple fact finding missions.

They came sweeping in offering detailed advice on their specialized area, be that marketing, finance or product development. These tended to be the most difficult discussions, as they were pushing often their personal agenda’s, holding back a critical element of the corporate agenda. They often were believing what you were doing was going against company policy, general direction or conflicting with branding issues. I found much ‘creative friction’ in these visits from the regional fireman.

Ultimately you may have the final decision, or you thought you did,being responsible for the P&L but these visiting firemen could wreak havoc in the ‘whispering game’ back at regional group, prompting numerous conversations with the regional president to clear these ‘conflicts’ up. Most were short on specifics or detailed understanding, grabbing at potential ‘straws’ to be floated in the corporate wind.

I found this group of visiting firemen far less supportive than expected; they had enough understanding to be dangerous but could potentially provide those value additional insights or access to resources you needed. These visits were the most difficult. These were closer inspections to see that the house was in good order and you were not a potential ‘fire hazard.’ It often was a fine balance between their contributing value and what they constrained. These visits often disturbed and confused the local teams.

The second group of visiting fireman, the corporate ‘big-wig’

The corporate firefighter typeThese were usually the corporate executive vice presidents, the chief operating officer, the corporate legal beaver or even the CEO himself. This was a visit where you polished your credentials, went through countless preparations and checks around the facilities. They always had one or two of the regional group in close attendance at least; to point out areas they felt helped the ‘broader agenda’ that “facilitated” the discussions or messed the visit up completely by going off script and you spent the rest of the visit in ‘personal crisis’ mode.

These were times of real pressure where you had two to three hours of getting the message across on what was happening, what needed to be resolved, what was missing, what was the value of appreciating making further investments within the country and why it (and you) was relevant in their bigger picture of things.

Then off on visiting the multiple manufacturing facilities, you praying continuously that the plants would not come to a grinding halt at that precise moment. A ‘lightning inspection’ by this big-wig where you always know the visitors will simply compare, suggest and sometimes to pick up on something that did not fit with their view but was totally out of your local context. Or how they would become (briefly) misty eyed and comment on “when I was running an operation like this”. These visits from the corporate fireman often were defining moments, often that career or future investment defining one rested on the ‘good visit’ deemed by all in the food chain that determined your career.

I always searched for the opportunities for one-on-ones with this corporate fireman where you got the deepest ‘transfer’ of their knowledge. Cutting out dedicated time from the encircling herd of ‘minders’ allowed for some terrific and intense conversations that become the real bond that cemented understanding. These exchanges allowed for my constant learning of the mind-set of the corporate visitor and the value it gave to what you could contribute into the bigger corporate ecosystem.

These visits gave real moments of identity for the team that often drove it on for weeks and months after. These were also times when you could separate personal agenda’s of the more frequent visitor with the corporate agenda, to ‘ground’ your contribution you could make to the corporate set of goals and tasks. These were hugely important visits by the corporate firemen and women.

Then we had the final group of visiting firemen, these were the outside consultant

Outside consultants were often brought in on behalf of someone else or because you needed some different perspectives or solutions. They break down into two types.

The outside consultant firefighter you paid forThe first type is the ones that arrive to make an assessment on behalf of others always had that ‘air’ of real detachment. That ease of knowing what you don’t know but you would love to find out. They listened, they seemed to always take many notes, made countless photocopies that clearly supported their investigation and only gave away what they wanted too.Then left.

These types of visiting fireman is what I regarded as always “short” on advice, even though they had such a potentially richer potential to offer me thoughts than I would benefit from. They were not there for that!

I had to work really hard to ‘draw them out’ by separating what they were there for and what issues they could offer me alternative thinking. It was in many of these conversations you gained some terrific insights on alternative practices, possible avenues of investigation to help you.

Then the ones you were paying for, well not you but it is coming out of your P&L

Your firefighterThen the other ones, where you needed their expertise and the funds for this were to come out of your P&L. I never really seemed to work out this group, or extracted the value I was expecting. I think my need and their agenda mostly with often prepared solutions beforehand often were incompatible. They never seemed to learn the full context before they were off fire fighting. In all honesty I would reckon I got better value from about 25% of those I engaged. They seemed to come well-equipped though

I was recently reading on www.sourceforconsulting.com that only 27% of clients say that the value added by consultants exceeds the amount paid to them in fees when they completed one survey in the Gulf region.

I wish I knew then what I know now.

It is this group, the ones your engage with as consultants, employed by you that I want to spend some time on, in a future post. This will relate more than likely to innovation consulting, although I think most of the comments and observation can be generally applied to most consulting that is for sure.

Where do you feel about the visiting fireman, the expert or consultant and how it works for you? Do you suffer from the many mixed emotions I felt?

 

Are we getting real value out of innovation consultants?

When you stop and think about how innovation has been managed and understood over the years you soon realize how much has changed in this time.  It is very significant, yet there is still much to do. Innovation understanding is changing, certainly for the better and as it shifts our perspectives on where knowledge resides as this is altering.

Today I think we are yet again at yet another crossroads in this innovation understanding and perspective. That is to extract the leading edges required from their innovation activities within organizations. This will require fresh innovation consulting business models to exploit the growing complexity of managing emerging innovation practice to support and extend their understanding.

I’m attempting to get my head around it, let me share some of my thinking here.

There has been a continual shift of where innovation knowledge resides. The external provider, who was the main source of latest insight, hands on practice and leading ideas in the past, I think have been significantly falling behind in recent years, on their contribution and value to organizations.

The advice they are providing is shifting from deep research and repeating practice into investing into offering more the insights of what might constitutes leading edge models to then suggest offerings that generate client value, as a must to understand and have. They have moved from clear ‘leading’ practice proponents to often ‘lagging’ but are exploiting their connections for knowledge insights to offset this.

Innovation knowledge is residing far more in-house of the client

The innovation knowledge needed for completing innovation has transferred more and more within the actual organizations needing to achieve the innovating. Through their constant ‘sets of experience’, working daily within innovation they are building up some essential capabilities and capacities. The external provider has to be able to spot and fill the gaps to offer any value, they are not leading but responding.

With the growing reliance on collaborative tools and the use of technology has meant much more of the complexity of projects has to be managed from within, far too much of the necessary insights and linkages needed cannot come from external resources.

Consultants are being relegated to issues that remain complex but essentially generic, important to organizations but not the vital part of innovation need.  The use of external providers has progressively reduced in high-end value activities into more gap filling ones, as they lack the depth of inside knowledge to pull together the thinking and outcomes needed for delivering the innovation outcomes.

Their value as project specialists has even diminished due to the network need becoming so vital within dispersed organizations and this requires a deepening internal understanding and where the knowledge resides to be extracted.

It seems the role of the consultant has become more marginalised or specialised.

The business model for innovation consulting needs changing. Innovation within consultancies has been seen to be a cheap exercise to support, often not seen as the powerful force for driving the growth and fortunes of the organization as it should have been.

Much of innovations troubles today have been this poor recognition of the need of innovation to ‘reside’ in the boardroom.  It was disconnected from the strategic domain as it was a little ‘abstract’ and intangible, light on established practice.

Today that has changed, innovation needs a much higher focus, it needs to be fully aligned to what an organization wants to do, if it wants to thrive and grow. Innovation is very strategic.

There was also the ‘established practice’ over many years of consulting multiple times across similar issues that were just repeating themselves across many clients that had value that clients were willing to pay for. Often the consultant invested in the costs only once to find the (common) solutions and then set about extracted an increasing yield of return from repeating this multiple times. Today clients see through these practices and are certainly seeking uniqueness to their specific problems. Best practice still extracts from that rather tired model of establishing common practice.

Today innovation needed has to be increasingly unique, for the end results to stand out. This has its implications for anyone providing a service.   The value of best practice might give assurances to the doubters but it is the growing focus on emerging or novel practice that is more valuable to know about.

Also the growing use of open innovation has also enabled more organizations to learn from others and exclude the middle man, by working directly with others tackling similar problems and learning from each other.

Large Consultants are becoming marginalised as they lack the depth of expertise, collaborative inputs that contribute, the notable exception being still in technology application and the expertise and knowledge to link this across global organizations.

The large consulting practices certainly still possess the ‘on-hand’ extra ‘feet-on-the ground’ to augment the repeating work being undertaken within organizations or validating its position. These shift means thinner margins, more chasing to cover growing fixed costs being built up in the broad scoped consulting practice.

Shifting focus on what innovation consultants need to offer.

Consultants working in innovation today, are less ‘innovation factories’ producing the solutions and are often left with more ‘constant’ re-bottling the wine’ to maintain their place. The taste is for consistency not challenging the palate. Consultants can become more advocates for change but this needs a consistency of focus to extract value out of, as the external source of championing change, by providing the knowledge insight.

There is also this rapidly adjusting position into specific ‘knowledge providers’ and validators. Just look at the explosion of thought leadership coming from consulting firms, their ability to hone in and benchmark trends by having access to C-level executives provides a more ‘open’ understanding that internal analysis can ‘pick apart’ and absorb or reject.

Actually in a recent piece of research by www.sourceforconsulting.com they are suggesting the Law of Inverse Audiences for though leadership pieces: the narrower your focus (research or thought piece) the smaller the number of readers but the more interested and engaged those readers are likely to be.

The real insight in this was not so much thinking you know your audience here but the trend that is occurring- to forward this insight onto colleagues as validation or collateral to doubters. Yet the consultant who researched or wrote the piece will most probably never know where it has been used as it’s gone internal. Inside absorption of this external knowledge and what was actually achieved by the consulting firm that undertook this. The old model states “the client will think of us when needed” Will they?

No, the business model for innovation consulting is actually under attack, the position of making money is becoming a whole lot harder unless you shift perspectives and redesign what you can offer so it ‘fits’ far more with the internal needs of clients today.

Are these some of the shifts we are detecting?

An initial work-in-progress list of the shifts in consulting taking place relating to innovation – so what is missing here? This is certainly not exhaustive and not set out to be that, it is attempting to ‘ indicate’ the consistent shifting that has and is taking place in adapting the innovation consulting business model, in search of growth and utilization.

        Old Consulting Models

    New Consulting Needs

Required search for ‘tested’ best practices

Need for emerging and novel practice

Quickly ramp up and replicate work to ‘defray’ costs and extract margin

Starting from scratch, rapid assimilation, pushing to provide increased value and services to get margins

Have established road maps to overlay over multiple projects

Needing to translate unique efforts and contribute to building novel road maps

Established project management and milestone reporting

More ‘ad hoc’ project validation and screening

Sharing established models

Searching for unique models

Building a repository of best practice and replicating these across industry players

Extracting emerging practices to quickly translate and inject into unique approaches

Gather & Extract in a ‘paced’ way

Rapid dispersion and translating the absorbed learning

Defined tried and tested solutions based on established practices

Reacting to adaptive challenges, shaping solutions to search for ‘something’ new

Pushing for broad scope

Forced into narrow scope engagements

We are here to serve as the trusted advisor and wait your call

We need to consistently  search for our meaning and value to have a role to fill

Looser frameworks to extend and explore

Tighter context for value and alignment

Seen as the broad experts

Role of niche provider, resource support appeal

Seen as broader change agents

Needed for managing specific change to handle the continuity and stability challenges in resource thin organizations

Source of original / creative thinker

Source of objective view to quantify risk

Having relevant skills available

Providing general resources

Provider of clear and established methodologies and practices that are accepted norms

Assessing and validating risks for alternative solutions and practices outside the norm.

Initial ‘Go To’ Source of External Knowledge and sole trusted source.

Augmenting Broader Options for External Knowledge from Suppliers, Clients, Journals, Competitors, Universities & Institutions

Provider of Best in Class ‘Classic’ Training and Research and Development Thinking In-house, taking revenue stream

Ad Hoc provider or orchestrator often outsourcing to more specialist providers, sharing revenue stream, more reciprocating.

Stand Alone- all in-house resourced

More Collaborative – bringing in ‘one off’ expertise for specific assignments

Managing challenges in more ‘static and stable’ market conditions.

Coping as much with the constant challenges and challenges of complexity in market conditions

What does the future hold for ‘traditional’ innovation consulting?

Whatever the shifts taking place and I think there are many, the established, more traditional consulting model is not working for innovation. They are being marginalized, left often to catch up with the work going on within their clients. The consultant is not leading; they are following in the practice of innovation. Greater specialization is required and seemingly valued by clients. Knowing what this is becomes the hard part.

There also needs to be further work on what differentiates’ one consultant with another. The client is far more discerning, reacts very negatively to any ‘one size’ fits all approach as innovation activity is unique to each client. The establishment of more Chief Innovation Offices or Vice Presidents for innovation are demanding more from their service providers than ever before. These providers need to be clearly seen as differentiators otherwise that will not get house room.

Shifting sands, covering up old weaknesses

The world of consulting does need to change but many of the client issues still continue to remain the same or in some cases might have even got worse. It becomes  the consultants challenge on more how you can reduce the ‘pressures’ on internal teams or provides real ‘impact’ that supports ‘delivery’ differently than before and can’t be achieved internally alone.

Clients still struggle with a consistent ‘lack of time’ and as we know time is either a friend if you have it or the worst enemy to innovation if you don’t. Just simply chasing for client answers is getting worse rather than better.  Clients are constantly stretched in their utilization of the limited resources they have available to them. They are constantly being distracted away from managing the bigger picture, into side events or having ‘dual’ roles.

There remains this chronic attitude of “I’m not taking any risk or we don’t have a real appetite for experimentation” pervading board rooms. The reality is clients still want tried and tested solutions, yet for me, crazy as this is, they are reluctant to be the experiment lab yet they cry out for the need to be different. How do you ‘square that off’ with what innovation needs to have – a constantly exploring and experimental climate – to find new solutions?

Client budgets seem to be tighter each year, the cost of each innovation undertaken is rising and taking more time and cost as well as the toll for dealing with growing complexity and conflict is demanding. Organizations and the individuals responsible are under growing pressure for innovation to generate real sustaining growth.

Consultants have to manage complexity within today’s dynamics.

Consultants have to work through these dynamics to find their position to offer value and how to figure out what their position is so as to provide the relevant services. This will increasingly call for a far more flexible, agile and focused model than ever before. The pressure on margins, the inability to have more ‘bench strength’ simply waiting around for that client call, the procurement procedures that batter down fees, scope and future options, limit detailed discussions until contracts are awarded makes this harder to work through, yet consultants must.

There are also seemingly more competitors around, in the form of boutique providers of really specialised focus or industry specific expertise, a clutch of independent providers of detailed innovation knowledge and plenty of workshop and training providers, all nibbling away at those finite client budgets that keep eroding the margins and scope for building a reputation for innovation consulting.

Can today’s consulting practice for innovation stand out?

How can they provide real needed and welcomed services to the client? It is getting harder I feel out there for many and the search for different and unique innovation consulting business models is definitely on.

Some are managing this by working on their value position to offer 1) new solutions, 2) adapting solutions that are more evolutionary in their growing understanding, 3) thought leadership that provides new insights and advice to underpin selected competencies and 4) being masters of creative problem solving.

Getting your specialization right

For me I designate these emerging inovation practices as made up of 1) Systems thinkers,2) Structure implementers, 3) Subject Matter experts and those that are 4)Advocacy Catalysts within innovation, or there is a hybrid of all of these, aligned more than likely to a given innovation specialisation.

Whatever the services offered, these still need to be valued by the client (as their clear jobs-to-be-done) and to be positioned and recognized as the service provider who can deliver a higher degree of uniqueness for supporting the specific solutions on these.

I think this is calling for very different innovation consulting business models, more agile, flexible and adapting to unique conditions found within each client.

So if you are an innovation consultant are you mapping your one out or working through the multiple options on your business model canvas yet? I would, as it is not just to survive but to search and find the winning ways to thrive and be recognized as the expert needed.

As for clients, to extract real value from your providers are you clear enough on what you need? Perhaps I can help? I prefer to work in the advocacy space and try to offer subject matter thinking.