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When I joined the consulting industry, my guru's taught me an important lesson. They told me that clients are of three distinct types
Those who don't know what changes are required
Those who don't know how to change
Those who don't have the capabilities and resources for the change
In the first case, clients may be proactive or reactive. Proactive clients are those that are looking at the future and are purpose-driven. They seek insights into changes that are required to protect their future. The reactive clients are those who are facing a crisis and need insights into the changes they need to do.
In the second case, the clients have a realization that change is required, but they don't know how to change. The insight about the need for change may have come from market trends, industry trends, conversations with peers, customer feedback etc.
In the 3rd case, clients realize what should be done, but lack the resources and competencies that are required for designing and executing the plan.
When we talk to organizations about innovation, we come across three types of organizations
Organizations without an innovation agenda - these are organizations that are yet to recognize innovation as a key requirement for their future. As a result, they have no clear approach towards innovation.
Organizations that recognize the need for innovation but deal with it as an improvement project - these organizations realize that future growth and competitiveness require innovation. However, they are tool focussed and don't realise that innovation requires a different operating model. What they end up with is Innovation Theatre
Organizations that recognize that innovation needs a systematic approach - develop strategies that are appropriate with ambition and capabilities. Often they discover that this is a transformation journey.
How can consultants help such organizations?
I have come to realize that selling innovation as a transformation program is not going to work.
It's very much like the days of Total Quality and Operations Excellence / Lean. TQM, TPM and Lean became industry standards decades after the practices were well established. Organizations had challenges with quality, OEE, productivity, inventory, flexibility etc., but didn't immediately jump into TQM, TPM or Lean programs.
Until customers became serious about quality and only when they realized that improving quality was key for operations excellence, did organizations invest in programs such as TQM, TPM, Six Sigma, Lean etc. Once they had this realization, they stopped being tool focused and began calling these programs operations and business excellence.
Right now innovation is in the same phase that quality management was between 1990 and 2005, they range reflecting the maturity of the organization.
Some organizations look at it as a modern-day fad, that will pass.
Some organizations look at it as tools and begin looking for "fashion statements"; hackathons, creativity, design thinking, TRIZ etc.
Some organizations think it is not relevant to them / their industry and completely ignore it
Some organizations think they are already innovative and rename their R&D or excellence teams as innovation centres/teams.
Some begin to understand the full impact of innovation and the task ahead
Meanwhile, you will find confusion abound in the consulting industry. Old practices will be resold as innovation. Digital transformation will be labelled as innovation (it is one of the most powerful ways of innovation). Consultants will also come up with a variety of frameworks.
Eventually, everyone will come around to a few things about innovation
Innovation is an outcome - A new or changed entity, realizing or redistributing value
Innovation requires a management system different from one that successfully drives the day-to-day business
Innovation deals with uncertainty and hence requires a balanced portfolio across horizons.
Innovation requires some sort of future scenario planning
You will unlikely have all the competencies required to deliver innovation.
You need a well-thought strategy; incremental vs radical. First to market vs fast follower. Develop internally vs acquire etc.
What could you do?
I am a big fan of hypothesis testing and fast iterations. The first thing is to start with the right hypothesis. Here are some and you can choose the ones you want to answer.
Hypothesis 1: I know how the future of my industry/organization (think 10 years)
Hypothesis 2: Our portfolio of offerings/solutions is relevant to the future
Hypothesis 3: The direction of efforts is robust and will ensure the long-term viability
Hypothesis 4: We have a common understanding of innovation
Hypothesis 5: Innovation receives priority within the organization
Hypothesis 6: We spend enough money and resources on innovation
Hypothesis 7: We aren't recycling what we already know as innovation
Hypothesis 8: What we develop as innovation are the ones that customer desire, the ecosystem finds feasible and the business finds viable
Hypothesis 9: We know how our value chain is evolving and maturing. This is part of our strategy
Hypothesis 10: We have the capability to innovate, it is measured and is quantifiable
If these aren't sufficient, I am happy to provide you with more hypotheses to evaluate.
Your decision of what to do about innovation will be far more clear once you have gone through these hypotheses.
We are of course happy to have a detailed discussion with you on the topic of innovation and how you could improve our process.
Reach out to krishnan@thinkhorizonconsulting.com or book a free 60-minute consultation using the link https://bit.ly/talktoKRN
Krishnan Naganathan
Krishnan is a leading innovation consultant and focuses on helping people and organizations innovate and build capabilities for innovation. He brings over 25 years of experience in the industry and consulting. You can reach him by phone / WhatsApp: +919791033967 or email: krishnan@thinkhorizonconsulting.com