Being fairly curious you search for the fit and its meaning to both parties as Innosight has been continually shaping their offering to focus more on the strategic positioning of innovation over the past few years as the market has been undergoing a significant change in client demands and innovation solutions. I wanted to work through all of what this might mean and some more.

The transaction overview is ” Huron will purchase Innosight Holdings, LLC for $100 million upon closing, consisting of $90 million in cash and $10 million in Huron common stock, plus contingent consideration of up to $35 million if specific financial performance targets are met over a four-year period”

This time last year we saw another acquiring of a pure innovation firm

This time last year we saw the takeover of Fahrenheit 212 by Cap Gemini and I wrote about it here under “In the blink of an eye, it gets something bigger.” I had suggested at the time that “David meets and marries a Goliath” and worried over the deal for Fahrenheit’s future.

Recently I went back and took an updated look and from all accounts the relationship is thriving (on the surface) and the Fahrenheit team seems to be well on track to achieve their stated aim of being a global innovation strategy and design firm  where their stated objectives are “we challenge the belief that innovation is inherently unreliable and have spent the last decade designing the method, building the model, and assembling the minds to make innovation a predictable driver of growth for our clients’ businesses“.

Part of their magic sauce lies in the Applied Innovation Exchange that had been designed and launched by Cap Gemini some weeks before Fahrenheit 212 was acquired. Still taking a fresh look at the underlying changes of that marriage is for another post, let’s return to Innosight’s move of being acquired by Huron.

Back to Innosight.

I consistently look at different innovation consulting firms and the directions they are taking as it makes sense to gauge the directions that client demand is taking. Innosight is one of those first port of calls for me. They have been undertaking some internal moves in recent years, to reflect the changes and challenges around a ‘pure’ focus on innovation and where it fits within the larger organization,  by attempting to move further up into the strategic design and alignment in building greater C-Level engagements, searching for larger project sized contracts.

Innosight has been continually shaping their offering to focus more on the strategic positioning of innovation. They break down their offering into three core parts- 1. Create Growth Strategies that “Strengthen and extend today’s business – while harnessing the disruptive innovations of tomorrow”, 2. Develop Innovation Capabilities of “the talent, culture, and systems to make innovation repeatable and reliable” and 3 Build New Business to “discover opportunities, design new business models, and launch high-impact new ventures.

Understanding the rationale. Working through it.

Innosight is a partnership so it was not so easy to gain the type of understanding you require, relating the aspirations, reality with hard numbers. Well as Huron is on the  NASDAQ (HURN) it becomes a little easier in what they need to declare for this acquisition.

I was a little surprised that Innosight had a turnover of $43 million in 2016, I was expecting more from a team of 90 people. Also how the breakdown of revenue by industry specific their business profile was not as I would have expected. Although these clearly change by the demand of the clients and the recognition that the consultant can deliver the work, compared to others, in a very tough competing environment.

According to the first webcast on this acquisition (17/2), Innosight has 31% of their revenue in Life Sciences and 15% in Healthcare in 2016, so on the surface, they have a 46% ‘fit’ to Huron. The big difference coming in the fact that Huron is servicing around 500 health organizations mostly individual hospitals and academic medical centers, with 400 universities and institutions. Innosight has focused far more on Corporations, one notable one being Aetna. Huron has around 2,000 employees and having present revenues (excluding Innosight) of $726m in 2016. Is it such a fit?

What did surprise me on how the Consumer Products part of Innosight’s business had fallen away from what I can see and that might reflect the growing gap still to be found at ‘appealing’ to the C-Level on strategic innovation and the ongoing need for operational delivery of innovation capabilities and competencies.

These insights show Innosight has been adapting and responding to changing innovation needs and market opportunities as they felt they could work the horizontal, across industry, for many of the innovation capabilities and designs, although it is certainly becoming more complex at strategic design level. Yet this across-industry has been going against the ‘competitive’ grain when you are facing large vertical and horizontal consulting practices that claim they offer both a real depth of industry and innovation-specific knowledge. Often I do question these claims, in what I see, with notable exceptions.

I think it is this positioning as a strategic consulting company, competing in an extremely tough environment with the big strategic consulting companies of McKinsey, BCG, Deloitte, Strategy& and a whole host of full consulting and service solutions where EY, KPMG, and others all compete for a slice of the innovation pie is a very tough one for Innosight to gain the momentum they would have liked.

Equally, at the operational and integration end, we see Cap Gemini, Accenture, TCS and many others offering digital and transformation services. No, a very tough market to compete in and I think for Innosight this must have been a constant ongoing struggle.

Rooting for the specialist.

I will instinctively root for the focused business that has innovation at its core and Innosight has been one of these. Their focus on strengthening and relating growth needs coming from innovation and its necessary alignment was a good but perhaps too niche a position to constrain their growth against such global competition.

The disruptive message they offered, although a powerful one, needs a highly receptive audience and most organizations leave their changes until they are often in the middle of a crisis and then they tend to panic and call in the ‘big guns’ of the consulting world.

Finally, in this section, Innosight’s growth route through innovation was a good position. They focused increasingly on alignment and taking a ‘future back’ approach to eventual strategic design, to determine new innovation business models was a good targetted focus and has been, I suspect, the reason for their compounding 20% yearly growth. Yet I can imagine they were not achieving that critical mass and scale I suspect they wanted, to stay independent and became open to an offer. For some to perhaps ‘cash out’ while others stay for varying reasons.

In the announcement of this acquisition Huron made the following overview:

“When combined, Huron and Innosight will use their strategic, operational and technology capabilities to help clients across multiple industries develop pioneering solutions to address disruption and achieve sustained growth.

“No industry is immune to disruption. Faced with increased competition, often from unconventional sources, organizations are forced to rethink their historical strategies to stay ahead of market forces and changing customer preferences,” said James H. Roth, chief executive officer and president of Huron. “Together, we will provide a full spectrum of services – from strategy to execution – that will help organizations think, plan and act differently to confront disruption and accelerate growth.”

Built by leading strategic thinkers and co-founded by renowned strategy consultant Mark Johnson and Harvard Business School professor and author Clayton Christensen, the world’s foremost authority on disruptive innovation, Innosight is a trusted partner to Fortune 500 companies and other leaders looking to strengthen today’s business while creating tomorrow’s growth engines. The firm’s innovation and transformational strategies have proven successful in industries undergoing disruptive change such as aerospace, automotive, energy, financial services, healthcare, insurance, life sciences and retail.

“Companies are under mounting pressure to satisfy a range of competing interests,” said Scott Anthony, managing partner at Innosight, who will become a Huron managing director. “But shifting stakeholder expectations, combined with disruptive change, create significant opportunities for today’s leaders. Huron and Innosight’s combination of capabilities in strategy, operations, technology, and analytics will enable us to offer transformative change to address these opportunities.”

Formed in 2000, Innosight recognized that traditional approaches to strategy and growth were not enough to help companies accelerate transformational change. This became the basis for its “future back” approach to strategy. Organizations that apply Innosight’s approach build leadership alignment on a vision for the future and create portfolios of new innovations and growth businesses that address changing customer needs and outpace their competitors.

Applying the same methodology alongside Huron’s deep industry expertise in healthcare, education and life sciences, the combined firms will help leaders in these critical industries successfully navigate changing market dynamics, regulations and consumer expectations to grow for the long-term”

“No industry is immune to disruption” Here lies the rub.

I think this disruption thought underscores the joint rationale for this acquisition. Heron is facing some massive forces of disruption in their primary business of Health as well as Education. With a Republican party looking really hard on how it will unwind or redirect the Affordable Care Act (ACA) The comprehensive health care reform law enacted in March 2010 (sometimes known as ACA, PPACA, or “Obamacare”) has given much of the past growth to Huron. Today they are seeing declines in this sector while this uncertainty continues. Clients are downsizing in projects while the political and macro conditions are sorted out.

The same is about to possibly ‘hit’ in Huron’s Higher Educational offerings as the new Administration has signaled large questions of necessary change in the general direction of Education- Presently with all the uncertainties of the new Secretary of Education, Betsy DeVos and the directions she takes in what some are assuming is a radical agenda of change, leaves the higher educational institutions in a potential ‘state of flux’.

As this potential set of policy disruptions will need time to get the level of clarification and granularity clients required, it exposes Huron and 70% plus of its business to many uncertainties.

Arguably, it will be well positioned when these policy decisions become clarified but that is potentially arriving over the next two to even four years between being decided and enacted, into policy and clarity for the individual institutions to react too.

This present operating environment for Huron does make for real uncertainty, especially in larger transformational consulting projects but it needs to manage the interim in different ways. So positioning for disruptive change and managing strategic and operation transitions become essential to help manage this period of great industry uncertainty.

Transformational guidance becomes the key mutual focus.

Innosight has been positioning itself increasingly as a growth strategy consulting firm focused on helping organizations design and create the future, instead of being disrupted by it. As a leading authority on disruptive innovation and strategic transformation, these identifications of new growth opportunities, making changes through new ventures and designing the capabilities to accelerate to significant industry and organizational change. will require a lot of guidance to support organizations as they contend with the change transforming their industries and businesses.

For Innosight does it make any changes with its direction? Open questions perhaps?

Innosight had a global footprint, it seems Huron withdrew from its international business expansion back in 2015. Although Innosight has 80% of its business in the US, will it continue to pursue growth outside?. It has an office in Singapore and one in Switzerland and when you are servicing Global fortune 500 equivalents you need this broader presence. Huron has really a 100% business in North America.

Do they compliment and focus only on the US market or will they stay global in ambition, if the C-Level remains as an essential focus, it stays both a necessity for one (Innosight) and an aspiration for the other (Huron). That will have its integrating challenges perhaps or will they combined have and global appeal in the focus sectors Huron currently serves as very US centric?

Equally, although Innosight has been growing its Healthcare and Life Sciences business the blending of very specific work on operational matters by Huron with Innosight’s C-Level future back work and the search for growth, new business models and launching new ventures needs some radical aligning to leverage well, it needs some dedicated work.

Innosight by spanning more the horizontal position, across industries needs some recalibrating possibly with Hurons’ more vertical depth and very deep operational engagement. Possibly not so easy but a challenge to extract and leverage the complementarities in many ways quickly, or it gets likely to becomes ‘bogged’ down in those past entrenched internal positions that are highly vertically focused.

Will this be a prelude to a new operating structure? Maybe it is the time.

Having this aspiration of Hurons in dealing at C-Level becomes a reality with the leadership team that resides in Innosight and the thought leadership that constantly emerges in the form of innovation thinking, books, and academic work.

Will Clayton Christensen, along with Mark Johnson and Scott Anthony give Huron the entry point into the C-Level and Government Corridors? I’m not sure it the core leadership team of Innosight is staying or cashing out?. That has yet to be fully and specifically clarified. How does that move across the 2,000 seemingly highly industry specific plus consultants, I think will be an equal challenge.

When you also look at the present advisory heavyweights of Academia, advising Innosight in the form of Vijay Govindarajan, Rita McGrath, Hal Gregersen, Jeff Dyer, Clark Gilbert as well as Clay Christensen, along with numerous others that work with Innosight to varying degrees, it should have greater ‘growth’ gravitas.

If the advisors to Innosight stay involved then the potential to gain leading academic insight, to help open corporate C-Level doors and clarify much, has a powerful ‘enabling effect’ that Huron will need to relate too. Hopefully, they, (Huron) are not losing this in the acquisition as it harnesses a really powerful brains trust in my opinion at the right point of organization entry.

I was a little surprised that Huron has 120 plus client-serving Managing Directors.

From what I understand is that Scott Anthony, the present MD of Innosight, will become one of these Managing Directors positioned in the Business Advisory service area. I wonder about this, for positioning around so much uncertainty and potential disruption if this is the right place?

Of course, I don’t have details of any of the Innosight teams new positioning but to transition from a partnership to a (highly) structured consulting firm as Huron seems to convey. The question becomes perhaps one of utilizing talent in the best way not ‘just’ fitting into given structures.

Maybe something more radical will emerge

I would argue with so much ahead in many corporate strategic redesigns, as well as coping with industry disruptions, both in the US and global markets, the scarce resource becomes those that can articulate and energize the set of strategic decisions needed, experienced in disruption and planning out new business models becomes the critical one to nurture and transfer.

That is not easy as it calls for a combination of change management skills and strategic grounding at C-Level ‘speak’. Then you gain the operational outcome ‘flowthrough’ from this and the challenge is harnessing those fairly rare resources both across vertical and horizontal challenges with the strategic dialogues delivered at the right level.

This managing of an internal design change can become the critical enabler and criteria to judge how this acquisition works in identifying, leveraging and harnessing the diverse resources across the ‘disrupting’ landscape ahead.

The existing structure at Huron is a classic consultants – seemingly siloed.

In Hurons recent risk assessment (Form 10-K) it stated on its employees ” the managing directors are the key drivers of the business. They work externally to serve clients as advisors and engagement team leaders, originate revenue by developing new and existing client relationships, and enhance our reputation. Internally they create our intellectual capital and develop our people. Our senior directors, directors and managers manage the day-to-day client relationships and oversee the delivery and quality of our work product.”

I would wonder how the dynamics and flow of a partnership differs in where it places its emphasis, time, management and energy. I feel it will require some adjustments for Innosight to relate into a much larger organization set up more vertically in focus and structured in the traditional lines of a larger consulting practice?

Finally Huron’s headquarters are located in Chicago with domestic and international (?) offices including those located in the following major metropolitan areas: Atlanta, Bangalore, Boston, Buffalo (N.Y.), Dallas, Denver, Detroit, Houston, Madison (Wis.), New York, Pensacola (Fla.), Portland (Ore.), Raleigh (N.C.), San Francisco, Toronto and Washington, D.C. Whereas Innosight is located in Boston (80%) of the team, Switzerland, and Singapore. The domestic US market perspective will clearly dominate, will it become all-dominating? Are we going to see a growing global footprint or a retreat into America?

I think the acquisition does come as a surprise.

I had not, in all honesty, heard of Huron but that is not so surprising because I am not so focused on Health Care, Hospitals and Medical Institutions, or the operational matters they have clearly built a strong business upon, specifically in the United States. So I initially wondered on the attraction between the two. Just simply why?

It boils down to a significant cash consideration for the partnership of Innosight to distribute, partly knowing being independent is a long hard slog. It is equally this growing recognition that “no industry is immune to disruption” including consulting, often working on perhaps outdated consulting models. It is also a crisis of revenue need for Huron, a publically quoted organization recognizing the deteriorating state of the US healthcare market.

There is this increasing realization that greater disruptive forces are coming into play, in the form of even more competitors, increased pressures on margins, a struggle to achieve the bigger projects in uncertain time and the debate on where to focus, vertically or horizontally.

A further choice of  managing all the forces of change domestically in the biggest consulting market of the USA at a significantly changing time politically, or taking out a global footprint further out becomes a real challenge to manage well and keep shareholders happy. Global footprints come at a far higher higher cost to utilization of assets, facing the growing, diverse and challenging consulting market where big seems to be getting bigger and more diverse, offering such scale and access to deep resource to call upon any time. Some tough decisions have to be made here beyond the aspirational.

In summary

Both Huron and Innosight trade on close client relationships once established, a focus on clear reputation, harnessing either industry experience or subject matter knowledge (disruption theory, innovation, business model change) to then deliver to the client’s explicit needs. in potentially more meaningful and focused ways as highly specialized.

Do they achieve a balanced portfolio of services with this deal? Perhaps no, they certainly fill or plug some essential gaps but the ability to really leverage this is the “real ability to straddle“, not just diverse client needs but the one that for me, makes or breaks this, the internal straddling required to integrate and leverage each of the parts into a cohesive whole. It will be interesting to see how this plays out.

The macro and micro forces are in play across all the consulting industry, it is not immune itself. So many questions are being raised on global uncertainties that will impact both the US & global focus for many. Many political and Government decisions will be forcing change but while this stays unclear, for many this is a growing time of uncertainty.  It is the ability to “focus out”, design and determine what are the real disruptive forces each client has to double down upon, will provide options and alternatives to thrive in this age of transformation.

As I said earlier that is a rare ability to harness the strategic patterns and design new innovation business models and this takes a specific skill set, which seems Huron are buying in this acquisition of Innosight. Time will tell on the acquisition success as the internal design of Huron to take advantage of these changing market forces does need further fleshing out. It needs a very different language of (client) design and articulation, I believe.

Hopefully, that clarity comes in the coming days in further investor and webcast calls.

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The post Possibly a Significant Shift in the Innovation Consulting World? first appeared on Building Your Innovation & Ecosystem Intelligence.

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?

The post In the blink of an eye, it gets something bigger first appeared on Building Your Innovation & Ecosystem Intelligence.

Putting that aside the website, the current point of reference, leaves me puzzled, a little unclear on its ‘compelling’ proposition. I think I get it but it simply strikes me as a launch as ‘thin,’ on really spelling it out for me, or surely the very clients, in its value and potential. It actually seems a very minimum viable product.  I just had to go in search of a better understanding.

The concept of having any “applied innovation exchange” coming from Capgemini should be promising, as somewhere to go, as they are a leading technology consulting practice. It ‘seems’ to be offering a connecting platform, well-established ecosystem advantages but it seems so understated here.

Why? It seems so tenuous, a toe in the water. I would have expected a much bigger bang here. The website told me just enough but I think it should have delivered more.

My understanding came more from the press release

So to get a better understanding I actually had to reverted to the press release and that provided more than the website in providing some improved clarity, as there seems precious little else at present. It seems they are offering a place and a digital space where others can come and play, to accelerate their innovation activities.

According to this press release AIE is “an integrated system, offering a process to rapidly and securely gain competitive advantage in today’s fast-pace innovation market landscape, by compressing cycle time from discovery to deployment of innovation“. Now that would be good news for nearly any innovation team, as they all seem to be under growing pressure to add even more speed from idea to final concept, so they can get their innovation ideas out of the door. Yet my puzzlement shifted a little here on the optimism of this.

The solutions are coming from offer spaces and “exchanges” where organizations are able to immerse themselves in the understanding, experimentation and application of all aspects of emerging technologies, as well as addressing the business disruptions confronting them and their industries”. Again my pulse moves up a notch or two on this. Although these did seem to be bricks and mortar, more than cloud and remote based.

Also they will be offering a global curated ecosystem of innovation partners and a framework of tried and tested tools to help enterprises to exploit these market disruptions in a structured way. I assume ‘the curated by’ will be by Cap Gemini as it is their Exchange.

The physical spaces they are providing are presently in Munich, Paris, Lille, Toulouse, Utrecht, Mumbai, Melbourne and now San Fransisco, followed soon by London, that will house key sectoral and process domain expertise, to allow the applications of these “innovations” to their specific business connect need. Presently these are working on different solutions for the automotive sector, virtual reality glasses, agile products and services for energy, developing applications for the French Railway (SNCF for connected watches) and a number of other examples outlined in the press release.

The promise presented in this release is also that they will provide the connecting up to other significant global technology players, most already in the Capgemini network, with the intent to build a global network of start-ups, academic institutions, research organizations, access to venture capital and private equity firms.

The promise is that this AIE ecosystem will be an operating framework constantly evolving taking a greater collaborative approach and allowing the balance between external and internal thinking to apply innovative solutions.

Returning to the web site of AIE

Here is the puzzle, I was really expecting something that underscored platforms, ecosystems, gave a greater clarification of partners, a greater story on all this physical space being offered; what was in it to play with, learn from and engagement with, but it remains “thin” and this from a leading technology consultant. The client stories help validate an (emerging) concept but does it really differ itself, in ways that make me stop and feel that this Applied Innovation Exchange is really different?

I’m not sure on what I see going back to the website, it looks like a story unfolding possibly, that might have been put together quickly or in this MVP way. It seems to have a very limited architecture or depth behind it as far as you can initially explore- for me it seems somewhat beyond a placeholder but it just does not seem to reflect a real “connected thinking” behind it, that you would expect from one of the global digital leading consulting firms.

It is speaking the language of need but I’m yet unsure of if it’s a game changer or “breaking traditional models” even though it is suggesting it is taking a multi-party collaborative approach.

Being far too cautious perhaps?

For me it is a wait and see, what about for others? I believe in platforms and written fairly extensively on these (here,and here), ecosystems (here) and (here), collaborative innovation (here) and (here), transcending different industry boundaries (here),  where consultants can contribute (here) and (here) . Equally presenting the arguments that there is this need is to shift to a new radical model (here) and are we getting real value out of the existing innovation consultants (here), which I certainly believe we are not. I felt Capgemini could have presented a more compelling and connecting story for this launch

Have Capgemini fallen into the trap that I’ve written about before (here) of “Consultants are far too cautious for their own good“ It is often harder to make internal change than providing the advice for others to make. As I assume this was all internally driven you enter the world of the typical client, lots of conflicting opinions, worries of risk, what to reveal and provide, as others are watching and can be fairly nimble if they spot something different. Maybe this is an assumption too far but it is not delivering a wow factor, yet for me.

Bridging the intent with the present deliver

So I hear you Capgemini on the intent, I would suggest the execution and launch might not be living up to this as yet. Still it is early days, or I am missing something a whole lot deeper that is failing to be conveyed in this website? .As I say, the press release gave a whole lot more than this site. Is that a good thing as it stands?

There is a real need to put some ‘red meat’ on the bone here or perhaps a seen ‘gap in the market’ might be lost to others as they can explain it better, Capgemini needs to recognize urgently this real need for a deeper understanding presently missing.

Equally internally, in consultants you have strong and diverse opinions and I would fear these potential internal antibodies kick-in and go back to the traditional practice unless they see their own compelling value, treating this as just another part of the technology service offering, an add-on, or perhaps it simply was just that, an extension to existing services?

The post Is this really breaking the traditional model on Innovation? first appeared on Building Your Innovation & Ecosystem Intelligence.

We hear this consistently, our continual problem is trying to make sense of it for ourselves, we know all around us seems to constantly increase in its complexity but how are we keeping pace or at least trying too? I can’t check out of the human race just yet, can you afford too? If not then read on.

The post Delving into a complex world: helping to keep pace first appeared on Building Your Innovation & Ecosystem Intelligence.

Unless this changes it will continue to erode the clients’ confidence in these service providers and they will be seeking increasing internal solutions to tackle their problems. I think if this trend continues it will be a mistaken course.

Consultants are not addressing many of the changes occurring and ignoring opportunities to adapt to different circumstances, they are simply not putting up a strong case of their engagement by redesigning their business models or opening themselves up to different forms of collaboration.

In many ways, the consulting industry specializing in innovation is its own worst enemy.

It is highly fragmented, often highly specialized in certain innovation practices, and much of the advice comes from a cottage industry of independent practitioners, caught up in executing and little time for advancing their own knowledge.

There is this sense that consultants are resolutely staying very internally driven, self-promoting, still trying to convey the story of innovation mastery, when clearly this is lacking in rapidly changing market and technology conditions and due to this staying ahead of the knowledge curve are actually failing the client.

Many consulting firms have spent the last decade trying to make themselves more efficient, going from craftwork to selling one solution as a mass production to many, to yield ever-increasing fees, so as to gain a re-occurring return on a one-off invested solution. Innovation solutions simply need to be crafted to each set of circumstances mostly, in my opinion, and that conflicts with this repeating model.

When clients were pushing down prices it made sense to offer general solutions but the disruptive forces occurring in clients’ markets are requiring far more the return to crafting individual solutions.

Larger Consultants have been offering body shops, and set-piece solutions, to offset client resource shortfalls. This sits less well in a time where demand for unique innovation is required to offset these disruptive forces coming from often unexpected sources.

The two, quality versus quantity of consulting, are difficult to equate coming from the same consulting firm. Bespoke needs to be recognized as necessary for innovative solutions.

The scrabble for consultants is to re-position themselves back at the high-value end but they need a greater depth of knowledge, expertise and experience to convince clients of this need to change differently than simply providing resources. Both clients and consultants are struggling with their own legacy of where resources reside and what value these can provide.

The mismatch of client needs and consultants’ offerings.

The client is increasingly requiring more organic or holistic solutions not a ‘piecemeal’ innovation offerings. These separate pieces often don’t dovetail into one complete innovation system because they are supplied by a variety of different service providers, all having their own ‘pet’ approaches.

Perhaps there is a real mismatch between clients’ needs in aspirations and budgets and the available innovation consultants’ ability to match and relate to specific industry practices and scale to meet client needs.

There also seems this perpetual dilemma of clients’ wishes that are hard to reconcile with operational realities to turn their organizations from being focused on effective and efficient into agile and adaptive, required for innovation.

Often the two are caught in the classic “who does what”, “how much each can and should manage” and the ability to handover or what happens when the consultant finishes the project and leaves, taking a level of knowledge with them that was never given time to reside inside the clients.

Consultants are far too cautious for their own good

Consultant firms, on the other hand, are moving far too cautiously to any form of collaborative form, they tend to bring ‘experts’ in for ad hoc, one-off assignments when they need deeper expertise. Wherever possible consultants want to manage as much as possible internally to ‘keep’ the fees generated inside. This is not a recipe for building lasting relationships that have mutual value in growing understanding.

Often this ‘keep it in-house’ whatever it takes, promotes that in-breed fault and is not reflecting the commonly held view today, “that all knowledge does not reside within its own walls”; they still reluctantly hang on to the closed system of inventing only inside here.

This often manifests itself in the host of variations in what is claimed as their ‘unique’ versions of “common innovation” where they constantly reinvent the wheel in their own approaches to processes, definitions, tools, frameworks, systems of working and idea management etc. I often feel those “unique solutions” are often just simply mutton dressed up as lamb.’

The resultant cost of rework if clients bring in a different consultant grows.

Today I think part of the clients experimenting and learning internally is due to this disappointment with the consultant. Clients are becoming extremely selective for the use of any outside advice. Many clients are simply building their own innovation teams with individuals that have had some given time consulting to offset, defray and strengthen their own in-house capabilities.

The reality is these are often more ‘at odds’ with the business units, seen as elite, out of touch often just pursuing their own agenda, not accountable, and often less supportive of the current business needs.

Also, innovation itself is going through really a massive change.
The need for ecosystems, platforms, the greater use of analytics, big data and reliance on technology are all crowding in on innovation delivery.

The emphasis on thinking through new business models, combining design thinking, lean management, customer development, prototyping, experimenting outside the lab, collaborating with clients, finding different partners, the different exploitation of research techniques are all breaking out in different forms and combinations is radically altering approaches to innovation.

Also collaborating and networking are far more essential to innovation exchange, be this in the early idea forming stages but increasing in the development and execution of innovative solutions. Partnerships are diverse, delivering on the need of the job to be done. Orchestration is increasingly playing its part to manage all the assets and knowledge coming into play.

The innovation consultant can lead or can be simply a bit player in this synchronizing of innovation activities or offering ‘leading’ advice.

I have suggested in past posts that we all need to think differently:

innovation is based on the thinking around the shift from products to solutions, from transactions to growing far more value-adding ongoing relationships, from a supplier of product services, into highly valued network partnerships, exploring innovation across all options, instead of delivering on discrete elements; this requires managing the whole ecosystem of the innovation design differently.

The external innovation consultant needs to change

I get the distinct impression the focus of most innovation consultants is still locked into product innovation or improving the process of the pipeline/portfolio, the idea generation and project execution model. It is not evolving into broader services or accounting for the transformations underway at the clients end.

While the consulting firm stays closed-up, intent on delivering their own solutions,will mean they are often far too busy catching up, lagging in their own emerging practice and due to this ‘lag’ have lost any leadership position in many things relating to innovation.

To overcome this you need to be engaged, to be able to piece together fragments of information to gain the insights that independence can offer. Consultants need to explore and experiment themselves in a laboratory and pilot testing environment, that allows clients to work alongside them to learn and gain from this in collaborative ways. Both learn and both benefit going forward in new ways.

Sadly general well experienced innovation practitioners are actually thin on the ground. You do need to search hard for these but they are available. This exploring and extracting insight requires dedicated experience and constant involvement in broader innovation understanding

Often even the large consulting practices can’t afford to have more than a few experts scanning this innovation terrain yet clients, again and again turn to the broad consulting provider for specialist advice.

The one real change that is occurring is in thought leadership from consultants

Clients often lack real deep insight or draw out the implications of these emerging practices, they want to work more alongside others in experimental practice spaces to truly figure out how to respond to them or understand the implications to their own business. It is only part of the innovation knowledge puzzle for the client.

They need to constantly look elsewhere to piece this together, if at all they can, as so often the reporting loses much of its value as it is not translated into suggested solutions if the consulting industry fails to provide these services or knowledge laboratories.

There is increasing value in the thought leadership pieces emerging from the large, well connected consulting firms. Their ability to extract knowledge from their clients and increasingly match this with merging practice is valuable.

The work of many of the larger consultants in the field of thought leadership, including Deloitte’s, Bains, McKinsey, Booz, PWC, A D Little, PA Consulting and some others, has begun to provide a much greater insight through their access to C-level people and their ability to provide reports on best or emerging practice.

This is helping understand changes occurring and the emerging practices around organizations’ current thinking of innovation, yet it is failing to be fully translated into the client application.

Translating thought leadership to new practice is a real opportunity for all
Presently much of this thought leadership is failing to be translated into practical solutions, they remain research findings.

Thought leadership seems to be increasingly dominating the marketing activities of consulting firms, and with some good cause: clients require evidence and good thought leadership, it does matter to them, to figure out their internal solutions.

I’m not unhappy with that, I’ll be honest, as my competitive space is largely about understanding emergent innovation practice to relate and absorb the findings and then attempt to connect the thinking to improving innovation practice within client thinking at individual, team or organizational level.

I’ve been shifting my business model in the past few years, into a far more advisory one than consultative for clients, attempting to connect the multiple and different dots coming in from multiple sources to help this thinking and understanding.

We come back to the reason why, what used to work before, often doesn’t now.

If the innovation consultant needs to question the changes occurring all around them, then they need to ask “why not develop a different type of sustaining collaborative arrangement?” One where they, the consulting firm have scale and resources, become far more aligned with people like me, who have the entrepreneurial energy and zeal that explores and exploits, probes and connects, offering a further validation path that clients might value.

There is so much convergence, linkage, networking, and integration pieces occurring that none of us can remain islands of specific knowledge, we must find innovative ways to collaborate, to build an ecosystem of knowledge that provides clients a real competitive advantage. I want to participate in far more scaling, proving and validating.

Consultants must learn within themselves to collaborate, exchange and value a greater ‘collective pool’ of innovation knowledge, otherwise, solutions being offered to clients remain incomplete, stilted and lack the real diversity of understanding they require to combat a different set of market conditions than in the past. They need greater transformational services.

Collaboration in the making?

Perhaps we have here a collaboration in the making, that is for the clients (markets) benefit and bridges some of the current client / consulting gaps that I feel are there.

I wonder if the larger consulting company can see beyond their own noses for the value in this?

The post The Challenges Being Faced by Innovation Consultants first appeared on Building Your Innovation & Ecosystem Intelligence.

Recently Arthur D Little provided their latest innovation excellence study, its 8th Global Innovation Excellence Study, into what companies can do to achieve a better return on their investment in innovation management. The report can be downloaded or viewed here and outlines in their opinion what really works in terms of managing the innovation process.

They offer some good pointers and understanding of what differentiates top innovators within and across industries. It also suggests that it provides new insights into what companies can do to achieve a better return on their investment in innovation management. I think it does fall a little short on a depth to support and validate these claims in my opinion, but it does still provides sound insight.

They specifically attempt to focus on understanding what differentiates top innovators from other companies in different industries. Drawing on over 650 responses, the study sheds new light on the basic key question: what innovation management techniques are most important in achieving a better return on innovation investment? The results they suggest are important for any company that wishes to stay competitive.
Overall the report highlights six key insights:

1. There is strong evidence that excellence in innovation management based on Arthur D. Little’s model leads to higher innovation performance.

It is such a pity they lead off with this ‘claim’ adopting their best practices helps to achieve innovation success. I would strongly argue adopting any good, coherent framework will contribute to improving performance, providing you give this the dedicated focus, resources and top management commitment. I think they have put the “cart before the horse” by leading with this.

2. Top quartile innovation performers obtain on average 13% points more profit from new products and services than average performers, and 30% shorter time-to-break-even, although the gap is narrowing.

They argue the gap in best and worst performers has narrowed in recent years and past under-performers can and do catch up and maintaining a lead in innovation performance is getting harder. I’d have liked to have this observation explained or validated some more.

3. Innovation performance achieved has decreased on average since 2010, yet satisfaction with this level of performance has nearly doubled

This is the really  interesting point for me. Comparing 2010 and 2012 results, they found a significant overall decrease of up to 25% in innovation performance across a range of industries and suggest this may be driven by the tough market conditions of recent years which have forced companies to focus on short term performance, as well as issues specific to certain industries.

In contrast, they found that overall satisfaction with innovation performance increased significantly from 25% to 42%, although the majority of respondents are still dissatisfied. They conclude on this point that this might also reflect recognition that innovation success is getting harder to achieve.

4. There is a clear correlation between capability in innovation measurement and innovation success, yet less than 20% of companies believe they have a good innovation measurement capability.

What they found as more surprising is that less than 20% of companies believe they are better than average in innovation measurement capabilities and indicates the level of dissatisfaction with their efforts to measure innovation performance.
They offer the view this underlines both the inherent difficulty of effective measurement of innovation, and the significant potential for companies to improve their capabilities in this area.

5. Certain innovation management practices have a particularly strong impact on innovation performance

Top innovation performers invest relatively more in radical improvements to products, services and business models, as opposed to incremental improvements. They suggest there are four basic practices but the key, for me, is the one of mobilizing the whole organization to develop new ideas. I would argue mobilization across all that innovation covers is critical, not just new ideas but ideas to commercialization.

6. Top innovators do much better in adopting best practices in accelerating growth

The study found that top innovators are better at identifying unmet needs, fostering an entrepreneurial culture and leveraging existing key competencies.

Another really important point for me that is often understated.
They pick up on it is the organizations ability to overcome important internal challenges such as getting top-management support, enabling fast decision-making and establishing productive cross-functional relationships that gives them innovation leadership.

The conclusion of the study.

The study concludes with the two important insights: there is a strong correlation between adoption of new business growth practices and achieving innovation success and top innovators are more effective at dealing with internal barriers.

I think the study gives encouragement that having a focused, disciplined approach to innovation does make a difference. By tackling the internal barriers successfully will change innovation performance. It is not a ground breaking study but it does offer some helpful focal points to improve organizations performance.

The real disappointment for me?

I still feel disappointed they started off with promoting their own model as blatantly as the reference point to success. I am not a lover of  generalizing around “best practice”. I’m of the school arguing for “emerging practice or novel practice”.

I also wonder if they have not fallen into this old trap of perhaps practice leader’s self-justification for this study, hard as it might seem as a comment. This tends to be for me the older consulting practice approach of self-promotion that I believe actually constrains your perceived value to clients. Today a more detached view seems to offer greater consulting judgement even in best practice observations.

I quote from www.sourceforconsulting.com in a recent article “Consulting firms need to re-think their approach to thought leadership from scratch.  Less money should be frittered away by people writing whatever they want and more invested in centrally co-ordinated thought leadership.  Some seriously innovative thinking needs to go into developing a game-changing approach to content or publication”

I would apply this observation also to this Arthur D Little study. To quote again from the above www.sourceforconsulting.com article “Research is a good example: liberally distributing the results of an expensive survey in your publications used to be a differentiator but even the smallest firms do this now; primary research has to be either very clever or very big to stand out”

My final thoughts
I think the Arthur D Little innovation practice does make a really sound contribution to innovation practices without doubt. I think they can do a whole lot more actually.  I really do think translating their observations from benchmarking and best practice observations can be significantly lifted up in being real value differentiators by extending their existing toolkit at www.adl.com/InnovationExcellence into something more dynamic as a “must go to” source.

They need this deeper thinking through of thought leadership, aligning their innovation practice and the growing knowledge coming into them to provide a distinctive set of offerings . There are surely,  far more imaginative ways to offer us all more value from their studies, from their engagement and practice involvement than simply leading with “strong evidence suggests our model leads to higher innovation performance” and you read on with that growing feeling they are simply working backwards to this opening validation, as you read more of the report.

I think they can do better, they have the capability but not yet the right application and end goal. Innovation and its management needs broader engagement by the larger consultants.

There is a real leading innovation practice space to fill and this goes way beyond existing approaches made by the bigger consultancy firms or the ones exclusively focusing on innovation. A large diverse innovation practice can fill this space but it needs so much more. Will anyone step up to the plate I wonder, it needs it.

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