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.

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.

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.

The post Are we getting real value out of innovation consultants? first appeared on Building Your Innovation & Ecosystem Intelligence.