Why you should consider hiring an innovation consultant and how to convince your boss and peers of your wisdom.
8 minute read
You’re already a leader in a significant business but how would you explain that you need innovation consulting advice to your boss, your peers, your staff, or yourself for that matter?
The first place to start is there has to be some business problem you need to solve.
It might be an urgent call to action where you need solid results, fast. It might be an intangible long-felt pain that is always present. Or it could be to address trends or changes in a market where time is on your side, but the skills or horsepower are not.
In the business world, there has been a long-term trend towards The Generalist; climbing the corporate ladder rewards the generalist. A specialist hire is made to sustain the core business or explore new ventures where the company lacks skills or knowledge and occasionally new behaviours, such as intrapreneurs. The specialist is more likely a technical hire such as a scientist, engineer or digital marketer.
Innovation management is somewhat of a specialist field that has undergone rapid growth both in its reach and knowledge about its role. It exists to apply to a special set of circumstances relating to growth, products, capabilities, strategy, technology and leadership. It evolved because strategy, marketing and R&D as functions alone do not cut through organisational silos and now, year on year, it is developing breadth and depth in a variety of situations.
But it still unlikely that a company has very many – if any – specialists in innovation topics. Corporate innovation managers are themselves generalists having a broad understanding and possibly some depth in niche topics. A company innovation manager might have the so-called T-shaped profile described by IDEO combining breadth and a narrow, specific depth in a technology or tactical toolset like design thinking.
So let’s consider the pain points of the key roles that are most likely to make the hire.
- The CEO / MD / President asks “How do I create the conditions in the firm so that innovation thrives and we achieve a credible return on innovation investment and we are seen as a leader among peers?”
- The Chief Technology Officer of Head of Corporate Innovation asks “How can I efficiently and effectively transform our new offerings, harness new technologies and have confidence over the innovation pipeline?”
- The Head of the Innovation Centre wants to showcase their raison d’être and demonstrate business impact to the business unit heads and make the company more receptive for breakthrough innovation concepts.
- The R&D Leader needs to make sure the technology development and partnerships is firmly connected to the product pipeline and show business impact to the top line.
- Outside of innovation, the Head of Business Development wants assurance that customer needs are being satisfied on time.
Innovation-As-Usual is a Risky Business
Economists use the term Bounded Rationality when describing managers in companies. It’s a polite way of saying – they can’t possibly know everything and worse, are largely blind to their lack of knowledge and experience. We are all rationally bounded in some area but the very act of knowing it can be a breakthrough moment.
The making of the new is fundamentally, and by definition, an uncertain game. So many factors feed the uncertainty and the consequential risk. From fickle consumers to uncertainty in the supply chain, to economic and political factors and the science that just won’t do what you want it to.
These factors are largely out of the control of the company, but even inside the firm, the things that are meant to be in “control” of the management, it’s not so easy. Managing innovation is mostly a people thing. And that brings issues of leadership, governance, culture, politics and behaviour.
But if a firm is to thrive, even survive let alone reach a leadership position, Innovation is a game you have to play. So you may as well play it well.
Playing innovation well could mean more quickly gaining an edge in leading innovation management practices like bp when they engaged to sharpen their practices in scaling their new ventures. The result known as the bp Launchpad is now making impact. It could be getting unstuck as a large transport company worked through its selection of digital ideas for their digital factory start up incubator. Or it could be exemplified by a global FMCG company running fast to identify new platforms for plant-based food ingredients.
The outcome of this innovation uncertainty plays out in numerous surveys of business and innovation leaders.
- PRIORITY: The Boston Consulting Group’s Innovation survey consistently identified innovation to be a Top 3 strategic priority with 80% of CEOs yet 94% are companies fall short in impact (McKinsey, Innosight).
- FEAR: The IBM Global CEO study sees leaders fearful of falling behind in the innovation arms race.
- BEHAVIOUR: 68% of new ideas are treated with downright hostility. Only 25% of companies say that they are excellent both in idea creation as well as in idea execution.
- DELAY: Slow products to market by 9 -12 months reduce returns by 50% of anticipated revenues and 15 to 35% of the Net Present Value. Product delay announcements decrease the market value of the firm by 5.25%.
- INCUBATORS: Make close to zero impact. A study into new business ventures showed that for 100 currency units invested into new corporate ventures less than 10 was returned.
- RETURN: 47% of senior executives describe their company’s various innovation activities as a ‘costly failure’. The best performers enjoy a 3-year Total Shareholder Return above peers of 6.3% and higher operating margins compared with the average.
You can break the trend and create the results you want
What would the following mean to your organisation? Knowing these will help you generate the business cases for your convincing yourself and your peers to invest in an innovation consultant.
- If as CTO, you could generate an uptick of a modest 20% in new products over 5 years, what does that mean for revenue?
- If you could increase the speed of new product launches by just 20% what would be the gain to profitability?
- If, as CEO, you could raise your sector position just a few positions, what would that do for your company reputation (and your own)? See the Most Admired Company lists each year.
- If, as head of R&D you could win investment for your research projects next year, what would that do for the company results, and your own?
- If you could become a Great Place to Work what would that do for your staff retention and the quality of applicants?
- What would a modest 20% rise in productivity do for your cash generation or a 10% reduction in operating costs through process innovation?
- If you could build and launch an entirely new and disruptive business venture how would the markets, shareholders and peer companies see you?
Let’s be modest and assert with good confidence that the Return on Investment on hiring a suitable innovation consultant could be at least 10 times fees but could be 50 times.
Also, anecdotal evidence points to market pull. In the last few years, innovation consulting has experienced a medium-term growth rate of 8%pa: the market tells us that there is a value generated from innovation consulting.
ACTION: Now work out the tangible results where you are.
8 Starters to sell your idea of hiring a consultant
- Identifying and delivering new products, and services grow revenue and profits and process innovation can save you money increasing profits.
- Access to latest thinking – innovation consultants invest a lot of time in sharpening the saw (Stephen Covey Habit No 7) so you don’t have to. Extensive knowledge of the topic area and is plugged into a network of cases and contacts.
- Helps you to identify and manage the risk of taking new solutions to market.
- It will positively impact your company and personal reputation.
- Speed in driving and managing the process while you are busy on your day job.
- Takes the strain by helping your design the right innovation process, facilitate it, manage the process, advise on change management. An embedded consultant can help make the difficult change and then leave at the end of the project.
- Takes an objective view as a fresh pair of eyes and an objective trusted advisor. Can act as a sparring partner as a challenger to overcome company blind spots
- Build, innovation management fitness with staff capability and organisational muscle through training, coaching or transformation management.
This article was written from a conversation with a client about hiring innovation consulting. It can help you navigate the conversation inside your firm. By remembering the different information and emotional needs of each of your key stakeholders e.g. Hard Financials for the CFO through to the softer but important wellbeing of your people and politics you can strategically influence to get your project signed off and reap your reward.
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Rob Munro is an innovation strategist and consultant focussing on improving innovation results for organisations. Please contact me at firstname.lastname@example.org to discuss ways to bring greater effectiveness to your innovation processes.
Read more about my service to organisations for Innovation Planning in improving innovation results.