I did an Internet search on "most innovative companies in the world". Predictably, the search engine that I used, Google was in the list along with several other new-age organizations. There was a clear pattern though - none of the lists featured top-notch business or management consulting organizations at the top. Isn't it surprising that reputed management consulting firms that drive innovation at several client organizations are not considered innovators themselves? They have the ideas and the expertise, so where do they falter?
This brings us to the central idea of this discussion that innovation is not about a breakthrough idea, but rather about managing the change within. The more nimble, agile and receptive an organization, the more likely that it will be able to execute the changes to implement the innovation.
Innovation is really more about the last mile than the first.
NOTHING TO FIX
The downside of success is that the organization is tempted to shun innovation and continue doing what made it successful in the first place. When an organization feels there is "nothing to fix" it becomes increasingly difficult for it to think differently, change course or innovate.
There are two broad categories of innovation - breakthrough and incremental. A breakthrough innovation disrupts the innovator organization itself, and hence is not accepted very easily. Incremental innovation is less disruptive, and runs as a series of initiatives bringing about step change and incremental benefits in cost, productivity and output. Both types of innovation are important for the health of the organization; however some studies indicate that the excessive focus of large organizations on incremental innovation takes away precious energy and focus from the breakthrough variety.
We mentioned earlier that innovation is more than idea generation. In fact, a true innovator picks up the thread from where an idea generator leaves it. The key is in implementation - aligning the stakeholders who are impacted by any disruption to their status quo. It is no different from the political process of change management where each entity is made aware of what lies in store.
CREATING SOLUTIONS FROM KNOWELDGE
Anyone who has worked in a business consulting setup will never tire of talking about frameworks, tools and models. I can say from personal experience that consulting firms have a number of disparate tools, techniques & datasets to play with, but hardly any business applications to encompass them. So knowledge within the organization is a necessary but not sufficient condition to drive innovation.
There is an opportunity for consulting organizations to create multiple problem solving business solutions, backed by industry best practices, benchmarks and proprietary knowledge acquired over time.
Here, innovation is about productizing consulting services and offering to the end-user an integrated experience that solves a problem. The basic difference between products and services is that a product is additive, whereas a service is repetitive or iterative. Products get enriched over time, but services repeat the same cycle of creation and consumption.
A consultant's biggest challenge is in believing that even original, highly creative work can be standardized and subsequently productized. Consultants take pride in the highly differentiated work they do, which according to them, can't be coded into any business application. They apply analytical capability to generate meaningful insights from raw data. This is how it has worked since decades.
Consultants do recognize that today there are modern technologies, which can automate their core skill - the art of problem solving. But even though such innovation might be to their clients' benefit, it is disruptive to the consulting organization itself. This is the biggest obstacle to innovation, which must be addressed for any initiative to take off the ground.
PRINCIPLES OF MANAGING CHANGE IN INNOVATION
1. Clearly articulated vision: The end is the best place to start. What problem does the application solve and how? A perfect prototype of the end solution is the ideal way to demonstrate this. My experience says that spending more time in creating a good wireframe pays more in the end. It becomes the vision to communicate in best possible way. It also ensures that the idea is thought through and the value proposition is sharpened enough. How the different stakeholders use the application to derive value is best explained in a well- designed prototype.
2. Client validated business case: Once the vision is captured, it is imperative to establish that the idea is feasible and profitable. There should be a documented analysis of cost versus benefit in the short and long term. This is also an appropriate time to run the idea past clients and conduct a workshop for them to demonstrate the prototype. This will help build a potential pipeline and lend serious credibility to the idea.
3. Right sponsor for the idea: Once the idea is found to be viable, it is time to get a sponsor for it. The more radical the idea, the more critical the role of its champion. The sponsor should have the formal authority or influence to effect the change. It is therefore important to identify the sponsor early on and involve them in the process of co-creation.
4. Plan for incremental success: A key factor of success in any innovation is implementation. It is necessary that the implementation program be planned in multiple phases, with quick wins in each. This would help to overcome skepticism or change course if need be. It is also important to invest incrementally. Such a phased approach would minimize disruption.
5. Believers vs non-believers: A good change management process should accommodate both sides. If the idea invokes criticism, it should be taken as a positive sign of involvement. No reaction is more alarming. With the passage of time and successful implementations, the number of non-believers should reduce; if it does not, then there could be a problem in the innovation itself.
Consulting organizations or setups can leverage IT to create business applications for their client's use that can diagnose, solve and monitor client problems on an ongoing basis. These applications, which make use of data, benchmarks, frameworks and proprietary knowledge, will demystify some part of business consulting; they will also provide greater value to the client and licensing revenue to the consulting organization.