Innovation is the primary engine driving business success today. As technology continues to evolve and dominate the global market, organizations need to think ahead and focus on appropriate and unique methods to create value and growth. Although typical, predictable, and routine business efforts can bring about stability, they do not help in the generation of new ideas or problem-solving. This is why innovation consulting has become an essential part of modern business strategy. By tapping into the right knowledge, experience, and potential of specialized consultants, business organizations can inject a burst of creativity into their systems and reach new heights. This article takes a look at the basic concept of innovation consulting, starting with the meaning of these two terms individually, before considering the relevance of combining these two words to gain success.
Innovation is the art of making use of creativity for growth. It is a way to use factors such as imagination, knowledge, experience, and motivation towards the attainment of long-term business success. Innovation has been universally hailed as important for value addition, which businesses look to depend upon to grow. Innovation in any form, be it product, service, or process innovation, offers a series of competitive advantages and secures superior profits. Clients do not want a defective or unexciting product or service; consultants provide a new approach to designing customer solutions in a manner no one would anticipate.
Defining Innovation Consulting
Innovation consulting is a niche and cutting-edge business segment that offers consultancy services designed to help other companies drive innovation throughout their operations. By developing a detailed and comprehensive definition, accuracy and understanding can be achieved concerning the nature, scope, and objective of innovation consulting.
1.1. Defining Innovation Consulting
Green and Ram describe innovation as a continued pattern of improvement in various aspects of a business and organization. Innovation can be incremental or radical, yet regardless of the nature of the innovation, continuous improvement plays a critical role in driving improvement from within. Consulting, in contrast, has unique activities to other forms of business service provision. In general terms, consulting is a process of offering a professional service to a third party. It is estimated that by 2027 the global innovation consulting market size will be over USD 3.5 billion. This amounts to a CAGR of 25.3% from 2020 to 2027. However, Gartner offers an alternative view on the development of the innovation consultancy market, notably that the sub-segment is too new to accurately measure its cyclical development with a proven and representative record.
The Importance of Innovation in Today's Business Landscape
Innovation is the core of every successful modern-day business, irrespective of its size and shape. It contributes to a set of existing customers, along with attracting more. Business innovation impacts the overall performance, along with sustainable profit at a higher rate.
Organizations do not default to the state of being innovative naturally. Human beings are bound to walk on the same paths if nobody guides them in any newer direction. In the business environment, the competition is getting tougher and stronger on a daily basis. Customer preferences are varying and changing rapidly, which creates a barrier between companies and their potential customers. The dynamic business landscape is never standing still. For these reasons, any organization must look for innovation to abandon stagnation and fallacy and fight against obsolescence. Innovating your business is the only way to have it running for the next years and even beyond.
The development of a novel approach, idea, or product is always appreciated in the business context. An introduction of a swift change, refurbishing an established process, or establishing something entirely unique are significant alterations both an organization and its stakeholders can benefit from. Most people commonly use the product or process innovation, which is perfectly fine in the current context. It has actually developed into an incorruptible reality that businesses around the world - some evolving constantly and some maintaining stagnancy - have embraced and continue to fight for their niche. Business innovation that gives birth to innovative products, services, or processes is recognized as disseminating creative models that change the market, making an organization more competitive and maintaining long-term growth within the industry.
Impact on Competitiveness
Innovation often tops the priority lists of corporate executives and business leaders—but why, exactly, is innovation so important? In short, innovation is critical for businesses because it can provide a direct, positive impact on a business's competitive positioning. When the market becomes so fiercely competitive, as it is today, there may be few ways to outpace the competition. Innovation becomes a crucial tool in any such strategy. Not only can it enable a business to introduce new products or services, thus feeding their growth directly, but it can also allow businesses to execute established processes more efficiently or improve business performance in other ways.
Creation of new markets and stimulation of new demand: Innovation yields the creation of new markets and helps businesses stimulate new demand for their products and services. Whether a business is introducing new features to an already-established product or service, like a new iPhone iteration or Microsoft Office updates, or entering a market with an entirely new offering, like the entrance of the first iPad to the market, this can provide a huge opportunity for growth. The introduction of the Apple iPhone is pointed to quite often as a classic example of this.
Competitive advantage: Businesses pursuing innovation are also investing in their industry relevance—that is, their ability to maintain a competitive edge against other market players and remain relevant to their customers. This is a business's ability to differentiate itself vis-à-vis the competition and is the main tenet of Michael Porter's Competitive Advantage/Positioning model. If businesses can continue to differentiate and "position" themselves in growing markets, they will have ample opportunity to grow—innovation makes this possible.
Key Strategies and Tools in Innovation Consulting
Passionate employees have long been recognized as primary innovators within any organization. Between the invaluable information they obtain as employees of the organization and their heightened motivation in terms of implementing new ideas, they have their value proven again and again. Thus, the central principle in consulting team members in this area is to learn and work with the employee's passions and motivations.
In innovation consulting, we focused our attention on three ideas: design thinking, lead user methodology, and idea screening. Each of these strategies and tools creates cutting-edge deliverables that set the consultant's unique in the eyes of the company. They consistently take an employee's innovative attempts and shape them into well-thought-out possibilities and organizational improvements.
Design thinking is a set of methods and mindsets that starts with the participant in an innovation process – a consultant's client, an employee of that client that seems to have a real passion for an aspect of their work. Lead users are people who lead the way and often use products or services in ways that are novel and probably not widespread for quite some time. When these trendsetters/lead users do something truly new about product usage, they disclose this behavior and the underlying drivers to the outside world at an early stage. When merchandise or service development really begins, it pays to be aware of these "revealed need" information because it allows for a more successful development of user-centric products or services, more likely to be purchased and used by a wider spectrum of similar users, or even lead users.
Design Thinking
Fundamentally, design thinking provides a solution-based approach that organizations adopt to tackle complex issues that occur within the business domain, client management, and within human resources. Ideologically, design thinking is applied in every problem and thus adopted as a cardinal practice within the role of an innovation consultant. Design thinking in itself is a 'non-linear, non-sequential, and iterative process' that typically consists of five interconnected methodologies - empathizing, defining, ideating, prototyping, and testing. These methodologies enable consultants to humanize and drive the patterns and emotional aspects of an issue to build creative and acceptable customer solutions.
With the design thinking process and principles at the forefront of a consultant's mind, Administrate can work with a client to navigate the problematic situation and follow a step-by-step crucial procedure with the client's recruitment process, resulting in a solution that is quantifiable, agreed upon by stakeholders, and backed up by evidence. Design thinking can basically help managers develop a deep understanding of all elements and associated problems with a job role and the desired recruitment experience, all from the perspective of the incumbent worker. It is essentially the art of solving complex problems involving human emotions and experience. However, within the practice of innovation consulting, tools such as the five whys, customer interviews, and customer journey mapping are commonly utilized in facilitating design thinking.
Case Studies of Successful Innovation Consulting Projects
Innovation consulting is increasingly catching the attention of businesses and industries throughout the world, many of which are enlisting the help of innovation consultants to develop new products, services, and go-to-market strategies in order to remain profitable through perpetually shifting markets. The process of innovating does not happen in a vacuum, though. Successful changes to business models, concepts, and strategies require an in-depth understanding of target markets, customer segments, and potential user-groups. They also demand a clear strategy for resourcing, budgeting, the identification of potential strategic partners and JV's, and effective go-to-market strategies for valuable business offers.
In the fast-moving, opportunities-bound world of innovative change, leveraging the insights and input of professional consultants should be an easy sell—especially in large corporations. Innovation consulting is versatile and can suit any type of business of any size or complexity, across any industry sector or domain. The strategies used to deliver an effective and successful business innovation will curate and develop a specialized and unique service package tailored to meet your current and future needs or requirements. Based on the companies' corporate innovation strategies, a range of services, comprising a sub-set of their overall service package, will be delivered. In consultation with partner companies, a range of innovation consulting projects have been identified which have resulted in corporate take-up of both projects and intellectual property output generated simultaneously from these projects. This section of Partner to Research and multinational companies gives an overview of the projects and the insights generated, and the effects-in-practice of each have been described below.
Company X: Transforming Operations Through Innovation
Company X is an incumbent Industrial 4.0 company that has broad consumer reach and a reputation for high-value products. The client is perceived as providing high-quality offerings but is also viewed as conservative, slow, and unwilling to adapt by customers and staff. The organizational culture is characterized by a top-down hierarchical approach and complacency on the part of managers as well as the operators. Consequently, executives have reported facing difficulties recruiting new workforce. Company X is facing tough competition as cost-efficient and technically sophisticated international competitors continue to enter and undercut the market share. The history of the market and knowledge of how energy prices fluctuated also led to the realization that input costs between European regions differ to a greater degree than has previously been the case, indicating a general structural shift within the semi-industrialized world that we find compelling.
On this background, Company X has initiated a plan to distinguish itself not as a company that cuts prices, but is instead recognized as an industry leader. The establishment of an innovative-execution department in combination with a new industrial offering is the first step in the implementation of this plan. This department is tasked with responding to a new transient operation market by fundamentally re-rating the mode and pace of industrial production. In order to accomplish these lofty ambitions, Company X engaged a firm with vast experience in venture creation as well as a broad network in the energy and machine learning data analytics markets to aid in this proof of concept phase. For the first year, our work primarily focused on understanding the operational and market context: we produced data analytics to illuminate Company X's position as an operational lead window. As we progressed, our service was valued enough to consist of operational R&D in reprogramming to the current conditions of safety pillars, and remote retrofitting using augmented reality. Our project approach used an agile entrepreneurial roadmap, adapting to the developing industrial context of one of two participating sites. To illustrate Company X's commitment to the innovation consulting and industrial scaling potential of this project, in Q3 2019, it became involved in a co-creation exercise in which we workshop ideas for producing machini decarbonization-related content for possible wider market use by its online educational platform.
The Future of Innovation Consulting
The field of innovation consulting is changing rapidly, and that trend seems set to continue throughout the coming years. As companies operating in the tech landscape look for a new type of consultative support, existing innovation consultancies will need to rethink their day-to-day practices to provide meaningful and impactful solutions. At the same time, burgeoning industries, such as Blockchain, need consultancies that understand their specific requirements – and this trend is set to continue. Businesses operating in niche markets are likely to find innovation consultancies that are equipped to work in these new landscapes, while leaving broader consultancies for big businesses seeking to futureproof their operations. As the ROX model becomes part of the foundations of ‘traditional’ business consultancies, we’re likely to see a new, dynamic crop of specialist consultancies operating across industries, simply because the requirements of each have become so diverse.
Next-generation consultancies are currently developing tools to track consumer consensus on the streets. Using tracking sensors and AI, consultancies can measure consumer reaction to a new brand release, product launch, or service in a matter of minutes. The real value-add of the approach, however, is the ability to compare scores by location, thus determining a consumer profile and region where a product could potentially be worth advertising. The future? As consultancies develop AI, real-time tracking will be even more effective when applied to the workforce – delivering insight based on data that has been captured and analyzed remotely. In the future, we could enter the office, have a sensor automatically judge our body language and mood, and before you’ve had a chance to make a coffee, the results of your latest report have been analyzed, providing you with insights and feedback.
Emerging Technologies
As the world grows and changes in new and unprecedented ways, technology continues to evolve. The rise of technology and "real-world" events altering society have shifted the landscape of innovation consulting. As a result, we are confronted with a changing global society layered with possibilities - including the adoption of powerful technologies that will frame our future. As consultants strive to understand these dynamics, industry approaches will shift, expand, or evolve in response. Why? Because the use and integration of a new technology as a business offering sharpens client convenience, adds innovation mystery to the mix, and aligns the consultant's practice in a desirable and consistent future-focused direction. A context reinforced by the emergence of major technologies, and digital technologies will inhabit dominant positions. What are the technologies reshaping industry - and strategy setting - in 2022? Three are poised to drive change in future-facing sectors and, potentially, enhance a sector-neutral consulting practice. All have the potential to reshape global consulting into the future. They are artificial intelligence (AI), blockchain, and 5G.
The emergence of new technologies offers advantages such as efficiency, scalability, and flexibility "as a service". Digitization often translates into financial savings, and the expanding global digital behemoth increasingly attracts new investments without prejudice in product and market sectors. Cutting-edge technologies are likely to enjoy the most significant financial returns in the event of a business expansion. For the consulting industry, these "billion-dollar" tech products create a plethora of opportunities to strategize, deliver, and track the successful innovation of value-laden services to clients. The technologies above are moving quickly towards standardization. Finding consulting opportunities in a "grey area" where "the technology does not yet exist" is contract-building - as clients, tech startups, and the product strategies and contracts of established firms are "pumped up" for those with the solutions to industry challenges. Furthermore, the market interest in meeting the face of the "unknown future" has prompted the scaling up of innovation strategy and budget diversification in the consulting sector. And the use of technology to effect successful business objectives will not diminish; rather, market interpretations converge "on technology" - a future trend that will secure the revenues of a global technology consulting behemoth.
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