Posts Tagged ‘Innovation’

The Case for Thinking Differently about Consultants

Pricey engagements too often disappoint

Your client wants to accomplish an aggressive list of priorities. As a consultant, your job is to help them create the right change that will make a substantial difference. But that’s not what usually happens.

Pricey consulting gigs too often disappoint. Acquisitions hobble companies when their leaders are unable resolve conflicting views. Transformation, initially the goal, becomes a debacle as mid and lower levels watch the big ideas crumble. Unfortunately the human side of change and growth is hugely neglected, including the biases and faulty assumptions of leaders and their advisors.

In 1995, John Kotter, Professor of Leadership, Emeritus at Harvard, published research showing that only 30% of business change initiatives succeed. McKinsey’s survey of executives in 2008 showed that the number of successful change programs was still 30%, and several years ago, two of its consultants pointed to “The Inconvenient Truth About Change Management: Why it isn’t working and what to do about it.”

With this record as a backdrop, I was fascinated with the commentary about Duff McDonald’s new book on McKinsey. The author explores “the remarkable… disconnect between the advice McKinsey offers and the ultimate results.” The list of bad advice is startling. So are observers too quick to blame a company for a failed initiative or strategy, as though the vente toboggan aquatique gonflable data, facts and logic behind a strategy or deal tell the entire story? A client’s inability to convince others to act on a final plan is just one of many factors that fuel bad outcomes.

A consultancy needs to keep ahead of change and make the most of a client’s strengths while bringing forth fresh ideas, new behaviors and insights. They should be engaged to add value and do what the company can’t do alone. Their advice should help the client avoid the missteps that lead to bad decisions and botch implementations. I’d push expectations even higher: consultants need to inspire innovative, but “doable” recommendations and plans.

Broad-based innovation is one of the most important drivers of growth today. But it won’t happen unless clients are able to think differently and honestly about their businesses, their M.O. and their leadership. Companies can’t lock into a model for success when the environment is radically changing, or the consumer is moving to a different place. A consultant that gets the client to reimagine or invigorate a business, even to include ideas that were once off the table, has a valuable and much needed skill set.

What makes these consultants uniquely effective?

They ask the right questions, for example: Are the big ideas big enough, and supported by the right data? Are clients so afraid of risk that they are overlooking some of the most promising opportunities of the century? Are they stuck in their own story? Are they afraid to deal with the currents and truths that are blocking results?

They listen, ask, and then listen more. In the creating strategy and the solutions, they look for the missing pieces, connect the dots, and spot connections that create new options. They are able to present alternatives, backed by facts and logic, in a way that the client will hear and engage. They suggest ways to leverage emerging trends and needs, even if the client is inclined to stay the course.

They encourage clients to develop new collaborative efforts inside and out – to save development time and create the discipline to invest in their own ideas with greater confidence. They understand how connections beyond stakeholders can open doors and spark new partnerships.

They seek information and opinions from a wide group that goes beyond the “inner circle” of top executives and cuts across generations and levels.

They think broadly even if the client doesn’t; they know that in a complex, unpredictable world, no one problem can be considered or solved in isolation. While a client asks for a study that targets a single function, product, or problem, context matters. Casting a wider net catches the critical insights and the intriguing ideas beyond the client’s usual line of vision.

They view each business from all relevant perspectives, which means taking a global view, looking outward considering critical constituents, competitive activity, customers, and technology, as well as inward including infrastructure, capabilities and capacity.

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My research shows that innovative business leaders know that actions designed to make their current businesses marginally better aren’t enough in today’s markets. They understand the importance of speed and creating a strong sense of urgency. They have a “ruthless” focus on people and their cultures that is hardly typical today. These leaders need consultants who can think big but create proposals that work. I’ll continue to explore this new breed of consultant in a future blog.

What Makes a Formidable Innovator?

Does an unstoppable innovation company simply sell ahead-of-the-herd products that give customers exactly what they want? No doubt, Apple is one of the most innovative companies of the century. Their superior products command premium prices from the stickiest customers imaginable. But head-of-the-curve products regularly appear in the market, only to be one or several-hit wonders.

So what makes a company a formidable innovator capable of transforming industries and consumer behavior? I can think of several things, largely invisible to the naked eye.

1.  A company’s strategy successfully moves the business and consumer to another place and gets people to think and act differently.

Steve Jobs made Apple great by moving beyond computers and deciding that Apple would sell the public something they didn’t know they wanted. The parc gonflable innovative thinking behind the new devices allowed Apple to invent new markets and up-end industries.

The combined iPod, phone and Internet connector called the iPhone changed consumer behavior and captured the attention of the business world. I remember watching the traders on CNBC’s Fast Money ridicule the new phone on its launch day, 2007.  These same market strategists soon became believers.

Then with the iPad, Apple penetrated the barriers of established markets, including stodgy law firms and financial institutions. This newest device intrigued the business world by engaging entirely new consumer segments, educators, the medical community, Gen Y – even the parents of children with severe forms of autism (see 60 Minutes). Consumers discovered they could do things they never did before, and marketers jumped to make digital media part of their consumer and in-store strategies.

Bloomberg Businessweek said in late March, “The iPad was at once familiar [to iPhone users] and radically new to consumers – an instant hit.” It was a huge game-changer. Tech observers predict that the tablet could overcome the PC “as consumer tech’s center of gravity” as competitors rushed to redefine their offerings, add features, and create new partnerships.

Apple proves it’s a formidable innovator every time its products strengthen or build the capabilities and competencies of consumers, businesses and universities. Its specialists have worked with prominent media companies to develop marketing innovations to support their franchises. Independent developers (a burgeoning industry) have created over 600,000 apps for the iPhone (plus another 500,000 for Android phones). “Boundary-less” has moved beyond theory to the real world as silos, language barriers and technical hurdles are torn away.

2.  The business’ culture bolsters and sustains innovation.

So-called innovative companies are everywhere, though many can’t sustain their markets and ultimately go away or play a diminished role. The business culture needs to drive innovation if a company wants to be a formidable innovator – and that starts with the mindset and behaviors of the business’ leaders. Apple came up with the iPod, not Sony.

In 2005, Motorola took the market by storm with the RAZR, but couldn’t duplicate its success in a quickly changing market. They stopped innovating following the sudden death of CMO Geoffrey Frost, [called the father of the RAZR and an iconic marketer], and failed to invest in the next big wave of groundbreaking consumer devices. CEO Ed Zander is said to have abandoned Frost’s mission and his distinct culture for growth in which the marketing and technical development teams thrived.

That hasn’t happened to Apple – not yet. CEO Tim Cook acknowledges that Innovation is their focus and their culture fuels it. For Cook, his company’s culture is “so unique and special” that he’s committed to work hard and keep it that way.

3.  Leaders have big ambitions for change even when their markets look challenged or sleepy.

There are leaders who can find a different angle, a way to create a more unique customer experience, to rethink what’s possible amid the most entrenched or difficult environments. Look at Kohler and Ikea, for example, when each was confronted with the Great Recession.

In 2008, Kohler moved quickly to counter a declining U.S. market – they cut production at domestic factories by 30% to build the export business and altered the product line to capture the Chinese market, especially the top end. A priority product was the Numi, a robotic toilet that sells for $6,400 to consumers who are obviously looking for more than utility in a plumbing fixture. Expensive but luxurious, the consumer enjoys leg-warming porcelain, music, special lighting, motion detectors and three bidets. In March, the Wall Street Journal reported that half the revenues came from China.

But Ikea took a different course – to restructure the way the business is run with the goal of continuing to improve the lives of customers while giving them lower prices each year. Managers would separate good and bad costs and use every cost reduction to build up the essentials of the business or turn the savings back to the customer in lower prices. The results were noteworthy –10% top line annual growth and stable margins in a severely challenged economy.

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A formidable innovator commands admiration, respect and wonder in the marketplace – formidable means a powerful contender, but not always the biggest. These companies sustain their position over long periods of time. At the opposite end of the innovation continuum is what John Bell, former CEO of Jacobs Suchard, calls the Hustlers: companies that make incremental changes – tweak after tweak, easy to copy.

Figure out what’s right for your business. But weigh the costs and benefits of the path you choose.

It Never Hurts to Ask Everyone

What do a business author, a financial journalist, a medical illustrator, and a software architect have in common? If I said advice on innovation, would it surprise you?

Practically Radical, William C. Taylor’s latest book, is a wonderful thought provoker, full of stories of companies and their leaders who take a novel approach to improve profits and create new enterprises. One of Taylor’s main concepts addresses the idea of engaging customers and in some cases any interested persons for ideas for new products, solutions to business and technical problems and even product design. Although companies are constantly receiving feedback from customers, Taylor encourages readers to reach beyond customers – and well beyond the responsible employee group – to track, value and encourage participation from the human race.

This is very reminiscent of the data presented by financial journalist James Surowiecki in The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations. Surowiecki asserts that ideas submitted by a wide range of people are better and more innovative than those of a single individual or an ongoing committee.

Software architect Blaise Aguera y Arcas illustrates the power of collective intelligence in his demo of the Photosynth project. Photosynth technology takes Flicker photographs, which include partial images (e.g., of a structure or landscape) submitted by anyone, anywhere and intelligently combines the partial images of a subject (e.g., the Eiffel Tower) to create a perfect image of the complete structure for all to use and enjoy. This convergence of independent images to create a whole may lead to new discoveries, connections or historical revelations drawn from the wider audience that the picture now reaches. See the TED Talk, Blaise Aguera y Arcas demos Photosynth.

In the same vein, in the well-known TED talk, David Bolinsky Animates a Cell, Bolinsky, a medical illustrator and animator, explains that he took on a project for Harvard to animate a cell in an enlarged movie format to unveil the amazing activity that goes on in these complex metropolises called our cells. “Cells work to help our bodies – huge entities that they will never see – function properly,” he says.

If we think of each individual as a cell, we can extend that thought to say that each of us is ultimately working to make this world function better, even if we don’t realize the part we play. As in the Photosynth project, the contributors don’t necessarily know about the end product that’s being created. This concept is proven in Taylor’s Practically Radical. Over and over, he provides instances where contributors, unrelated to the business’ reward system, offer profitable ideas for improvements.

4 Ways to Get to Your Best Solutions

So how can your business achieve benefit from the arguably infinite number of ideas in the collective intelligence? Here are 4 ideas:

1.  Expand the decision process and encourage diverse opinions when developing your business vision, strategies and product plans.

2.  Create a structured system to evaluate options and put ideas into action.

3.  Restructure your reward and recognition systems: no leader or business unit should feel it has to come up with the answer alone. To assess performance, focus on business results (instead of the source of innovation) to encourage everyone to accept others’ ideas.

4.  Develop a recognition program for submitting ideas so business units seek a wide range of ideas and encourage active participation.

The best strategies and initiatives are developed with extensive input and participation, tapping into the intelligence of many. As I advise clients, it never hurts to ask everyone.

Sharon Terry, Director of Strategic Initiatives at LaserBeam Consulting, helps executives unleash their own and their business’ full potential, allowing them to amaze their customers, leapfrog competitors and grow rapidly.