Choosing the Right Firm Empowers You to Answer Critical Innovation Questions
Innovation strategy consulting overlaps with innovation consulting, with both focused on delivering new products. The consulting outputs vary considerably, however. When selecting an innovation strategy consulting firm, there are three important outputs to look for.
We suggest you begin with the end in mind and look for a consulting partner that will deliver these outputs.
Innovation Strategy Consulting Output #1:
Prioritized Innovation Drill Sites or SGOAs
Prioritized innovation drill sites or strategic growth opportunity areas (SGOAs) are based on quantitative market segmentation of customers and prospects as well as usage occasions.
With a solid innovation strategy consulting output, your organization should be able to answer these five questions:
- What areas are we committed to innovate against?
- How are the areas defined? Why are they chosen?
- What specific new product ideas address these areas?
- What business results do we expect from pursuing these areas, i.e., size of the prize?
- Will internal new product and innovation efforts be sufficient, or do we need to consider an acquisition or partnership?
The discipline to select and prioritize an SGOA drill site requires that it is large enough and attractive enough to merit ongoing investment.
With this focused approach, even if one new product fails that is targeting that drill site, the organization learns from that failure and continues to pursue the drill site with a series of products.
This is the opposite of launching a bunch of new products and “spraying and praying” that something sticks.
Innovation Strategy Consulting Output #2:
Portfolio of New Products and Platforms
When working in innovation, there can be a tendency to focus on the close-in, quick wins such as close-in flavor extensions in food and beverage.
If your entire focus is close in, we’d suggest you don’t need an innovation strategy.
The innovation strategy consulting outputs should enable your organization to answer these three questions:
- Do we have a portfolio of close in, mid-range and farther out new product projects to deliver against the SGOAs?
- What resources and time are dedicated for each grouping (i.e., close in, mid-range, farther out?
- Who is leading these efforts, e.g., existing brand team vs. innovation leader?
Many organizations are looking for larger-scale new product platforms that are farther out from being launching and also require investment.
As an example, 40% of the projects in the new product portfolio may be close in (e.g., less than one year), 40% may be mid-range (e.g., two to three years) and 20% of projects may be farther out (e.g., four or more years).
Of course, the timeline for mid-range and farther out varies by industry, with pharmaceuticals potentially taking 12 to 15 years to launch, cars taking as long as 72 months and one to four years for a video game.
Innovation Strategy Consulting Output #3:
Aligned Organizational Stakeholders
We advocate including the cross-functional team in the initial discovery and new product creation and assessment.
When the new product ideas are proven to hold customer and market appeal, it’s our experience that further vetting the strategy with cross-functional stakeholders provides a critical additional lens.
Vetting the ideas as part of the innovation strategy consulting process will mean that your organization can address the following three questions:
- What is the organization already doing or capable of doing that is needed by this new product idea or platform?
- What are potential internal organizational pitfalls, lack of capabilities or obstacles that will prevent the new product idea or platform from being created and launched?
- How confident are internal stakeholders, outside of the marketing and innovation team, that the new product or platform is attractive and that the brand has a right to win with this new product?
Finding an Innovation Strategy Consulting Firm
A typical process to identify an innovation strategy consulting firm to work with might include getting referrals from colleagues in the industry or at your own firm, understanding if your firm has worked with a consulting company previously and is satisfied with, online research through review of websites, blog posts and white papers, dialing into an online webinar or attending a conference where experts are speaking, to name a few.
Online sources identify many firms with expertise in innovation consulting. Lists of top innovation consulting firms come from consultancy.org, boardofinnovation.com, innovolo-group, consultancy.us, guerric.co and reallygoodinnovation.
The list from online sources heavily overlaps with the largest consulting firms as shown below. The four most frequently mentioned firms for innovation consulting are:
The next five frequently mentioned firms are:
Similarly, Huron acquired Innosight and Interpublic acquired RG/A.
There are also an additional 14 innovation consulting firms identified by two sources:
- Board of Innovation
- Bow & Arrow
- Cedar Management Consulting
- FROG (CapGemini)
- L.E.K. Consulting
- Maine Pointe
- QC&C Strategy Consultants
With all these choices, most organizations will consider at least two innovation consulting firms to work with, usually at least three and sometimes many more.
Once your organization has initial conversations, the list may narrow. At that point, often an RFP is sent, and two or more proposals are secured.
We suggest stepping back at this point to consider the priority of the different outputs and where the consulting firm will prioritize its efforts. Look through the proposals with an eye to the final outputs and see where the emphasis lies.
Recently, we were told that we lost a project on a three-to-five-year innovation strategy to a consulting competitor that was better able to show the direct mail campaign example to the client. To us, this was a clear indication that the correct focus was on the close-in and not the farther-out horizon.
While we weren’t pleased to lose, we realized that the prospective client was not committed to invest in high-quality customer segmentation consulting to drive its innovation strategy and needed to focus on the close in. This is an example of how the focus can change during the proposal process as different organization constituents weigh in with different priorities.
Additional conversations and proposal refinement will result in the selected firm that best meets your organization’s needs.
If you’re interested to explore different examples, check out our article, “Innovation Strategy Frameworks: 3 Examples.” Or explore a recent innovation strategy from the gaming industry. More examples are found on our innovation strategy resources page. We also address whether the investment in innovation strategy is worth it for your business.