Make Your Consultancy More Innovative: Put a Kipper on Your Head

Key Takeaways

• Innovation’s Role: Vital for countering margin erosion due to procurement, competition, and experienced clients.
• Transformation vs. Superficial: True innovation transforms, while superficial efforts aim at higher bids without core changes.
• Key Ingredients: Requires knowledgeable, motivated consultants with time, supported by conducive systems and a culture valuing new ideas and failure.
• Investment Needed: Significant investment, clear strategy, and alignment with branding and market demands are essential for effective innovation.

Perhaps the 1980s ‘quality’ obsession was the last time that a word was as popular in business as ‘innovation’ is today. For consultancies, innovation is seen as a strategy to fight against the slow erosion of margins prompted by procurement, competition, commodification and fickle yet increasingly experienced.

The Role of Innovation in Consultancies

Since leading a 3-year project into innovation in the consulting industry I have the occasional gig with firms wanting to improve their levels of innovation, prompted usually by a high number of rejected bids on an innovation score, as a strategy to push up fees or increase client buy-in through co-production projects.

Whilst some of these projects have been truly transformational, I’d say in about 50% of cases, the firm I’m helping sees innovation as a bolt on, typically phrases as: what innovative things can we do to land more bids at a higher price point?

Generally, the owner or partner is looking for a tool, technique or piece of technology that will be the ‘magic bullet’ of ideas: a low-investment add-on which will not change the company.

Attempting to become more innovative without reflecting on your firm’s strategy is likely to generate wonderful sounding projects that founder when it is discovered consultants neither have the time, knowledge or desire to innovate.

The Key Ingredients for Innovation

Despite the wondrous lauding of AI and Big Data, the beating heart of innovation is still people. And you, or your people, need:

• Knowledge of innovative solutions
• Time to research and prioritise innovations
• The desire and motivation to innovate, and apply that innovation

When I have this conversation, Partners or owners agree wholeheartedly. Yet, things often become a little unstuck when we discuss the systems that will support such people:

• Target leverage ratios and utilisation rates that allow space
• HR structures that recruit and motivate staff to be more innovative
• Knowledge systems that introduce and share new ideas that work
• A culture that values new ideas to the point of welcoming failure

The Investment in Innovation

Things often become even less comfortable when firms realise that an idea don’t come for free. What is the firm’s innovation strategy? What is the business case? What is the market for more innovative services or bids?

What investment is the firm prepared to make to reach this target? What does this mean for the firm’s branding? What are the measures, and over what time-scale?

Of course, there are hundreds of different tools, techniques, training, and technologies that can support innovation, but without motivated, knowledgeable consultants with sufficient time, the innovation in consultancies simply becomes something that is new, but fundamentally pointless, distracting and temporary. Like a kipper on your head.