Starting a business is hard. Growing and sustaining a business is also hard. Both require innovation. To remain viable, modern businesses often find themselves in a race to innovate, to differentiate and set themselves apart from the competition.
How important is innovation in business? According to McKinsey research:
- 84% of CEOs believe innovation is critical to growth
- 80% of business models are at risk
- 6% of CEOs are satisfied with their innovation performance
Think about what this means. Companies know innovation is essential—and they’re right. At the same time, though, very few company leaders consider their own innovation level to be sufficient.
It’s no wonder there’s an entire emerging industry around the simple promise of helping businesses innovate, keep up, and thrive. You probably have questions like, “How do you become an innovator?” and “What are innovation consultants?” In this post, we’re going to take a deep dive into the role of business innovation consulting, answering those key questions and more.
We’ll cover the following:
- The definition and role of innovation in business
- The challenges that make business innovation difficult
- The definition and types of business innovation consulting
- The benefits of working with an innovation consultant
- How to find the right innovation consulting partner for your business
Let’s get started, by defining exactly what we mean when we talk about innovation in business.
What Is Innovation in Business?
The dictionary definition of “innovate” is pretty straightforward; it’s to “Make changes in something established, especially by introducing new methods, ideas, or products.” In other words, it’s the exact opposite of resting on your laurels, and of stagnation.
“Innovation is, at its core, about solving problems,” as Greg Satell, author of Mapping Innovation: A Playbook for Navigating a Disruptive Age, puts it. To that end, stagnation becomes a prime challenge to address proactively.
But it can be difficult to innovate. In fact, that’s an understatement, at least as far as continuous improvement and innovation are concerned. Keeping a business innovative and competitive takes energy, day in and day out. As organizations innovate and experience more significant differentiation and success, it can become tempting to sit back, celebrate, take the foot off the gas. However, with new businesses starting every day, established businesses simply can’t afford to take their success for granted and feel like they’ve checked the “innovative” box by just existing.
We’ll take a deeper dive into common innovation challenges or barriers. First, though, let’s look at some of the general types of innovation and innovation strategies.
What Are the 4 Types of Innovation?
In Mapping Innovation, Greg Satell suggests four distinct roles or types of innovation: basic research, breakthrough innovation, sustaining innovation, and disruptive innovation.
In his often-cited work, these innovation types appear as quadrants within a matrix, positioned along two axes. Each of these axes is based on a factor that relates back to the problem-solving definition of innovation. Specifically, these two considerations are how well the problem or challenge has been defined and how well the related domain or skill set to overcome the challenge is understood.
Taking these factors into consideration ensures that efforts toward innovation are productive and focused on identifying problems and solving them creatively. Here’s how the four types of innovation fit within Satell’s matrix:
The vertical axis asks, “How well is the problem defined?” The higher innovation types on this axis have a better-defined problem, meaning that leaders and teams know what they’re trying to achieve. Companies pursuing these innovation types then work to develop appropriate strategies for those problems.
The horizontal axis asks, “How well is the domain defined?” In this context, “domain” refers to the specific skill sets and perhaps other resources that will most likely help solve the problem. The innovation types with well-defined domains are well-positioned to begin strategizing.
What Are Innovation Strategies?
Satell’s spot-on thinking is that each of these four innovation types would require different strategies and processes, based on how well-defined the problem and related domain are. The four types of innovation, and where they fit within this problem-domain framework, are:
- Basic research (problem: not well-defined; domain: not well-defined)
- Breakthrough innovation (problem: well-defined; domain: not well-defined)
- Sustaining innovation (problem: well-defined; domain: well-defined)
- Disruptive innovation (problem: not well-defined; domain: well-defined)
Defining these types of innovation should help provide a more complete picture of the scope and focus of business innovation—and business innovation consulting).
The closer an eye a business can keep on the industry and competitive landscape it operates within, the better-positioned it will be for success. It also helps leaders come up with innovative solutions that can place the organization at the forefront of (if not the de-facto inventor of) emerging trends. It can feel daunting for small- and medium-sized companies to compete with the major corporations and their giant budgets to devote toward research. There are, though, several ways these companies can keep pace, including working with local universities, seeking out federal government programs, or collaborating with national labs, for example.
Breakthrough innovations include solving a well-defined problem by thinking outside of conventional or obvious-seeming domains. Basically, instead of continuing to iterate on a particular solution within the same confines of thought that have only produced incremental advances thus far, breakthrough innovation rethinks the parameters of a potential solution. Breakthrough innovation essentially asks, “What if we look at this differently, apply new skills and methods to develop a different type of solution?”
A majority of innovation tends to fall into this category. Sustaining innovation essentially means getting a little (or a lot) better at what you’re already doing as a business. This is where strategy roadmapping comes into play, or research and development initiatives—with the objective of supplementing efforts with new roles, resources, and skill sets. The work of sustaining innovation is often responsible for updates or changes to product and service offerings, for example.
Disruptive innovation refers to the application of a well-defined skills domain to a not-so-well-identified problem. This innovation type is responsible for many industry-changing advances. Disruptive innovation is often the area in which startups emerge and operate. While it’s not limited to startups by any means, they’re often the best positioned to think about truly new ideas and approaches, since they haven’t necessarily been operating in the same environment for months or years—like established businesses. For an established business, pursuing truly disruptive innovation can be a risky proposition, as it could threaten the company’s continued success.
What Makes Business Innovation Difficult?
What makes it so hard for companies to keep innovating? On one hand, as humans, we naturally trend toward complacency and risk aversion. As days, weeks, months, and quarters go by—especially if there are no major crises—business just hums along. Every employee has their job description, role, and responsibilities, and their full plates prevent them from doing much unstructured brainstorming, for example.
Also, as humans, our focus tends to narrow over time. In some cases, we can be a little short-sighted, unable to effectively see other perspectives (without prompting from, say, an innovation consultant). Employees throughout an organization specialize and deal with their specialty day-in and day-out. When employees and leaders are that close to something, it can feel difficult and even unnatural to zoom out and view the bigger picture, to think about novel and new ways of doing things. It can be hard to see blind spots or inefficiencies—especially if the business is successful.
Innovation can require introspection. Successful innovation requires self-awareness (as a company or individual), a willingness and ability to know that you can’t keep an eye on every aspect of the business at all times.
There are many additional challenges that may apply, too, including the following:
- Politics: Internal disagreements about strategy and priorities can derail innovation by bringing extra stressors (and ego, potentially) into the mix.
- Fear of failure: Especially risk-averse companies—or companies operating within a high-risk environment—are often, understandably, reluctant to “disrupt.” A fear of failure may also take the form of dispositions like “if nothing’s broken, why change?”
- Hesitation: Business can move fast, especially in competitive industries and markets. Many factors can contribute to innovation hesitation, from risk aversion (see above) to logistical challenges, recognizing the signs that innovation should be pursued, generating buy-in for change, and more. Unfortunately, the longer you hesitate, the tougher it can be to catch back up.
- Lack of clarity: Without proper insight and analysis into the pros and cons of change, the strengths and weaknesses of different approaches, the risks and potential reward, and so on, it can be difficult to see where innovation opportunities may exist. Simply put, you can’t effectively change what you don’t fully understand.
Ultimately, these obstacles can make it truly difficult to know where to go, innovation-wise. Since, as Satell puts it, “There are as many ways to innovate as there are types of problems to solve,” the emergence of innovation consulting companies seems like it was inevitable.
In order to mitigate these challenges and innovate, businesses should consider partnering with innovation consulting firms like NEXT Studios. We’re getting a bit ahead of ourselves, though. What exactly is an innovation consultant, and how can they help provide concrete support to would-be innovators? Keep reading to find out.
What Is an Innovation Consultant?
With the “solving problems” definition of innovation in mind, it makes logical sense to think of innovation consultants as professional problem-solvers. They’re experts you can depend on to address any of the challenges described in the preceding sections.
What Does an Innovation Consultant Do?
Generally, an innovation consultant works with a business to provide them with advice and guidance in evaluating and implementing strategies for business growth and improvement. Consultants typically specialize in one or multiple areas of expertise, but some common responsibilities might include items like:
- Leading, supporting, and participating on project teams.
- Performing relevant market and industry research to identify opportunities for growth.
- Strategizing to deliver increased value to customers through the development of new products and services—or new ways of delivering or monetizing existing products/services.
- Investigating and helping to upgrade IT services or technology infrastructure.
- Identifying mentoring, coaching, and training needs to enable the staff to better understand innovations—including how their own roles and responsibilities might be leveraged.
- Creating workflows and communication channels to align and unite disparate teams or silos.
- Enabling cross-team collaboration to generate shared objectives and buy-in.
What Are the Three Types of Consulting?
There are 3 types of innovation strategies in business consulting, based primarily on the scope of their focus: product, process, and business model. They are fairly self-explanatory:
- Product innovation: Focuses on developing new products, or improving existing products.
- Process innovation: Works to evaluate and optimize business processes to improve efficiency, effectiveness, and so on. This could also involve upgrading mission-critical technology or improving core workflows.
- Business model innovation: These consultants think about the big picture, and future viability. They focus on rethinking how products or services could provide increased value for customers. This could also include revenue-generating innovations, like updating pricing structures or creating eCommerce or app-based elements to the business model.
These types of business consultants are not necessarily separate from one another, and will quite possibly overlap. We just point them out to better explain the scope of an innovation consultant’s work, so you can better understand the different approaches of corporate innovation consulting partners.
What Is an Example of a Consulting Job?
Terms like “innovation” can mean a lot of different things. Specific innovation consultants—in the context we’re discussing in this post—will often have job titles like:
- Business Support Consultant
- Strategy Consultant
- Implementation Consultant
- Sustainability Innovation Consultant
- Solution Support Consultant
What Qualifications Appear in an Innovation Consultant Job Description?
Candidates for innovation consulting roles typically have the following strategy consultant skills and qualifications:
- Relevant professional experience in innovation, strategy, or change management.
- A collegiate or graduate degree in business, or a related field.
- Leadership, problem solving, critical thinking skills/experience (often supported by references).
- Excellent skills in organization, time management, and communication.
How do these particular qualifications help businesses innovate, and what benefits do they bring? Let’s look at those answers next.
What Are the Benefits of Business Innovation Consulting?
The benefits of business innovation consulting are the ways in which consultants are able to apply their unique perspective and skills to business challenges. These include all of the challenges we discussed earlier, but most importantly to help companies recognize and address problems company leaders might not be aware of. In short, their value is in uncovering opportunities for innovation.
To put it rather simply, bringing an innovation consultant into the equation can reinvigorate a business, helping them develop new strategies for sustainable growth. Whether that means optimizing the company’s existing product/service offerings or coming up with entirely new revenue streams, the business and its goals will help inform the consultant’s recommendations.
Business innovation consultants come to your business with an unbiased, third-party perspective of your business. Even just the initial stages of describing your business and related challenges to a consultant can help identify blind spots, representing unseen challenges and opportunities. When applicable, they can help find what’s broken and help develop solutions.
They can also help improve internal efficiencies and effectiveness by helping remove barriers to progress and rethinking workflows. This can mean saved time and enhanced productivity.
As professional trend-trackers, innovation consultants can look at an industry or market in a new way. They might have ideas for better connecting with and providing value to customers, or in identifying new technologies to improve how products and services are delivered and supported.
Throughout their work, consultants can help refine an organization’s mission and vision, and devise new strategies for accomplishing that vision and fueling growth. This may also involve training or upskilling the workforce in order to raise the ceiling of what’s possible.
What Makes a Good Innovation Consulting Partner?
So far, we’ve covered most of the ins and outs of business innovation consulting, including what it is, what the challenges are, and the benefits that innovation consulting can bring about. How do you choose the right consulting partner for your business, then?
This question really boils down to where your business currently stands, and where you want it to go. Based on that information, you can evaluate potential partners by learning about their particular areas of expertise and experience. Since communication and collaboration are so pivotal when working with a consultant or consulting firm, use initial consultations to gauge whether their communication and collaboration styles mesh well with your company’s culture and vision.
How NEXT Studios Approaches Business Innovation Consulting
When it comes to innovation consulting, the approach matters. At NEXT Studios, our approach begins with setting intentional objectives and then applying our consulting methodology, using a framework that is effective because it is:
- Incremental: Improving existing product/service offerings through evolution, a less-risky proposition than approaching innovation as “starting over.” Incremental innovation is well-suited for established players within an industry who want to remain relevant and competitive without putting the existing customer base at risk.
- Disruptive: Innovation requires boldness and a willingness to weigh the pros and cons to identify and implement meaningful changes. Tech startups primarily benefit from this approach, as they’re trying to make a big splash as a new player within an already-established industry.
- Architectural: This approach to innovation attempts to apply successful skills, structures, or methods from one market or industry to another. Architectural innovation is usually undertaken with the aim of breaking into a new market to gain new customers.
- Radical: True to its name, radical innovation prioritizes thinking differently about existing problems. It’s helpful when iterating through incremental innovation doesn’t move the needle enough, and leaders might suspect a totally new approach is needed. While radical innovation doesn’t always result in some brand-new, transformational outcome, there is often value to be found in the simple act of questioning the ways things are done—the beating heart of innovation, in other words.
How Does NEXT Studios Help Businesses Innovate?
We help our clients envision and implement incremental, disruptive, architectural, and radical innovations to keep their businesses relevant and successful. We provide an “innovation ecosystem” to help leaders and teams in a number of different areas, as needed.
Our Business Consulting Services List
The five main areas in which we provide inspiration and support for business growth and innovation include consulting services related to the following:
- Ideation and creation: Our experience as a venture studio informs our methodology for transforming ideas into outcomes. We can accelerate the innovation process by leveraging the same types of tools and techniques—including design thinking—that have led to startup successes.
- Budgets and resources: We understand the vital resources needed for successful innovation—primarily, funding. We’ve helped numerous clients to secure the funding they need to power new initiatives and support innovation.
- Coaching and mentoring: In business, “change management” is a popular term, one that often causes some anxiety, especially within a risk-averse industry or environment. With decades of experience in business development on our side, we can help determine coaching, mentoring, and training needs to ensure that necessary resources are optimized and available.
- Political and public policy: Our experience over the years has created a network of impactful connections that can help decision-makers understand how to take advantage of government grants or research and avoid inadvertently violating any policies along the way.
Are You Ready to Innovate?
Whether you’re curious about the trends driving modern innovation, understanding the common barriers to innovation, or learning how to design and implement innovative solutions within your industry or market, reach out today to learn more.