The early stages of getting a business off the ground or going back to the drawing board ten years in to re-define the company share many similarities. Both budding entrepreneurs and established corporations in these situations must tackle the same messy and complicated beast: innovation. Because innovation is such an all-encompassing task, the industry of business innovation consulting has taken off. Deloitte found in a 2021 study on innovation that 27% of leaders in most industries undertook the task of innovation to deliver a better cost advantage or other similar efficiencies.
While innovation’s a vital element of longevity in virtually any industry, it’s a common misunderstanding that all innovations must be large and complex changes to how a company operates. Thankfully, quality innovations come in all shapes and sizes. That is why our passionate team at Next Studios has put together this guide on corporate innovation consulting to further explain what this concept is and the positive effects it can have on any business.
What is Corporate Innovation?
The best and easiest place to start is by defining what, exactly, corporate innovation is. It can be difficult to pin down an exact corporate innovation definition. Still, at its core, this concept is where an organization will try new methodologies, technologies, strategies, and other opportunities. This is in hopes to transform the existing business model into a more efficient and effective one. Quality corporate innovation should encourage all members within an organization to think about ideas, strategies, and decisions from a different perspective. After years of success, it can be easy for even the most competent corporations to become complacent with where they currently stand in the market.
To aid these efforts, some companies will have a dedicated innovation team. This can be a costly approach that not every company will be able to afford, which is why working with a consulting team like Next Studios can help.
What is an Example of Corporate Innovation?
What does innovation look like? There is no one way to innovate in business, and new ideas can be either large enough to shift a company’s identity or simple enough to make a vital process more efficient. Here are a few different innovation strategies examples.
- Process Innovation: This kind of corporate innovation involves the introduction of a new strategy or methodology that will help an organization stay competitive by reducing costs, improving efficiency, and more. A great example of process innovation would be implementing automation technology to improve a function like transferring customer data. This is a task that would not need human interaction to be completed, and would free someone up to tackle bigger tasks.
- Product Innovation: Fairly straightforward, product innovation is about creating new products or improving upon existing ones. One product innovation that almost everyone is familiar with is smartphones. Like clockwork, new versions of phones are released with both major and minor improvements to create a better product for their customers. Another innovation would be to add subscription-based services as a type of product as well.
- Business Model Innovations: This type of innovation calls for decision-makers to take a step back and evaluate the big picture elements of the business. How are the services or products impacting the customers, and if changes need to be made in order to improve that experience. An example for a SaaS company would be to introduce a new pricing model that included a “freemium” option where customers could get a taste of what you provide before fully committing.
Regardless of what types of innovation a corporation chooses to implement in its business strategy, any form of these changes will be beneficial in the long term.
What is an Innovation Consultant?
The basic functions of an innovation consultant are to work with their clients to identify untapped markets and opportunities that will lead to business growth. Consultants help map out possible future growth through new strategies and models as well. The partnership between an organization and consultant is a two-way street where both parties need to be a good fit for one another. Here are a few reasons that a corporation may hire an innovation consultant.
- Perform market research on the client’s behalf
- Review current company data
- Offer fresh perspectives on current and possible operations within the business
Don’t think of an innovation consultant as wanting to tear down everything a company has accomplished because they have a better strategy. Organizations can often become blind to areas that need improvement if we are involved in it every single day. These consultants are there to give a professional analysis of what is and isn’t working as things currently stand.
Characteristics of Innovative Organizations
While any organization can implement innovation strategies, it might not be as successful as one might think if the company has not built up the right culture. So what are the key pillars of an innovative organization?
- Customer-Centric: A company is nothing without its customers, and the organizations that understand this and keep the customer at the forefront of every decision will wind up successful. We have all heard the phrase “the customer is always right”, and while it might not be inherently true, the best companies will do everything in their power to keep their customers happy and satisfied.
- Innovation Metrics: In this age of automation software, companies track everything that will have an impact on their bottom line. Unfortunately, monitoring innovation is something that often slips through the cracks. This is an area that can be difficult to track, but one easy area to start with is efficiency. After a process innovation has been implemented, for example, the speed and accuracy with which tasks are completed should be measured in order to compare with data before the innovation took place. These metrics help keep the organization accountable by ensuring the strategies being used are actually helping the business.
- Not Adverse to Failure: A fundamental part of pushing limits is risking that an idea or change may fail. Leadership should encourage all team members to step forward with bold ideas and cultivate them to the point they are ready to be put into practice. Not every innovation will work, and that is okay. The innovative business will never shy away from the possibility of failing.
- Flexible Work Environment: The changes to work culture over the past few years has shown that the more successful and innovative organizations have shifted to either a hybrid or fully remote environment. Giving individuals the choice of where they conduct their work just might lead to innovations that catapult the company to another level.
What are the 3 Horizons?
There are various innovation models and theories that have circulated the business world for years, but one has stood out as a breakthrough model for modern organizations. McKinsey’s three horizon model sets out to explain that businesses need to invest in the products they currently have, through small changes as well as larger, more disruptive innovations. The three horizon levels can be broken down as follows:
Horizon 1 Innovations
The first horizon level is primarily about the immediate needs of the current business model that present the greatest opportunities to improve profits and cash flow. At this level, the majority of the projects are short-term (1-3 years). The innovations at this level are easier to conceptualize than the other levels as the results should appear in the near future.
Horizon 2 Innovations
The second level shifts the focus of the projects to emerging opportunities for the company. These projects will often take more time to implement and require a more sizable investment to pull off. A horizon 2 innovation might look like a company adapting a current technological asset or restructuring an old revenue stream to bolster the bottom line.
Horizon 3 Innovations
The third and final level takes aim at projects that are further down the line at the current moment. These innovations are also centered around the creation of new capabilities that either lead to or counter disruption within the industry.
When this concept was first published, McKinsey advised that companies must invest money, time, and effort in all three levels to stay competitive. While that still remains true, some elements of the 3 horizons model (mainly the time aspect surrounding each level) are not as accurate as they used to be. In this modern age, innovations do not need to be segmented out by time as rigidly. A level 3 innovation might be able to be implemented just as quickly as a level one. Ultimately, the 3 horizons model is a great foundational piece but should be adapted with other modern methods to yield the best results.
Next Studios: The Next Stage of Innovation
Next Studios is a team of experienced entrepreneurs who help visionaries shape their ideas, craft them with a repeatable process, and move them forward with capital and talent. For years, we have been supporting existing businesses to innovate to a higher standard. Partnering with our organization will give you the tools to better understand societal megatrends driving innovation and learn about the common barriers to innovation and how they affect your team.
If you want to learn more about what is next for the future of your organization, contact us today.