Innovation Integration – Part 2

Earlier this year, we published our first industry report titled Innovation Integration where we shared our learnings on what innovation is, how the marketplace was taking shape, and included key input from global business leaders, innovation agency founders, and pioneers. With this very topic soon to be debated at an upcoming IPA event, we have built on our learnings and in this article share insight into the different types of innovation consultancies – a who’s who – and new trends.

Over the last 5 years, innovation consultancy has stepped away from being a ‘nice to have’, to a firm positioning with its own marketplace. Although there isn’t yet the ‘innovation brief’ that goes to tender, there are now a plethora of 21st century consultancies built to solve for tough strategic challenges that go upstream and beyond communications; these new players are fast stealing away marketshare from traditional management consultancies who haven’t yet fully integrated the ability to truly understand consumers, and the importance of creativity in the innovation process.

Many refer to a ‘spectrum’ when positioning different types of firms in the innovation space – more often than not putting McKinsey at one end, and IDEO at the other – with commercial on the far left, and creative/design led far right. Digging a little deeper, we suggest type can be categorized into 3 key camps:

  1. Strategy-led
  2. Brand-led
  3. Design-led

Whilst the aforementioned camps aren’t separate, most consultancies tend to have a basis towards one of these lenses – the heart of what they do. As a quick run down:

Strategy-led: historically owned by the management consultant, but over the last 5 years boutique growth consultancies have made their claim. The end here is about not only identifying the road to growth, but is also focused on rigorous analytical and commercial thinking including market sizing, and business case and model design. Some go as far as having skin in the game, a model Fahrenheit 212 pioneered whereby they put a significant portion of their engagement fee at risk, contingent on their solution meeting the agreed milestones. Bow & Arrow – one of the fastest-growing players in this space – are an excellent example of strategy consultants who do actually execute.

Brand-led: inherently born out of creative routes, their core is in idea development and unlocking creativity. Further, customer-inspired thinking is their USP where they offer up expert insight into consumer, category and culture to help brand leaders spot the opportunities that fuel breakthrough innovations. Research agencies and brand consultancies certainly compete here, notably future-thinking firms, but – unlike their brand-led innovation counterparts – they stop at strategic recommendations with little room to go upstream. One of the most exciting players who arrived from the US are Redscout who bring together an unique culture that is built to promote entrepreneurialism and the ability to seamlessly switch between strategic and creative. Collaboration and customer inspired growth – the strapline by C_Space– is continuing to capture client interest highlighting the importance of consumer involvement in the innovation process.

Design-led: as it sounds, design is their engine with world-class makers who create breakthrough products and services. Whilst strategy is a part of their offering, the intricacies of designing a new business model and developing a growth strategy tend not be a core capability. Instead, design firms will often collaborate with their clients’ commercial and product teams to deliver on this end. It’s only fair to include IDEO here as they have for years been pioneers of innovation, along with the likes of Frog and Smart Design.

In this conversation, you cannot exclude management consultancies given that their core purpose is to help CEOs and their senior teams to write their growth strategies, which invariably has a strong focus on innovation, transformation and capability building. Where they fall down (at least historically) is in their ability to connect with consumers and unlock creativity. Taking note, we have seen a surge in acquisitions to address, this such as Deloitte acquiring innovation firm Doblin, Accenture and Fjord, and – most recently – Ernst & Young’s purchase of Seren. The other growing force is coming out of ad land, where communications agencies are fighting for a piece of the innovation pie -we’re seeing an uptake of  business strategists, and a push to move their own teams upstream. BBH have ZagR\GA have a growing presence in digital product development; Grey London recently hired trio Springate, Green and Skoog to champion innovation across the agency, and to their clients. A little further along the journey is Albion who today are known as a creative partner that deliver the full suite – communications, branding and innovation – highlighted in their recent account win where they’re leading on all fronts for Thomas Cook.

The challenge to this new breed of consultancy is not only heightened competition, but perhaps more pertinent is the rise of brands bolstering their in-house capabilities. Arguably a double-edged sword as a key offering from innovation consultancies is exactly this – building out innovation capabilities for businesses and up-skilling their teams, building out processes and ultimately providing them with the tools for innovation. ?What if! have for years been in this space.

Regardless, the innovation marketplace is growing and will continue to do so in 2016 resulting in new job opportunities, and hundreds of breakthrough innovations launched into market

I’m a Founding Partner of Bamboo Crowd. I help our clients invest better in people and scale through Engine. I solve recruitment challenges and help our clients source the best talent across operations, business development, programme management, and technology. Ask me about good films, beards and hip hop.