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Consulting firms have never quite lived up to expectations around innovation. Post-pandemic, with clients looking for more imaginative solutions delivered more quickly, this needs to change.
Innovation has long been at the top of clients’ agendas when deciding which consulting firms to shortlist. As part of our ongoing research programme, we ask clients to rate the importance of around 15 attributes. Although all are important to some degree, an “innovative approach” is more important than anything else; however, it comes close to the bottom when we ask the same clients to rate individual firms’ strength in this area. Historically, that’s been an easy gap to ignore, if not to excuse, particularly as the global consulting industry has been growing at a relatively healthy 7-9% for almost a decade, defying predictions—including ours—of cyclical adjustments. But the crisis is creating a generation of business leaders who—spurred on by the speed and extent of the changes they’ve made in the last year—are looking for more imaginative solutions.
So why do consulting firms seemingly struggle to deliver innovative solutions to client issues? We’d like to suggest two problems, and one solution.
The first problem stems from confusion about what an “innovative approach” means. Clients often ask consultants to deliver a standard solution in an innovative way, but this is really a euphemism for doing something more cheaply. Less commonly, they seek help in making their—the client—organisation more innovative. By working side-by-side with client teams, consultants can encourage new ways of thinking but translating these into large-scale change is difficult: You can’t tell people to innovate any more than you can order them to be empowered. Conversations we’ve had with clients have highlighted a third, and perhaps more recent, meaning: The extent to which a consulting firm can look at a very specific problem and come up with an innovative solution for solving it. That’s the kind of lateral thinking which meant that, during the space race, when it emerged that pens don’t work in zero gravity, NASA invented an expensive pen that does work—and the Russians took a pencil. Of the three definitions, it’s the third that appears to add most value to clients, but it’s not always what they buy or get.
The second problem is focus. When Thomas Edison was trying to design a long-lasting incandescent lightbulb, he claimed that he and his team tested around 6,000 possible filaments. Although that figure is disputed, it highlights the importance of knowing precisely what the problem is you’re trying to solve, and the persistence required to find a viable solution. Consulting firms are rarely given such a clear brief, but even when they are, the pressure on time and budgets makes it hard to challenge assumptions and to come up with new ideas.
The solution to both issues lies in changing the client-consultant relationship. The term co-creation isn’t new, but it’s now applied liberally to any activity that has even the faintest whiff of collaboration. But the innovative ideas we’ve seen emerge from consulting firms in recent years have all stemmed from a deep and sustained conversation about a specific problem or opportunity, undertaken by experts. These aren’t conversations that you can have with every client: Consulting firms will need to pick and choose the organisations they want to work with on an exclusive basis. It also means creating joint “laboratories” in which the clients’ knowledge of potential products and services is mixed with consulting firms’ ability to re-engineer and accelerate processes, and to model consumer behaviour. As Edison said, “There’s a way to do it better—find it.”