Innovation at Scale, #4: Why Innovation Consulting Fails

Two common types of failure for Innovation Consulting projects

This week, I want to talk about the two most common ways that an engagement with an Innovation Consultancy can fail. Both failure modes are extremely common, and they come from a misunderstanding of what kinds of value can be created by Innovation in a 21st-century company. It’s also rooted in the core business models of the companies that offer Innovation services.

An Innovation Consulting engagement can fail for one of two reasons: either the consultants do too much, or they do too little.

Failure Mode 1: Doing Too Much

What happens:

An Innovation project that “does too much” is one where the consultancy takes full ownership over the process and the outcome of venture-building, without a succession plan for once they leave. They might deliver a feature-complete Version 1 (either a complete design, or a working, launchable product), but that is the end of the engagement. Over time, the new product is poorly maintained or fails to develop as fast as it could, and often fails to succeed in the market as a result.

Why it happens:

The client and the consultancy agree to deliver a large scale, finite innovation initiative. Once the engagement ends, the client thinks they are getting something complete rather than the start of something continuous. Many clients don’t understand that any digital product needs to be continuously improved, which requires skills and knowledge in house. (The same is true of physical products, on a larger time scale). Even business model innovations usually require tweaking of the mechanics and go-to-market strategy for some time after launch.

How to fix it:

If the client is using an Innovation Consulting engagement to deliver a Version 1 of a product, service, or business model, there needs to be a plan for how the organization will take ownership of the project gradually and during the engagement itself. The future project needs to be resourced, and those resources need to be deeply embedded in the Innovation team - or vice versa. The process needs to be deeply collaborative from the kickoff, and the project should be co-owned by team members on both the client and the consulting side.

Failure Mode 2: Doing Too Little

What happens:

An Innovation project that “does too little” is one where the consultancy is responsible for powerpoints and plans but is separated from the operational realities of the project. One example is when a consultancy devises an Innovation Process to be deployed by Innovators within your company, but not co-creating with those teams to ensure that the process fits with their ways of working. The deliverable might be a PowerPoint that has all the right answers, but that teams feel unprepared to use and unwilling to adopt.

Why it happens:

The engagement has been defined as a quest for the right answers rather than a quest for increased performance. This is a version of the traditional management consulting model, which assumes that “know-what” is sufficient to make changes, rather than “know-how.” Even if the right answers are on the PowerPoint, teams are often left without the knowledge of how to implement those answers, and the engagement hasn’t addressed the actual blockers to building an empowered, high-performing team.

How to fix it:

What’s required for a successful project is to set a goal of organizational change and high performance. The process should be co-created with the teams, and engagements should be advisory and experimental. Advisory in the sense that no playbook will accurately define the knowledge of how to play the game; Experimental in that, for the process as well as for the products themselves, teams should be learning and adapting constantly.

The common thread

You might have noticed some themes connecting these problems, and their solutions. I think about them as two related points about collaboration:

Co-creation is essential: Successful innovation consulting projects treat the clients as collaborators; the consultant brings skills and expertise in the tools of innovation, the clients bring domain knowledge and knowledge of the institution’s goals and limitations.

Teams need to own their long-term future: Teams need to be empowered, and responsible for deep collaboration with any outside consultants. To build effectively for the long term, we have to be working together today, making decisions and sharing knowledge. They need to be set up to carry any project forward once the consultants go away. If you want to bring in the consultants again, it should be to push further ahead, not to make up for missed steps and looking backward.

Reading List

Each week, I'll include links to articles, books, or podcasts related to corporate innovation, that can help you accelerate the knowledge and progress of your teams. 

  • Jeff Gothelf, author of Lean UX and Sense and Respond, was a guest on the Boss Level podcast last May. In this interview, he offers lots of terrific advice about how to build effective systems for innovation. He clearly articulates the value of a hypothesis-driven approach to strategy, and how this empowers teams to change direction when discovering new evidence. He also discusses how to organize for collaboration, and the importance of cross-functional teams in effective collaboration. (This will be my topic for next week!)

  • A quote, this time, from computer scientist Alan Kay: “The best way to predict the future is to invent it.