25 September 2019  4 min read

My approach to innovation as a business consultant

arek-skuza-business-consultant-smiling

So my wife's friends have come for dinner. This sounds like the moment for a beautiful, relaxing evening, including sweet talks and beer. We sat at the table, and they turned to me and asked: "So what do you do Arek, we have heard you are a business consultant?" I love and hate this question, especially from people who aren't quite sure what "the startup" is or who consider business innovation a buzzword.

So I sliced it as best as I could and explained exactly how I wanted it. I told my wife's friends that I am an business consultant, and I help companies with product growth, digital innovation, and innovation performance. I help with new product and service discovery, removing internal inefficiencies via cutting-edge technologies and build growth by applying content strategies.

Our guests thought about that for a while, and in their unique way, said: "that sounds amazing." Actually, it can be.

However, it left me thinking about what it is that business consultant does, and I think I've managed to break it down and shared my approach to innovation, and hopefully help you think about what you should demand from an innovation consultant.

First, the customer comes first, and business consultant should start his work there if he wants to innovate effectively

Random acts don't work. I think, at the heart of customer-centric innovation is a rigorous process, which must be underpinned by customer feedback. This can be achieved through client observation, on-site studies, and co-creation, investigating data to uncover trends, iterative development, and gathering direct input into the digital innovation process.

I believe this is what we, business consultants, should help companies to execute.

By forging an excellent customer relationship and knowledge, your company can develop better ways of communicating its value proposition and deliver a complete and satisfying end-user journey. It cuts time-to-market significantly and brings a more tailored offering in front of your customers' eyes. Business consultants like me, it's my belief, should articulate this approach broadly and explain the advantages of it clearly.

customer-centric-person

The power of client-centric innovation is the way it supports businesses to think more broadly about their customer, helping companies see precisely from multiple angles in designing products, services, and microservices – decreasing the risk of innovation efforts not meeting customers' requirements and expectations.

We, innovation consultants, help companies to create and implement a new way of building value for customers via a customer-centric approach. Value co-creation, I am not afraid to say, is the only way that works in a dynamic world which we live in today. Customers have so many choices nowadays, that only a compelling and robust value proposition can give them a reason to come to your company, not to your competitors. Your company can build a strong value proposition, only if it performs customer-centric processes.

Second, iterative development keeps risk under control and brings optimal costs structure

I love to follow startup stories, read IPO documents, study papers, and reports which explain how and why startups snowball. I love to do it, and as a business consultant is part of my job. I always check how and when startups leverage iterative development.

AirBnB is a success, not because of the brilliant idea (a network of bed and breakfasts), but rather, because of a series of small iterations from the well-designed interface to a low barrier of entry for buyers and renters. Its iterative process is smooth, ongoing and never ends. The iterative development helped to build feature by feature and tune it according to customer's expectations. "Customer comes first" approach was a DNA of AirBnB.

itterative-development-cycle

The story of Facebook started in the halls of a Harvard dormitory. Facebook was not the world's first social network; similar services such as Friendster and Myspace were around since 2002 and 2003, respectively. Mark Zuckerberg started small and focused on smaller target markets of college campuses. He began to improve feature by feature and leveraged iterative development process. What happened afterward, everybody knows.

I love the iterative process and constant iterations because they don't cheat and they wipe illusions out. If you always experiment, close to the customer, you continuously get out of the office to check another assumption, another hypothesis; life is different. It's based on facts, not assumptions. The iterative process naturally injects truth into your digital innovation, new product, and re-designed service. It's just about discovering the truth which, to me, is a customer preference discovery.

I think business consultants can bring this fantastic approach to larger companies and help firms to innovate faster and more precise than their competitors do. To be a fundamentally iterative based, teams must be both "simple" and scalable; "simple" in that it is easy to execute with discipline (no politics, no red tape, fast decision-making process) and scalable in that it can be applied to tactical missions as well as an organizational strategy. The skeleton of an iterative process is well known, and it's based on agile methodology.

Let's get in touch if you like my approach. Click here to schedule a call with me.

I believe that we, business consultants, should bring this approach to larger companies, help to understand how it influences risk and costs structures, and what kind of reorganization is required to embrace iterative development fully.

Companies like Facebook, Apple, Amazon, AirBnB are fantastic examples of how iterative development can discover value which makes customers happy and pushes competitors into the corner. Can you remember that first iPhone didn't offer "copy-paste" feature, and Amazon only sold books without any customization engine? Yes. All of them started with a small, one-feature approach and developed along the way, leveraging customer-centric methods.

Third, business consultants should understand startups and academia ecosystem very well

With thousands of new companies being launched daily, startups can't afford to rest on their laurels and avoid experimenting or innovating. They need to keep their eyes and ears always open to what is happening around them, check on what their competitors are doing. 

This is why:

  • The best startups are always customer-centric and embrace iterative development, 
  • startups always work in the future. I mean, they always test and look for the next technology, the next business model, the next solutions which, if developed, brings higher value proposition to the customer than existing products and services,
  • startups quickly test and check what works, if the technology doesn't provide value to the customer segment, startups change the direction
  • A great startup is efficient in handling its finances and able to operate in a very lean way.

Kellog School of Management, University of Chicago, McCormick School of Engineering and Santa Fe Institute analyzed more than 65 million academic papers, patents and digital products that span the period 1954–2014, and explain that across this time smaller teams have tended to disrupt science and technology with new ideas and opportunities faster, leaner and more effective, than bigger groups.

space-rocket

I love startups; I believe they are a fantastic source of digital innovations; they test what works quickly, kills what doesn't work promptly, and always hunts for the most compelling value proposition. Otherwise, they die because they can't afford a long runway (except for limited resources, investors will not finance something which can't bring a home run).

My belief is that we, business consultants, should assist your teams in finding the best startups "out there," evaluate them, and pick the best ones. Then, we should help to establish collaboration with them and eventually embed their technologies into your company processes. 

If it's AI, machine learning, booking management system or image recognition Saas, we should help you to find them and make sure your internal processes will be boosted because of your collaboration with top-notch innovators. It's a perfect way to dramatically improve operational performance and do it in a more productive way than your competitors which follow the classical approach of buying software license and conducting traditional implementation. 

Four, business model drives change and if an innovation consultant wants to help, she should start there

By focusing only on existing revenue streams, distribution channels, and offering, companies could face a fate similar to Kodak, Blockbuster, Commodore, or Nokia.

The reason for why business model it's so critical to firms is that it has a stronger impact on profit margins than product and service innovations solely and, at the same time, it can disrupt established industries.

Business-modelling

If you think about companies like Salesforce (software as a service business model), or Uber (sharing value business model), they introduced amazing technology, delivered to the market by a fantastic business model. Currently, companies like IKEA, Wal-Mart, Southwest Airlines, Ford, BMW conduct many experiments in order to discover new business model (e.g., IKEA wants you to rent the furniture instead of buying the new one). I love it ❤️❤️❤️❤️❤️❤️ in my business consultant journey, that I am always exposed to examples like IKEA or BMW.

  • I think the business model is critical
  • I think the business model can't stay still; in my opinion, your company should always look for a new value proposition, new distribution channels, new partners, and new revenue and growth. All of them combined to create the business model, which has the power to transform the industry
  • I think the business model can shoot the company to the moon or kill it
  • I think business model innovation should be an ongoing, never-ended process

Me, business consultant, should be your company eyes and ears. We should always be on the hunt for an excellent value proposition which you can bring to your customers. The same time, we should also bring your team scalable, milestones based, metrics-based frameworks. These frameworks should be lean, fast, and easy to be executed so you can always test new business models and quickly decide which one should be scaled, and it's worth of your time and money.

Now, back to the dinner with my wife's friends. How does a business consultant, encapsulate all of that into a straightforward pitch? I've not yet designed the sharp elevator speech that can include all that what me, a consultant, needs to be able to do to help my clients succeed. I find it hard to create a short, sweet description which I can always share and be sure people got that quickly.

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