Innovation Battle — 3 Insights from Start-Up, Design, and Business
What I learned from entrepreneurship, management consulting, and design — who packs the innovation punch?
Who is going to win? Who packs the biggest punch? Where should we place our bets? The bell has rung and the round has begun. The crowd falls silent as the three walk toward each other into the middle of the ring. They all have their strengths and weaknesses, but…
who will prevail to innovate at the speed of light?
Clay Christensen’s Innovators Dilemma lays out the tension nicely between management scientists and entrepreneurs (I am using management consultant to represent all management scientists and big business here), but with the ‘design breed’ of consultants becoming more popular, it calls to question, where do they fall in the mix?
Will management consultants who are focused on innovation, evolve by adopting ‘design’ principles?
Are design consultants the next breed of ‘innovation management’ consultants? Where should businesses turn for innovation?
Do consultants hold the answers or do start-ups on the fringes reveal the keys to innovating quickly?
Let’s check out the round thus far.
Introduction — Poised to strike
In one corner you have the three hundred pound gorilla, the management consultants, with their khaki pants and blue collared shirts. These hypothesis-driven analysts can whip together a PowerPoint ‘deck’, financial model, or business plan like is no-body’s business. They are driven by the principles of management science and carry the flag of big business. They are focused on building on past successes and protecting the current organization by helping them become better and faster than their rivals. These A-type overachievers will roll into your office from a far away land, roller-board grasped in one hand and laptop in the other, ready to type notes and show you a five-point framework, revealing why you are four steps behind and why you need them to squash the competition and win in your industry.
In the other corner you have the peacock, the design consultants, who thanks to Apple (or more accurately, the wealthy of the planet consuming Apple) have become the exotic guests at the cocktail party who everyone wants to chat with. You can identify these quirky personas by their thick-framed glasses, colored jeans, and year-round matching scarf and/or hat accessory to complement their mood. They continuously question and probe to reveal more about your business and your user than you ever knew (or you always saw, but failed to recognize). After being detectives for a determined amount of time, they use magic (post-it’s, handouts, walls with idea paint, and sharpies) to shine a light into the abyss of the future by sharing the opportunities they have discovered and providing clarity on what to create and where to go next.
Last but not least, you have the roadrunner in the other corner, the entrepreneurs. They are lightweight, on their toes, and always speeding around the place. At times, they are moving so fast that you are not sure where they are going and by the looks of it, neither do they. Poised for purpose they are aiming to create the next Uber or Airbnb, but are always struggling to assemble the right team and raise money to make it happen. Eloquently preaching about their disdain and desire to disrupt the status quo, only to ironically express ambitions of becoming the standard (a new status quo) and getting paid for it. This scrappy bunch of hoodie-wearing, slightly disgruntled, jack-of-all-trades misfits can pitch, prototype, and pivot like no other, but in their reach for autonomy and purpose, they end up, at least initially, being lone wolves or armies of one.
Round 1 — Cash and connections are king
Management consultants are rich in social and financial capital. They are a phone call away from the CXOs (fill in the ‘X’) of top firms across the world. These firms have the money, marketing, and distribution power to get your transformational products to customers. Consulting firms have access to a network of experts and provide unparalleled training for practitioners. When it comes to bringing the richest talent and tools to the table, typical management consulting firms come with a Batman ‘utility belt’ of tools, information, and connections to address almost any situation. On top of that, they have the cash-flow to pay top talent to assure they stay and focus on one thing: Delivering results.
Design consulting firms are smaller and have a more limited social network compared to management consulting firms. They bring the team of top talent to the table, but utilizing the connections (social capital) of the client to get to customers and execute. They too, pay to keep top talent in a core super team, but at times rely on a loose external network of contractors to satisfy the spikes in demand for specialized talent, as it can be costly to keep them in house.
Start-ups in general do not have the constant flow of cash or connections to make things happen from the start. The average start-up hustler has slept on a fare share of couches and knows where to go to get a cheap meal to keep their personal burn rate low. The exception is start-ups with VC (venture capitalist) funding. VCs bring the money and network to get them off the ground, but with only 1 in 400 even getting to this point; they are the exception rather than the rule.
Ding Ding Ding! — The gorilla takes the round by sheer force. With a war chest of connections and resources, they assemble an unmatched armada to address client challenges.
Round 2 — Customers hold the keys
The design consulting firms are masterful at discovering the insights needed to create products and services that customers desire. With trained social scientists, researchers observe and interview users to discover latent patterns of ‘opportunities’ or ‘problem areas’ that companies can focus on solving. Firms follow a somewhat systematic approach to consistently reveal what customers truly desire which proves powerful in repeatedly innovating.
Start-ups usually have a member of the team, usually the founder, that has felt the pain of the core user’s problem and has developed a solution to meet the core user’s needs. They carry the insights of the core users as the initiative evolves and are likely to design something customers will actually use. The issue is they usually fail to focus on the problem and get married to a solution. When that solution does not work, they are resistant to move on to try other ideas. In my last start-up, we made this fatal mistake by repeatedly testing a mobile app and not making radical changes to test while the number of new users and time users spend on the app per day was not increasing. The best start-ups treat ideas sacrificially, move to being ‘problem centered’, and continuously test a range of different ideas to find a working solution.
Management consultants follow a different process all together, a hypothesis driven approach. In short, they take a guess on what the answer to the challenge is and they conduct an analysis to prove or disprove the hypothesis. It is a more effective approach compared to the human-centered design process when you need to benchmark the firm against competitors, compare acquisition targets, and conduct sensitivity analyses when there is a plethora of existing data and clear choices to be made.
When you need to create a new future for the world, grounded in what users want, the customers hold the keys to the future and the human-centered design approach is the way to discover latent needs to create what does not exist.
Ding Ding Ding! — The peacock squeezes out the round. The design consultants systematically discover insights while good start-ups carry the insights with them, but at times fail to focus on the problem.
Round 3 — Speed trumps control
Start-ups minimize downtime, move to execution, and operate with a sense of urgency that is simply not represented in consulting or big business. Entrepreneurs commonly ‘hack’ together prototypes of working solutions in a weekend at ‘hackathons’ and ‘start-up weekends’. I participated in the CodeRed ACEP Emergency Medicine Hackathon held at 1871 in Chicago. In a weekend, we prototyped a smart watch application to assist doctors in CPR, developed a business model, and a pitch presentation. Granted the app would not have passed the Apple Store requirements, but it was ready for testing…in two days.
Prototype video of the ‘Codetimer’ smart watch app
The trade off in consulting (putting design and management consulting together here) is that they deliver high quality results in return for speed. These results are accomplished in part by layers of hierarchy. Teams are structured with analysts at the bottom then consultants, managers and partners at the top. Each layer provides filters and checkpoints for quality. Design teams are usually multidisciplinary and have fewer layers, but are more similar to management consulting than start-ups in structure.
In consulting, the emphasis on speed comes from higher-level management expectations, peer pressure, and personnel care in quality of their work, but it is poised toward analysis, synthesis, or implementation of a quality- ‘high fidelity’ -output. For start-ups, the urgency, at least early on, is focused either on winning money from competitions or hitting milestones to show progress and obtain funding from investors to stay alive. The bias toward action is focused on gathering evidence to show customers are using and will pay for the product before it is fully developed.
Ding Ding Ding! — The roadrunners did not stop moving. They built and experimented before the management or design consultants collectively agreed on where to investigate and what they should build.
At the commercial break they walk back to their corners. They all hold there own. The gorilla is frazzled, but ready with a bag of tricks. The peacock is focused as she shakes off the last round. The roadrunner seems slightly weathered while she takes position for the next round. Who will take the title?
