Consulting Frameworks for Innovation

Synopsis

Do you have what you need to confidently guide any client through the innovation process? With the right frameworks and mental models, you can use logic to guide any client regardless of specifics. In this Consulting Frameworks for Innovation presentation, we review key problem-solving models like Minto's Pyramid Principle, Blue Ocean Strategy, Accelerating Diffusion of Innovation, McKinsey's Three Horizons, and SIPOC New Product Introduction Process, which you can download and customize to your needs.

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How can these models help in the development of new products or services?

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These models can help in the development of new products or services by providing a structured approach to problem-solving and innovation. For instance, Minto's Pyramid Principle can help in structuring thoughts and ideas logically, Blue Ocean Strategy can guide in creating uncontested market space, Accelerating Diffusion of Innovation can assist in understanding how an innovation gains traction in the market, McKinsey's Three Horizons can help in balancing immediate and long-term goals, and SIPOC New Product Introduction Process can provide a comprehensive view of all elements involved in introducing a new product.

What are some key considerations when choosing a model for problem-solving?

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Some key considerations when choosing a model for problem-solving include understanding the nature of the problem, the context in which the problem exists, the resources available, and the desired outcome. It's also important to consider the complexity of the problem, the time available for solving it, and the skills and knowledge of the people involved in the problem-solving process. Additionally, the chosen model should be flexible and adaptable to changes.

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This collection of consulting frameworks uses logic and time-tested frameworks geared towards business and product innovation. These tools can be used for all kinds of consulting scenarios outside of strict "innovation" but its highly tailored to help consultants guide their clients through this highly tumultuous time.

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What are some of the key methods in these consulting frameworks?

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The content does not provide specific methods used in these consulting frameworks. However, it mentions that these frameworks use logic and are time-tested, geared towards business and product innovation. They are also highly tailored to guide clients through tumultuous times.

How can these frameworks be used to foster structured thinking in a business?

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These frameworks can be used to foster structured thinking in a business by providing a logical and time-tested approach towards business and product innovation. They can guide businesses through tumultuous times and can be applied in various consulting scenarios, not just strictly for innovation.

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Tool highlights

Minto's pyramid principle

One area you might not expect to find consultants is in charitable giving. However, when billionaire McKenzie Scott gave away $8 billion in 11 months, she worked with a consultant firm called Bridgespan Group. Formed by three former Bain & Co. consultants, Bridgespan advises the Bill and Melinda Gates, Ford, and Rockefeller Foundation on where to donate their billions. Unlike those organizations, McKenzie Scott had some $60 billion in Amazon stock and no organization to spend it. SHe didn't even have a website to solicit requests for donations. With an urgency to give away as much as possible as soon as possible, she needed solid recommendations on where to give and fast.

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What are some potential impacts of McKenzie Scott's donations on her own wealth?

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McKenzie Scott's donations could have several potential impacts on her own wealth. Firstly, the act of giving away a significant portion of her wealth could reduce her overall net worth. However, this could be offset by the potential growth of her remaining assets. Secondly, her donations could potentially provide her with significant tax benefits, as charitable donations can often be deducted from taxable income. Lastly, her philanthropic activities could enhance her public image, which could indirectly benefit her financially in the long run.

What are some potential impacts of McKenzie Scott's donations on Amazon?

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The potential impacts of McKenzie Scott's donations on Amazon are not directly stated in the content. However, considering she is a major shareholder, her philanthropic activities could indirectly influence the company's reputation and public perception. Additionally, if she sells her Amazon stocks for her donations, it could potentially impact the stock's value. However, these are speculative impacts and the actual effects would depend on various factors.

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For a situation like Bridgespan's, Minto's Pyramid Principle is a tool consultants can use to frame their solutions in the form of a single thought. This framework was created by Barbara Minto, known for her creation of the most commonly used frameworks called MECE. Since consultants often use groupings to simplify problems, Minto developed the Pyramid Principle with a top-down thinking structure to share ideas across teams and organizations more clearly and enable consultants to more easily convince execs that their solutions are strong. This pyramid structure is helpful for both working consultants and those interviewing for consulting positions. (Slide 4)

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What are some resources for learning more about the Pyramid Principle?

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Some resources for learning more about the Pyramid Principle include Barbara Minto's book 'The Minto Pyramid Principle', online courses, and articles on consulting websites. Additionally, consulting firms often provide training on this principle.

How does the Pyramid Principle support the Accelerating Diffusion of Innovation?

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The Pyramid Principle, developed by Barbara Minto, supports the Accelerating Diffusion of Innovation by providing a clear, top-down structure for sharing ideas. This structure allows for more effective communication across teams and organizations, which can facilitate the spread and adoption of innovative solutions. By presenting information in a hierarchical manner, from the most to the least important, it ensures that the key message is conveyed quickly and effectively, thereby accelerating the diffusion of innovation.

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Since top execs (and billionaires) often start with a conclusion and use smaller ideas to support their main argument, Minto's Pyramid begins with a big answer to the question you're trying to solve for them, and then breaks it down into supporting arguments. Ideally, you want to make three strong recommendations to support your conclusion, each recommendation supported by three supporting facts. This helps the recipient to focus on what they are most invested in.

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Blue ocean strategy

Once you've won your client over and want to guide them through new challenges and stay competitive, what tool do you use? Among ed-tech platforms that work in online education, Masterclass is unique in that it created its own dimension of innovation with cinematic quality and top-tier talent. Instead of competing directly with universities, it created, packaged and sold "Edutainment", using inspiration and credibility to market itself. As the writer Adam Keesling estimated, the company has been very successful, doubling revenue every year from $70 million in 2017 to something like $200 million in 2020.

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In MasterClass' case, its credibility is the marketing tool, coupled with cinematic quality ads that draw you in. Compared to rivals Coursera and Udemy, which use individual instructors from actual universities, MasterClass is in a league of its own - a blue ocean, if you will.

Blue Ocean Strategy compares conventional logic to what's referred to here as value innovation logic. Consultants can use Blue Ocean Strategy to advise clients to use similar tactics to MasterClass and invent their own markets instead of being swept away in a bloody red ocean of competition.

In this visualization, consultants can sort the conventional logic against innovative ideas by strategic dimensions like industry assumptions. Then, they can compare where the business is now, assuming that industry conditions are given, versus what they could do instead if they take a Blue Ocean mindset — that conditions can actually be shaped. (Slide 38)

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So when your client assumes that competitive advantages need to be built to beat the competition, you can advise them to pursue a quantum leap in value instead and dominate the market in a different way. You can then take your comparisons to a canvas visualization to compare potential value propositions against the competition and see which strengths pose the greatest opportunity for blue ocean moves.(Slide 39)

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What are the challenges a company might face after achieving the initial adoption stage in the innovation landscape?

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After achieving the initial adoption stage in the innovation landscape, a company might face several challenges. One of the main challenges is the chasm between early adopters and the early majority. Both groups have very different expectations, and the strategies to cater to them have to be drastically different. The early majority requires more convincing and proof of the product's effectiveness than early adopters. Additionally, the company might face challenges in scaling up, maintaining product quality, and dealing with increased competition.

How does the Consulting Frameworks for Innovation deck help in fostering creative ideas and structured thinking?

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The Consulting Frameworks for Innovation deck aids in fostering creative ideas and structured thinking by providing a structured approach to unparsing complex problems. It offers various frameworks and mental models that can guide an organization or client through periods of change. These frameworks help in navigating the innovation landscape, preparing for what comes after achieving the initial adoption stage, and understanding the chasm between early adopters and the early majority. They also assist in formulating strategies to capture the early majority after the 'true visionaries'.

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Accelerating diffusion of innovation

So how do you guide your clients as they navigate the innovation landscape? Eventually, they'll be a victim of their own success if they aren't prepared for what comes after they've achieved their initial adoption stage. There is a chasm between early adopters and the early majority, even though both are earlier on in an innovation's adoption. Even though they both sound "early" they have very different expectations. For a product or company to capture the early majority (after the "true visionaries") there's still a big gulf. Because of this, the strategies have to be drastically different.

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How does the adoption profile and psychographic categories influence the messaging and media strategy in accelerating through the chasm to the tipping point in innovation?

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The adoption profile and psychographic categories play a crucial role in shaping the messaging and media strategy for innovation. Initially, when the adoption rate is less than 16%, the strategy is based on scarcity, emphasizing the uniqueness and value of the innovation. However, once the adoption crosses the 16% mark, the strategy needs to shift towards social proof. This means leveraging testimonials, reviews, and other forms of social validation to convince the larger majority about the value and effectiveness of the innovation. This shift in strategy helps in accelerating through the chasm, which is the gap between early adopters and the early majority, and reaching the tipping point of wide-scale adoption.

How does the change in messaging and media strategy from scarcity to social proof influence the adoption profile and psychographic of an innovation?

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The change in messaging and media strategy from scarcity to social proof significantly influences the adoption profile and psychographic of an innovation. Initially, when an innovation is new and scarce, early adopters are attracted to its novelty and exclusivity. However, once the innovation reaches about 16% adoption, the strategy needs to shift to social proof. This is because the majority of consumers rely on the validation of others to make decisions. They need to see that the innovation is widely accepted and used by others. This shift in strategy helps to accelerate the adoption of the innovation through the chasm to the tipping point, leading to wide-scale adoption.

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Diffusion of innovation theory is the "oldest social science" theory outside of business. It states that persona types who adopt an innovation early have different characteristics from others. This means that as your client promotes a new innovation, it's important to promote the characteristics that will help or hinder adoption for each unique psychographic group.

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What role does social proof play in the success of a business like Tesla according to the Consulting Frameworks for Innovation?

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Social proof plays a significant role in the success of a business like Tesla according to the Consulting Frameworks for Innovation. Initially, Tesla's messaging was about being a visionary and being one of the first to drive a battery-powered car. However, as Tesla gained success and popularity, the messaging shifted to social proof. The argument became about joining the millions of people who already own a Tesla. This shift in messaging leverages the concept of social proof - the idea that people are more likely to engage in an action if they see others doing it. In Tesla's case, the fact that millions of people have already bought and validated Tesla's cars serves as a powerful motivator for potential customers.

How can the Consulting Frameworks for Innovation be applied to improve a company's messaging strategy?

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The Consulting Frameworks for Innovation can be applied to improve a company's messaging strategy by first identifying the target audience and understanding their needs and motivations. This can be done using various tools and techniques such as customer segmentation, persona creation, and customer journey mapping. Once the target audience is clearly defined, the company can then craft a compelling message that resonates with this audience. The message should be clear, concise, and aligned with the company's brand and values. It should also be tested and refined based on feedback and performance metrics. Finally, the company should ensure that the message is consistently communicated across all channels and touchpoints.

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In this visualization, you can see each category broken down by adoption profile and psychographic. The chasm is the tipping point between early success and wide-scale adoption. Once you have reached 16% adoption of any innovation, you must change your messaging and media strategy from one based on scarcity to one based on social proof, in order to accelerate through the chasm to the tipping point.(Slide 25)

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How can consulting frameworks for innovation help banks to target younger demographics?

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Consulting frameworks for innovation can help banks target younger demographics by guiding them in identifying and implementing innovative strategies that appeal to this group. For instance, they can help banks understand the importance of digital banking, which is popular among younger people. These frameworks can also assist banks in developing and launching online-only offerings, which can attract younger customers. Additionally, they can guide banks in recognizing the long-term value of investing in younger demographics, who may not have much wealth now but will likely accumulate more in the future. Thus, by using these frameworks, banks can ensure consistent growth and future-proof their business.

How does the SIPOC New Product Introduction Process enhance a bank's business strategy?

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The SIPOC (Suppliers, Inputs, Process, Outputs, Customers) New Product Introduction Process can enhance a bank's business strategy by providing a clear and structured approach to innovation. This process helps identify key suppliers, inputs, outputs, and customers involved in the introduction of a new product. It can help banks identify gaps in their current strategy and develop a more customer-centric approach. By understanding the entire process, banks can better align their new product development with their overall business strategy, ensuring that the new product meets customer needs and contributes to the bank's growth.

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As an example of how you might change your messaging: For the visionaries, let's say you're Tesla ten years ago. The messaging was "you could be one of the first to drive a battery-powered car. Be the change." But after Tesla's rapid rise and continued success, now the messaging should be: join the five million people who already have a Tesla. This is the social proof argument: so many people have test-driven and validated it, so what are you waiting for?

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Mckinsey's three horizons

As companies mature, they often face declining growth. In order to focus on consistent growth, they need to look out for areas to grow into in the future to make themselves better. For example, traditional banks across the world have been slow to innovate in digital banking even though they've been aware of it for years. Many banks even neglected to grow their online offerings for a long time despite the fact that online-only banks have become popular with younger people. Part of the reason they ignored pursuing something like Robinhood was that young people don't have as much money. It wasn't financially viable for these banks to pursue them since they made the bulk of their money with asset management for older adults. However, as those young customers get older, their wealth will increase, so for banks that did invest in digital banking offerings early on, they could win younger customers that five, ten, fifteen or twenty years later could be part of their biggest demographic.

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The McKinsey three horizon structure allows consultants to guide clients through this same thought process so companies can assess potential areas to grow without overlooking present performance:

• Horizon one represents the core businesses associated with the company's business, the bread and butter, the highest profit margin to defend and expand this current business through continuous improvements, optimize operations and maximize culture benefit and profit.
• Horizon two, which takes place over 2 to five years, represents an emerging market to explore but will require hefty investments Horizon three is more experimental, explorative, and potentially transformational and takes place over five to ten years.(Slide 29)[/text]
• Horizon 3 is the more transformational bet, as first there was AWS, which was exploratory and experimental.

SIPOC new product introduction process

Say you have a great idea but logistically it doesn't make sense. This new product could even sacrifice what you're doing well. How do you launch new products without disturbing current workflows and processes? Is this product the right fit? Will it ever fit? How can you ensure operations are stable?

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Tata Motors of India is an example of how collaboration created an affordable innovation that fills a real need. The car company worked with other countries like Germany, Italy, Japan, and the United States to create a $2,000 Nano car. Each country contributed cost-effective components that reflected their particular area of expertise. The result of this collaborative effort is a quality-built, more affordable car — and one that worked based on feasibility as opposed to what we usually think of as "innovation."

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What are the benefits of using the industry life cycle framework in project management?

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The industry life cycle framework is beneficial in project management as it provides a structured approach to understand the evolution of an industry over time. It helps in identifying the current stage of the industry (introduction, growth, maturity, or decline) which can influence strategic decisions. It aids in forecasting future trends, understanding competitive dynamics, and planning resource allocation. It also helps in risk assessment and mitigation by understanding the potential challenges and opportunities at each stage of the industry life cycle.

How can the 3C's framework and competition-based pricing be utilized to enhance business profitability?

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The 3C's framework, which stands for Customers, Competitors, and Company, can be used to enhance business profitability by providing a structured approach to identify and analyze these three key business factors. Understanding the needs and behaviors of customers can help a company tailor its products or services to meet those needs, potentially leading to increased sales. Analyzing competitors can provide insights into market trends, opportunities for differentiation, and potential threats. Evaluating the company's own strengths and weaknesses can help in making strategic decisions about where to invest resources for maximum return.

Competition-based pricing, on the other hand, involves setting prices based on what competitors are charging. This strategy can be effective in markets where products or services are similar and price is a major factor in customers' purchasing decisions. By offering competitive prices, a company can attract more customers and potentially increase its market share, which can lead to higher overall profitability.

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SIPOC is a visual tool to document business processes from beginning to end prior to implementation. Often used to define the whole process before the work begins, SIPOC is especially useful for project management, especially with LEAN. SIPOC stands for Supplier, Input, Process, Output and Customer, and is a framework to guide how your client can carry an idea out instead of defining what the product is.(Slide 24)

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For instance, how will your client make this happen? What do they want, what is the opportunity size, what is the demand? Itemize task dimensions below each column across various business components like suppliers, input, process, output and customer realities. Use this checklist during innovation launches to ensure you have the process in place to actually fulfill the task, which SIPOC helps you lay out.

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Conclusion

To learn more about process and project management and download additional tools, make sure to check out our library. For more tools on Consulting Frameworks for Innovation, you can download this framework. You'll gain additional slides on profitability trees, problem definition worksheets, 3C's framework, competition-based pricing, and an industry life cycle framework. Plus, if you liked this resource, you can gain more business frameworks and book summaries from our library.

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