Filling the Massive Innovation Void
For any veteran of the innovation front lines, the past few months have signaled a seismic shift in modern innovation practice, with a massive conundrum at the heart of it, and a gaping opportunity in solving it.
The conundrum is this:
At a moment when companies are buffeted by an unprecedented array of disruptive forces — driving their need for high impact innovation help through the roof — the innovation ecosystem is the weakest it’s been in decades.
The signs of lost muscle mass are everywhere.
The pages of Fast Company recently chronicled the gutting of Ideo with massive layoffs under a headline that ‘the design thinking era is over.’1 Coming from design thinking’s most committed and articulate cheerleader, that was a big statement. Frog had its own deep cuts, shedding nearly a third of its staff by some accounts.
A second Fast Company piece2 noted the ouster of a generation of senior design leaders from corporate roles, implying that the attempted transplant of design into corporate C-suites to stoke the innovation heartbeat led to a rejection of the organ.
Add to this the revolving door of companies launching, repurposing and eventually shuttering internal innovation labs, and the capability gap gets even more glaring. Walmart’s innovation incubator Store No. 8 is the most recent casualty.
For any innovation black belts who hang out with CEOs and hear their stress level about inadequate pipelines, the meltdown of the ecosystem seems counterintuitive. How is it possible that the need for innovation help is soaring, yet the ecosystem that provides it has taken a massive step backwards? The answer is fascinating.
An entire generation of leading innovation firms have lost their mojo, not because they were incompetent, but because they were so important.
With CEOs losing sleep over how to keep pace with external disruption, and innovation as the obvious but elusive answer, traditional big consultancies had a problem. They’ve always been adept at analyzing what already exists, but creating anything brave and new is not in their DNA. They had no choice but to buy up innovation firms. Communications groups joined the shopping spree too.
What played out was not a few cherry-picked acquisitions, but a bona fide feeding frenzy. A clean sweep of the table where every innovation firm of reasonable scale and reputation got snatched up. Fahrenheit 212 (the firm I co-founded), Ideo, Frog, WhatIf?, Fjord, Innosight, Doblin, Idea Couture, Bow & Arrow, Red Scout, Possible Future, and more.
There are exceptions to every rule, but the consequences of the M&A blender are well understood. Leadership distraction. Talent drain. Culture decay. Hasty expansion. Swapping an obsession with brave work for parent company concerns like scale, productivity and efficiency. Trading originality for cookie cutter solutions that can be resold to client after client.
While the M&A impact is undeniable, the firms themselves are not free of blame. There were self-inflicted wounds, too.
As powerful as design thinking is as a theory — promising to ultimately solve the holy trinity of desirability, feasibility and viability — what too often happened in practice was putting 90% of a firm’s energy and passion into desirability. Implicitly saying that working out how to execute the thing and make money was the client’s problem.
Also egregious, a tendency to pay mere lip service to real strategy, analytical rigor and discipline. The fact that consumers desire something doesn’t mean it’s a smart move for a company to launch it. As companies push over time to do more with less, strategic choices on where to play, how to win and how to build competitive advantage matter more and more.
What’s Next
The need for world class innovation help continues to go up. The problems clients face keep getting bigger, harder and more complex. Someone has to step in and step up to fill this void. Yeehaw, I say.
What I’m calling for here is competition. A new wave of next gen independent innovation firms — like Electric, the new shop I co-founded last year with a brilliant team of veterans of Fahrenheit 212 and Frog — to join us in the fray.
Leveraging what worked about design thinking while being brutally honest about its shortcomings – like insufficiency of strategy, analytics, commercial rigor and financial acumen in the firms that championed it.
Embracing AI and the other new tools at our disposal today to get a lot further a lot faster, to allow bold, brave moves to be rapidly de-risked through experimentation and rigor.
Bringing back the passion. The joy of the craft. The love of that electric feeling when a huge idea kicks open the door and changes the air in the room. The adrenaline rush of running through brick walls in pursuit of big concrete outcomes.
The need is glaring. Lifeguard, please blow the whistle. Everybody in the pool.