Understanding The Evolving Ecosystem Of Innovation Service Providers

I recently finished the draft of my report on the ecosystem of innovation services providers.  This report, to be published in July, explores the landscape of companies that are unified by a single purpose:  they are dedicated to helping their clients unleash their own innovation potential.  These are not companies who simply use "innovation" as a marketing buzzword.  Rather, they are dedicated to the discipline of innovation – and bring unique innovation expertise to clients in wide variety of corporate roles. This report builds on much of Forrester’s previous work related to Innovation Networks and Innovation Management, but expands the "ecosystem" to consider all of the companies I interact with that have a distinct innnovation focus.  In the report, I explore the offerings of:

  • Strategy consulting organizations
  • Technology service providers
  • Product management firms
  • Outsourced product development firms
  • Idea management/solution generation companies
  • Other niche service providers (including training program, design firms, and others)


I argue that this ecosystem of providers will be an increasingly important part of a comprehensive innovation strategy. However, it will be up to very knowledgeable and “connected” individuals within companies to help manage the diverse players, and connect suppliers to the right role, at the right point in the innovation process.  I also argue that this is an opportunity for SVM professionals who want to play a more strategic role  in their organizations.

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Nemo Versus Scotty: Who's The Better Innovator?

Since I've been talking a lot about innovation, both in print and in person, I've been running through countless metaphors to make this point or that about the innovation process. My latest inspiration uses some well-known fictional characters to encapsulate the difference between invention and adoption: Who is the better innovator, Captain Nemo (Jules Verne's 20,000 Leagues Under The Sea) or Chief Engineer Montgomery Scott (Star Trek)? 

Most people would probably choose Nemo. After all, his greatest invention, the Nautilus, antedated by decades the first real submarines. (The US Navy honored Verne's vision by naming the first nuclear submarine the U.S.S. Nautilus.) Previous military experiments with submersibles, such as the Hunley, seem primitive and almost comic compared to the sleek, powerful Nautilus, which was, at least in fiction, sinking enemy warships decades before U-boats became the terrors of the high seas. As an invention, the Nautilus was so new that naval experts assumed it was a sea monster, not something as novel as an underwater ironclad. Now that's inventiveness for you.

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Marketing Innovation Must Be Planned And More Ambitious

Many of the CMOs I engage with are adept at dealing with change. Marketers have to be adaptable these days, right? We're all playing in new channels and at different ways of interacting with customers. 

But through my discussions with marketers, I've noticed two things: 1) Most marketing organizations are reacting to, rather than driving, change, and 2) marketers aren't reaching far enough. 

Why do I call marketing reactive? Well, CMOs don't consider themselves change agents, and that's despite rapid changes in consumer behavior and the new possibilities technology offers them. Indeed, marketers see their own company's efforts at marketing innovation as middling, according to our September 2009 Global Marketing Leadership Online Survey (see figure below). I suppose that's to be expected. Marketers have a job to do, business to deliver, budgets to protect, and bosses to satisfy. Innovation isn't often part of their job description . . . but it should be. 



As a first step to making innovation a more important part of marketing's role, CMOs must define their marketing innovation strategy. I've structured a framework and process for doing just that in my new research.

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Rejecting Your Technology Is A Rational Decision

In the immortal words of Keanu Reeves in Speed, "Pop quiz, hotshot!" Answer the following questions:

  • On average, how long does it take for customers to implement your technology? (Include people using the technology in the definition of "implement.")
  • In all phases of a project (building the justification, drafting the requirements, selecting vendors, implementing the technology, reviewing its success), is there anyone in the customer organization who champions the project from start to finish? If not, when and how does the hand-off happen?
  • Is there anyone responsible for successful execution in each phase? Again, if not, what does the hand-off look like?
  • How does the project team convince people in their organization to use your technology?

Don't worry if you couldn't answer some, or even all, of the previous questions. You're not alone. Most technology vendors don't have anything but the most superficial understanding of how customers adopt their technology. Naming a few stakeholders isn't the same as understanding the adoption process, unless you think there's no reason to read Gone With The Wind if you can identify Scarlett O'Hara and Rhett Butler as the main characters.

Tech vendors have all kinds of reasons to understand adoption better than they do. When projects fail, and adoption doesn't happen, those customers are far less likely to stay customers. That's also a potential success story that you must cross off the list. And that's just the beginning of the problems.

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(R)Evolutions In Management Consulting

The next decade will represent the decade of management consulting innovation, as it's reached its local peak. Consulting service provider strategists are being forced to not only innovate their clients' businesses but their own businesses, too. Four trends are pushing service provider strategists to ignite innovation in 2010:

  • Convergence — of business and IT services markets. Service providers are looking for new routes to value for growing their business in their rapidly commoditizing markets. Because the business is becoming more and more intertwined with technology, and related decisions are moving up within client organizations, providers of all types are expanding their corresponding portfolios — either up or down the value chain — but with mixed success. However, this makes traditional provider labeling meaningless. Classical management consulting firms are eager to evolve their IT capabilities, accounting firms strive to be more than just another Big Four company, business and IT services players focus on new integrated services, and IT outsourcers are overhauling their business consulting units. At the same time, new entrants such as product vendors and cloud-native providers are entering the services market.

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