Innovation in consulting report

Despite a lack of detailed studies on the subject, many commentators have suggested that innovation in the consultancy sector is under pressure. In the words of The Economist, "the consulting industry desperately needs a 'New Big Idea'". At its most basic, this report refutes that argument.

Key findings:

Innovation is primarily driven by the need to 'differentiate from the competition', a factor identified as important by 64% of respondents
Only 21% of respondents have a 'formal innovation process'
Innovations are most commonly initiated through 'working with clients', a practice highlighted by 26% of respondents
69% of all respondents believe innovation has increased in the last five years
Since 2005, there has been a 36% increase in respondents reporting the introduction of new or improved services in their consultancy
Access to external research, high levels of autonomy and strong upward communication were rated as the most important enablers of innovation
The main constraints on innovation are seen as being lack of time due to high utilisation rates, and low levels of risk taking by clients
50% of consultancies report working with clients on innovation, a figure up from 22% in 2005
83% of respondents believe that procurement hampers the sale of innovative consulting services. This is felt equally by those specialising in the private and the public sectors

Huw Hilditch-Roberts, Director in charge of the Institute of Consulting says, "This report is a timely wake up call for consultants. The value a consultant brings to a business is new ideas, innovation and smarter and better ways of doing things. Firms must not lose sight of this. Yes, consultancies like all businesses are under financial pressure right now, but this is no excuse to neglect innovation. It is as important as billing clients. If a consultant loses their ability to innovate, their role is effectively redundant and the industry fundamentally at risk. Management consultants also need to demonstrate the value of innovation to their clients as a way of gaining much needed competitive advantage."

A full copy of the Innovation in Consulting report is available here.