- The reasons for the change
- WHY THE CURRENT BUSINESS CONSULTING FORM IS OBSOLETE
- So how can a new form of business consulting be defined?
- the need for a return to the basic faculties of the business: the Insight of the inventor of solutions (entrepreneur)
“We need to understand the difference between change and transformation (you can fold a handkerchief in infinite different ways: there is a change, even a very obvious one, but the essence remains the same. Transformation means that nothing of the old remain“
With the advent of Market disruption everything changes for the business.
The product changes in its essence, the Companies in the structure and methods change.
And it cannot but radically change Business Consulting.
Upstream of all that changes is the concept of innovation itself.
The reasons for the change
To understand why and how the business paradigm changes, it is necessary first of all to understand the meaning of the Disruption in progress today.
● disruption (change) is not an option
Customers today can no longer buy the products of the current generation, but must fall back on products capable of satisfying their actual needs <see Why disruptive innovation is not an option>..
● there is still no “culture of Disruptive Innovation”
In reality today there is no such thing as a Culture of Disruptive innovation: Culture in the current meaning of knowledge (ie set of notions, rules, conventions, or practices associated with a particular field, activity).
The essence of the issue from the point of view of Consultancy is that today there are no reference models for business. And because of that
in the world of Disruptive innovation
there can be no advice
as it is conceived today.
WHY THE CURRENT BUSINESS CONSULTING FORM IS OBSOLETE
The current type of business consulting is therefore obsolete for many reasons – not only because there are still not models to offer to customers.
One of the main problems is that the philosophy underlying the current Business Consulting is wrong: in fact
today it claims to
PROVIDE ADVISES ON THE DISRUTPIVE INNNOVATION
THE PRINCIPLES OF THE DISRUPTIVE INNOVATION.
This can be considered, depending on your point of view, an ingenuity, or a fraud.
This is not a moral issue: this bluff cannot however last long, since the lack of real positive results soon becomes evident.
Today the vast majority of Consultants do nothing but tell the Client what it wants to hear. That is, it is not necessary to make radical changes, and the performance of some departments is sufficient.
The problem for such Consultants is that, precisely, their advices lead to failures of the new strategies of their Clients.
And furthermore, these Customers – reading the ever increasing number of articles available on the subject – are beginning to understand that disruptive innovation does not correspond to that proposed by their Consultant.
So how can a new form of business consulting be defined?
The return to the innovation dimension of the past
To understand how a new form of business consulting can be defined, a premise is needed:
it’s not about inventing anything new, but
TO RESTORE THE DRIVER OF THE MARKET
OF THE LAST CENTURIES: THE REAL INNOVATION
(the entrepreneur’s intuition).
The question is in fact that Man – before the advent of modern marketing in recent decades – has always been a “inventor of solutions” (solutions to human problems).
This inventor of solutions not yet developed previously – in essence, the real innovation – was the entrepreneur.
And in this activity the Entrepreneur used his peculiar talent: intuition.
The problem of the market is actually the fact that the entrepreneur is supplanted by the managers. This is, precisely, the main cause of the current lack of real innovation, that is the lack of effective satisfaction of the real needs of the Customers
In other words, Business today is no longer a Entrepreneur driven Business, but has become a Financial capital driven Business.
The current crisis derives precisely from the fact that the Business, having betrayed its fundamental principle, the law of Supply & Demand, has failed for too many years to satisfy important Customer needs.
And today the Demand urgently requires a strong dose of Innovation: a phenomenon that today is labeled as a disruption.
The need to recover the qualities of market Pioneers (who developed real innovation)
To better understand how one can enter into an effective dimension of disruptive innovation it is necessary to remember how in the business there have always been always Leaders and Followers.
● Leaders / Pioneers are those who enter the market with a new product (from Nutella to the Automobile).
That is they are the ones who “invent a solution” for the Customers (they, among other things, are the first mover with respect to the specific Market niche).
● Follower are those who are “satisfied” with copying an existing product, creating a cheaper version of it.
It is crucial to understand how – before the “Manager’s Business” of financial Capitalism prevails – the Pioneers of the market have always developed Disruptive innovation (an innovation that brought disruption to the market).
That is, except for the last few decades,
THE DISRUPTIVE INNOVATION
IT IS THE HISTORICAL BUSINESS DRIVER.
The Managers and the lack of real innovation
The fact is that the current financial market has replaced the entrepreneurs – the “solution inventors” – with managers, with whom the company ceases to develop value for the customer (the managers of the big companies currently do nothing but exploit the maximum of the Value created previously by the Entrepreneur). <see The Entrepreneur’s DNA >
The problem of the Market is in fact that the current “Leaders” no longer invent real solutions, they no longer satisfy the important needs of people. But they “induce” customers to buy their products by leveraging emotional factors. <see Business problems: the difference between original and current marketing>
It is therefore precisely due to this condition of prolonged lack of a really useful value for the Customers that emerges the new Demand for Disruptive innovation.
And to adapt the strategies to the new demand,
the Market must recover a real dimension of entrepreneurship: return to being an Entrepreneur driven market.
The “cultural question” (why the need for disruptive innovation)
In order to define a new approach to business consulting it is therefore first of all necessary to understand the reason for the need for disruptive innovation.
The problem, in essence, is that with the new market dimension of the “Manager’s Business” a new simplified Market Culture has developed (in the Market of the last decades it is no longer necessary to be able to develop the complex process of interpretation of needs of people, and to be able to develop effective forms of satisfaction, but it is sufficient to “create” emotional purchase reasons – that is, to design effective promotional messages).
The motto of the Manager’s Business is “not to taste the yogurt that produces the company you work for”: its purpose is in fact to create abstract forms of promotion with respect to the product.
The problem – which must be solved with Business Consultings – is that this new culture has erased the original Market culture.
More specifically the question, from the Companies’ point of view, is that they lack a culture that allows them, not only to understand how to develop the value that they have failed to develop in recent decades. But also simply to understand what is happening. (at least to understand the need to change).
This applies not only to Managers and Consultants, but also to all the Market Culture “experts”: Professors, Authors, etc. … (note that the last two generations have been formed by the new Culture revised and corrected, and they no longer know what real entrepreneurship is, and real innovation)
As illustrated in the next chapter, the task of business consultants is therefore to restore the Company’s original culture and aptitudes in the Companies.
the need for a return to the basic faculties of the business: the Insight of the inventor of solutions (entrepreneur)
The following article illustrates how for a business consultant, in essence
it’s about driving the Companies
TOWARDS A RECOVERY
OF THE ORIGINAL INNOVATION DIMENSION,
THAT OF THE ENTREPRENEUR
It is basically a restoration of lost qualities operated on two levels:
● APTITUDE FOR INNOVATION, a task more for Counselor/Coach than for “teacher” (the current setting of Business Consulting, in which we tend to “teach” something to the Client).
● “CULTURE OF ENTREPRENEURSHIP”.
Keep in mind that the cultural question is quite demanding: today market players completely lack the idea of what a truly innovative approach can be.
It must in fact be considered that the dominant culture (the educational programs decided by the institutions) have led to the spread of an “employee” mindset (which has practically eliminated the awareness of the individual’s entrepreneurial potential).
In Italy in the 1990s a survey among young people revealed a great majority of interviewees who aimed to find a job on their own. After a few years of school “reforms”, the same survey revealed a large majority of young people who hoped to find a permanent job over time.
Since the propagation of this new “reformed” culture has been going on for several decades, now most managers are lacking in a culture of entrepreneurship.
The task of a business consultant is to restore a business able to satisfy the new demand, operating on two fronts that overlap in this phase of development of the market: that of the established companies, and that of young people who want to activate StartUp.
In both cases it is a question of acting in a manner very similar to that of the Incubators. In fact, even for the big Companies it is basically a matter of activating Startups that are independent of the main structures.
(in the following article, this topic is discussed in more detail – in development).
For an effective assessment of the quality of a product's innovation, the Guidelines to Disruptive Innovation was developed, which offers:
1) an essential description of the meaning and methods of Disruptive innovation, and
2) a methodology for those who want to start a Disruptive Innovation business.
3) a Table summarizing the quality of the Disruptive Innovation for an assessment of business innovation capacity (usable both for developing a new Business and for analyzing Business already in progress).