By: Anthony Ferrier / James Mabbott
The ideation platform marketplace hasn’t really changed that much in the past 7 years or so. There was an early burst of innovative design and alignment with user needs, but at this point the sector seems to have stagnated in terms of how they add value. Call it reaching middle age, or perhaps they are having a 7-year itch?
Within this article we have prepared a list of improvement opportunities for the sector, and in a follow-up article (out next week) we will outline responses, for both the platform vendors and their clients.
These platforms remain an essential part of most innovation programs. But the needs of Program leaders have changed, with a focus on driving impact (based on idea execution) and culture change. In terms of impact, innovation leaders need to improve how ideas are executed, rather than sourced. Of course, you still need to start with the front-end generating—generating, selecting and (initial) developing ideas–but innovation leaders realize that the hard work is in execution.
Within this environment, many innovation providers continue to focus on sourcing new ideas, but for companies generally the issue is not getting ideas, it’s getting ideas that move the dial and then executing on them.
Some providers are refocusing on back-end support and reporting, and there are a few vendors that exclusively specialize in this. Others separate out their offerings into bundles or packages, presenting a choice for clients, but these can just be chances for vendors to increase the cost of their platforms.
Many vendors oversell the ability of these platforms to deliver fully formed ideas. Challenges can be structured to develop ideas beyond initial concepts, but that kind of design is complex and rarely utilized. Even then, these platforms can take an idea only so far. Vendors need to consider the virtual and physical interaction of an idea’s development, often with more focus beyond the actual challenge / campaign.
Platforms often position themselves as a stand-alone resource (classic “everyone is a nail and I have the hammer” tech-sales approach). However, clients are generally looking for platforms that can integrate with other innovation resources and are tailored to suit their existing processes / methodologies. In response, platform vendors need to recognize that they are integrated elements of an existing innovation strategy (aligned with overall business strategy) and need to readjust their focus around that.
Platforms generally downplay the role or need for supporting services. The background to this is that many of these organisations are funded as technology companies and services are seen as a drag on P/E multiples and ability to drive scale. The message of a “technology only” play is alluring, but not the reality of how companies are able to drive value.
The result is that services are often directed to support individual challenges, rather than taking a more strategic perspective. This misses the opportunity (and major benefit of platforms) to drive longer-term, cultural change. Some vendors are starting to more actively push this message, but it’s unclear if the services supporting the platform align with (or are effective around) this thinking.
At a more tactical level, junior consultants are often packaged into a platform integrations with a focus on supporting the first challenge. The message here is that we will help you the first time around, and you can take over from there. It sounds smart and aligned with a message of not embedding consultants into the business forever. However, in our experience the problem is that once the consultants leave, focus on driving value and impact from the platform dissipates and not much happens. A more holistic program management perspective and a realistic assessment of resource needs are a starting point when negotiating these contracts, rather than being treated as an afterthought. In this case, support resources should be considered around maintaining a rolling series of challenges, focusing around implementation of ideas, tracking of an idea pipeline, etc. This more strategic perspective (and portfolio management) is often needed, to integrate the platform into existing needs / plans.
Finally, Platforms often sell themselves around new functionality bells and whistles. While some are adding on, others are paring back, providing simplified, self-service offerings. As you would expect, Artificial Intelligence (AI) is often a central talking point, but the reality is that we haven’t seen any platforms where this is really being used as a way to drive business impact (a couple of recent releases may be changing this however). Functionality selling is sure sign of a fragmented, undifferentiated marketplace and works when clients don’t actually know the outcomes they want.
So, that’s it for now. What changes are you seeing with these vendors?
Our next article will focus on ways that the innovation marketplace is shifting to add additional value, so stick around for when that comes out.
By Anthony Ferrier and James Mabbott
About the authors
Anthony Ferrier is a well-regarded executive, entrepreneur, advisor and thought leader on corporate innovation. He has worked with organisations in the US, Europe, Asia and Australia to develop effective innovation strategies that guide organizational change and build cultures that encourage the development of new products and solutions. Anthony has worked with organizations such as Transport for NSW (Australia), Department of Defence (Australia), Bristol-Myers Squibb (US), Fidelity Investments (US), Pfizer (US), Volkswagen (Sweden), Ergo Insurance (Germany), etc.. He currently leads innovation and commercialisation efforts at Swinburne University, and previously led The BNY Mellon global innovation program, as well as co-founding two successful tech-driven consultancies. He has a Master of Commerce (University of Sydney) and Bachelor of Economics (University of Newcastle).
James Mabbott heads KPMG Innovate, the innovation services arm of KPMG Australia. A management consultant and technologist, James has spent over 15 years working with some of Australia’s largest companies on complex problem solving, industry and client analysis, relationship management and development, sales strategy and execution. As head of KPMG Innovate, James is responsible for delivering innovation projects to government and corporate clients, leading the firm’s startup eco-system initiatives and alliances, and bringing new KPMG products and services to market. James is also an active member of the community, heavily involved with Jawun (Indigenous Corporate Partnerships) and on the regional advisory council of the Sydney Business Chamber.
Featured image via Unsplash.