David leads our Client Innovation team globally. He has more than 20 years experience helping clients bring to market new products, services and business models.
In the early days of the down turn, or Great Recession as some now call it, companies came to consulting firms for survival advice. Then, when they realised their markets were not going to return, they came for cost-cutting advice. Now, they’re asking how they can grow again.
Why, you might ask, do companies need advice about how to grow? Surely this is fundamental to their purpose and should be second (if not first) nature to them all. The truth is though, many companies have forgotten how.
Much has been written about the challenges facing companies today - global competition, regulation and disruptive technologies - but not enough has focused on the legacy of the downturn on leadership, talent and culture.
Retrench, recapitalise, restructure and cut costs – this was the mantra of the last six years and, so difficult have they been, that a whole cohort of corporate innovators have been let go, passed over, demoted or redirected. Now that many (Western) companies are ready to grow again, they’re finding they lack the ideas and innovation they need to do so.
Put simply, leaders at all levels are disproportionately cost-cutters, and cost-cutters are unlikely to come up with the next big thing. There needs to be a serious rebalancing of talents.
But changing organisational cultures is hard. Companies need outsiders to show them how current models will not lead to growth; how competitors are achieving higher multiples; how to get their creative pipeline up and running again. After that, changes can be made to operating metrics, performance appraisal systems and acquisition policies.
The tide is turning. Our recent global survey of CEOs showed an increased focus on innovation relative to cost-cutting. A separate study found the most innovative UK companies achieved 50% higher growth over recent years than the least.
There’s no doubt what true innovation can add to the bottom line. UK companies can grow again if they can just find people who remember how.