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#231: Applying Reverse Innovation to Consulting

Posted By Mark Haas CMC FIMC, Monday, February 1, 2010
Given all the attention being paid by major companies to reverse innovation, how might this huge trend be applied to consulting?

In a globalization strategy, innovation is conducted in developed countries to create new products targeted at home markets and then adapt them for use in emerging markets. Because of differences in incomes and local needs, this transfer often requires a deliberate change in price-performance configuration. Reverse innovation is flipping the globalization concept in two ways, (1) to create products and services in the emerging market country specifically for the local market, and (2) to develop products in emerging markets for adaptation and export to developed countries. One way to describe it is to create a product that is half the quality for one-tenth the price. A good example is creating low-cost laptops for sale in developing countries, but finding out that many developed countries have high demand for a "good enough" laptop. Like disruptive technologies, reverse innovation has the potential to overwhelm high end services that once captured the market.

As consultants, we pride ourselves on creating the most sophisticated and cutting edge services for our clients and charging them accordingly. However, given the recent economic slowdown, many clients (in all markets) are interested in alternative services along the price-performance continuum. Regardless of where you are consulting, there is plenty of opportunity to look at reverse innovation concepts to create a range of services. Why should we offer only best practices services when our clients may not need them?

Tip: For your signature consulting service, design two alternative offerings. The first should be for one-tenth of your normal price. It may be uncomfortable cutting out quality but start with those aspects that provide the least value, such as reporting, discussion presentations or follow on service. Now that you have forced yourself to cut way back, design a second service that at least doubles the quality but keeps the price about the same. This will show you the kind of process major companies like GE and Microsoft are making a centerpiece of their strategy.

© 2010 Institute of Management Consultants USA

Tags:  client service  innovation  product development  trends 

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