India is a market ripe for an innovations consultant

The companies you consult with are possibly staffed with accomplished B-School-trained executives. Are they happy to take the advice of an innovation strategist such as yourself?
They’re actually extremely enthusiastic because we don’t compete with them. When a Fortune 100 company is looking for growth, typically they’ve been looking at the same industry for a long time. So, if you’re in telecom, you know it very well. The job of an innovation consultant is to come in and bring cross-category insights from healthcare, food and beverage to telecom.

There’s always criticism of consultants such as yourself. If you’ll are so good, why don’t you do it yourself?
Absolutely! If we’re the right people to develop a toy platform for Mattel, it doesn’t mean we have factories or are the right people to execute a toy business. We’ll take them as far as they want to go. For example, Samsung can make anything, but, they love to outsource a lot of their thinking and ideas. There are some firms that want us to go all the way to market with them. But we don’t actually find it a good use of our time to get all our resources on something as big as a toy platform that someone else can do easily. For us, scale comes from working on many businesses at the same time.

So this is a bit like backseat driving. Right?
All consultants in some way are advice-givers. That’s a fair criticism of the consulting industry versus the innovation industry. At the same time, people turn outside when they need resources they don’t have initially. What a firm like Fahrenheit can bring to an organisation that’s looking for growth is a very interesting combination of skillsets that they don’t have. If you think about how companies have evolved over the past 10 years, the bias has been on efficiency and getting very, very lean. Streamlining bottomline. A lot of them have actually cut their ability to grow and come up with new ideas.

According to you, which product category or product has seen the maximum innovation over the years?
Think of innovation in a couple of ways. We see incremental innovation every day. Look at the Nestles, Mattel… 80% of what’s there in the shelf was not there before.

There’s obviously innovation needed in product specification and the other is in terms of the business processes. Which do you think is more important or are the two mutually exclusive?

They’re mutually exclusive. These are two very different needs. There are companies that are not built to execute anything new. Companies that have created an engine than runs so well that if you try and introduce something new to it, they break down. People need organisational help and there’s plenty of that out there. Change management.

Do you have a presence here in India?

We don’t. Our presence is through multinationals like Coca-Cola. We happen to believe India is a market ripe for an innovation consultant for a couple of reasons. Here’s why. Incredibly entrepreneurial talent base. You need very sharp people to do what we do. India has no shortage of that. Two, consumer need and a rising middle class. A lot of people to buy whatever is coming out. Three, a very high willingness to adapt to technology, including leapfrog technology. In a way, India has a lot of advantages over other markets. Financial services is a great example. We’ll get to mobile payments and certain leaps faster than many entrenched industries do.

India is a very price sensitive market. Does it help in innovation?
No, price sensitivity doesn’t help anybody. This happened in Western markets where innovation breaks off from brand consultancies and agencies. What you start to see is people using the word innovation to sell brand services or to sell certain design services, it’s a marketing tool. As long as that’s happening, innovation will never achieve it’s price point. It will always be dragged down.
You mentioned about frequent updates and product categories, but we’ve had a consumer electronics maker like Nokia which did that and went down as there were so many new innovations, people got sick of them!
I have a disclaimer here is that Samsung is a client. There’s a huge difference between things you can and should offer consumers. In consumer electronics, one of the quickest way to die is to push out features and expect a lot of people to discover them, use them and incorporate them into their lives. Simplicity, as is with Samsung’s new app world has a massive advantage over pushing out everything that exists. Being the first wearable is not always the good thing. Being the first person for peer-to-peer payments is not always a good thing. 

There is criticism that there’s nothing new between Samsung’s S3 and S4. Ditto with the iPhone 6 and 5S.
Innovation does not mean change or new. It means taking a system that exists and creating growth in the right way within that. Typically, the consumer and the business. Sometimes, that’s because of an experimentation strategy. It doesn’t mean because they didn’t innovate correctly. Samsung, for example has a much different strategy that we know, than Apple. Apple will wait a decade till they feel it’s exactly perfect. Samsung will throw 5 different things at the world, to learn, to figure out about consumers. They’ll sometimes get a bad reputation saying this wasn’t good enough, this was in the middle. They have a very interesting strategy. This is how they think about home entertainment, television, audio. They want to learn. If you look at it through a macro lens and take a mid-term view, all these companies are just learning. What’s the one feature they’ll focus on two miles down the line? But the price point at which some of these products come is very high, and as result, people don’t try out the innovations.

Look at the upgrade cycles within phones. If you look at washing machines, they have a 10-year replacement cycle. TVs have a 7-8 year replacement cycle. Phones, which are small computers for some reason, have 18-20 months. Manufacturers are seeing these are being pushed out as luxury items, accessories, personal items and computers. I think you’ll be hard pressed to find a industry like mobile where the price point is so high where what’s being featured new about is often so incremental.

Do you see that increasing in terms of the experimentation and innovations given the fact that the stakes have become so high?
I think the material replacement cycle will be around for a while. We’re starting to see some backlash though. ‘There’s nothing wrong with my phone.’ I think what we’ll start to see is more of a modular system where you can make better versus I have to have an entirely new piece of equipment. There’s some commercial reason that’s true, too. The carriers will stop subsidizing these things. 
The phone is now starting to follow what’s happening in television. Samsung will tell you TV lives for 7 years in the living room, then it gets downgraded to the bedroom or the basement. The phone doesn’t go away, the two-year cycle is the excuse to give it away to a child at a younger and younger age. I’m not gonna go out and buy an iPhone for my 4-year-old. You’re starting to see excuses to upgrade, more than a need to upgrade.

Would you say that the mobile phone is possibly the most hyper active category for innovation?
I don’t know. I think financial services is absolutely ripe. The way global banks have evolved is that they have cobbled together different systems that don’t even talk together in different countries. I think what we’re going to see in financial services over the next 5 to 10 years is going to be staggering.

Do you look at innovation strategies differently for different geographies? Specifically, are you looking at doing any for India?
Innovation strategy is actually channel by channel, not market by market. We develop innovation strategies for what we call, bottom of the pyramid or what can be called low income for a food company. There are certain more millenials where we’re seeing huge amount of questions from every industry. How do we deal with this generation between 20 and 35? We certainly are doing a lot of research about how established companies appeal to this generation. That said, we don’t believe countries are simple enough to come up with country level innovation strategies. There are the realities of that market that you have to find out, but, for us, food and beverage innovation in India is not going to look like banking innovation in India. They might have some similarities, like we talked about with packaging, going smaller in some ways, access may be an issue, some of the channels may change, there may be some healthcare for example, that actually can skip some last mile strategies. We tend to on purpose, not say, this is our India strategy. We’re very excited to work within India, but it’s really going to be based on what’s the growth assignment for that company.

Any targets of when you want to get in to India?
We absolutely do. It’s a market with intense growth potential, a deep appetite for innovation, incredibly deep talent pool and companies both global and more exciting here that are looking to grow and innovate out of the pipelines. Not just organically, but accelerate that. When we look at who’s playing here in the innovation space, it’s not that many. It’s a lot of design agencies starting to use that language. We think our model which is based on predictability and has a 10-year track record is going to be perfect for India. So, we’re excited.

Have you started discussing with people?
We have. Names we can’t give out yet, due to the nature of it. We’re in a few talks right now, a couple of agency partnerships which we’re happy to explore.