freeing the spirit – driving growth through innovation

Consulting Magazine has recognised Egremont Group as one of the Fastest Growing Firms in 2017 out of all the US based management consultancies.

This led me to reflect on what has driven our growth and how have we managed to achieve it. One key reason is our emphasis on innovation, both in the way we run our business but also in the way we work with clients, which in turn drives growth on both sides.

Innovate or die is a macho expression often bandied about when big changes are needed to turn a business about. What does this really mean and why is it so important.

The pace of global change is increasing exponentially year on year. Businesses are running to catch up and finding it harder and harder to accurately identify their competition. In order to survive in this environment they need to be dynamic and flexible but also conscious and aware of the outside environment and internal business dynamic.

To understand how this works in practice it is worth glancing back at the Fortune 500 from 1956, only 12% of the companies from that era are still on the list. While there are many factors involved when companies go out of business, those that remain have had to work hard at staying relevant while the world around them changed. Put simply, they had to innovate.

The story of Kodak is well known as one of the very high profile casualties in the recent past. Who can forget their demise, a company who once held the world at its feet with their dominate position in the film market. Their mistake was to remain static, not to innovate quickly enough. Fuji, their one-time rival, decided to concentrate not on a product but on a concept - the effect of light on material. This opened up the business and took them into many different areas from skincare to semiconductor materials and medical devices as well as digital cameras and recording equipment. By contrast Kodak stagnated and failed – innovation is not an optional extra. Innovate or die is not hyperbole.

Adapting and reacting to the fast pace of change is essential to maintaining an edge over competitors, but also to avoid ending up with an operating model that no longer fits the company it is supposed to service.

Morrisons is a great example of a company that has focused on practical innovation to turn itself around with spectacular results. In the latest grocery market share figures from Kantar Worldpanel published in mid October Morrisons were the fasted growing large UK supermarket over the last quarter increasing sales by 2.8 per cent. A new leadership team has revitalised the Bradford based business by adapting the operating model and re-focusing the grocer on what customers really valued. The Kantar figures show that big sales increases came from ambient and fresh food products, cakes, pastries and fruit were all up by 10 per cent. By adjusting the core processes and systems at the same time sales and profits have returned.

How much better, though, if innovation is embedded into the fabric of the organisation – not just in an innovation department – and each employee understands that unless the company is moving forward it will be left behind.

At Egremont Group our biggest project in recent years is the ongoing practical store innovation programme at Walgreen’s. We worked at the customer interface to innovate at a practical level and change the store experience, drawing on the everyday knowledge of the frontline store staff. Best practice developed here was taken back to HQ. This is dynamic innovation in action.

It is an example of innovation reimagined. Not the revolutionary innovation favoured in the past which meant throwing out the old ways and replacing them with completely new thinking. Instead think of it as ‘evolutionary innovation’ and continuous improvement.

A good idea in principle but all too often we see innovation paralysis in organisations. Big change often means having to rework the whole operating model. If there has been no change for a while, when change does start it is often at a time of crisis and knowing where to begin is a challenge in itself. Organisations have become too big and complex for one person to have complete overview of the whole business, how is it even possible for a modern CEO to know exactly what happens in all 10,000 stores?

For these large companies, the individual staff are the key to innovation. By breaking free from an outdated command and control factory model and giving people space to breath and move within their roles it is possible to liberate the spirit of a company. By helping staff to understand who they are, what their meaning is, why they are performing a particular role and ultimately what business they are in, they will create a better experience for each customer. Who better to assess and feedback on the shopping habits of a supermarket customer than the people who serve those customers every day?

Many of the top down management control systems still prevalent in large operating models date from a factory mentality when leaders didn’t want their people thinking too much. This is a waste of valuable insight. Companies have detached their personal shopping habits from those of their customers – they may all be shopping online / from Amazon, but are surprised when their customers are doing the same.

This brings me back to Egremont Group, I believe strongly that as a company we need to practice what we preach. As a business, we too need to evolve and transform ourselves in the way we transform our clients. The downside of this continuous innovation is that it can be destabilising for the team, the upside is that one of our teams recently won a significant project through their own creative endeavours.

Innovation is not a static concept, it is not something we can do every so often. It needs to be embedded into our everyday thinking. Only then can we provide the very best experience for our customers and employees. We are thrilled to see our rapid growth recognised in the Consulting Magazine rankings this year but are very aware that only by freeing our employees and clients to be innovators in their own right can that growth be sustained over the long term.

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