Innovation strategy

Helping our clients create future value

Helping our clients create future value

Innovation is at the heart of every business and we work with clients from across all industries on creating successful innovation - from banks to restaurant chains to retailers.

When it works well revenues grow, costs can shrink, and market share can be captured. It's no secret that innovation is as hard as it is important though. You can’t just ask customers what they will want in the future, and you can’t innovate well without failing once or twice along the way.

Designing a better future for our clients' businesses usually comes from a mix of the right insight, a focus on value and a clear vision for something that cannot easily be copied by the competition. Economics has a lot to offer in this context, from defining the value of a new product, to creating incentives for customers to buy into it. And beyond the numbers, this journey is also about embracing a test and learn approach that is robust and allows businesses to learn and adapt.

We use our economic toolkit to support clients to build, test, iterate and implement innovation. Using five key questions we pinpoint the underlying economics behind specific innovation needs. We then help our clients navigate the uncertainty of customer behaviour, competitive threats and changing context.

This approach helps to innovate faster, better and in areas that create more value. And it’s flexible too: able to support individual product innovations as well as transforming how innovation works from the ground up.

To get in touch with someone from the team please email innovation@frontier-econmics.com.

 

How to be better at innovation: the 5 questions we ask our clients

How to be better at innovation: the 5 questions we ask our clients

We’ve developed five questions that we ask all clients who want to innovate. These questions allow us to get to the underlying economics behind a business’s innovation needs, and demonstrate how they affect innovation decisions at all levels.

Discover more

Frontier’s flexible approach helps our clients innovate faster, better and in areas that create most impact for them. Our aim is not to take over the innovation process for our clients, but help them remove the friction points that hinder successful innovation.

 

Providing clarity

Our approach is based on five questions that are relevant across different stages of the innovation process. We use it to support both - strategic overhauls and individual product innovations. The questions allow us to get to the underlying economics quickly and bring structure and clarity to our clients’ challenges. For example, if a business is worried about not being innovative enough, we explore their economic model first to understand what really is driving the blockages. Without this understanding, we risk developing fixes which are superficial.

 

Navigating uncertainty

If a business is considering an investment in new, cross-cutting technology and struggles with navigating the uncertainty, we explore the value drivers of the innovation and articulate what our clients would need to believe for the investment to be worthwhile.
Using an economic lens can help find a way through some of the hardest elements of innovation.
Finding value

Innovation is ultimately about creating value for a business. This means that identifying where value might be and sizing its potential in a robust, timely manner is fundamental to successful innovation. Doing this well is a lot easier said than done, and many businesses struggle with it. For example, customer insight might be asking the wrong questions, quantitative models might be too focussed on short term pay-back and decisions might be biased towards quick wins. We support our clients by identifying the levers to enable evidence-based thinking right through the innovation process. We help them to identify value pools and assess the size of the prize, tweaking our approach to accommodate different levels of uncertainty based on the innovation time horizon.

Navigating uncertainty and risk

Innovation is always uncertain, and there is risk linked to any change a business makes. For example, a different decision process is usually required to place bets on uncertain, long-term innovations versus signing off incremental improvements to a proposition. Some businesses find this tricky to navigate and try to push different types of investment decisions through the same static processes. This can slow down decision-making and risks missing out on opportunities. We support our clients in building the evidence base and the right framework for decision-making across all types of innovations - from small tweaks to big bets.

Using incentives

Incentives are fundamental to successful innovation. It can be easy to create enthusiasm for a new proposition in the internal team at first. But it is usually much harder to design incentives in a way that genuinely motivates the right behaviours in the long term - from avoiding conflicts between competing business units to personal objectives of executives. And for customer-facing innovation to be successful, incentivising customer behaviours efficiently is key. We use a mix of economic modelling, behavioural economics and pragmatism around real business needs to support our clients to navigate this space effectively.

Team thoughts

Innovation processes need to fit with a business’s economic model. When you try and work against it, innovation tends to fail - and no single process, team or plan will be able to fix it.
Laura Petschnig
Manager
Truly innovative businesses look beyond what their competitors are doing to judge where to innovate. By its very nature innovation needs to take some risks, and that might mean following future value you can see that others have not spotted yet.
Kalina Kasprzyk
Manager
Testing innovation is critical and the better the trial the more you learn. There is a huge opportunity in digital channels and e-commerce for traditional bricks and mortar businesses to learn much faster what their customers are doing and how to adapt to serve them better.
Richard Bradley
Director

In numbers

£27bn

are spent on R&D per year by businesses in the UK

58%

of large firms in the UK are actively innovating

59%

of business leaders in Spain say satisfying a customer need is the main reason they innovate

Team Thoughts

# of #

Innovation can look very different across sectors, businesses and industries and is about much more than just brand new, shiny products or services.

We understand that any change in markets, policies or regulation can create a need to be innovative - and we support a wide range of clients through combining our innovation approach with deep expertise in regulation and policy.
Please see some of our interviews, case studies and further reading materials.

Content on Helping our clients create future value

Innovating Better: An interview with Dave Lewis

Innovation strategy

Innovating Better: An interview with Dave Lewis

March 2022 Article
Innovating Better: An interview with Shira Lappin of UK Power Networks

Innovation strategy

Innovating Better: An interview with Shira Lappin of UK Power Networks

March 2022 Article
Innovating Better: An interview with Gráinne Allen of McDonald’s UK & Ireland

Innovation strategy

Innovating Better: An interview with Gráinne Allen of McDonald’s UK & Ireland

January 2022 Article
Innovating Better: An interview with Dan Hodges of Innovate UK

Innovation strategy

Innovating Better: An interview with Dan Hodges of Innovate UK

January 2022 Article
Innovating Better: An interview with Balázs Fónagy at Supercharge

Innovation strategy

Innovating Better: An interview with Balázs Fónagy at Supercharge

August 2021 Article
Innovating Better: An interview with Stephen Dury at Santander UK

Innovation strategy

Innovating Better: An interview with Stephen Dury at Santander UK

July 2021 Article
When throwing caution to the wind works best: innovation during a crisis

Innovation strategy

When throwing caution to the wind works best: innovation during a crisis

May 2021 Case Study
Updating your portfolio: build, buy or partner?

Innovation strategy

Updating your portfolio: build, buy or partner?

May 2021 Case Study
Open banking and GDPR: Regulatory burden or chance to innovate?

Innovation strategy

Open banking and GDPR: Regulatory burden or chance to innovate?

April 2021 Case Study
Disruptive innovation for a fast food giant

Innovation strategy

Disruptive innovation for a fast food giant

April 2021 Case Study
Innovating through analytics in the travel sector

Innovation strategy

Innovating through analytics in the travel sector

April 2021 Case Study
How to be better at innovation: the 5 questions we ask our clients

Innovation strategy

How to be better at innovation: the 5 questions we ask our clients

April 2021 Article
Move fast and fix things: Business responses to Covid-19 lockdowns

Covid-19

Move fast and fix things: Business responses to Covid-19 lockdowns

April 2020 Article
How can department stores remain competitive in a changing retail world?

Competitiveness

How can department stores remain competitive in a changing retail world?

July 2019 Article
Developing new products through consumer behaviour

Incentivising innovation

Developing new products through consumer behaviour

April 2019 Article

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