Collaborating with Design Consultancy firms for Effective Strategic Decision-Making in New Product Development

Abstract

To contain risks and increase the profitability of innovation efforts, firms frequently engage in joint innovation activities with external sources of knowledge, like design consultancies. Innovation literature has given limited consideration to the strategic role that design consultancies can play in the innovation efforts of their clients. A plausible explanation reside in the difficulty to assess and quantify the quality of their output, given the intangibility of the output itself and the difficulty of connecting a knowledge-intensive output to clients’ performance indicators. By analysing the data from 7 dyadic case studies, we examine design consultancies’ impact on their clients’ strategic decision-making as a way of capturing their strategic role in clients’ innovation efforts. We conclude that design consultancies can influence clients’ strategic decisions by enhancing the two main strategic decision-making mechanisms identified by the literature – rationality and intuition. Design consultancies’ impact on strategic decision-making is then transferred to some indicators of innovation performance. Early involvement in problem definition and long term relationships with clients seem to strengthen design professionals’ influence.