For Innosight, disruptive innovation begins at home

Innovation watchers will be familiar with Scott Anthony, President of Innosight, some time BusinessWeek contributor and author of books such as the recent The Silver Lining. A sharp thinker on innovation, Scott’s always worth keeping an eye on. So it was with interest that I saw the news that he’s upping sticks and leaving. Not leaving Innosight, but shifting roles to become MD at the still somewhat nascent Innosight Ventures, the company’s venture and investment arm.

This is a big deal, not least for Scott and his family, who will leave the U.S. and head to live in Singapore in 2010. But also because of the signal it sends. Innosight, founded by disruptive innovation specialist Clayton Christensen, has made a name and a living from advising clients on how to manage risk and build a sustainable business. Now Innosight is itself identifying key areas it thinks are ripe for disruption, and getting a foot in on the ground floor.

The move is actually reflective of a wider trend that’s been playing out in the consulting business over the past few years, Scott told me in a phone conversation last evening. Particularly in this economic climate, clients aren’t content with having a PowerPoint to wave around at the end of a consultant’s extensive tour of duty. They want more than strategic insights—they want the consultants to implement and execute ideas, too.

So as the consulting business has shifted to become more practical, so too has Innosight’s own focus. And now Scott will spearhead the hands-on side of things.

To date, Innosight Ventures has invested in four ventures: a laundry services business in India; a men's grooming business, also in India, an online education business in the United States and a program with the Singapore government. Note the areas of interest: these aren't the traditional areas for VCs, who themselves seem to cluster around certain often high tech-focused industries. Instead, these are service industries. As it happens, Innosight's taking a leaf out of its own disruptive playbook.

"I have nothing but respect for VCs," Scott said. "I don't suppose I could do it better. But then the question is 'how do you go where they aren't?' You go to sectors that people aren't paying attention to and you play the game in a different way."

And what of potential conflict between Innosight the consultancy and Innosight Ventures, the supporter of fast-growing disruptors? Scott's clearly aware of the potential problems. But for now, he emphasizes that it's still early days (Innosight Ventures is currently only a team of ten) and underlines his excitement at taking a step away from the theoretical in order to plunge into the muck and grime of modern day business. "It's another laboratory," he says. "We have this body of academic theory refined through our consulting services and this is the next level where we operationalize it. We'll learn what happens when people stop being polite."