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Business as unusual – innovating professional services – 6

November 30th, 2015

Professional Service innovation blackboard

by Alastair Ross, Director, Codexx Associates Ltd

Part 6. Starting your innovation journey

Introduction

This is the sixth of a series of seven articles on professional service innovation. The objective of the series is to provide a basic introduction to innovation management for managers, partners and change agents working in professional service firms. This article focuses on the approaches for starting or enhancing an innovation programme. To read the first article in the series go here.

Beginning a journey of change

There are a number of ways for a professional service firm to become a measurably more innovative business. There is no one ‘best practice’ way for how a firm should make the journey to realising their own effective innovation system. For that is as much to do with the goals, culture and the leadership of the firm as anything else. However, there are three significantly different approaches that are worth reviewing, as one of them may very well fit with your own firm’s situation and culture. It is important to note that just as an innovation process is drawn as a straight line, but in reality is closer to a lump of spaghetti, so the execution of an innovation programme is rarely clean. Here are three different practical approaches for developing an improved innovation capability in an organisation:

1. Top down strategy

2. Emergent

3. Champion led 

 1. Top down strategy

This is in many ways the classic consultant-advocated approach to innovation, which is logical and structured, putting in place the required ‘infrastructure’ (i.e. process, training, metrics, resourcing etc.) and the conditions (i.e. leadership, cultural changes and new behaviours) – as described in the previous articles – to enable and sustain innovation.

Strengths: This approach will deliver the conditions required for effective and sustainable innovation.

Weaknesses: This approach requires resourcing and will take time to deliver results – the other approaches can be faster to yield initial benefits.

 2. Emergent

The emergent approach offers a pragmatic way to build or enhance a set of innovation capabilities. The trigger will be an existing event (typically external) such as tough business conditions driving the need for efficiency improvements to save cost; or a new requirement from a major client(s) for a dramatic change in a solution(s) value or price; or a business event such as a merger or acquisition.

Strengths: The innovation programme can piggyback on an existing change driver and enable more innovative behaviours and outcomes as a result. The existing change driver helps legitimise the need for innovation, so helps management push through the typical inhibitors to establishing innovation activities in a professional services firm. It can yield faster results than a ‘top down’ approach.

Weaknesses: It is unlikely to be sustainable beyond the short to medium term as the conditions for ongoing innovation have not been put in place and a ‘crisis-driven’ change programme can only run for so long.

3. Champion led

This is an opportunistic approach, which finds potential champions for innovation and then supports and resources them.

Strengths: This can be a fast and effective way for bringing new offerings to market. Individual champions are motivated to make their ideas a success. This can be a low resource approach, with little supporting infrastructure required, and only the matter of budget.

Weaknesses: Success depends on a few key individuals and if they fail to perform or they leave the organisation, then the innovation capability dies with them. This is not a system that leverages the capabilities of all the employees and is not sustainable in the long term. This approach is not uncommon in partner-based organisations when individual partners can be ‘given their head’ to take their ideas forward. Success is mixed however, typically with successes at least equalled by failures. And unless the budget is effectively allocated and controlled, a money-pit can be created….

What does experience tell us?

I’ve worked with a number of professional service (and industrial) firms over the last ten years on innovation programmes and inidividual projects and researched many case studies in the writing of my recent book and other articles. What are the three most important lessons that I have learned?

  • It is difficult to start (or ramp-up) an innovation programme
  • It is even more difficult to sustain innovation programmes
  • You cannot underestimate the importance of committed leadership

As discussed in previous articles in this serious, innovation requires a different paradigm to the dominant one that is prevalent in professional service (and most) businesses – i.e. the focus on delivering today’s business. Establishing an innovation programme requires focus and resources pointed at developing tomorrow’s business. This is why leadership is critical to its success. AXA Insurance (Ireland), IBM, PWC, Allianz Insurance plc and the law firm RPC all provide examples of successful innovation programmes where the senior management personally championed and were active in the programmes.

But the starting of innovation programmes benefits from the ‘excitement of the new’ which can help gain initial support, resourcing and involvement. Existing innovation programmes do not benefit from such enthusiasm, which is typically eroded over time, and it is often a struggle to maintain and progress them. These programmes must be kept fresh – through new focus themes, new champions, innovation competitions and rewards, for example.

But most importantly innovation must be embedded in the fabric of the firm – as part of ‘the way we work here’. This means strategy, budget, good people, time, management, measurement and rewards need to be allocated to innovation on an ongoing basis. In effect, professional service firms need to establish something similar in purpose (though not necessarily in structure) to the Research & Development (R&D) function that exists in industrial firms to enable an ongoing focus on innovation.

So what approach is best for taking innovation forward in your firm? My experience leads me to recommend a pragmatic approach that is the hybrid of the above:

  • Work to establish the required infrastructure – a system of innovation – whilst building involvement and gaining demonstrable results (thus maintaining management support and increasing employee buy-in).
  • Employ opportunistic approaches that make use of the energy and capabilities of key personnel acting as innovation champions.
  • Build on any ‘burning platforms’ that are available and help legitimise the need for the innovation programme.

In the final article of this series I will identify the typical challenges that firms face in seeking to improve their innovation capabilities and the approaches that are helpful in sustaining innovation into the longer term.

References and further reading

This article and the others in the series are based on the approaches, references and case studies detailed in my new book ‘Innovating professional services – transforming value and efficiency’ published by Gower in May 2015. This provides in-depth coverage and case studies of the topics featured in this series. For more information go to: https://www.codexx.com/2015/innovating-professional-services-new-book/

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