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Monday 12th October 05:27 (UK)

Archive for the ‘Innovation’ Category

Law firm re-engineering – 10 lessons from 2005-12

Tuesday, October 16th, 2012

We have worked with a number of major UK law firms since 2005, in innovation and in particular re-engineering of existing services and business processes – including Commercial Property, Insurance, Inquests, Employment, Probate, Matter Management and Innovation.
During that time I have experienced both the satisfaction of clear and measurable benefits achieved by our clients from this work, but also encountered many common challenges along the way. I thought it would be useful to share a ‘Top Ten’ of the key lessons I have learnt, to provide guidance to change leaders in law firms.

1. Benefits from re-engineering are major
Let’s start by answering the ‘Is it worth it?’ question right away.

    Yes, indeed it is.

A re-engineering programme will be a significant exercise that will require a good amount of time from partners and associates – taking them away from fee earning work. So it is not to be taken lightly. But our work with law firms since 2005 has shown major benefits can be realised. Typically our projects have achieved:20-40% reduction in the direct costs of performing a service (with limited capital investment) and improved competitive differentiation by enhancing and innovating services. In addition, the re-engineering programme provides a platform for ongoing change in a number of ways: A culture of improvement has been started among partners and employees; a template for future re-engineering has been proven (we support this with skills transfer) and measurable benefits help encourage other potential change leaders to take action.

2. Board and partner support is crucial
Making major change in a Partnership is much more difficult than in a Corporate, where the CEO can decree ‘It’s my way or the highway’ and force changes quickly through. Change in a Partnership requires the consensus of the senior personnel and therefore it is critical to have board support in place if major firm-wide change is envisaged. Once support is in place, successful execution depends on the active support of the Partners who manage the teams and the clients affected ‘on the ground’. It is not unusual to have vocal support from a Partner until their fee earners are needed to be involved in the programme—then they will resist their fee earner involvement, citing immediate business needs… Partner Champions must be actively engaged in the programme and be able to commit the time and energy required.

3. Lawyers must be challenged to overcome their innate conservatism
Or as one ex-Managing Partner put it: “Lawyers don’t do radical.” They also don’t naturally think as business people who provide a service, that just happens to have as a core, legal content. Changing the paradigm of lawyer from legal-centric to business-centric and breaking free of existing (often self-imposed) ‘rules’ is key to achieving the potential of re-engineering. This is why leading partners and associates need to be engaged in the re-engineering programme, so that they can change their thinking and share this with their colleagues. This is also why the initial ‘AS-IS’ phase of the programme is key, so that partners and fee earners can remove their rose-tinted glasses and view the business as it truly operates today, riddled with waste and inefficiency – and ripe for major improvement.

4. Clients must be engaged
Client input is key to effective re-engineering, to ensure that services are redesigned with client requirements in mind. However law firms typically do not know their clients’ business at all well. Lawyers can be reluctant to ask clients the open and ‘naïve’ questions needed to better understand their businesses and so enable innovation. This is why our ‘Smarter Working’ approach deliberately engages clients in the re-engineering programme, through meetings and workshops to talk about the business – their business – using structured approaches. This also has the benefit of improving the client relationship and making the firm stand out from others. The Managing Partner of one firm we work with is a strong advocate of the Lean approaches which we are helping him implement in his firm. He communicates Lean enthusiastically in his meetings with clients and incorporated Lean into a recent (and successful) bid. He helps differentiate his firm and also improves empathy with the firm’s industrial clients for whom Lean is a key part of their business improvement activities.

5. Re-engineering needs to be approached in a structured way
Few law firms think about their business processes as an area for examination or improvement. They often consider IT-led improvement activities, as if implementing an extranet, new Blackberry applications or Case Management alone is the answer to their performance challenges. IT implemented in this way has a well defined (and major) cost but undefined (and often little) actual benefit. IT investment should follow process/service improvements, as part of a structured re-engineering approach which is business and client led. In addition, major change requires active ‘Change Management’, which is a skill that few law firms possess. That is why our ‘Smarter Working’ approach uses a structured and phased approach based on 20 years of re-engineering experience.

6. Fee earners must be involved
I was once asked by a Department head in a major UK law firm, “Why do we need to get associates involved [in the re-engineering programme], can’t we just use partners?” It is key that Senior and Junior Lawyers, Paralegals and support staff are involved as they know how work is really done—not just how it is supposed to be done. Getting the best of them released from fee earning work to attend the required re-engineering workshops and work on subsequent change projects is always a challenge – but it must be done to enable practical solutions and help establish a culture of involvement in improvement.

7. Measures and rewards must recognise change agents and new ways of working
In professional service firms, chargeable time is the most valued performance measure for a fee earner – this is as true in a law firm as in an accountancy. Yet if fee earners are to be involved in re-engineering, they must not be penalised for missing utilisation targets, they must be encouraged and rewarded for innovation. And since law firms will be increasing the amount of work performed to fixed or value pricing, rewards based on number of hours performed will be counter to the new behaviours of efficiency and delegation required. New measures and rewards based on profitability, growth, collaboration and innovation will needed instead. Establishing new metrics and rewards needs to be considered as part of the change management element of the re-engineering programme.

8. In-house IT capabilities will be a bottleneck
Information Technology is a critical competency for providing professional services effectively. Indeed its importance will increase with the need for improving collaboration through e-working and the provision of internet-enabled legal services. Yet all too many law firm IT departments operate far behind best practices in other sectors in IT strategy, application development and effective user interfaces. Re-engineering will require IT solutions to support improved services delivery through Case and Document Management and to support new internet-enabled services through internet solutions. In my experience, all too often the IT group will not have sufficient resources or skills to meet the solution design/timescale required by the re-engineering programme. Change leaders need to be prepared to utilise external IT resources for projects where internal IT capacity is inadequate or specialist skills are needed.

9. An integrated strategy for innovation & re-engineering is needed
A key success factor in successful business change is a focused improvement programme. However, too many firms will dilute their efforts with multiple (often conflicting) programmes for IT, innovation & re-engineering. To increase the chance for re-engineering programmes to deliver on time, robust ‘pruning’ of other projects should be performed to postpone some and cancel others to enable resources and management time to be focused on those most critical to the business. Model your change programme on a fast moving stream, where a few projects are run in parallel and complete quickly through focused resources and management – rather than on a wide slow moving river where sediment and detritus cause blockages and delays….

10. Success requires managing a multi-year programme
Re-engineering is more akin to a marathon than a sprint and firms need to have the stamina and resources to stay the course. Whilst analysis and redesign work can be completed in a few months, development, piloting and deployment of new services and new ways of working take many months and indeed years to secure the full benefits. Active programme management is required to monitor progress, manage the required cultural change, and take action where delays occur. In my experience few law firms do this seriously or effectively, resulting in long delays before they can realise the identified benefits in cost reduction and value improvement from their re-engineering projects.

That’s my ten for now (although I can feel another couple coming…). Of course a ‘Top 10’ list is a gross simplification of reality, but hopefully the above points will help guide firms looking to improve their competitiveness through re-engineering activities. For more information in this area a number of articles and ‘New Directions’ newsletters can be found at https://www.codexx.com/knowledge.php

Law Firms can get a complimentary copy of our whitepaper: ‘Smarter working in law firms – re-engineering value and cost’ published in March 2012, which provides further information on this subject – see here: Smarter Working in Law Firms – Re-engineering value and cost – 2012

I’d welcome your views and comments on this topic.

Alastair Ross
Director
Codexx Associates Ltd

Standardisation – the path to commoditization or innovation?

Friday, October 5th, 2012

Standardisation has a bad name in the professional service community. It is seen as another name for ‘commoditisation’: the de-skilling, devaluing and ultimately the de-profitisation of services. So it is typically a four letter word in a law firm, accountancy or consultancy seeking to provide high-value services. But is standardisation really such a bad thing?

Standardisation certainly shatters the work paradigm in place at most professional service firms, where the individual ‘craft’ approach to work is applied. Experienced (and highly paid) professionals deliver services such as due-diligence, audit and business improvement using methods which are typically highly individualised. From a client perspective, professional excellence is of course valued. But inconsistency in service delivery between offices and between partners is not helpful. And in today’s tough economic times, high prices have to be justified.

I would contend that standardisation is actually a key stepping stone to raising service value. On the surface this seems counter-intuitive. But bear with me. Many professional services are repetitive in nature – e.g. commercial due diligence, audit, probate and are simply tailored for the client. Others have significant repetitive work elements in them – e.g. ‘discovery’ in litigation, ‘data gathering’ in management consulting projects. Repetitive work is is the rich soil in which standardisation can flourish. By codifying and standardising repetitive elements of work, it can then be effectively performed by a less skilled person (e.g. a paralegal or administrator). Of course this has benefits in reducing service cost – aiding service firms as they seek to respond to severe price-down pressures from clients. And of course it then frees up the most valuable (and expensive) employees to work on more complex (and profitable) activities for the firm – raising protitability. But it also has major benefits in two areas of service innovation:

1. It frees up the time for high value employees to spend on innovation – to enhance existing services and develop new services to add more value to clients and differentiate their firm from rivals. Service firms are waking up to the need to become more innovative, but are challenged in finding the available time from their fee earners.

2. Standardisation of a service (or service element) is the first step to enabling effective continuous improvement
of that service using Lean techniques (which are increasingly on the agenda of professional service firms).

So standardisation is not a word that should be feared by service firms. It is simply one of the key methods which firms need to embrace as they streamline themselves for the emerging new era of highly competitive, deregulated, globalised and internet-enabled professional services.

Alastair Ross
Director
Codexx Associates Ltd

Galaxy Note – excellent business tool or obese phone?

Friday, September 21st, 2012

Technology can enable mobile professionals to enhance their productivity whilst improving responsiveness to their clients. The Samsung Galaxy Note smartphone, launched last year and updated this month, established a new niche for the giant smartphone of ‘phablet’. But does it offer anything really new for mobile business users? I’ve had 4 months to find out – see if you agree with me:
Galaxy Note for Business – 4 months in

Innovating Professional Services

Wednesday, September 12th, 2012

Professional Service firms are increasingly seeking to improve their innovation capabilities – to raise their competitiveness in today’s tough business conditions. However we find that firms are challenged in this, with questions such as:

What are the benefits of increasing innovation?

What are the ways in which we should innovate?

How should we organise for innovation?

To help in answering these questions, we are producing a series of whitepapers on ‘Innovating Professional Services’. Part 1, published in May, covered the opportunities for innovation for professional service firms. This week we published Part 2 – how to establish a system for innovation in your firm. Part 3 will deal with managing challenges in innovation and is planned to be published in October. These papers are based on our 10 years’ experience of working with service firms to establish effective approaches for innovation and the latest thinking from our academic partners. To help maximise the value of this series of whitepapers, we are taking a collaborative approach to writing, working with our clients and colleagues in professional service firms.

If you would like to apply for a complimentary copy of one of these papers, please contact us via the website.

Masterclass on Smarter Working for law firms – London 22nd June 2012

Thursday, May 3rd, 2012

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Smarter Working – helping law firms find their mojo

Friday, December 23rd, 2011

How can law firms respond to increasingly tough business environment, deregulation and the march of internet-enabled business models?

We advocate the application of ‘Smarter Working’ – an approach that embraces re-engineering and innovation to address both value and cost. Codexx has been applying Smarter Working methods with major UK law firms since 2005.

To help change leaders understand this we have just produced this short video ‘Smarter Working – helping law firms find their mojo’:

New Client projects – in Insurance, Law and Manufacturing

Sunday, October 23rd, 2011

We are pleased to announce a number of recent client projects:

  • Allianz Global Corporate & Specialty – to help them further develop their global innovation capabilities.
  • Nabarro – to support their re-engineering initiatives.
  • Grundfos Denmark – whom we have been helping to re-engineer their maintenance operations, working towards a world class standard.
  • ASB Law – to help them apply Lean and re-engineering methods in their business.

Making law firms more innovative – Codexx presentation at international innovation conference

Tuesday, July 5th, 2011

Alastair Ross, Director of Codexx, is speaking on ‘Making law firms more innovative’ at the ‘6th International Innovation Lab Conference: Updates from the Frontier of Innovation’ in London on Friday 8th July 2011. The conference is run by the Advanced Institute for Management and hosted by Professor John Bessant of the University of Exeter Business School. For more information go to: http://www.aimresearch.org/calendar/61/232-Updates-from-the-Frontier-of-Innovation-Innovation-Lab-2011

How to be a leader in the innovation journey

Friday, March 25th, 2011

There has rarely been a time when innovation has been more important for businesses. Today’s challenging economic conditions allied with global competition provide a business landscape that is hostile to companies that stand still. The dramatic and seemingly incessant development of technologies – particularly those allied to the internet – provide opportunities for new products, new services and indeed new ways of doing business. And lastly, today’s market is truly global, offering an unparalleled opportunity for businesses.

For businesses to survive, let alone grow, they must be effective at innovation – at converting ideas to products and services in the market that deliver value to users and income to their creators. The journey from ideas to value is not a simple one. There are many steps along the way and many opportunities for good ideas to be lost, poor ideas to reach the market or for the journey itself to take longer than it really should.

Working with our academic partners, Exeter University Business School in the UK and Aalborg University in Denmark and with Gill Jennings & Every during 2010 we examined the innovation journey for 25 technology-based businesses operating in the UK and Denmark. We sought to understand which aspects of the innovation journey were of most importance to eventual market success; and also to understand how well businesses typically make this journey today. We saw that whilst much research had been performed in various elements of the journey (in idea generation, in development, in selection for example) little research had been performed across the entire ‘end-to-end’ journey. We decided to study this journey for new products and in sectors where time to market is a critical requirement. We developed a model and questionnaire and used these to examine the innovation practices and performance of 25 product-based businesses across this innovation journey. The participating companies had revenues varying from around £10 million to more than £2 billion. We made the following key findings from the study which was published on the 28th February 2011:

1.Overall our study found significant correlation between innovation journey practices and ultimate innovation performance (see scatter chart below). This showed that improving practices across the nine steps of the innovation journey will result in improved innovation performance. To further enhance innovation performance, businesses need to address the other innovation practices in areas such as Leadership and Culture.

2.The biggest gaps between Innovation Leaders and the others, in innovation journey practices were in Idea Exploration, Market/Launch Preparation and in IP Strategy & Management (see chart above that maps innovation practice scoring across the 9 steps of the innovation journey). This suggests that these three areas are the most critical in determining innovation success. It is interesting to note that Idea Exploration and Market Preparation are at opposite ends of the innovation journey – one determining the quality of the new ideas that go into the ‘innovation pipe’ and the other preparing the market resources and partners for new product exiting the ‘innovation pipe’. This is an issue for many businesses whose existing New Product Development processes rarely cover these key front and back-end activities.

3.Leaders had a noticeably higher level of user focus across the innovation journey than did other companies and we would conclude that this is a key enabler to their higher innovation performance.

4.In contrast, practice areas that might have been expected to have high importance – such as Product Development – show little difference in practice between Innovation Leaders and the others.

5.When we examined the individual lower level practices that together comprised the nine individual steps through the innovation journey and their level of individual correlation with overall innovation performance, Intellectual Property (IP) management practices had the highest correlation with overall innovation performance. We believe that this is as much an outcome of being an effective innovator as an enabler to becoming an effective innovator.

6.Overall, there was generally little overall difference between the UK and Danish participants, (see chart above) other than in Idea Exploration and in IP Strategy and Management, where the UK companies were a little further ahead. There were more differences at the detail level with different priorities in areas such as Learning and IP Management.

7.The study also confirmed that those companies practicing significant Open Innovation today were more likely to have higher innovation performance than those who were not.

8.The study sample was too small to enable valid comparisons between individual business attributes such as sectors and size. We hope to address this by expanding the database with further participants.

In the detailed study report provided to participating companies, we identified key learning points from this study and made recommendations for businesses who are seeking to improve their effectiveness in their own ‘innovation journeys’. Participating companies were also provided with their performance score against the other participants – on an anonymous basis.

We propose to extend this work by growing the sample of companies assessed against this model, through use of the model in consulting work and in research to help businesses improve their innovation performance. For more information on the study, on how to have your company assessed against the innovation journey model or  to request a copy of the complete report, please contact us via www.codexx.com.

The innovation journey for product businesses – new study results

Wednesday, February 16th, 2011

What’s critical in the innovation journey?

What are the critical practices that businesses need to apply in their innovation journey from ideas to products generating value in the marketplace? This is the question we decided to try and answer at the end of 2009.  For it is a key question for businesses wanting to improve their innovation effectiveness and therefore their ‘hit-rate’ for creating successful new products. We have now completed our initial study on 25 medium to large technology businesses based in the UK and Denmark. We were greatly aided in this work by our collaborating partners: The University of Exeter Business School, Aalborg University Denmark and Gill Jennings and Every (GJE).

Studying the Innovation Journey
Our study used our three phase model of the Innovation Journey, an end-to-end conversion of ideas to value (see diagram). The model explores the three phases of  ‘Initiation’ (Idea generation, Exploration, Selection), ‘Implementation’  (Prototyping, Development, Go/No Go) and ‘Into Market (Prepare, Launch & Support, Learn).  We developed a detailed  80 question assessment to explore these practice areas and compare them against the participating companies’ innovation performance. This enabled the individual practices with the strongest correlation with innovation performance to be identified.

Study findings
Our study found that the innovation practices in our defined innovation journey correlated significantly with the innovation performance of the 25 participating companies – which means that those companies that had superior innovation practices achieved higher innovation performance.

We also selected the top 1/3 of the participants based on their measured innovation performance and defined them as the ‘Innovation Leaders’ and compared their practice scoring with the others, so that we could determine which areas of the innovation journey were of most importance.

Critical practices for innovation leaders
We identified three areas where this Leader group were significantly superior to the others in their innovation practice, indicating that these areas were more critical to the achievement of superior innovation performance than the others. These were: Idea Exploration, Market/Launch Preparation and Intellectual Property Management. Those areas which traditionally are considered most important – such as the Development step – showed little difference between the innovation performance leaders and the others. It is interesting to note that it is the ‘front and back ends’ of the innovation pipe which seem to be most critical i.e. the exploration of ideas prior to entry into the pipe and the preparation of the resulting product exiting the pipe for market. IP Management was shown to be strongly correlated with innovation performance. We believe that this is primarily an outcome of being an effective innovator – you need to effectively exploit your IP.  One other marked overall difference between the leader group and the others, was that the leaders showed much more user focus throughout the journey. We believe this is key to ensuring that developed products are strongly user-influenced, rather than simply technology-driven. To enable a successful user-focused innovation approach, but also to create significant innovation, effective techniques need to be applied to determine user value (such as ‘user anthropology‘ or ‘lead users’).

Moving forward
We will be publishing the study report by the end of February. Participating companies will receive a copy of the report and their individual (anonymised) scoring against the other participants and the innovation journey model. We are seeking to expand the study database size and also intend to use the assessment tool developed from this study to help businesses improve their innovation effectiveness.

For more information
For more information or to request a copy of the study report when it is published, go to https://www.codexx.com/contact-codexx.php

Energizing Change

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