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Chapter 1
About this Book
What’s It About, Who’s It For and What Will You Gain From Reading It?
These are three good questions that any author should deeply consider when writing a book. For they are very much questions that you, the potential reader, will ask when picking up a book in a bookshop or clicking onto it on a website. So let me answer these questions:
1. This book is about the opportunities and means for professional services firms to employ innovation to make them more competitive. It draws on both academic thinking and practical experience (including my innovation consulting with professional service firms over the last decade) to provide a practical guide for planning, implementing and sustaining innovation in professional service firms.
2. This book is aimed at a number of different types of reader: It is primarily for change leaders in professional service firms (for example, a Partner, Director, Manager, Professional or Support Specialist) who are seeking to drive improvements in their firm through innovation). It can also be used by external change agents – such as management consultants – who wish to better understand and execute innovative improvements in professional service firms. The third type of reader that I foresee as being interested in this book is one in research or academia. This book provides current experience and case studies on innovation in a sector which has been relatively little explored by Universities and Business Schools.
3. By reading this book you will gain awareness of the opportunities for innovation and the typical challenges in establishing effective innovation in a professional services firm. You will also gain an understanding of current ‘best practices’ in innovation management and how to apply these in a professional services firm. The book is grounded in practical experience and supported by a large number of case studies in professional service firms.
Why Did I Write This Book?
Why did I feel the need to write this book? Doesn’t the world have (more than) enough business books already? At the time of writing, a search on Amazon UK for books on ‘Innovation’ yielded 42,215 results … it will be more by the time you read this. So is there really the need for yet another book on innovation?
I believe there is. And before you can say ‘He would say that’, let me explain why. The short explanation is that change leaders in professional service firms lack a practical guide to help them drive innovation in their firms.
Here’s the longer answer: With the increasing importance of services in the Western economies, research and methods are required to help service-based organisations improve their effectiveness and competitiveness through innovation. Whilst there is a large number of books and many years of academic research available on product-based innovation, there is little in comparison on service innovation. Indeed a search on Amazon UK for books for ‘service innovation’ yielded 545 results at the time of writing – under 1 per cent of the total of innovation books. This is simply due to the fact that Western economies were founded on their industrial businesses until comparatively recently and thus the innovation focus was primarily on product innovation.
Over the last decade there has been the beginning of an increased focus by authors and researchers on innovation in the service sector, with a number of books available on the subject.1 But, here’s the rub – there is very little written specifically on innovation in professional service firms. This does not mean that this sector cannot learn from approaches and techniques applied in other sectors. But it does mean that the sector lacks written guidance providing a cohesive approach to innovation that recognises the unique elements of professional service firms – such as their services, business model, culture and governance. There is simply an absence of books and practical research to provide relevant insights and practical guidance for change leaders seeking to drive innovation within a professional service firm.
I came to realise this absence in my own consulting work for law firms, consultancies, financial services and insurance firms. In 2004 I worked on an innovation project for a financial services firm and became aware of the cultural challenges to effective innovation in a services firm. I then became involved with a major regional UK law firm in 2005 looking to improve innovation within the Litigation Department and subsequently across the firm. Since then I have worked with a large number of UK-based law firms and other professional service organisations in the consulting, insurance and accounting sectors. I came to see that there was an increasing demand within these firms to improve their competitiveness to respond to increasing competition and tougher markets (particularly after the 2008 financial crash). These firms were looking to apply innovation to their businesses, for example to develop new services to increase revenue and profitability, or to reduce cost by improving their efficiency of working or to create a more ‘innovative culture’. Yet there was a lack of published guidance in how best to do this, in a form that recognised the nature and challenges of professional service firms. Surely there was plentiful academic research in this area?
Here’s the rub – there is very little written specifically on innovation in professional service firms.
Unfortunately not, as I found out. As part of my consulting work, I have partnered with academics at major UK universities (such as Imperial College London, The University of Exeter, The University of Southampton and Cranfield School of Management) on a number of studies – for example ‘Study of innovation practices in major UK law firms’, performed together with Imperial College London in 2006–7 and the ‘Study of innovation practices in UK and German law firms’ performed with the University of Exeter Business School and the University of Leipzig Graduate School of Management in 2013–14. It became clear to me that there was very limited research in this area which could provide practical guidance for change agents in professional service firms.
Therefore I decided that there was a clear opportunity for a book that explored the opportunities, requirements and challenges for innovation within professional services firms. I wanted this book to provide practical guidance for change leaders in these firms in a way that recognised the unique challenges of making change in professional service firms. As an experienced practitioner in this field, having worked on innovation and re-engineering in both industrial and professional service businesses for over 20 years, I realised that I was as well placed as anyone to write such a book.
How This Book Was Written
To help ensure that this book effectively addressed the key issues of innovating in professional service firms, I sought and received invaluable feedback from many professionals2 on early drafts of key chapters of this book. In addition, I have used multiple interviews with partners and managers working in professional service firms to understand their aims and their challenges in innovation. The intention of this degree of collaboration was to ensure that the final book was a relevant and practical tool for executives and change agents working in professional service firms.
This book focuses on the Why?, What? and How? of establishing effective innovation.
This book focuses on the Why?, What? and How? of establishing effective innovation capabilities in professional service firms. Its aim is to provide a practical guide to change leaders, partners, managers and associates as they seek to increase innovation in their firms in response to increasing business challenges. It is based firmly on academic research and best practices honed by my consulting work with professional service firms over the past decade. The book has been designed and written against a number of design principles to provide a number of benefits to readers:
Book Structure
This book is structured into five parts to take a reader through the development of innovation understanding relevant to a professional services firm. However it also enables readers with varying requirements to tailor their approach to the book to fit their needs – I have suggested where different ‘reader types’ might wish to start the book.
» Start here if you want to gain a full understanding of innovation in professional services.
Introduction – In this initial section I set the scene for professional services innovation by reviewing the ‘landscape’ for innovation in professional services. This provides a summary of the nature of professional service firms, based on their history and function, and flags some of the key challenges in establishing innovation. To help answer the (not uncommon) question from partners and managers in professional service firms ‘What has innovation got to do with us?’ I explore the major changes ongoing in the UK legal sector – which has seen an increased appetite for innovation – as a case study example.
» Start here if you want to want to find out potential opportunities for innovation in your firm.
Part I: Opportunities for Innovation – The purpose of this section is to introduce the concepts of innovation and show the opportunities available in professional service firms. To do this a model of innovation ‘dimensions’ is introduced which provides a ‘map’ for negotiating the complex and often confusing landscape that is innovation. The key areas of opportunity for innovation in a professional service firm are then detailed.
» Start here if you want to improve the innovation capabilities in your firm.
Part II: Establishing a System for Innovation – This section explores the practices required to enable effective and sustainable innovation within a professional services firm. The concept of the holistic ‘innovation system’ is introduced. This structure of the system is based on business experience and academic research.
» Start here if you want to understand how to utilise re-engineering approaches in your firm.
Part III: Innovation through Smarter Working – This section is devoted to a key opportunity area for innovation in professional services firms – that of applying process innovation (often referred to as ‘re-engineering’) to enable ‘Smarter Working’. This is a key area as process and service innovation blend together in service businesses, in a way that is not the case in a ‘product’ business. So truly effective services require process innovation techniques to be applied – to ensure that they are cost and value effective.
» Start here if you are in the midst of an innovation/re-engineering project and have challenges.
Part IV: Managing Key Challenges – In this final section I explore the common challenges that professional services firms face in improving their innovation capabilities. I used interviews with executives and Partners in a number of major UK professional service firms to identify the common challenges to successful innovation activities encountered in their firms. This information was used to focus on those challenges that were most commonly encountered and provide guidance on how best to address these challenges with case study examples. There is then a chapter that reviews different approaches in ‘kicking-off’ an innovation programme in your firm, before I wrap up the book in ‘Final Words’
There is a short Appendix covering an innovation self-assessment together with a paper on the development of the professions in the UK to provide a useful historical background.
Case Studies
Twenty-five major case studies are included in the book. These are a mix of projects performed by the consulting company Codexx, in which I am a Director; others which have been the subject of study by Codexx and some relevant case studies which are in the public domain. The objective of these cases is to illustrate approaches to innovation and to reflect on the strengths and weaknesses of the approaches used as a way of informing and guiding readers on the application and merits of different approaches to business innovation that are relevant in professional services.
Welcome to your Innovation Journey
I hope that you find the book a valuable guide in your work as you drive innovation within your firm. I wish you well in your innovation journey. It will be a journey that will be a rich brew of hard work, excitement, frustration, challenge and ultimately learning and improvement. You will make mistakes (make sure you learn from them) and you will achieve successes. And if you occasionally begin to doubt the value of what you are trying to do, let me remind you of some words from my favourite ma...
