Organizing for innovationProfessional Services

Building New Service Development Capabilities for the Fourth Industrial Revolution

The Fourth Industrial Revolution is happening right now. Steam engines, electricity, and information technology revolutionized industries before. However, not the professional services. Artificial intelligence and connectivity is driving the fourth industrial revolution. That is, connectivity between and among people, organizations, and things. This fourth industrial revolution is expected to have significant impact on professional services. Does your organization have the capabilities to deal with its impact?

Fourth industrial revolution

The impact of the fourth industrial revolution on professional services

The first, second and third industrial revolution changed little to nothing in the professional services. Physicians saw their patient at their homes during the first and second revolution. No steam engine or electricity needed. During the third industrial revolution, they started to see patients in their offices and wrote down their notes on a computer. Only a minor change, as the work itself and the nature of the visits remained unaffected.

However, the Fourth Revolution, that consist of concepts such as the internet of things, telemedicine, and wearables will significantly impact how and where physicians treat patients. For example, with virtual reality, anatomic lessons no longer depend on the availability of corpses. Complex procedures can be practiced, multiple times, before being performed. The same for the doctor’s visit. Patients are starting to monitor their own health. In the near future, they probably expect clinicians to pro-actively alert them if their health is off track. Similar trends are impacting other professional services.

Impact of the Fourth Industrial Revolution on health care

Making the fourth industrial revolution happen

All of this is not futuristic. The technology is readily available to support these changes in the medical, legal, accountancy and other professions. Nevertheless, practice is still lagging behind. Not because clients/patients are uninterested in change. Very much the opposite. Clients and patients are ready to move to the next era and are waiting and looking for professionals to follow.

What is the delay? …The professionals.

Physicians, lawyers, engineers, are trained to practice medicine, law etc.. While smart and highly educated, they have not been trained to develop new services and take advantage of the opportunities of the fourth industrial revolution.


Do we have to wait for the next generation of physicians and lawyers to be trained in new service development? So that they can implement these technological advancements that result in better and more accessible professional services?

Hopefully not. Waiting for the next generation is not only very impractical, it is also doubtful whether your clients have the patience to wait that long.

Instead, professional service organizations should follow the practices that other industries adopted long time ago to respond and survive these industrial revolutions: build new service development capabilities.

Building new organizational capabilities

While building new organizational capabilities is certainly not easy, it is doable. Recently, the Boston Consulting Group laid out a 10 step approach how to systematically build capabilities

Courtesy of the Boston Consulting Group
Courtesy of the Boston Consulting Group

Building New Service Development Capabilities

How can you use this step-by step approach to build new service development capabilities?

  1. Ruthless prioritize: Make new service development a priority. After all client/patient satisfaction and future revenues depend on your ability to stay on top of your profession
  2. Assess the gaps: What are your current competencies, tools, process, and governance for new service development? In most organizations we have worked with, new service development happens ad-hoc, without any structure or focus. To build new service development capabilities, you will need a systematic approach, in order to be able to address larger opportunities, reduce the risks, and increase the likelihood of success. If you are unsure about your current capabilities, we have a scan to help you asses possible gaps.
  3. Align leaders: Who in the organization is accountable for new service development? What budget is available? What return is needed to make this investment sustainable? While you don’t need a big budget to set up the process, time spent by employees involved in new service development projects adds up. Making that new service development can become very costly if not monitored and controlled correctly.
  4. Design each capability: What tools, processes and governance are you going to use for your new service development process? As we have argued before, innovation requires a structured approach.
  5. Assemble a cross-functional team: To get started we recommend not so much a cross-functional team, as well as a multi-disciplinary first cohort, that can service as the mentors for the new service development teams that will follow.
  6. Use rigorous change management: For those familiar with change management and improvement: Plan – do -study – act
  7. Build capabilities: From our research, we know that dedicate innovation units that innovate on behalf of the organization don’t work. Instead, engage rising talent in the new service development process. They are the future of your company; educate and train them accordingly.
  8. Measure results: Innovation or new service development efforts have the reputation to be difficult to measure. Certainly, focusing on results will stifle the innovation process. Yet, that does not mean that progress cannot be tracked and traced. For example, FIEW provides you with the data and analytics you need to keep track of your new service development efforts and capabilities.
  9. Address both “hard” and “soft” aspects: Hard measures for new service development capabilities are revenues from these new services, the % of employees involved in new service delivery and the % of new services among all service offerings etc. As the BCG group states, soft skills are equally important. So don’t forget to also track the impact of your new service development capabilities on client satisfaction and employee retention.
  10. Stay the course: It takes 1-2 years to get your new service development competencies to the level that you will see consistent results. It may take another 2-3 years to make your new service development efforts to be sustainable. In other words, new service development capabilities are not built overnight!


Organizing for Innovation | professional services

Organizing4Innovation is proud to be the first to offer new service development education and support dedicated exclusively to the professional services. For more information see