Organizing for innovationProfessional Services

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Professional Service Innovation Webinar

In most professional services businesses, your employees are your most valuable asset. Investing in training your talented recruits results in retention, improved profits, and increased competitive advantage. Consider this from The Guardian:

The firm of the future creates the conditions conducive for creativity by building a culture that facilitates, empowers, unlocks and supports people’s creative potential; an organisation that encourages people to overcome fears and inhibitions, where the work dynamic is of constant evolution, where failure is not criticised but embraced for what it is – an opportunity to learn, adapt and evolve.

Investing in innovation training and management should be an important aspect of both retention and profit optimization.

Forbes highlights the dual benefits derived from training professional staff in their interview with Deloitte on their Deloitte University program. Benefits of this program include:

  • Strengthening and fostering diversity of thought (out of the box thinking)
  • Better customer service
  • Improved innovativeness

It’s really this last benefit of training I’d like to discuss today.

Evidence comes from a podcast through Knowledge@Wharton. Although addressing IT professional services specifically, this podcast clearly links training with improved profitability. A key finding from the study shows:

By leveraging general technological skills, in combination with business domain knowledge to address customers’ business problems, firms can earn and sustain higher profits.

The same holds true for other professional services firms, like consulting, accounting, legal, and healthcare services since they, too, must educate their employees to become valued professionals and possess the necessary business domain knowledge to apply this knowledge and address customers’ business problems.

Link between innovativeness and training

Studies linking innovativeness to training are rare, mainly because data requirements are significant. In a recent study of Canadian data, investigators found a strong relationship between training (both in-classroom and on-the-job training) and innovation (both incremental and discontinuous).

More specifically, a 2015 study of professional services firms finds the following types of learning impact innovativeness, specifically in the context of learning-by-doing:

  • understanding customer needs
  • internal learning
  • formalization
  • external and relational learning
  • integration
  • learning and knowledge accumulation
  • knowledge embedded in service provision
  • co-creation of knowledge through interactions with customers, clients, and partners

In addition, others find that external knowledge has a strong impact on innovativeness. This requirement suggests innovation requires not only domain specific knowledge, but collaboration across functional areas and specialized training in innovation.

Learning to innovate

For most professionals, innovation and innovation management weren’t part of the curriculum. Instead, they became subject matter experts in law, medicine, engineering, etc. Unlike counterparts in manufacturing and product development, they don’t have dedicated staff trained in innovation management and charged with developing new products. To say such knowledge doesn’t impact innovativeness within the firm is naive.

Those involved in innovation recognize the need for formal training in innovation processes. Most professionals have not been trained to scout for opportunities, generate ideas, write business cases etc. Managing the innovation process requires this specialized set of skills and more, otherwise you are likely to wast precious time. BTW, if you’re looking for a great paper tracing the development of innovation process management over time, here’s a great overview that demonstrates the complexity involved in innovation management.

History is replete with examples of firms who manage the innovation process badly. Despite colloquial notions, it’s not coming up with ideas, but harnessing resources to see innovation through implementation and commercialization that’s the biggest innovation challenge, according to Forbes.

Possibly the most heavily referenced example of innovation failure is PARC labs, part of Xerox. PARC invented the GUI (graphical interface now used ubiquitously on PCs and iOS devices), the mouse, and other innovative computer technology. Unfortunately, it fell to others to commercialize (and profit from) these innovations as Xerox lacked the vision to follow through on these inventions.

Professional service firms must train subject matter experts who face challenges every day and are in the best position to generate innovative solutions to manage the innovation process effectively. Most professional service firms require continuing education of their professional lawyers, clinicians, and others (in most cases a defined amount of continuing education is required to maintain licensure). Using a portion of these continuing education credits for teaching innovation skills and processes gives your organization a sizable leg up in creating competitive advantage through innovation.

Benefits of innovation education in professional services

Organizations reap tangible benefits from innovation education, including competitive advantage and improved market performance. Yet, the intangible benefits of innovation education might outweigh these tangible benefits because they create a culture of innovation extending into the future: These benefits include professionals who:

  • adopt faster
  • learn how to innovate
  • gain soft skills on the side.

Employee retention, especially of your younger professionals, is also an important intangible benefit gained by teaching innovation.

Educating individuals so they develop a “true understanding of the values and direction of the transformational journey” not only aids current innovation, but encourages them to share their knowledge across the organization to create a culture of innovation, according to The Guardian.

Aligning innovation and strategy

While innovation is good and training for innovation develops internal innovative capacity, it’s not enough. Innovation must be aligned with strategic imperatives for the firm. Yale’s Innovation Alignment Team is a great example of institutional alignment.

The team manages the innovation process, ensuring projects align with organizational strategy and creating a culture of innovation, as well as a formal process consisting of members and innovation champions within each strategic initiative.

To effectively aligning innovation with strategy in professional service businesses, a firm must:

  • aligning innovation with strategy
  • determine future directions
  • support aligned projects through education and coaching

How to make a start: innovation program

Firms focused on delivering professional services face unique challenges requiring education and a process to manage innovation. As we’ve seen, one of the biggest challenges is developing innovative solutions, but failing to see them through to implementation. Thus, firms need education and support for each stage of innovation: developing innovative ideas, developing them, and implementing change.

Adding to these challenges, professional service firms require staff focus on delivering the services for which they are trained, while supporting and encouraging innovation from these professionals and building cohorts to develop and implement solutions.

I thought this image from declarainnovation process might help firms develop a sound innovation process. The image divides innovation challenges into 3 elements:

  1. Alignment
  2. People
  3. Process

While I’ve not heard good things about their innovation management tool from professional service firms, the value of this canvas remains.

Each element consists of several subelements and demonstrates the integration across elements necessary to achieve innovation implementation.

Want to learn more about implementing an innovation management process?

We’re here for you. Organizing4Innovation is proud to offer the first innovation management approach that is dedicated exclusively to the professional services.

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