Professional service organizations (such as law firms, hospitals, and consultancies), are organizations whose primary asset is a highly educated professional workforce and whose outputs are intangible services encoded with complex knowledge. As a result, these organizations differ significantly from manufacturing firms in their organizational structures, employee composition, and decision-making processes. The most valuable asset of professional service organizations is their pool of talented professionals. These professionals have a pivotal role in the day-to-day operations and the innovation efforts. Therefore, their time commitment is a scarce resource that significantly impacts the management and organization of new service development.
In theory, there seem to be few differences between new service and new product development. The process from idea to implementation is indeed similar. However, in practice the differences are significant. For the Product Development Management Association, I wrote a chapter for their new Essentials Book "Leveraging constraints for Innovation". In this chapter, I argue that professional service organizations face a unique constraint – time commitment. Because of the time-commitment constraint, professional service organizations need to organize and embed the innovation process in a rather unique way - using an innovation support function.
The main reason to move away from the traditional innovation unit to a support function for innovation, is that in professional service organizations the state-of-the-art knowledge is dispersed throughout the organization. The front-line people, those who interact with customers daily, typically know most about the field and where it is heading.
The challenge of these professionals? Time commitment to address today's issues and focus on the opportunities of tomorrow.
The role of the innovation support function is to help these individuals with the latter. To make sure the organization excels today and that the innovation activities that are taken on contribute to the future prosperity of the organization.
In the chapter, I explain how to get started. For a brief overview see below:
Download a PDF copy of the chapter below (and I apologize in advance for the quality of this copy).