Innovating professional services - introduction

Innovating professional services

Innovating professional services - transforming value and efficiency an introduction Alastair Ross Director Codexx Associates Ltd

Codexx Associates Ltd 3-4 Eastwood Court Broadwater Road Romsey, SO51 8JJ United Kingdom Company Registration No. 04481932 Tel +44-(0)1794-324167 www.codexx.com


Introduction

A practical guide for managers, change leaders, consultants and academics.

• Professional services and the need for innovation

• Opportunities for innovation

• Establishing a system for innovation

• Innovation through smarter working

• Managing key challenges


Agenda







Professional services?

Firms providing services based on knowledge, expertise and intellectual property


Some numbers….

• 450,000 people working in professional services in the UK alone

• In the USA there are about 400,000 practicing lawyers & over 1 million accountants

• Professional & Business services account for ~20% of UK output & 14% of exports

• Professional Services is reported to generate > US$ 3 trillion in revenue globally

…..it’s an important business sector.


It’s a sector that has seen major growth, but is often traditional in its culture and working methods

To understand the opportunities and challenges for innovation in the professional service sector, one has to understand the idiosyncrasies of professional services - and the firms themselves - and how they can affect the firm’s ability to innovate.

Challenging paradigms:

• Services exist to solve a problem

• The professional is not the service

• The service is more than the content

• Metrics can discourage employee innovation

• A partnership model slows innovation

• Traditional culture discourages innovation

Source: ‘Innovating professional services – transforming value and efficiency’, Alastair Ross, May 2015, Gower.


It’s a sector that is seeing increasing forces for change….

• Price-down pressures from clients

• Deregulation

• Service commoditization

• Increasing competition from lower cost economies

• New internet and IT-enabled business models

…. and therefore a need for innovation


"Our culture and measures don't really support innovation." Manager, Business Services

“People don't want to take risky ideas to the boss." Partner, Management Consulting

“Not a coordinated approach to innovation.” Head of Knowledge Management, Law Firm

"We have ideas but we're not good at making them happen.“ Managing Partner, Law Firm

“We should have clear frameworks but within that allow people to be entrepreneurial – which is quite lacking at the moment.” Manager, Insurance

… but there’s a problem



Agenda







What is innovation?


Opportunities for innovation

‘Do Better’ innovation

• A law firm introduces an online web-based document viewing and sharing service for clients for use in deals such as Property or Company Purchase/Sale.

• An insurance firm maps and improves the flow of its new policy process to improve its customer responsiveness and efficiency in doing so.

• A consulting business launches an improved benchmarking service for clients.

‘Do Different’ innovation

• Quality Solicitors was established in 2010 as a marketing alliance of a number of law firms, with 350 branches in place across the UK, operating common services and branding.

• In 1985, Direct Line became the first UK insurance company to use the telephone as its main communications channel. It then had 63 UK employees – it now has 10,000.

• Freelancer.com provides a marketplace for customers and freelancers to offer and bid on work including software development; > 7 million projects have been posted on the site.


Agenda







The innovation journey

Source: Codexx


Effective innovation needs a systematic approach

Source: Codexx


Why the need for an innovation system?

“Most partners are promoted because they are lawyers first, salesmen second and managers a very distant third.” Employee, Law firm

1. Leadership

“We don’t hear about innovation from the board. I can’t remember a CEO statement on innovation.” Manager, Insurance Company

"We have a bureaucratic review process. We have difficulty in dealing with radical new ideas.” Manager, Business Services

“Hostile culture to innovation - often the case in Partnerships that are doing well doing what they did.” Director, Accountancy Firm

"Carving out real time for innovation instead of chargeable work is a major challenge…..we don't do enough of it.“ Partner, Management Consultancy

“We live in an insular world here and don’t see what is going on.” Manager, Insurance Company

“Examples of best practice are not shared and innovation driven into one client relationship is not necessarily driven into others.” Manager, Law Firm

2. Strategy

3. Process

4. Climate

5. Resources

6. External Linkages

7. Learning



Thinking of innovation as an ‘ecosystem’

Source: Codexx


Agenda







‘Smarter Working’ applies re-engineering to processes and services

“Reengineering strives to break away from the old rules about how we organize and conduct business. It involves recognizing and rejecting some of them and then finding imaginative new ways to accomplish work. From our redesigned processes, new rules will emerge that fit the times. Only then can we hope to achieve quantum leaps in performance.” Professor Michael Hammer, 1990


Lean thinking techniques can also be applied

Source: Codexx


Key elements of Smarter Working

Source: Codexx


Smarter Working approach to process and service innovation

Source: Codexx


Agenda







Key challenges to innovation in professional service firms 1. Poor supportive culture for innovation

2. Limited understanding of client needs

3. Insufficient resourcing for innovation

4. Poor innovation process

5. Ineffective execution

6. Resistance to systemization of work


Developing your innovation system



Case Studies

1. Process Innovation – Re-engineering the Probate Process in a Law Firm

2. Service Innovation – Mills & Reeve’s ‘Tailored Inquest Service’

3. Market Position Innovation – Nintendo and the Coming of the Wii

4. Business Model Innovation – IBM’s Ten Year Transformation

5. Innovation Leadership – Examples from Insurance, Law and IT

6. Innovation – Examples from IT, Insurance and Law

7. A Process for Innovation – Examples from Insurance, IT Services, Accounting and Law

8. Climate for Innovation – Examples from Insurance, IT Services and Law

9. Resourcing Innovation – Examples from Law, IT Services, Accounting and Pharmaceutical

10. Looking Outside for Ideas and Resources – Examples from IT Services, Law and FMCG

11. Learning from Innovation – Examples from Management Consulting and Architectural Services

12. High Participation Innovation at QinetiQ

13. Service Standardisation and Automation – Nelsons Solicitors and Rocket Lawyer

14. Re-engineering Commercial Due Diligence

15. Re-engineering Real Estate Purchase

16. Applying Lean across a Law Firm

17. Culture Change in HCL Technologies

18. Client Focused Innovation – Moving Away from the Chargeable Hour in Legal Services

19. Intuit’s Use of ‘Unstructured Time’

20. Google’s 20 Per Cent Time – No Longer the Right Approach to Innovation?

21. High Engagement Innovation at Allianz Insurance plc

22. Experiments in Innovation at AXA Insurance Ireland

23. New Product Innovation at Bank of America

24. Innovation in an Expert Culture at Intermountain Healthcare

25. Embedding Innovation in RPC


Wrap-up

'Drawing on both a strong academic research base and his own practical experience, Alastair Ross has done a great job in shedding light on this important field and doing so in a readable and practical fashion.'

John Bessant, Professor of Innovation and Entrepreneurship, University of Exeter, UK

'Practical and insightful, this book is clearly the result of someone who has made innovation work in the challenging environment of the professions. Ross combines an understanding of partnerships with a deep knowledge of innovation to create an indispensable guide for an era that demands change.'

Robert Pay, Director of Business Development, Alvarez & Marsal

'Lots of initiatives are launched but many fail to deliver any discernible business outcome and yet clients are screaming out for better ways of doing business. This practical book - filled with insights, case studies and useful tools - offers a blueprint for the creation of a sustainable innovation system. I recommend you read it for the benefit of your clients.'

Andrew Clinton, Managing Partner, ASB Law LLP

Innovating professional services - introduction

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