Innovation and value creation, differentiation and leadership are emerging as important topics in professional services.
With global and local structures quickly changing and competition intensifying often from unexpected sources, innovation is high on the agenda with most firms.
But at the same, time innovation that delivers a real advantage is hard to come by. Across all industries some estimates say that up to 9 out of 10 innovations fail to live up to expectations.
Common issues found in the less than successful innovations include:
˃ Too narrow and unstructured collection of ideas,
˃ Pet project advancement instead of objective criteria
assessment,
˃ Internal blindness to simple, cheap, big impact opportunities,
˃ Lack of prioritisation, planning & process and resource
allocation,
˃ Lack of client orientation,
˃ Resources are focused on the launch rather than spread
equally across the development process including testing.
These issues often lead to innovation not having the desired impact, not being delivered well enough or at all – resulting in wasted resources as well as innovation fatigue.
In our innovation work with professional services and other industries 4 key success factors emerge:
1) Innovation must be client need focused.
If you don’t know client needs beyond the obvious, rational and functional, it is very difficult to identify ideas that could offer genuine value. Understanding client needs is therefore critical. It not only makes sure ideas are focused on the client; it also makes sure your innovation is focused around platforms you want to play in and supports your business strategy.
2) Develop strong idea platforms.
Innovation can relate to many aspects of the business. Technical ones are often the first that come to mind. But left of centre ones often disrupt better and tip the playing field towards you much better.
For example:
˃ Product & technical aspects including IT use,
˃ Service aspects such as interaction, processes and content,
˃ People & communications.
In ideal cases through the first workshops additional platforms specific to the firm can be identified, ensuring even more differentiated innovation.
An aspect often overlooked is IP development from existing business capabilities or approaches. This can be a low cost, very strong source of competitive advantage.
3) Pipeline horizons.
Structuring and assessing innovation into horizons is critical to building a pipeline that delivers immediately and strategically on your business plans.
Typical structures are the Horizon 1, 2 and 3 structures that look at maximising current business, developing additional income streams and fundamental business changes. Often these are re-interpreted into immediate, mid-term and long term.
Other ways are the capability vs impact prioritisation and thus time framing, or using concrete to hazy front end terminology.
In any case, these frameworks serve to ensure that a continuous pipeline of relevant innovation at different levels of impact and significance can be driven. It also allows for resource allocation.
4) Process & Tools.
A strong process and the right tools ensure the impact is as powerful as expected. This starts with the overall process. The best known one is probably the Stage-Gate process developed by Robert Cooper and Scott Edgett.
It splits the innovation process into five distinct stages from ideation to launch. After each stage there is an evaluation gate that consists of different, stage relevant criteria and stakeholders. It starts with the overall ideation to ensure as many relevant ideas as possible are developed. After that these ideas are filtered into the process to ensure the right ones are advanced at the right time with the right speed and the right resources.
Each stage & gate has its own tools and criteria. Some of these are standardised, others are individually created to suit the firm.
Another important aspect of process is continuity. Successful innovation is a continuous process with new cycles starting typically every 3 to 6 months.
The perception that innovation is a difficult, big and a resource hungry distraction from core business is an oft cited reason for not pursuing innovation or doing it haphazardly. But innovation can be simple, focused and create immense value through differentiation, leadership and better client need fulfilment if the right knowledge and processes are applied.
