Australia: Keep innovation on the agenda - and reap the rewards

Last Updated: 17 July 2015
Article by Nick Humphrey

A key aspect of building an innovation culture is simply keeping it on the agenda at all levels of management, from your team meetings and practice group meetings to executive committee or board meetings.

Think about your firm. When you have meetings, do you only discuss work in progress, debtors, rates and billings? How much time, if any, is spent on thinking about better ways to serve your clients? How much time is spent on exploring innovation?1

As a starting point, ask yourself the following questions.

  (A) (B)
Does management spend more time in monthly reviews talking about ...? Financial metrics, budgets and meeting forecasts Innovation, client needs and growth opportunities
Which metric is more closely watched? Outstanding days for debtors Revenue from new products or services
In what area does your firm focus more energy? Cost management New product development
Do your senior leaders have a reputation for ...? Delivering financial results from existing business lines Building new service lines

Source: Adapted from Brian Christian, "Strange Bedfellows: Innovation and Risk Aversion – Engineering Innovation", May 2007, Appliance Magazine.

If you answered (A) to one or more of these questions, you are probably working in a fairly risk-averse organisation where innovation is not on the agenda. A successful organisation needs to keep both financial hygiene and innovation on the agenda. It is equally problematic to simply ignore the hygiene issues and endlessly ponder the subjective elements of innovation, new markets and potential services.

Collaborate or perish

A common element of a culture of innovation is active collaboration within the firm among partners, across practice groups and, in the most dynamic firms, with clients and perhaps even competitors. Some people feel that collaboration stymies innovation as it leads to consensus thinking (otherwise known as 'group-think') and may mean the process becomes bogged down in endless meetings.

To overcome any risk of group-think, a key element of successful collaboration is that the team has diversity in its make-up. This will ensure a variety of different perspectives on a problem, as well as a broader tool-box of heuristic styles and experience. It will also be important to ensure a mixture of teamwork and solo work.

Potential advantages of collaboration:

  • Likelihood of adoption: Remember, for an organisation to successfully innovate, it is not simply enough for great ideas to be generated; they need to be adopted throughout the organisation. A key benefit of collaboration is that the likelihood of adoption is greatly increased because other people in your firm have been along for the journey and are vested in its success.
  • Speed of work: In many cases, a team comprised of the right people (open-minded and intuitive) are more likely to solve a problem faster than a person working independently. Your collaborators can help you to speedily reject weak ideas, validate sound ideas and expand your ideas.
  • Associations: It may well be that collaboration not only speeds up the process of innovation but substantially increases the likelihood that a successful combination of ideas will be formed. Management consultant Jeff Dance argues that: "The inventor may not even originate the idea, but he might combine his half idea with another's idea to realise an innovative 'configuration'. To say it in other words, our half ideas associated with other's half ideas can make whole innovative ideas."2
  • Energy: Dance further suggests that as innovation is often borne into a "hostile environment", particularly where management did not create it, a team can provide the support to "push through the hierarchies of inertia ... Team feedback can also provide energy to keep each other going through periods of unknown outcomes".3

Customer-centric perspective

Effective innovators are actually focused on solving complex problems for their clients, rather than trying to innovate. Successful innovators do not set out to innovate; it is really just a by-product of addressing important challenges.4 It requires an external mindset, whereas many businesses are purely introspective.

Management that simply puts innovation on the agenda is missing an important element of context. This approach is usually driven by self-centred motives, often when the organisation is losing market share. They know they need to protect themselves from more nimble competitors by doing something called 'innovation'. The quest for innovation is a positive start, but "this focus tends to create a culture where customers are on the sidelines, not in the centre of the dialogue".5

The key to innovation is really to focus on your customers or clients; in particular, their problems. A customer-centric perspective requires asking the right questions: why are certain customers unhappy with your service? Why are they reducing business or switching to other providers? Why are they so happy with your competitor? What market threats are they facing? What business issues are keeping them awake at night?6

From a practical perspective, to start building this new mindset you need to get out of your office and start conversations with your clients. Ask them some simple questions about what their challenges are and listen carefully to their answers. Gather feedback about their complaints on customer service, market challenges and opportunities. Then go away and brainstorm a hundred different ways that might help solve the problem. Discuss the issue with your colleagues. You will probably end up discarding most of your ideas, but remember it is really an iterative and combinative process – in other words, it is about trying different things and merging good ideas to create new ways of solving problems.

Have the courage to challenge the status quo

Innovation is inherently about challenging the status quo. This does not mean criticising management or the existing regime, but it does mean you need to have the courage to take on difficult issues and test the assumptions that underpin your current strategy and structure. To be effective, it is important to 'play the ball and not the man'. In other words, focus on the issues themselves and do not make it personal. Part of the mindset is 'healthy creative tension'.

Create space and time to innovate

It takes courage to experiment and risk failure, particularly when you are measured on 'outputs' such as daily billable unit targets. Management needs to put less emphasis on the financial metrics and more weight on cultural factors. Reward staff who drive culture, build an environment of trust and foster creativity in their teams. Support those staff with fee relief, celebrate their victories and provide management and administrative support to their projects.

A practical step towards fostering innovation is giving your team permission to take the time and space to innovate, to consider non-file related problems, and to consider how to serve their clients better. This permission might take the form of opening a non-billable file that is counted towards their annual targets.

Technology company Atlassian, famous for its innovation day, has for the past decade been running quarterly days which give employees the opportunity to park their normal work projects and focus on new innovations. They have 24 hours to 'ShipIt' or deliver the idea.7 Atlassian explains that the goals of ShipIt are to:

  • Foster creativity. "Atlassian is good at hiring smart people and we'd be mad to keep all that brain-power locked up."
  • Scratch itches. "Every developer has something that bugs them about our products, or something they'd like to see them do."
  • Spike. "Often, radical ideas don't get traction because we don't understand how they'd work or what benefit they'd provide."
  • Have fun. "Institutions like ShipIt make Atlassian a fun place to work."8

So why not give such innovative management ideas a chance. You may be surprised at the results they deliver.

This article was originally published by the Australian Law Management Journal and is republished here with their kind permission. Click here to read the article.

Footnotes

1 Brian Christian, "Strange Bedfellows: Innovation and Risk Aversion – Engineering Innovation," May 2007, Appliance Magazine.
2Jeff Dance, "5 Reasons why collaboration contributes to innovation", September 27, 2008. http://www.freshconsulting.com/5-reasons-why-collaboration-contributes-to-innovation/
3 Dance, ibid
4 Doug Sundheim, "Successful Innovators Don't Care About Innovating," Harvard Business Review, October 22, 2014. https://hbr.org/2014/10/successful-innovators-dont-care-about-innovating
5 Sundheim, ibid
6Sundheim, ibid
7 Craig Smith, "To Deliver Innovation Don't FedEx It, ShipIt!," Infoq, June 29, 2012. http://www.infoq.com/news/2012/06/shipit-days
8 Smith, ibid

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