Joanna Goodman recently asked me for some tips on how firms can go about balancing the need to control costs and manage the expectations of their partners and staff with investing in innovation to retain and win business and maintain competitive advantage as lockdown is lifted.
What should firms’ (especially mid-sized firms) priorities be for driving and leveraging innovation?
A few of my tips appeared in her great new article, “The Great Leap Forward,” in the Law Society Gazette.
I wanted to share all of the tips I came up with in this blog post. It’s part of my #blogfirst approach to writing and publishing articles.
Portfolio – Innovation efforts must be looked at as a portfolio. As in your financial investments, diversifying across asset classes, risk/reward, and investment horizons becomes essential. If you invest only in “low-risk” innovation categories and projects, you will not be diversified and your risks will actually increase and outcomes, for you and your clients, will not improve.
Client involvement – Innovation success is directly related to the amount of client involvement. Period. Firms that don’t talk with clients in depth often create products, services and improvement that are not what their clients want. Every survey of chief legal officers shows that clients are looking at you to initiate those conversations right now. Taking this approach can be a big competitive advantage for mid-sized firms.
Scientific method – Innovation involves experiments, testing, hypotheses, evidence-gather, learning from mistakes and missteps, and the like. That’s the scientific method we all learned in school. Innovation is not magic – it’s a practice and a discipline that can be learned and repeated.
Guidance – Our current crises have stressed our assumptions, our efforts, and ourselves. Projects that made sense at the start of the year likely no longer makes sense as conceived. At the same time, everyone involved in them are having difficulty seeing the bigger picture and the changes needed. Getting some fresh eyes from the outside – clients or others – will make a world of difference. A reality check can be a big help.
Retention – Innovators want to work on cool projects that show results. If those dry up and salary cuts occur, your innovators will be looking to leave the first chance they can. If you can put your innovators on projects that excite them, even it’s only one or two of them, your chances of retaining them will increase dramatically.
Microniche practice areas – If I were to suggest one area that mid-sized firms take a hard look at, it would be developing new cross-departmental microniche practices, especially those that anticipate where you clients are looking to be in a few years in technology, supplier and customer relationships, e-commerce, a changing legal and regulatory environment, and much more. Be the guide and the partner, with your clients’ biggest business needs on your radar. Yes, that means talking with clients on a regular basis.
De-risking – There’s a term I like and use a lot lately in connection with innovation efforts. It’s called “de-risking.” It combines both the portfolio approach and scientific method. How can you use evidence, testing, and flexibility to make innovation projects more likely to succeed? There are approaches out there that help you do this.
Three stages – Most firms are looking at three stages to getting through the current crises- surviving, restarting, and thriving in a new future. Obviously, most of the attention is being focused on the first two stages. Innovation, especially incremental innovation and process improvements, is certainly possible in the first two stages. However, your most important innovation efforts need to be directed at the third stage. Unfortunately, that’s where many firms are currently looking to drastically reduce or eliminate efforts. The negative consequences are both predictable and avoidable. Firms need to show clients how smart they really are and that they plan to be along for the long haul.
There is so much innovation opportunity in the mid-sized firm space! Concentrate on a few of these and see what you can accomplish. Let me know if these help you.
[Originally posted on DennisKennedy.Blog (https://www.denniskennedy.com/blog/)]
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