EY's lessons for making innovation successful in professional services
Professional services firm EY is one of the most innovative players in the UK consulting industry. In this article, Tracey Harrison – Chief Innovation Officer for EY’s Advisory business in the UK & Ireland – reflects on EY’s lessons for making innovation successful in professional services.
We’ve all had that rare and exhilarating experience of clarity and euphoria that comes with a great idea. The perfect solution to the problem you’ve been noodling over or obsessing about for ages. That flash of inspiration. The light bulb moment. But, it doesn’t matter how revolutionary your big idea is, if you don’t execute it well. And I’m not talking about actually building your idea into, say, a technology product. Building good product is a given.
No, I mean successfully executing everything else – and doing it well within a professional services environment. At various points in my career, I’ve seen great ideas lose momentum or get caught up in red tape. Or great products that, for one reason or another fail to be adopted, or make money in the market. I’ve also seen outstanding examples of successful innovation.
As the Chief Innovation Officer for EY’s Advisory business in the UK & Ireland, it’s my job to help ensure our Advisory business executes innovation brilliantly – whether it’s internal innovation or for our clients. Here are some of the lessons the innovation community at EY has learnt about how to successfully execute innovation in a professional services environment (or any other large traditional business for that matter) – some of them hard won.
Side of desk doesn’t work
We’ve had several goes at innovation over the years and they’ve been modestly successful. One of the key things holding us back? Trying to innovate alongside the day job. In recent years we’ve landed on a model that has lasted. Having a group of people within EY, working full time in innovation roles, has been crucial to turning ideas into reality. We did this in 2016 when we set up EYX, our UK & Ireland innovation skunkworks, and then again when we set up innovation teams across each of our business areas. And this also involved changing people’s metrics, reward and recognition.
Sound obvious? Well, it’s a big step for an organisation like ours where hitting revenue targets are the primary method of assessment across the entire business.
An idea is worthless if it doesn’t actually solve a problem or meet a need
How many beautiful products have been built that don’t get used because they don’t actually solve a real problem. And a problem that’s a problem for more than just the creator of the product. Again, sounds obvious? In our experience: it’s not.
Product/market fit is second nature to venture capitalists and entrepreneurs – but how do you get your employees to really challenge new ideas from the start and get in the mindset for this? An effective way of getting our people to start thinking about this has been sharing Clay Christensen’s “Jobs to be done” theory – and especially the classic ‘milkshake’ study example which you can find on video streaming sites.
Adopting a new innovation requires great change management
“If you build it, they will come” might work for Noah, or in the movies (thank you Field of Dreams), but it doesn’t work that way when it comes to technology adoption. In Kotter’s seminal work on change management, his research revealed that only 30% of change programmes succeed. So 70% of change programmes fail, 70%!
Why? Well, taking some inspiration from agile change practitioner Melanie Franklin’s example, when you make delicious biscuits in a biscuit factory, you do not make them and then leave them in a pile in the corner of the factory, saying to the public “come and get our delicious biscuits.” You need to package them, create a great brand, market them, sell them to stores and all the rest. The same applies to the creation of technology products. We cannot create a product and then say to people: “hey, use this”. We need to package our product, market it, and sell it to people in a way that addresses their beliefs and needs.
And it’s not surprising that new products don’t get magically adopted – change is hard! Especially if your culture is risk averse, as is commonly the case with professional services firms. Taking our people on the journey with us from an early stage has really helped them be open to using the new things we’re creating as a firm.
Don’t forget the commercial model
So you have a great product solving a thorny problem lots of people experience – tick. For solutions that are externally facing, what people don’t think about early enough is the commercial model that needs to support this. How are you going to make money from your product in the market?
For professional services businesses – which have the oldest business model in the world in that we hire clever people and charge them out by the hour – this involves a big change. Thinking in advance about the range of new commercial models you could use is really important, as well as actively helping your teams to select the best one for each new product.
Sure, it all begins with that one bright spark, but if you want to see your brilliant ideas become viable solutions and services, bear these four guidelines in mind!
Tracey Harrison will be chairing the ‘Alternative AI & Blockchain for Professional Services’ event in central London on Tuesday 4 December. More information on the programme and speakers can be found on the event website.
Related: Buoyant professional services firms are hiring people in advance of project wins.
