Articles
6 ways to unleash a culture of innovation and drive competitive advantage
Establishing a true culture of innovation within law firms requires risking failure, writes Shelley Dunstone.
The competitive market for legal services means law firms need to innovate in response to the changing environment and emerging needs of clients.
Innovation offers unlimited potential to differentiate your firm from your competitors, lessening the need to compete on price. It helps you build market share, enter new markets and introduce new or improved service offerings. Encouraging your people to be innovative motivates, energises and engages them. It also allows you get more value from those expensive, big-ticket items – your people. Human ingenuity is an unlimited resource.
Innovation, of course, is not limited to technology. You can innovate in any aspect of your business – your services, products, systems and procedures. It is part of a constant quest for competitive advantage. Sustainable competitive advantage is built on ‘strategic assets’. These are intangible things that are unique to your firm and which cannot be bought or copied by competitors. Too many organisations find that they can enjoy an advantage for a while, but then their innovation becomes the ‘new normal’. You cannot depend on any particular innovation to keep you ahead.
Your ability to innovate continuously is the ultimate basis of competitive advantage. A culture of innovation is a strategic asset. It is unique to your firm. It is something that your competitors cannot purchase or replicate.
Challenging conformity
Many law firms now proclaim that ‘we are innovative’. But building a culture of innovation requires deliberate effort. Organisations can contain invisible barriers to innovative thinking. The status quo exerts a powerful pull. There is real or perceived pressure to conform to real or perceived expectations. Conformity is a powerful human trait and is driven by the desire to be liked, accepted and respected by others.
The history of innovation is filled with stories of courageous, outstanding personalities who persevered with and promoted their ideas in the face of scepticism, ridicule or even persecution. Most people are not like that. This truth emphasises the point that innovation takes courage because it is difficult to know which idea might be a ‘winner’. There is risk associated with trying new things. It is easier and safer to adhere to the way things have been done in the past than it is to take the riskier path of initiating something new and untested.
Innovation presents a particular challenge for law firms because there is tension between traditional management (which emphasises control) and leading for innovation (which emphasises permission). A recent study on innovation in the United Kingdom legal sector * found that innovation in law practices is usually incremental rather than radical in nature. True innovation requires a willingness to give something a try and risk failure. However, lawyers tend to be conservative and cautious. The practice of law tends to be reactive. And when lawyers have very high billable-hours targets, they have little time or energy left for innovation.
Taking action
What can leaders do to develop and maintain a culture of innovation?
1. Have a clear vision of what you want your law firm to achieve. Communicate the strategy to everyone in the firm. There is no point in change for the sake of change. Ideas need to contribute to the strategic direction of the practice.
2. Instead of telling people what to do, ask them what they think. Set a new and unexpected topic for discussion. Ask the questions your competitors are probably not asking.
3. Admit that you do not know all the answers. Encourage people to challenge entrenched assumptions. Innovating is pioneering. There is no precedent for what to do next.
4. Ask ‘naïve’ questions as a catalyst for creative thinking. Challenge things that people normally take for granted. There is a competitive edge to be gained in your choice of business challenge.
5. Provide opportunities for people to share their thinking and build ideas collaboratively. Ideas start small and grow as different perspectives are contributed.
6. Be mindful of the way you respond to ideas and suggestions. It is easy to stifle innovation without meaning to. Do your best to be receptive and encouraging, even when you are under pressure.
In most organisations, human nature tends to work against human ingenuity. It is the role of leaders to encourage creative thinking, establish a climate in which ideas can flow freely, and to model the behaviour they expect from others.
Shelley Dunstone is the principal of Legal Circles, a specialist consultancy practice for the legal profession.
From February 17-19, 2016, a conference called Innovation in Legal Practice – The Hidden Drivers of Competitive Advantage, is being hosted by the International Bar Association in Adelaide. For more information, visit the conference website: http://www.ibanet.org/Article/Detail.aspx?ArticleUid=77e38803-b0b4-492a-a492-86533a66d4f4
(* Innovation in Legal Services: A Report for the Solicitors Regulation Authority and the Legal Services Board, 2015: http://www.sra.org.uk/sra/how-we-work/reports/innovation-report.page)