On 6 March 2018, ICON partnered with the research firm beaton to host an interactive webinar about innovation. beaton founder Dr George Beaton and Partner Paul Hugh-Jones delivered their firms latest research on innovation in law and consulting engineering, and discussed how to use innovation to benefit both clients and firms.
How important is innovation?
Dr Beaton started by de-bunking some of the myths around innovation. Innovation is constantly hailed as an important influencer of client decision making, but the research suggests otherwise. According to the 2018 beaton benchmarks, innovation ranked 15th out of 16 factors when clients consider which firms to work with – and it was dead last as a driver of purchase decision making.
“What clients are saying is that there are far more important drivers of decision making,” he said, while also noting it’s a hot topic that firms need to engage with.
So, what is innovation?
The media often conflates innovation with high technology but Hugh-Jones reminded the audience that while technology is important, it shouldn’t be the starting point for firms. Instead, innovation often has more to do with thought, people and creativity, especially in professional services.
To keep things straight, beaton has created the following definition for innovation: “Implementing an idea which addresses a specific need and delivers value for both their clients and the firm”.
beaton identified 13 types of innovation that clients do value. beaton’s Innovation research analyses how likely each type of innovation is to influence clients to use a firm, and the results range from moderate to extremely likely.
What types of innovation do clients want to see?
Clients want to see innovation that meets their specific needs, that innovation should provide value to the client and that firms should follow what the client wants.
According to beaton’s research, there is no point in having amazing, new innovative methods if they don’t suit the clients needs. The best way to discover what clients want and ensure firms are delivering relevant innovations is to collaborate with clients directly.
“Find out what the client needs and values and that’s likely to bring the best outcome for the client and value for you in terms of influence,” said Dr Beaton.
beaton’s research also found that 27 per cent of clients do not consider any of the law firms they know to be innovative, and 25 per cent of clients couldn’t name an innovative consulting engineering firm. They also found that of the firms nominated as innovative half to a third were not the client’s main supplier.
“This speaks to us as a huge opportunity,” said Dr Beaton. “Firms are not doing a very good job at letting their clients know how they are innovating.”
To address this, the speakers suggested talking to clients about the areas where they need innovation then finding paths that will both help the clients and firms.
What did ICON members think?
Half-way through the webinar the speakers asked for the audience to answer the question: “What type of innovation most influences choice of firm.”
The options were automation, lower fees, more effective communication and reduced risk. The participants answers were tracked on an external website and viewers watched as real time data came in. Interestingly, the 100+ people that attended the webinar 51% voted for ‘lower fees’.
Dr Beaton said that when the firm asked this question during his research, the answer was very different. More effective communication came in at number one as it centred around collaboration with clients, discussing with clients their needs for innovation. Reduced risk was second, lower fees third and automation last.
Dr Beaton used the example of a horse and carriage to explain innovation. He said that if we think back to when we had a horse and carriage our idea of innovation would have been a faster horse. If you asked the clients what they wanted, they would have told you a faster horse, rather than a car. Clients can’t be expected to develop new products but if you listen to what they need, you can exceed expectations by delivering products clients didn’t think were possible.
How can I use my innovation to help clients?
Another finding was that firms rarely win jobs by just pitching a new way of doing something – this rarely works and can be a waste of the client’s (and the firm’s) time. Only 12 per cent of law firm clients and 17 per cent of consulting engineering firm clients claimed to have received unsolicited help from firms in solving a problem that they were previously unaware.
More importantly, of the few that could offer useful help only 33 per cent in law firms and 35 per cent in consulting engineering firms claimed that it converted to actual work. Rather, Dr Beaton suggests that if you work with the client unpacking what the real problem is and working to resolve that issue through innovative techniques, there is a much higher chance of converting it to paid work.
If your firm is innovative, beaton’s research suggests that the clients to pursue are those who are also early adopters of innovation (as opposed to ‘laggards’). These clients value innovation and look to external organisations for advice in the area.
beaton also found that clients that are early adopters of innovative new ideas are less motivated by lower fees. However, finding these gems requires conversations, talking, explaining what your firm is doing and allowing them to identify themselves and their needs.
Which clients should I try to help?
As advisory service organisations, it is important to remember that you can only be as creative as your clients will allow. As the webinar made clear, there is no point having incredible innovative methods if the client does not need or value them. In turn, beaton recommends that the best way to work out what clients will value – and where they want innovation – is to talk them early and often.
To find out more about the 2018 Innovation reports for Law, Consulting Engineering or Accounting click here.
If you want a full copy of the slides used in the webinar, click here.