Strategy, innovation, and knowledge sharing

There’s no question that an important part of the equation for leading a professional service firm is the ability to ignite and then sustain innovation. It’s a key fundamental business process – easy to talk about and really hard to do.”
—Jim Quigley, CEO, Deloitte Touche Tohmatsu Limited

Without productization, intellectual capital just builds brand; it doesn’t create a new service portfolio.”
—Stephen Rhinesmith, Senior Partner, Oliver Wyman

The best services are developed in the field, and then the back office puts sophistication and scale to it.”
—Paul Reilly, CEO, Raymond James

Steps Three and Four: Select the Best Ideas, and Take Them to Market

The approaches that firms pursue to select the best new ideas vary widely by culture, size, and organizational style and range from a “gut decision” to a formal committee review and analysis. Arguably the most difficult step in the innovation process—and the one that leaders struggle with the most—is translating ideas into action.

Several years ago my team was conducting an assignment for one of our global consulting firm clients. Our task was to speak with 50 CFOs of Fortune 1000 companies in the high-tech field, spot trends, and develop a thought leadership series to position the client as an innovative thinker in the industry. It was clear to us fairly early on in the engagement that a significant, unfulfilled service need in major high-tech companies had potential to generate substantial revenues.

We presented the opportunity to our client, mapped out the service, and even suggested a game plan for rolling it out into the market. Our client was pleased and eventually developed the offering, deployed a team, and sold quite a few engagements. But the path from concept to execution was arduous. Our client did not have a formal process in place to proactively identify and create new service opportunities, and once the need had been identified, there was no official path to launching the service. We had to go door to door to find a partner advocate to take it on and drive it through the organization.

Based on our interviews, we’ve identified a ten-step strategy for moving from concept to commercialization:

Develop criteria for service viability. The first hurdle a possible new service offering must jump over is satisfying a predetermined set of criteria for applicability, marketability, and profitability. In the applicability arena, key questions typically include the following: How big an idea is this? Does it have cross-practice potential? Can it go global? Does it meet a compelling and substantial client need? Does it have enduring value from a service perspective?

In terms of marketability, key questions are likely to include the following: Does this idea have potential for enhancing our brand and reputation as a thought leader? Is it easy to sell both internally and to clients? Will it be a major competitive differentiator from a competitive standpoint? Can we get it into the marketplace quickly and efficiently enough to make it worth the investment of time and energy required? Does it have breakthrough, best practice, performance-boosting potential?

From a profitability standpoint, a baseline ROI analysis generally is conducted that objectively reviews direct development expenses, top-line revenue projections, gross margin, and other financial performance metrics. If an idea is given the green light for development, results are carefully tracked and measured against projections.

Build a business case for potential service. After an idea is vetted for service viability, most firms construct a business case to sell it to a review committee or top management group. The business case may be an extremely detailed multiple-page proposal or a concise summary. Whatever form it takes, generally the business case covers the service viability considerations just outlined and includes a development timeline and ramp-up requirements.

To drive innovation within the firm, Booz Allen Hamilton created a formal service campaign program. When senior leaders in the market surface new service areas that they think will be big opportunities, such as fiber or systems engineering and integration, they can garner investment dollars from the leadership team if they put together a good business case to justify the investment. To do so, they must spend time thinking about methodologies, people requirements, and projections for growth. Campaigns have a two- or three-year lifetime. The campaign either grows up and becomes an embedded service offering— such as cyber security—or it becomes what Booz Allen calls a sunset: It makes a splash, but the result doesn’t rise to the level of refreshing the firm’s core service offerings. Partners are highly motivated to build a successful business, which can mean promotion within the partner ranks.

Select the best ideas. The management team responsible for the selection chooses the ideas that best meet the firm’s criteria for viability, timing, budget, and resources.

Test-market for receptivity. At this stage, firms with well-developed innovation programs move from internal to external review. This may involve a range of activities: brainstorming with clients, submitting service concepts to a client advisory board, consulting with independent experts, researching the competitive landscape, and evaluating potential market use.

Establish benchmarks for the launch plan. After the business case has been presented and the development process approved, the next step involves determining a time frame and project milestones. The time frame from planning to launch can extend anywhere from a matter of months to three years, with clearly defined benchmarks to measure progress along the way.

Pilot service offering. As with any standard product or service, the next step generally involves testing with a limited number of client implementations and then rigorously evaluating the road test results. In most cases the original service viability criteria are revisited.

Refine and blueprint offering. When the testing process is complete, the next step is to fine-tune the offering and map it fully, with an eye toward market introduction. At this stage, a marketing plan for communicating the new offering and its client benefits is developed. If the offering has brand enhancement and/or thought leadership potential, promoting these assets will be integral to the marketing communications mix.

Train teams. As part of their go-to-market strategy, the best programs make sure that internal support and expertise are fully mobilized to give the new service offering the best possible chance for a successful market introduction. Practice leaders and their teams are fully briefed on the offering, instructed in effective service delivery, and given the communication tools they need to promote it to their client base.

Launch. If all the other pieces are in place, the launch stage should unfold smoothly. In some cases the launch may involve introducing the service on a limited basis and then rolling it out nationally or globally. A strong marketing communications strategy and its aggressive implementation are critical for maximizing market impact.

Monitor and refresh. The service is tracked and reviewed on a regular basis to continuously test its market acceptance and financial performance against plan. Clients are interviewed on the offering pros and cons, and adjustments are made as appropriate.