As the need for differentiation as a source of competitive edge becomes more important, innovation is shaping up as a key battleground for professional services firms.

1. Creating value growth
through innovation.
Innovation and value creation, differentiation
and leadership are emerging as important
topics in professional services.
By Melissa Wraith, Senior Consultant and Service Practice Lead, mextConsulting
March 2013
With global and local structures quickly ˃ Pet project advancement instead of
changing and competition intensifying often objective criteria assessment,
from unexpected sources, innovation is high ˃ Internal blindness to simple, cheap, big
on the agenda with most firms. impact opportunities,
˃ Lack of prioritisation, planning & process
But at the same, time innovation that delivers and resource allocation,
a real advantage is hard to come by. Across ˃ Lack of client orientation,
all industries some estimates say that up to 9 ˃ Resources are focused on the launch
out of 10 innovations fail to live up to rather than spread equally across the
expectations.
development process including testing.
Common issues found in the less than These issues often lead to innovation not
successful innovations include: having the desired impact, not being delivered
˃ Too narrow and unstructured well enough or at all – resulting in wasted
collection of ideas, resources as well as innovation fatigue.
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2. In our innovation work with professional are re-interpreted into immediate, mid-term
services and other industries 4 key success and long term.
factors emerge again and again:
Other ways are the capability vs impact
1) Innovation must be client need prioritisation and thus time framing, or using
concrete to hazy front end terminology.
focused.
In any case, these frameworks serve to ensure
If you don’t know client needs beyond the
that a continuous pipeline of relevant
obvious, rational and functional, it is very
innovation at different levels of impact and
difficult to identify ideas that could offer
significance can be driven. It also allows for
genuine value. Understanding client needs is
resource allocation
therefore critical. It not only makes sure ideas
are focused on the client; it also makes sure
your innovation is focused around platforms you 4) Process & Tools.
want to play in and supports your business
strategy. A strong process and the right tools ensure the
impact is as powerful as expected. This starts
with the overall process. The best known one is
2) Develop strong idea platforms.
probably the Stage-Gate process developed by
Robert Cooper and Scott Edgett.
Innovation can relate to many aspects of the
business. Technical ones are often the first that
It splits the innovation process into five distinct
come to mind. But left of centre ones often
stages from ideation to launch. After each stage
disrupt better and tip the playing field towards
there is an evaluation gate that consists of
you much better. For example:
different, stage relevant criteria and
˃ Product & technical aspects including IT use,
stakeholders. It starts with the overall ideation
˃ Service aspects such as interaction,
to ensure as many relevant ideas as possible are
processes and content,
developed. After that these ideas are filtered
˃ People & communications.
into the process to ensure the right ones are
advanced at the right time with the right speed
In ideal cases through the first workshops
and the right resources.
additional platforms specific to the firm can be
identified, ensuring even more differentiated
Each stage & gate has its own tools and criteria.
innovation.
Some of these are standardised, others are
individually created to suit the firm.
An aspect often overlooked is IP development
from existing business capabilities or
Another important aspect of process is
approaches. This can be a low cost, very strong
continuity. Successful innovation is a continuous
source of competitive advantage.
process with new cycles starting typically every
3 to 6 months.
3) Pipeline horizons.
The perception that innovation is a difficult, big
Structuring and assessing innovation into and a resource hungry distraction from core
horizons is critical to building a pipeline that business is an oft cited reason for not pursuing
delivers immediately and strategically on your innovation or doing it haphazardly. But
business plans. innovation can be simple, focused and create
immense value through differentiation,
Typical structures are the Horizon 1, 2 and 3 leadership and better client need fulfilment if
structures that look at maximising current the right knowledge and processes are applied.
business, developing additional income streams
and fundamental business changes. Often these
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3. About mext Consulting.
mext Consulting is a customer and consumer value consultancy that was created in 2004 with a view
to challenging the conventional thinking driving the disciplines of sales and marketing in order to
create a true understanding of customer motivation. mext bridges the gap between business
strategy and implementation. We provide businesses with:
˃ Consulting
˃ Training
˃ Research
We support businesses to gain a competitive edge in their markets and help our clients grow with
vision, precision and certainty. We employ a unique mix of rigour, insight and creativity and apply
our proprietary and proven tools to identify key growth levers.
We help you make your customers and consumers want more of you through:
˃ Brand
˃ Customer experience
˃ Innovation
˃ Category management
˃ Training
˃ Insight
165 Cremorne Street Richmond
Victoria Australia 3121
P: +61 3 9428 5417
www.mextconsulting.com
melissa.wraith@mextconsulting.com
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