A blog by Joel Barolsky of Barolsky Advisors

Intrapreneurs – the best way for your firm to innovate

In Articles, Commentary on 20 February 2014 at 11:17 am

As competitive pressures intensify, innovation is back on the strategic agenda of many professional service firms. Most experts recommend adopting an enterprise-wide cultural approach to innovation. In other words, everyone should embrace innovation and everything should be open to change and improvement.

0319261984109497c098ba9b8bf92d05This is generally sound advice but, in my view, it is NOT the best option for most professional firms. Trying to get everyone on board the reinvention train is nigh impossible when you’re working a diverse mix of early adopters, pragmatists, conservatives and laggards. Management’s energy will be sucked dry arguing with the sceptical laggards and in comforting the disappointed early adopters. In my experience, creating a shared commitment to innovation is something to aspire to but really really hard to achieve.

Intrapreneurs

The alternative to a firm-wide approach to innovation is to encourage “intrapreneurs”, or internal entrepreneurs, to flourish. This approach is about finding those in the firm with the passion and drive to innovate, appropriately assessing the merits of their ideas and freeing them up to execute. It may also involve bringing in or buying entrepreneurs where there is a sound business case to do so. Having a manageable portfolio of innovations that don’t overly disrupt the core operations of the firm is a pragmatic and practical approach with a far greater probability of success.

This approach does come with risks. The most pressing is that the prevailing conservative culture might treat intrapreneurs like knee-high skirts at SCG Members. To my mind, this risk is manageable if it’s recognised and there’s enough leadership resolve to make it work. An even bigger risk is do nothing and let market pressure overwhelm your firm.

One successful example of intrapreneurialism can be found at Deloitte Australia which created a central innovation fund by ‘taxing’ all operating divisions 3% of their revenue. It then offered intrapreneurs in each division the ability to get the money back or more by submitting proposals for great ideas around new products and methods. Backed by CEO Giam Swiegers’ philosophy of “fail fast and fail cheap”, the firm has seen a significant growth in the proportion of revenue from new services and ventures.

To my mind there are seven areas in which professional service firms can encourage intrapreneurial innovation:

Product

Developing new products and services is most commonly associated with the concept of innovation. These new product and services range from new-to-the-world offerings, such 3D printing IP advice and social media consulting, through to small enhancements to existing services. An interesting example of the latter is Landers & Rogers’ employment law practice which is now offering their clients a national 24/7 Incident Response Service. Clients can talk with a senior member of their team at any time to ensure immediate management of an OH&S, environmental or industrial relations issue.

Process

Henry Davis York (HDY) has invested heavily in using technology to reengineer their business processes, improve client experience and to reduce cost. Their intrapreneur and ex-real estate lawyer, Cristina Libro, and her team have spent the past five years designing and implementing workflow software. They have also designed new market-leading data management methods to handle the documents associated with large scale complex insolvency matters. She explains her role and HDY’s approach in this short video:

Crowe Horwath Accountants announced recently that they’ve installed Xero.com in over 1,000 of their clients. This cloud-based accounting package allows SMEs to simplify many of their bookkeeping, accounting and reporting processes and to significantly change the role that their accountant plays in their business.

Led by intrapreneur, David Griffith, IP firm Spruson & Ferguson have spent considerable time and money on radically reducing the delivery cost and cycle time of patent and trademark renewals. As this area of work has commoditised in recent times, Sprusons have achieved both scale economies and first-mover advantage. Building on their success, the firm has expanded into Asia and was recently reported as having over 80 people in their Singapore office.  In January 2014, they also became the first Australian IP firm to open an office in Shanghai.

People

In Janauary 2013, UK law firm Pincent Masons launched Vario, a standalone business unit offering lawyers on fixed-fee contracting basis. Their intrapreneurs, partner, Alison Bond and BD specialist, Katherine Thomas, developed the new business to reduce the cost of secondments and counter the competitive threat from Axiom, Lawyers on Demand and Agile. Within their first 12 months, Vario signed-up over 70 freelance lawyers and returned a profit to the Pincent Mason’s partnership.

Pricing

Much has been written recently on innovative pricing arrangements including those listed in recent post on this blog. One fascinating example in this space comes from intrapreneur Kate Fritz from Silicon Valley law firm, Fenwick and West. One of the things she initiated was the appointment of Product Managers to assist with the scoping and pricing of legal projects:


Promotion

It appears many firms spend more time on the message rather than on the medium. In a world where clients are bombarded every day with millions of competing messages, coming up with a innovative medium or method to communicate your message becomes critically important. One example of this is DLA Piper’s highly successful In-house Counsel Day where in-house lawyers can comply their CPD requirements by attending a single day of seminars put on by the firm. These seminars allow the firm to showcase their talent and to network with purpose and value.

Prospecting

The BD Director of a leading Australian consulting engineering firm has pioneered a method for “collaborative planning” with their key clients. This intrapreneurial approach radically improved the firm’s ability to identify future clients projects and to suggest new ideas for clients to consider. A key part of collaborative planning is a workshop that broadly covers the following topics:

  • Review relationship: what’s working, what’s not
  • Emerging issues and opportunities in the client’s world
  • Relevant developments from the firm’s perspective
  • Key priorities to focus on in the year ahead
  • Measuring value delivered and shared.

Partnering

As I mentioned in my last Relationship Capital post, there is much merit in asking the question: “which other businesses in your universe would be best to partner or co-venture with?” Co-venturing might enable rapid entry into new markets, accessing new technologies, acquiring complementary capabilities and de-risking new product development. A good case study is that of GRC Solutions, a subsidiary of Ashurst Australia, which offers online legal compliance training. CRC’s CEO and intrapreneur, Julian Fenwick, has successfully partnered with a range of other law firms and “best mates” including software suppliers, consultants, trainers and resellers.

In conclusion

If innovation is on your strategic agenda, will you make it all encompassing and try to get everyone on board, or will you identify and support intrapreneurs? These two approaches are not mutually exclusive but being clear how your innovate innovation is an important execution choice you will need to make.

NOTE: This post is based on a keynote presentation on innovation and collaboration I’m making at a forthcoming partners retreat in Brisbane.

  1. Joel, a very sound analysis and ideas for the way forward. This sits very comfortably with my 20 odd years working with lawyers in that, as soon as you show the firm one glowing example of a working strategy, there is invariably a queue of other partners at your door asking for something similar. Well done, Ray

  2. Another good piece Joel. We are working with the Uni of Auckland around the topic of Market Shaping. Some of your insights are very consistent with that idea which focuses on organisations behaving entrepreneurially, the concept of every innovation having a small business case which tackles “affordable loss” rather than a full blown analysis of ROI and finally the idea that the data shows that there are many more examples of business growth derived from shaping new markets rather than by chasing market share gains.

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