What Innovation *Really* Looks Like

Ron Baker got hammered last month in Accounting Today by a reader. He wrote an article about "Old Dogs/New Tricks" as it pertains to innovation in professional service firms. Not just pricing, but service innovation and more.

A reader took offense and called Ron, among other things, racist. What???? And "ageist." She posed that her situation, becoming a CPA at age 57, was an old dog, new trick. Sure. But it's not innovation. Not by a long shot.

To Ron's point, the professions are in dire need of a shake-up. Not just Ron's beloved pricing shake up, but all the things underlying pricing such as what merits value? What constitutes service? How do you inspire knowledge workers (lawyers, cpas, engineers, architects, and other creative "brain fed" professionals) to go above and beyond for customers AND the firms in which they work? 

Shoot, most of these highly intelligent, highly creative employees are bored to tears and that is largely because they work within environments where innovation is stifled, unbelievably, by the supposedly WISER senior professionals. (For a good and humorous read and examples of the "stifling" to which I refer, see Robin Jerauld's website.)

Well, the world it is a changing. Innovation is a critical component to the future success of the CPA industry. Not sure that it is as critical in law, law being so immersed and intertwined in other parts of business and life...we'll always need lawyers...but I digress.

What I really want to get at is that most of us who work in and consult within the professions do bang our heads against the wall at times (no offense to any of my beloved clients...) because of the high level of complacency that exists for "good enough" or, in the case of some firms, "almost good."

On Seth Godin's blog is a fabulous description of why those firms are stuck in their respective modes. He illustrates it (see graph) but you MUST go to his site to read his whole post. 

My favorite parts of his post are these:

Most people get stuck at the Local Max because changing strategy in any direction (this is really a 3D chart, but I've smushed it to make it easier) leads to poorer results.

You have 100 competitors in an industry that is self-described as a commodity. You use the same tactics your competition does, because if you change your pricing or fundamentally alter your marketing outreach, you get punished in terms of sales or profits.

If your market is changing, this idea is even more important to understand. That's because changing markets are always surfacing new Big Max points, and the only way to get to them is to go through the pain (yes, it's painful) of point C.

So where am I going with this?

Here it is: 

"Big Max" is the innovation you bring to your clients. AND your firm.

Innovative firms strategize on how to get through C and on to Big Max.

Added 11/10
I fear my point might not be clear enough.  What I mean is that most firms look like this:

People do things that don't make sense, or use processes that cause them shake their heads in wonder because when they question the wisdom or efficiency of the method, they are told: "Yeah, but just do it this way because...(pick one)":

1. That is the way we have always done things;
2. That is how we did it last year or
3. [insert partner's name] wants it that way

These are innovation killers. These firms will NEVER get past C until they untie those ropes of control and actually INVITE and ENCOURAGE the people who see potential "opportunities for betterment" to share their ideas for new and better ways to do things, serve customers, create new solutions.

Stifling creative people (aka knowledge workers) is business suicide.

So, sever the control ties, listen to your young people with an open mind, and don't panic and retreat back to B or A when you're in the "C" lull. Press forward with confidence because you have good stratgies and really damn smart people...if you'll just listen to them!