Innovation in professional services 🎧
An interview with ChatGPT
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Hi everyone. My name is Lauren Dixon and I'm here today with my co-host ChatGPT. Today we're going to be honing in on a niche within Work Upgraded: innovation for professional services firms. I think the best place to start is with the question: does it matter if professional services firms are innovative, and is it any different to any other business?
ChatGPT: That's a great question, Lauren. In short, yes, it matters if professional services firms are innovative. Professional services firms, such as consulting, accounting, and legal firms, have unique challenges and opportunities when it comes to innovation. For example, these firms rely heavily on their reputation and expertise, and therefore, must be careful when introducing new services or processes that may disrupt their established way of doing business. Additionally, many professional services firms have a large number of clients with varying needs, which can make it difficult to implement new ideas or technologies across the entire client base.
However, despite these challenges, professional services firms can benefit greatly from innovation. By introducing new services or processes, these firms can differentiate themselves from their competitors, increase efficiency, and ultimately improve the experience for their clients. Additionally, many professional services firms are facing increasing pressure to adopt new technologies and modernize their operations in order to stay competitive and meet the changing needs of their clients.
Overall, while there may be unique challenges and considerations for professional services firms when it comes to innovation, the benefits of being innovative can be significant for these firms, just as it is for any other business.
Lauren: I think another unique challenge for PSFs becoming more innovative is that they are people and knowledge-driven businesses. Their 'raw materials' as it were are the skills, knowledge and ingenuity of the people they employ.
ChatGPT: Yes, that's a very important point, Lauren. Professional services firms are indeed people-driven businesses, and the skills, knowledge, and experience of their employees are critical to their success. And that's why one of the key challenges that they face when it comes to innovation is how to foster and develop a culture of innovation within their organizations.
For example, many professional services firms have a hierarchical structure, which can make it difficult for employees at lower levels to share their ideas or to take initiative. Additionally, many firms have a focus on billable hours, which can discourage employees from taking the time to explore new ideas or processes.
However, professional services firms that are able to create a culture of innovation, where employees feel empowered to share their ideas, collaborate with their colleagues, and take initiative, are more likely to see successful innovation. To create this kind of culture, firms may need to provide opportunities for learning and development, create cross-functional teams, and promote experimentation.
Another way that professional services firms can leverage the knowledge and expertise of their employees is by implementing knowledge management systems. This can help firms to capture and share the knowledge and experience of their employees, making it more easily accessible to others within the firm.
In conclusion, while people and knowledge are central to the success of professional services firms, it can also be a challenge when it comes to innovation. However, by fostering a culture of innovation, providing learning and development opportunities, creating cross-functional teams and implementing knowledge management systems, firms can leverage the knowledge and expertise of their employees to drive innovation.
Lauren: You make some interesting points there! I'll come back to the point around culture, learning and development, cross-functional teams and experimentation. But you mentioned knowledge management systems as well. I'm kind of excited that you raised this in relation to innovation. I don't think many people immediately think of knowledge management when it comes to innovation.
Knowledge management seems more like an efficiency tool, especially in PSFs where it's often used to keep costs down by reducing how often staff need to "reinvent the wheel" when it comes to advice and deliverables. But knowledge management can also provide real opportunities for innovation. Not just through teams being able to build on the knowledge of their peers, but also through the content of the KM system being used to help "productise" the firms' expertise.
Can you tell me a bit more about why you link knowledge management with innovation?
ChatGPT: Yes, knowledge management can definitely be an important tool for fostering innovation in professional services firms. The reason for this is that knowledge management can help to capture and share the expertise and experience of employees across the organization, making it more easily accessible to others. This can be especially important for professional services firms, where the knowledge and expertise of employees is a key differentiator.
For example, by implementing a knowledge management system, professional services firms can create a centralized repository of information that employees can easily access and reference. This can help to reduce the time and effort required to "reinvent the wheel" when it comes to providing advice or deliverables to clients. Additionally, by making this knowledge easily accessible, it can also facilitate cross-functional collaboration and enable employees to build on the knowledge and experience of their peers.
Furthermore, by making the knowledge and expertise of the firm easily accessible, it can also provide opportunities to "productize" the firm's expertise. This can be achieved by using the knowledge management system to identify and package the firm's expertise into specific products or services that can be offered to clients. This can help professional services firms to generate new revenue streams and provide more value to their clients.
In addition, knowledge management systems can also be used for tracking the progress of a project and for documenting the lessons learned. This information can be used to improve the quality of the service provided and to identify new areas for improvement, leading to innovation.
In conclusion, by implementing a knowledge management system, professional services firms can capture and share the knowledge and expertise of their employees, reducing the time and effort required to "reinvent the wheel" and increasing the efficiency of the organization. Additionally, by making this knowledge easily accessible, it can facilitate cross-functional collaboration, provide opportunities to "productize" the firm's expertise, and enable the firm to continuously improve the services provided, leading to innovation.
Lauren: Amazing how powerful an innocuous function that is often relegated to the background admin can be such a powerful tool for innovation.
Earlier you also mentioned the importance of culture, learning and development, cross functional teams and experimentation. All four of these things are often used like buzzwords within executive teams and sometimes they can start to feel like innovation theatre. Let's start with the big one: cross functional teams. Cross functional teams, along with other agile practices, are often cited as a key part of innovation.
Why do you say they're important for innovation? Are we just conflating modern work practices with innovation?
ChatGPT: Cross-functional teams can be important for innovation because they bring together individuals with different perspectives, skills, and expertise to work towards a common goal. By working together, individuals from different functions can share their knowledge, experience, and ideas, which can lead to more creative and effective solutions.
Additionally, cross-functional teams can also help to break down silos within an organization, which can make it easier for new ideas and information to flow between different departments and functions. This can be especially important for professional services firms, where employees may be siloed by practice area or client.
However, it's important to note that cross-functional teams alone are not a guarantee of innovation. They are just one of many tools and practices that organizations can use to foster innovation. It is also important to have a culture that encourages experimentation and risk-taking, as well as providing opportunities for learning and development.
Also, cross-functional teams work best when they are empowered to make decisions and when they are given clear goals and objectives to work towards. Additionally, it's important to have a system in place for capturing and sharing the knowledge and experience gained by cross-functional teams, so that it can be used to inform future innovation efforts.
In conclusion, cross-functional teams can be an important tool for fostering innovation, but they are not a magic bullet. They need to be supported by a culture that encourages experimentation, learning, and risk-taking, as well as having a system in place for capturing and sharing the knowledge and experience gained by the teams.
Lauren: Yeah I think you hit the nail on the head there. It's more that silos, a low risk appetite and a lack of autonomy and empowerment are big barriers to innovation. Cross-functional teams are just one solution to this, but ultimately if firms are able to come up with their own solutions to the barriers, they will be able to be more innovative, with or without cross-functional teams.
You've mentioned experimentation several times. I'm sure many of us have never done an experiment since high school science class. What does experimentation actually look like within the context of a professional services firm? And what can we do to minimise the risk to our clients from experimenting with work that impacts them?
ChatGPT: Experimentation within the context of a professional services firm can take many forms, but at its core, it's the process of testing new ideas, methods, or processes to see if they are effective or viable. This can include things like piloting new services or products, experimenting with new technologies, or trying out new ways of working.
One way that professional services firms can experiment is by using a "Minimum Viable Product" (MVP) approach. This involves creating a simplified version of a new service or product and testing it with a small group of clients to gather feedback and see if it's viable before investing more resources into it. This can be a good way to minimize risk to clients as it allows the firm to test the concept with a small group of clients before rolling it out more widely.
Another way that professional services firms can experiment is by creating "sandbox" environments or "innovation labs" within the firm. These are dedicated spaces or teams where employees can test out new ideas and processes without worrying about the impact on clients or the rest of the organization.
Additionally, experimentation within professional services firms can also take the form of small-scale "proof of concept" projects, where the firm tests out a new technology or process with a specific client or project. This allows the firm to gain valuable experience and feedback before deciding to invest more resources into it.
To minimize the risk to clients, it is important to involve them in the experimentation process, to keep them informed of the changes that are taking place, and to get their feedback. Additionally, it is important to have a plan in place to mitigate any negative impacts that the experimentation may have on clients.
In conclusion, experimentation within professional services firms can take many forms, from piloting new services to creating "sandbox" environments, and can be a powerful tool for fostering innovation. To minimize the risk to clients, it is important to involve them in the experimentation process, to keep them informed of the changes that are taking place, and to have a plan in place to mitigate any negative impacts.
Lauren: Ah the good old MVP! Can we really use MVPs in a business-to-business context? Don't our corporate clients expect more quality and features right out of the box than the average consumer that has adapted to seeing MVPs and products iterate over time?
ChatGPT: The MVP approach can be used in a business-to-business (B2B) context, although it may need to be adapted to take into account the different expectations and needs of corporate clients. In a B2B context, MVPs may need to have more features and be of higher quality than those used in a consumer context, as corporate clients may have more specific and complex needs.
One way to adapt the MVP approach for a B2B context is to focus on creating a core set of features that address the most important needs of the client, while also providing a clear roadmap for future development. This can help to ensure that the MVP meets the needs of the client while also being cost-effective and efficient to develop.
Additionally, it's important to clearly communicate the MVP status and the plan for future development to the client, to manage their expectations and to get their feedback. This can help to ensure that the MVP is meeting the client's needs and to identify areas for improvement.
Also, it's important to involve the client in the development process, and to use their feedback to inform future development. This can help to ensure that the MVP meets their needs and is aligned with their goals.
In conclusion, the MVP approach can be used in a B2B context, although it may need to be adapted to take into account the different expectations and needs of corporate clients. By focusing on creating a core set of features that address the most important needs of the client, while also providing a clear roadmap for future development, and involving the client in the development process, firms can create MVPs that meet the needs of their clients while also being cost-effective and efficient to develop.
Lauren: Ok we've definitely strayed into a bit of a focus on tech and digital products. Do you think the future of all professional services innovation is into tech products? Or is there still a role for good old fashioned human-to-human expert advice?
ChatGPT: The future of innovation in professional services is likely to involve a combination of technology and human expertise. While technology has the potential to automate many tasks and provide new ways of working, it is important to remember that many professional services are still based on human expertise and knowledge.
For example, in the consulting industry, technology can be used to automate data collection and analysis, but it is the human consultant who provides the insights, expertise, and recommendations. Similarly, in the legal industry, technology can be used to automate contract review, but it is the human lawyer who provides the legal expertise and advice.
That being said, technology can also play an important role in enhancing the services provided by professional services firms. For example, by using technology to automate repetitive tasks, professional services firms can free up their employees to focus on more complex and value-added tasks. Additionally, by using technology to provide clients with real-time data and insights, professional services firms can provide more value to their clients.
In conclusion, while technology has the potential to play a significant role in the future of innovation in professional services, it is important to remember that many professional services are still based on human expertise and knowledge. By using technology to automate repetitive tasks and to provide clients with real-time data and insights, professional services firms can free up their employees to focus on more complex and value-added tasks, and provide more value to their clients.
Lauren: Do you really think technology won't soon be able to provide even better insights than the human experts?
ChatGPT: While technology has the potential to provide valuable insights and automate certain tasks, it is unlikely that it will be able to replace human expertise entirely in the near future. This is because many professional services require not only technical knowledge, but also soft skills such as critical thinking, creativity, and emotional intelligence. These are difficult to replicate with technology, and require human judgement.
However, it's important to note that technology is advancing rapidly and it is likely that it will be able to provide increasingly sophisticated insights and analysis in the future. For example, with the advancements in machine learning and artificial intelligence, technology has the potential to analyze large amounts of data and identify patterns that humans might not have noticed. This can help to provide valuable insights and support human decision-making.
Also, as technology advances, it has the potential to automate more complex tasks, such as legal research or medical diagnoses, which would have been previously considered the exclusive domain of human experts. However, it is important to note that these technologies still require human supervision, oversight, and interpretation.
In conclusion, while technology has the potential to provide valuable insights and automate certain tasks, it is unlikely that it will be able to replace human expertise entirely in the near future. However, as technology advances, it has the potential to increasingly support and enhance human decision-making and expertise.
Lauren: Ok we might have to leave it there. I could talk about this topic all day - which is why Work Upgraded is going to pivot to focus more on innovation in professional services. Even if you don't work in the professional services but provide expertise-driven services within your employer - I'm thinking in house counsel, finance teams, strategy teams and technology teams - you will probably find something of interest in the Work Upgraded podcast.
Thanks for joining me today, ChatGPT!
ChatGPT: You're welcome, Lauren. I'm glad I could provide some insights on the topic of innovation in professional services firms. I agree that this is a fascinating and complex topic, and there is much more to explore and learn. I wish you all the best with your podcast and I hope that it will provide valuable insights and inspiration for those working in professional services and other expertise-driven industries. Don't hesitate to contact me if you have any other questions or if you need further information on this topic.
This podcast and blog post were created in OpenAI’s ChatGPT language model free chat interface. The text in bold was written by Lauren Dixon. The text from ChatGPT was copied from the language model’s response without editing. The podcast was produced using Fliki to convert the text to voice.