What makes innovation at professional services firms unique
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I’ve been doing a lot of research into innovation at professional services firms lately. (Think law firms, accounting firms, consulting firms, engineering firms, technology consultants, marketing agencies, etc) I wanted to supplement my hands-on experience in management consulting with some actual scientific research into innovation at professional services firms.
- Consulting firms do change what they offer relatively frequently (from implementing SAP to implementing Agile). How they deliver it hasn’t changed much in 30 years.
- Might be interesting to think how firm size relates to innovation capability.
- Agree that big consulting firms tend to service big corporate and government clients - who also suck at innovation and tend to value reliability over new fangle stuff.
- Agree that the economics of product businesses are very different to services businesses (you can get a new service cash flow positive in 3-6 months. A product will take 2-4 years)
On the other hand:
- Automation is already starting to transform audit businesses. Which has a major impact on leverage models, talent pipeline, etc.
- The partnership model is starting to break down with salary vs equity partner structures emerging
Good list. Some thoughts:
- Consulting firms do change what they offer relatively frequently (from implementing SAP to implementing Agile). How they deliver it hasn’t changed much in 30 years.
- Might be interesting to think how firm size relates to innovation capability.
- Agree that big consulting firms tend to service big corporate and government clients - who also suck at innovation and tend to value reliability over new fangle stuff.
- Agree that the economics of product businesses are very different to services businesses (you can get a new service cash flow positive in 3-6 months. A product will take 2-4 years)
On the other hand:
- Automation is already starting to transform audit businesses. Which has a major impact on leverage models, talent pipeline, etc.
- The partnership model is starting to break down with salary vs equity partner structures emerging
- What do you reckon to this? https://www.danielsusskind.com/the-future-of-the-professions
- And this? https://www.linkedin.com/posts/joeomahoney_chatgpt-solves-mckinsey-case-activity-7024712161843118080-bPf4?utm_source=share&utm_medium=member_ios