Driving innovation in large professional service firms: Six high-return initiatives

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Over the last years I have spent significant time assisting professional services firms to drive innovation. This year I am finding that the economic climate is intensifying the focus on these issues rather than pushing them to the background.

The pressures that commoditize services are intensifying, local and global competition is increasing, and clients are seeking value in different forms than they have in the past. Another critical driver is the war for talent. Young, talented professionals show little interest in continuing to plough the furrow of long-established processes, however wax enthusiastic about creating new approaches to their work.

However there are many barriers to innovation in large professional firms, including billing imperatives, strong functional specialization, and often highly risk-averse cultures. Much of the management literature on innovation focuses on product development and design, and is not always relevant to a professional services environment.

I’ve written before about innovation in professional services, including the White Paper I wrote for SAP on Service Delivery Innovation and in Chapter 9 of Living Networks.

Here are some reflections on where I see the greatest potential for value-creation in the space.

DOMAINS FOR INNOVATION

There are several key domains for innovation for professional firms:

Services and products. In a rapidly changing business environment, providing the services that are most relevant to clients’ needs can provide real competitive advantage. The issue is not just in quickly generating new offerings, but also in packaging these so they can be readily communicated to clients by front-line professionals.

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Gerontocracy is our future

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Gerontocracy n. Rule by the elderly

When we think about the future, there are some things we can predict better than others. One of the things we have the best idea of is demographics and age distributions. There remain uncertainties such as improvements in health care and gerontology, the rise of unforeseen diseases and pandemics, and devastating war, but by and large we can be fairly confident of our demographic forecasts.

In recent keynotes I’ve done on technology in aged care and the future of the global health economy I examined the implications of future demographic profiles. The forecast profiles for 2050 for some of the world’s largest economies are shown below. Source for all of the profiles is NationMaster, an excellent repository of country information. Of all of these countries, USA is the country which will have the least imbalance to the elderly, accompanied by a dramatic shift in ethnicity of the young.

One of the many implications of these age profiles is the inevitability of gerontocracy – rule by the elderly. Given the age profiles below, it is starkly clear what segment of the population any warm-blooded vote-seeking politician will seek to woo. In other words, given a democratic future, we can expect government policies to be unmitigatedly pro-aged, with barely a look in for the young.

Fortunately I’ll be old by then.

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Video of TEDx on Future of the Enterprise in San Francisco

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We finally have video of my presentation on Future of the Enterprise at the TEDx event in San Francisco on May 5. The video is a nice production, very kindly done by Denis Mars to pull in the slides and Flash that supported my presentation.

Read more about the TEDxAdvance event, organized by Advance San Francisco. The best description is Andrew Mager’s excellent review of the evening.

The TEDx presentation format is strictly 20 minutes, so my presentation fits into two 9 minute YouTube videos below. Feel free to start at Part 2 if you want a sampler of the content – the story pretty much hangs together from there too.

In the presentation I discuss:

* Origins of organizations, from pre-agricultural through pyramid building, the guild, and modern companies

* Enterprise vs. Corporation. The critical distinction that means the “enterprise” will be more important than the “corporation” moving forward

* My personal work journey, through distributed computing, financial markets, Japan, information broking and NLP formed my thinking on organizations

* Knowledge and relationships are the only resources that matter in today’s economy

* Living networks of people, organizations and industry emerge

* Organizations are media entities – the flow of information defines its functioning

* Three driving forces today: Connectivity, Expectations and Commoditization

* Enterprise 2.0 is about creating the next phase of organizations – it is done by creating parameters for experimentation

* In the Heuristic Age structured trial and error is the only viable path to responsiveness

* Five questions: I end with five key questions we must answer to create the future of the enterprise:

What structures will emerge for allocating capital to enterprise?

What models will best turn participation into value creation?

How do we best tap the global talent economy in a virtual world?

What role will reputation play?

How will we make work meaningful?

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Keynote: The Global Health Economy – Today and Beyond

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Tomorrow morning I give the opening keynote at Cerner Corporation’s Leadership Forum, which brings together a select group of senior executives from hospitals, healthcare and government.

Below are my slides for the presentation. Note that these are designed to accompany my speech and are not intended to be useful as a stand-alone presentation. However a few summary thoughts on the topic are presented below.

Keynote: The Global Health Economy – Ross Dawson

A few quick reflections on the global health economy and where it’s heading:

1. The health industry has been largely immune to the price drivers of other industries

Health spending as a proportion of GDP is on a long-term uptrend in all developed economies. Many of the drivers of lower prices in other industries, such as supply chain efficiencies, globalization, transparency, and new entrants have had relatively little impact, largely due to the systemic nature of vested interest in the status quo. However the pace of change in the structure of health economy is accelerating.

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Interview on the global and Middle East economy

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Prominent Arabic region magazine Trends did a special issue to accompany the MegaTrends conference where I delivered a keynote last week, incorporating interviews with the three major speakers: Nobel prize-winning economist Paul Krugman, His Highness Sheikh Sultan bin Tahnoon al-Nahyan, chairman of the Abu Dhabi Tourist Authority, and myself.

My interview is in the document here. I’ve also posted it as text below (pre-editing) as it may be easier to read.


Interview with Ross Dawson for MegaTrends conference –

TACKLING THE TRENDS

Ross Dawson, CEO of international consulting firm Advanced Human Technologies, talks to Ehtesham Shahid about the nature of the Middle East’s economic stability and systemic risk.

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A purveyor of Social Media-Web 2.0-Geek porn

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@webtechman just posted this:

webtechman.jpg

For connoisseurs of geek porn who haven’t seen it before, click on the image below for my full Twitter background, comprised of four of our more well-known frameworks, or go to the full pdfs of the frameworks here: Web 2.0 Framework, Extinction Timeline, Trend Blend 2007, and Future of Media Strategic Framework. I’ve been intending to do a compilation of some of our frameworks – will post that soon.

Framework_mosaic copy.jpg

Keynote presentation: Profiting from Accelerating Change – MegaTrends in Abu Dhabi

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Below are my slides for my keynote at the MegaTrends conference at Abu Dhabi.

As for all my presentations, note that these slides are designed to accompany my speech and not to be viewed on their own, though may still be useful to people who didn’t attend.

Keynote: Profiting from Accelerating Change – MegaTrends Abu Dhabi Conference

For some more detail on the Driving Forces section, see my post on The MegaTrends of Technology, Business, and Society.

The MegaTrends of Technology, Business, and Society

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In preparing for my keynote at the MegaTrends conference in Abu Dhabi this afternoon I have distilled my thinking into a new visual representation.

Tech_Bus_Soc_framework.jpg

To gain insights the future we need to understand the intersection of three domains: Technology, Business, and Society.

In each of these domains we can distill one driving force that brings together the vast diversity of trends in these domains. These are:

Exponential Drivers. The most important technological drivers are all exponential: increased bandwidth, greater processing power, more storage, and the development of richer man-machine interfaces. These are driving a wide variety of fundamental shifts, not least an intensely connected and increasingly interdependent society and economy.

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Paul Krugman on the state of the global economy live at MegaTrends in Abu Dhabi

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The biggest highlight of the MegaTrends conference for me (other than my own keynote :-) ) is the presentation by Paul Krugman, who won the Nobel prize for economics last year, on the state of the global economy. I have a lot of respect for his outlook. Live notes from his speech:

The volume of world trade has fallen off a cliff – down 15% over the last year, the biggest since the Great Depression. In fact there are many similarities to the Depression, but that doesn’t mean that it will be the same. The global economy is stabilizing, but not recovering. Things are getting worse, but more slowly. It *probably* won’t be another Great Depression. Extraordinary declines in output, employment and more. There have been no havens.

So how did it happen? The crisis was far more global than those that point to US mortgage lending as the source. European debt losses will probably be as large as those in the US. There was an epidemic of excessive borrowing across all domains. The IMF now predicts $4 trillion of bad debt.

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Live blogging the MegaTrends conference

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I’m at the MegaTrends conference in Abu Dhabi where I will be giving my keynote this afternoon. I’ll be live blogging the morning sessions.

The conference was opened by His Excellency Sultan Bin Tahnoon Al Nahyan, a member of the Al Nahyan Abu Dhabi royal family, and chairman of Abu Dhabi Tourism Authority and several other government bodies.

He said that they have recently re-examined their forecasts, and still predict 15% growth in tourism each year over the next years. Yesterday the local newspaper reported that Abu Dhabi airport arrivals in April were up 12% from last year, suggesting this is feasible despite the downturn. This is strongly supported by the success of Etihad, the Abu Dhabi based airline that was established in 2003, and provides strong connectivity from Europe to Middle Eastern and Asian centers.

As mentioned the other day, one of the critical issues for the UAE is establishing itself as a hub in this time zone. Dubai and Abu Dhabi, despite their strong relationship, compete for regional activity, particularly in financial services. The UAE pulled out of the GCC (Gulf Cooperation Council) monetary union because Riyadh in Saudi Arabia was selected as the home for the union’s central bank.

More soon.

Keynote presentation: Profiting from Accelerating Change – MegaTrends in Abu Dhabi