Professional services will be at the heart of our economic future

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Last night was the announcement of the winners of the annual BRW Client Choice Awards.

Each year Beaton Consulting compiles the opinions of large professional service clients – this year 40,000 of them – who collectively select the best professional service firms in Australia. The results are announced at a gala dinner and published in BRW magazine.

The full list of winners is here. The magazine’s lead article on the awards Client choice awards: Savvy, digital, global: the face of the new professional, provides interesting insights into the state of the professions in Australia.

I gave the guest keynote at the event, with the intent of providing inspirational yet light-hearted perspectives on the awards.

My theme was “Creating Australia’s Future”, about how professional services firms are at the heart of Australia’s (and all developed countries’) future.
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Thinking about the future: Why predictions usually (but not always) have negative value

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A few days ago I spoke at the opening dinner of a strategy offsite for a professional firm, on the topic of ‘Thinking About The Future‘. It is a very common style of engagement for me, being briefed to set the broadest possible mental frame for executives before their in-depth discussions on directions for the business. The session went extremely well in provoking some very interesting conversations during the evening, and I gather driving new thinking through the rest of the offsite.

Just before I spoke the executive group had heard from a well-known economist who was giving them economic forecasts for the next 10 years.

As such, in my presentation I explained why forecasts usually have negative value. I spent a long time working in financial markets, and I have seen market and economic forecasts tremendously abused.

The most important point is that almost all forecasts will turn out to be wrong. The future is unpredictable. Giving numerical values to future economic or market data can easily shut down useful thinking about the reality of uncertainty and the range of possibilities that may transpire.
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The future of academic certification: universities, MOOCs, aggregators, and peer reputation

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This morning I gave the opening keynote at the Virtual Universities: Impact on Accounting Education Thought Leadership forum in Adelaide, organized by the Centre of Accounting, Governance and Sustainability at University of South Australia and the Institute of Chartered Accountants Australia. The audience was an invitation-only group of the most senior accounting academics and industry practitioners in the country.

My keynote was on the broad global context for the current changes in education. After looking at major technological, social and structural changes, the future of work, and shifts in learning, I turned to the role of certification and credentials.

The rise of Massive Open Online Courses (MOOCs) has helped bring into focus that universities have to date always bundled together three things:
– Education;
– Certification; and
– Networking.

The rise of Open Courseware and more recently services such as Coursera, Udacity and edX has now broken out (part of) the education piece.
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The 5 elements that enable expertise networks to flourish

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Last week I gave a keynote at an internal conference of a large technology services firm that has recently acquired another firm. The conference brought together senior executives and managers from the two organizations so they could get to know each other and plan how they would work together with existing and new clients.

A significant part of my role was to provide a highly upbeat, optimistic, engaging perspective on the future of business. However I also wanted to address the specific issues they would be encountering in combining their capabilities.

Many years ago when I was working with a large law firm to help them develop their client relationship and cross-selling capabilities, I created a simple framework, shown below.

The fundamental issue for any significant professional firm is to match the best possible capabilities in the organization with the relevant opportunities for value creation at their clients.

This begins at the interface with the client. Whoever has any interaction with the client, including the relationship leader and relationship team, has responsibility to identify and bring to the client the most relevant capabilities of the firm. However there are 5 key steps that are required for that to happen.


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Disruptive innovation in professional services: the value in expertise

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The concept of disruptive innovation is now well-recognized in business. It was originally described by Clayton Christensen almost exclusively in terms of products – often technology-based – such as storage devices.

Disruptive innovation can happen in any industry, however it can need translation and interpretation for other domains such as services.

I recently I ran a presentation and interactive workshop on the future of professional services to kick off a law firm partner strategy offsite. Among the more specific challenges, opportunities, and responses that the professions face, I ran through some of the core principles that could disrupt their industry.

In fact a broad range of expertise-based industries are being subject to disruption, however with quite different dynamics than in product industries. The 3 key drivers of disruption of expertise are remote work, process automation, and artificial intelligence.

Four expertise-based services industries that are being disrupted are:
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Axiom Legal and the rise of virtual professional services

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Back since the 1990s I have tracked the rise of virtual and distributed professional services models. They have progressed somewhat more slowly than I anticipated, but the trend is clear. Large professional firms are not in jeopardy, but significant and profitable aspects of their business are being eroded.

One of the great examples is Axiom Legal, which I first wrote about in 2002 in Living Networks:
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MegaTrends and the future of professional services – Melbourne and Sydney

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Next week I will be giving the first in the First Mover series of seminars for professional services leaders organized by Beaton Research & Consulting.

See here for the seminar series overview or the brochure for full details.

The seminars will be held in Melbourne on 25 July and Sydney on 26 July, with a live webinar option also available.

For quite a few years much of my work was with professional service firms, and while I have spent more time in other sectors recently, I still see the professional services model (in an evolved form) as central to the future of the global economy.
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Transforming clients and executives: How to enrich their mental models

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When I wrote my first book, Developing Knowledge-Based Client Relationships, which came out in 2000 in its first edition, I thought of it in many ways as a stepping stone for me to gain credibility and move on to deal with broader issues. Yet still today the themes of the book are immensely relevant to my work.

As a futurist the greatest value I can create is in helping people to think more broadly, to be more open and responsive to trends, issues, and possibilities that they have not yet fully considered. As I often say, my definition of a futurist is someone who helps people to think usefully about the future, so they act more effectively in the present.

It is in fact the same for every professional. Performing services for clients can only have a fraction of the value of actually changing the client, to help them think more usefully and make better decisions.

Chapter 4 of Developing Knowledge-Based Client Relationships is titled Adding Value to Client Decision-Making: Better Strategic, Line, and Portfolio Decisions. Below are some brief excepts on the theme of adding value to mental models, which is at the heart of tranforming clients.
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V&S acquired by Havas: A pivotal moment for crowdsourcing in advertising

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The purchase by Havas of a majority stake in crowdsourced ad agency Victors & Spoils is a sign of a major shift in the advertising industry.

I have written several times before about crowdsourced advertising agency Victors & Spoils. V&S Founder and CEO John Winsor spoke at our Future of Crowdsourcing Summit, and I have since written about some of their lead work with Harley-Davidson and where they have taken that.

The big news today is that global advertising conglomerate Havas has taken a majority stake in V&S, also naming John Winsor as Chief Innovation Officer for the group.
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Value based pricing is at the heart of the future of professional services

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In my first book Developing Knowledge-Based Client Relationships: The Future of Professional Services the final chapter was titled Value-Based Pricing: Implementing New Revenue Models. Pricing by value rather than time is clearly a central aspect to building true knowledge-based relationships, since knowledge should be measured by the value of its application rather than time spent by professionals.

The chapter in my book provides a fair overview of the key possibilities and factors in value-based pricing. However I am not a deep expert in the field. When discussing the issue with clients, I usually refer to Ron Baker, who among other claims to fame has written books including Pricing on Purpose, Professionals Guide to Value Pricing, and one I’ve long had on my bookself, The Firm of the Future.

Ron is currently in Australia running a series of workshops on The Firm of the Future, and he kindly invited me to join his masterclass session in Sydney this morning.
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