29 July 2016

Pete Williams on the challenges of “letting go” – innovation in professional services

How do you embed innovation in a sector which has traditionally resisted it?

Innovation does not come naturally to professional services, according to Pete Williams, Hall & Wilcox board member and CEO of Deloitte Centre for the Edge, who says that while many in the sector want innovation they find commitment difficult.

“Professional services often get stuck on innovation as they are focused on the need to ‘make more money today’, so they end up not investing in the future and not looking ahead.

“A good example is the constant battles you see between IT departments and employees. Companies often have restrictive IT policies where everything is locked down. If you’ve locked down your whole IT environment and no-one can test or try anything new, you naturally fall further behind because technology keeps advancing.”

Pete’s professional services career commenced in the most traditional route possible, as a chartered accountant, but Pete isn’t your average Big 4 accounting type. Known for his uniform of t-shirt and jeans, Pete speaks rapid-fire about innovation, without much jargon or business-speak.

He is a digital early adopter whose exploration and understanding of the emerging World Wide Web in the early 1990s led to him establishing Deloitte Digital, pioneering the delivery of professional services online. Pete has been Chairman of Deloitte’s Innovation Council since 2004 and heads up innovation hothouse, Deloitte Centre for the Edge. Two years ago, he joined the Hall & Wilcox board.

Pete says the natural tension between planning for the future and focussing on ‘this year’ has always existed in professional services, but is more apparent as the sector becomes more vulnerable to disruptive forces.

“Innovation doesn’t happen in business cases, spreadsheets and PowerPoint. It happens through prototypes and experiments, putting stuff out there, learning and testing.” 

“We say, sure, we want to make money today, we want profit and growth, but we need to be prepared to disrupt ourselves, and be prepared to look at different ways of doing things. What we need to be thinking much more about is taking a systemic and design-driven approach to innovation.

“Disruption’s not something where you just wake up in the middle of the night and think ‘we can change the whole world’, it’s the notion of a tempo. It’s small moves, smartly made, rather than one big bang idea. It is a series of base hits rather than home runs.”

Pete says innovation comes via long-term commitments, freedom to try new things and the ability to fail and move on quickly. Innovations, which improve work practices, client relations and the bottom line, only arise with creative freedom – this requires a certain letting go.

As professional services are driven by measurement and head hours, ‘letting go’ and allowing innovation to evolve can feel counter-intuitive. “Saying ‘prove it’ is the best way to kill innovation, because if it’s truly innovative, then it’s emerging and is hard to prove.

“Innovation doesn’t happen in business cases, spreadsheets and PowerPoint. It happens through prototypes and experiments, putting stuff out there, learning and testing.” 

Innovation in legal services

So where are legal services placed in the overall professional services landscape? Pete says, “Legal services are behind overall in the innovation space, but there are some interesting moves happening on the horizon.

“You’re seeing what they call new law, which is technically packaged solutions available online. These are packaged, customisable legal documents targeted at very small business, which may help with things like trademarks or creating legal documents (such as NDAs or shareholders agreements).

“There will always be the old model where you have a legal problem and call us up. But legal firms also need to ask how they can incorporate technology in the way they collaborate with clients.”

Pete has seen Hall & Wilcox go through discussion and exploration on innovation, leading to the embrace of ‘Smarter Law’, a mantra which drives the firm to constantly look for smarter ways of doing things.

He says it’s important to allow the time before leaping in too hard too soon. “Innovation is a process and you have to start with those discussions.

“We often see organisations who really want to innovate get sucked into the big bang blueprint, where they plan out over the next five years. They work out it’s going to cost us this much money, and it’s going to make us this much money. It’s this sort of detailed blueprint plan, but is not going to get anywhere near the market for three to four years, and by that time the world has moved on.”

He re-emphasises the need for small moves which are smartly made, a concept which underpins ‘Smarter Law’ in practice. “Hall & Wilcox said we have to be more innovative. They’ve gone through exploration, understanding and now commitment, through Smarter Law.”

Recent Smarter Law-inspired innovations at the firm include a web application developed for insurance companies, for locating recoveries in WorkCover claims. It was the brainchild of two young insurance lawyers at the firm, who saw that recoveries were being missed due to laborious manual processes and developed a solution which unearths recoveries in a couple of minutes. Hall & Wilcox was also involved in Westpac’s Blockhack 16, a hackathon involving new uses for blockchain technology. Hall & Wilcox developed an idea for a secure property ledger, currently being considered for commercial application.

“I’ve started to see Hall & Wilcox incorporate a lot more technology in what they do with the clients, thinking about partnering with different technology companies. They are sharing ideas, working more and using social technologies, so they are definitely on the path.”

Innovation in the DNA

Embedding innovation within an organisation is the ultimate goal, but it’s not something professional services firms can just switch on, according to Pete. “There needs to be a lot of discussion and a lot of exploration to get innovation into a firm’s DNA.

“You need to be thinking about it, talking about it. You need to be trying new things and sharing the fact you have tried this or done that. You’ve got to have intent – it’s got to be led from the top.

“In organisations, you often see groups of people who are innovating, but are too scared to put their heads above the parapet, because ‘that’s not really what we do here’. In these circumstances, the organisation should be doing something but no-one will  say anything. So we see that quite a bit, and not just in professional services.

“My view is it has to be driven at the top. There has to be that overall ‘what is our strategy, what are we trying to do’ with innovation. What would we say yes to, what would we say no to? Then, it’s getting into a tempo of trying new stuff, trying to extract value.

“Part of it is finding the sort of clients who will give new things a go.”

“Hall & Wilcox said we have to be more innovative. They’ve gone through exploration, understanding and now commitment, through smarter law.”

While ideas come and go, Pete emphasises the need for a process. “You want to have a structured innovation model, which is having a way, or a process, of looking at ideas. We can then get it prototyped or tested really fast and make a decision on whether it’s something we want to go with.

“It might be something like an innovation zone, where people can come in and put in ideas and those ideas are reviewed every fortnight. People vote, comment and engage – it is a process.

“Then you want to have a deliberate innovation model, which allows us to go real hard at a certain idea or area.”

Pete cites the example of Deloitte Private Connect, the firm’s cloud accounting service, which combines various accounting and bookkeeping software with access to advisors and charges via subscription. “The idea came from the structured program. Once we have proven the model for something we have a real big crack at it.”

He said creating the opportunity for organic innovation within an organisation is something he is passionate about. “Organic innovation does not require permission, for example, things like Google’s 20% discretionary time, hackathons, setting up labs and other creation spaces.”

For innovation to truly be in the DNA it needs to flow throughout the organisation. Pete refers often to ‘design-thinking’, on how design principles nurture creativity, the ability to win work and the open-mindedness to try new things. While design may seem a natural opposite to accounting and professional services, he has seen them blend with great success. “The 3 d’s – design, digital and data, are three of the big drivers that change things.”