Innovation by Design

A recent post on Dennis Kennedy's blog "Raising Your Return on Innovation Investment" discussed an article by the same name at strategy+business. Both address a four step innovation value chain:

1. Ideation
2. Project Selection
3. Development
4. Commercialization

Dennis focused on the concept of law firms outsourcing parts of the process, especially the ideation step. For lawyers this would include innovating their internal work processes, as well as creating new, innovative services for clients.

This discussion led me back to another recent article in Business Week, The Power of Design, describing how product design firm IDEO has branched into designing innovative ways to deliver services. The article desribes two critical concepts for successful innovation: focusing on the customer experience and merging its own experts with a cross-section of its client personnel (from CEOs to sales staff) into the design teams that turn out such remarkable innovations as the Palm V and emergency rooms that patients don't hate.

To serve those two conceptual goals, the IDEO process breaks the ideation step into two:

Observation and
Brainstorming.

Observation is where the team learns what the customers really want (or really hate). Brainstorming is where the breakthrough solutions come from.

Using this quasi-outsourcing model seems to me to improve the chances of "raising the return" on innovation investment dramatically.

And the point not to be missed: this applies to service professions, too. Yes, that includes lawyers.

For larger firms, the article points out how some IDEO clients developed their own in-house innovation capacity, partly from having top management participate in activities like role-playing as their own customers and going on field trips to experience the services provided by their competitors. This does not eliminate the benefit of having outside sources to expand the universe of new ideas at the early stages, but helps build innovation and the focus on "client experience" into the fabric of the firm.

For small firms and solos, hiring a consultant might well be essential to successful client experience innovation, given the limited time and people resources available.