Legal Business recently ran a piece on leadership in law firms which—surprisingly for articles on this topic—actually succeeded in getting beyond bromidic pablum. I commend it to you in its entirety, but meanwhile I want to talk about a particular perspective they called out for special attention, “innovation:”
Law firm clients clearly want to see more innovation from their legal service providers, and law firm leaders recognise that innovation is crucial if they want to provide a better-value service to their clients and stay ahead of their competitors. Leaders also know it is their responsibility to foster a culture within their law firms that rewards innovation from the ground up.
It comes as news to utterly no one reading this that clients are loudly and universally sounding the trumpet of “innovation.” So stipulated.
But what on earth does it actually mean?
These thoughts are prompted by my having been on two panels on two different continents in the past month alone focused on innovation and disruption, and a widespread sense that here in Law Land we don’t even have a common vocabulary to address these topics.
So a modest suggestion:
Let’s stop worrying about whether or not we’re “innovating” (in my experience it’s only in hindsight that you can only really) and start focusing on solving clients’ problems.
Under the head, Successful innovators don’t care about innovating, Harvard Business Review recently made this very point, using an example from an industry that could scarcely be more different from ours: Paint.
The fixation on innovation generally springs from self-centered motives: “Protecting ourselves from competitors,” “Finding a way to grow,” “Keeping up.”
Solving interesting problems, by contrast, starts with the client: “Why do these clients like us more than those?” “What could we do better?” “Can we help them build a systematic weay of heading off a certain type of recurring painful experience?”
What does this mean? Our edifying paint industry rat in the maze is Sherwin Williams. Its primary customers are professional painting contractors, not individual homeowners, and about 25 years ago, in the course of routine customer market research, they discovered—much to their chagrin, I’m guessing—that contractors tend to select the brand of paint they’ll use based more on retail outlets’ proximity to their job site than brand. (A brief sympathetic time-out for the news of this to sink in at Sherwin Williams.)
But, pulling up their socks, Sherwin Williams embarked on a concerted investment program to build out its retail network in four test markets. And recall this was before everyone was familiar with the Starbucks saturation strategy. The strategy produced outsize market share gains in the four test markets, and they rolled it out nationally. Which was swell until competitors realized what was happening and copied the same strategy. (We’ve told you the market is Darwinian; don’t pretend this comes as a surprise to you.)
Then came the acid test in form of the 2008—’09 GFC.
As competitors started closing stores to save costs, Sherwin Williams accelerating its push, opening as many as 100 stores annually. When things began to recover, its share of industry revenue took off and the stock price quadrupled in five years. But it wasn’t just stores per zip code; it was a total company-wide focus on serving the customer. Here’s the way the Sherwin Williams SVP interviewed about the company’s success describes it—using the word “customer” relentlessly and “innovation” never:
“We’ve always looked at business more like dating than war,” Wells noted. “It’s a theme that runs through our 140-year company history. In war, you’re focused on beating the competition. In dating you’re focused on strengthening a relationship. That difference of perspective has a million knock-on effects for how decisions get made.”
[This] comment points to a truth so often missed in today’s let’s-get-some-innovation-in-here-quickly climate. Successful innovation is a mindset before it’s a process or outcome. It’s characterized by a dogged determination to see the world through your customers’ eyes. […] Disabuse yourself of the notion that innovation is some high-minded creative process reserved for a certain class of people. Remember that most great innovations have been developed by regular people inspired by a problem.
Get out of the building and talk to your customers. Listen to their challenges. Come up with back-of-the-envelope, harebrained ideas about how you can help them. Get comfortable with the idea that you’ll throw 99% of those envelopes in the trash. [emphasis mine]
If you’re like me, recognizing that innovation can subsist in solving your clients’ problems might strike you as a call for a return to our roots as a profession. Indeed it is.
But it’s also the shortest route to connecting the dots that end up at increased financial performance: Solving clients problems –> increased loyalty –> greater share of clients’ spend –> truly valuing your services.
So can we end, once and for all, the bootless debate over whether we’re an “industry” or a “profession?”