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In a regulated marketplace which is under threat from new entrants to the field, innovation may well be the only way to provide differentiated customer service and secure the future.
Government organisations, private firms, international corporations; whatever the business there is no getting away from the fact that innovation has moved out of the shadows and is now seen as a force which will drive game-changing synergies and create growth. So said the G20 conference in 2014 and so says a host of business leaders. In fact 69% of corporates now name innovation in their top three priority list and the recently released London First report links growth with innovation and entrepreneurship. Interestingly this report comments that “the line between the technology and creative sectors is increasingly blurred and each sector acts as a catalyst for innovation in the other.”
But whilst some organisations are keen to embrace a culture of innovation others are reluctant to take the plunge into a whole new ethos of working. Partly that comes from a lack of understanding about what switching to a culture which embraces innovation would actually mean in practice. In fact 53%of UK executives say that their board often talks about innovation but nobody seems clear what it means.
Other clearly expressed reluctances include a fear that the sector’s regulators would not approve and that embracing the sort of more open collaborative regime which comes with innovation would not be feasible in an industry which has to follow tight regulation, be they health & safety rules, financial probity rules or the rule of law.
It was interesting therefore to see that in December 2014 the Solicitors Regulation Authority (SRA) launched a research project into innovation in the legal service market. The research is designed to explore the reasons for innovation in business practice, investigating “the impact of competition on the development of new business approaches, how well innovative change serves the needs of people using the services and the barriers to greater innovation.” Starting with a literature review and interviews the second phase of the research will be dependent on the findings of phase one but is expected to include a larger scale quantative assessment of innovation in legal services.
The research is of particular interest because it adds further weight to the idea that regulators not only are willing to embrace the concept of innovation, they are actually encouraging those who operate under their remit to embrace innovation models. Indeed this SRA research follows on the back of an FCA move to launch an innovation hub with the FCA commenting in 2014 that “Our commitment to fostering innovation in the interests of consumers is not a fad. It is now an important part of our regulatory philosophy.”
The move by the SRA underlines the fact that far from being a force for chaos, innovation can in fact be a liberating force which provokes high standards of customer care whilst at the same time remaining constrained by regulation. The truth is that if innovation is to succeed it cannot exist in a regulation-free vacuum. The very act of moving to a more open and collaborative methodology will only succeed if there is some measure of control over actions. Giving employees access to a dart board or pool table will only result in the creation of innovative ideas if employees are engaged in the aims and values of the organisation. So far from being synonymous with chaos, true innovation runs hand in hand with structure.
When regulated entities such as law firms look to innovate they aren’t looking to change the law but they are opening themselves up to new approaches and new services deliveries which will enhance customer outcomes and long term success rates. In a regulated marketplace which is under threat from new entrants to the field, innovation may well be the only way to provide differentiated customer service and secure the future.