Business model innovation
As part of its mission to explore the ‘Firm of the Future’, the September 2019 meeting of the Forum’s Strategy & Marketing Group addressed business model and service innovation.
The presentation from Alastair Beddow of Meridian West focused on five questions for those responsible for leadership and strategy at sector firms:
- What is the real risk appetite | demand for change within the firm?
- Which business model innovations are credible and appropriate for the firm and its clients?
- Where do you need to invest to be a differentiator as opposed to a crowd follower?
- How will you achieve alignment behind the vision across the whole firm?
- Who should be your partners and collaborators for the journey?
Detailed points:
- While there have been big changes over the past decade, how much have things actually changed? We may be living through an age of innovation and disruption, but the reality is less dramatic. “Open to change … sort of.” Have we achieved peak hype?
- The sector is innovative. Issues are being explored in more depth – strategic thinking – structured process. New propositions and services are emerging – many based on data analytics – there is increased effort on building organisational capability, with dedicated people being hired.
- Why are firms making these changes? Mostly it is to improve quality rather than competitive opportunities. Budget allocations are fairly low.
- What do clients think? The level of sophistication has increased significantly in past few years. There is a willingness to try new things, and adoption rates are fairly high. AI tools are seen as not that sophisticated, especially when used solely to increase efficiency. This is leading to some frustration and skepticism over the slow pace of change; As regards the impact on service delivery, clients observe a lack of joined up thinking across many firms. They are looking for new relationships, but the plethora of choice is difficult to navigate. So they need a trusted intermediary, indicating that traditional firms should remain at the core of the business model.
- How can the innovations enhance collaboration? No single roadmap has emerged. Firms are grappling with a range of different options – tech-based services; managed services etc. Many are developing consultancy-led propositions, but these tend to work best with certain clients and partners. Tough competition and stereotypes are also barriers to repositioning the firm.
- How can a firm be aligned to new business models? The key areas are likely to be talent – recruitment, skills – and return on investment. Material variances across the firm in these areas are likely to lead to internal friction.