Given the current trend of doing more with less, should innovation be a part of operations in the evolving firm business model? We define operations as the initiatives that fix or improve processes, experiences and technology (tools) already employed in a firm. Operations personnel are often referred to as those responsible for running the firm, sustaining success or support. Innovation generally means transformation of new services, processes, and improved experiences, and often requires a firm pivot. These transformations help firms compete more effectively, become more efficient, or make a wholesale strategic pivot. Shifts in operations and mindsets are crucial to a successful transformation.
The answer to the innovation question generally depends upon the firm's culture, size, existing talent (capability and capacity) and vision. In some firms, the same team or individuals handle both responsibilities. By assigning these responsibilities (operations and innovation) to different resources, you may be able to gain both capacity and capabilities for a number of reasons. Now is a good time to evaluate, as the firm's business model changes (or should be changing) due to enabling technology, outsourcing, and the expansion of service lines into more advisory and consulting services.
Dividing these responsibilities without a clear vision and plan can result in disaster, as there are trade-offs you should be aware of before deciding. Increased focus and structure is probably the greatest advantage. Capacity and resource planning may be easier when operations and innovation responsibilities are split.
Please remember that operations will always take precedence over innovation when there is a crisis. The major risk: There always seems to be a crisis in a CPA firm (e.g. talent, remote workforce, deadlines, technology and a pandemic). Another risk is the ability to develop reliable metrics differentiating investments in innovation and efficiency projects. Everyone wants credit for the return, but most resist the change and the investment (in time and money).
A disadvantage of splitting the responsibilities is that it naturally causes a divide that operation and innovation leaders must navigate. A clear vision and strategic plan help greatly, but communications and management of innovative projects is paramount. Internally, at Boomer Consulting we have developed the ATC (Air Traffic Control) system for managing innovation. A challenge has been to properly identify projects as operations (those we are going to do as part of operations) and innovative (new processes, new technology and new services).
Experience has taught that continuous updates and communications (regular cadence) are essential. Don't expect perfection; think progress and accelerated learning. Project managers and agreed-upon priorities are essential.
This reverts directly back to leadership (establish priorities) and project managers (who) to determine the how and get it done. Not every innovation is going to be a home run. Don't let the fear of striking out prevent you from experiencing singles, doubles and triples. You and your firm will improve with practice, resulting in increased capabilities and capacity.
If you split operations and innovation, consider interchanging team members to avoid burnout and to expose them to multiple mindsets and skill sets. This will accelerate the development of multiple skills and provide sustainability to both teams in the event of turnover.
The "one firm" vision and growth mindset are essential. Operations and innovation teams may have different responsibilities. However, they ultimately must play as a single department within the firm, chasing the same objectives and initiatives, attending strategic planning meetings, and anticipating the consequences of each other's moves.
Experience with our ATC system has provided insight and learning. Some of the more important lessons have been:
- "Culture eats strategy for lunch" — Peter Drucker. Innovation can occur at all levels of the firm.
- Clearly define what qualifies as operations and innovation. Failure to do so will create confusion and strain resources.
- Talk to your best clients (strategic accounts) to learn about their dangers, opportunities and strengths. This is critical in developing and launching new services.
- Focus on what adds value. "All value is created through leadership, relationships and creativity" — Dan Sullivan, The Strategic Coach.
- Celebrate success, as this will accelerate confidence, creativity, capacity and capabilities.
In summary, innovation and operations are essential for a firm to sustain success and remain future-ready (relevant). Participating in a peer community generally accelerates your progress. Innovation is often associated with new technology, while operations is focused on sustainability. Today's business environment requires both innovation and effective operations. This can only happen when there is a shared vision and plan integrating both in a transformative environment. Think — plan — grow!
