Pathways to Growth: Innovation is essential, but not enough
The role of innovation in our profession is unquestioned. It is widely accepted that new offerings, especially those that are technology-based, are critical not just for growth, but for an accounting firm’s very survival. I hear a chorus of managing partners ask in unison, “How are we going to incorporate blockchain, artificial intelligence and cybersecurity into our offerings?”
While innovation is the engine, it’s just one component of the three elements of growth strategies needed to stay relevant and profitable. Using a favorite, under-the-sea analogy, I characterize innovation as the bait — the tasty bits you use to attract the fish you want to catch. But who are those fish and where are they gathering? These are the other two elements of strategy.
The answer can be found in an early adopter program. It’s not only a proven way to transform your whiz-bang idea into a tested, commercially viable, ready-for-market offering, but also to discover the other strategy elements.
I’m reminded of the iconic question regarding the giant redwood that falls in the forest. If no one is there to hear it, does it actually make a sound? Shouting about your new, shiny thing from the nearest mountaintop does nothing to bring your innovation to market. You need someone to hear and respond. You may have created the most promising, tech-enhanced tool out there, but unless you know how to commercialize it, you don’t have much. This requires accurately identifying the buyer group and effectively utilizing the distribution channels into the buyer group. Distribution channels are where you find buyers, and they find you, in great quantities.
Everett Rogers, a communications professor working in the 1960s, developed a still-relevant theory about how innovation spreads. In his book, “Diffusion of Innovations,” Rogers explains that the spread of ideas happens through a predictable bell curve, with early adopters being key to the success of broad market adoption.
Rogers concluded, and I agree, that the way to get traction with early adopters, who make up a relatively small percentage of a population, is to enlist their help. Thoughtfully identifying and engaging them is essential to successful commercialization. When they are emotionally committed to your success, they’ll go to the ends of the earth to help you.
Do’s and don’ts
One of the biggest mistakes accounting firms make in choosing early adopters is applying primarily technically based criteria. For example, a firm that wishes to incorporate data analytics into its audits may seek prospective early adopters with multiple sites or complex audits. Equally important in selection, however, are commercialization criteria, such as forward-thinking industry influencers.
Your early adopter program should have a sharp industry focus. Just because you can present your innovation to anyone and everyone doesn’t mean you should. By concentrating efforts in a given market, you create a gathering place where buyers — like schools of fish in my ocean idiom — tend to congregate. An offering of data analytics in the health care industry, for example, will have a much greater chance of success than a generic data analytics specialty.
Once you’ve determined the industry you’re targeting, look for influencers (sponsors) at the epicenter of their ecosystem. This is because industry players hang like various species of fish — with their own kind. Approaching early adoption through influencers will permit you to quickly move outside your client base to the rest of the market. If you don’t have clients already, no worries. You can utilize distribution channels to find early adopters. In fact, often this is a more successful approach. The channels can participate in your success, creating additional momentum.
In seeking an early adopter partner, you’re not necessarily looking for the individual with the loftiest title, but rather, someone prepared to invest emotionally in your innovation. Someone who loves the idea of being the first to market with an exciting new offering. Who will, when it’s over, ensure you get opportunities to make the success known. One example is knowing which venues to appear on stage with you at an industry conference and make a high-impact presentation about the success of your early adopter partnership.
You want someone who will give you precise feedback about the elements of strategy (service, channel and target) essential for a successful program. You want:
- A service designed to be precise, purposeful and industry-driven.
- A target adopter profile with the buyer attributes and business needs which can lead to a sincere interest in your innovation.
- A strong knowledge of where other similar fish are swimming — the channels where you will find these buyers in great quantities.
Finally, be open and honest with a potential early adopter about what you’re doing. Don’t practice on a business that doesn’t know they’re the first. Shining the bright light of day on your process and purpose will benefit both your trial partner’s business, and your own. And the market intelligence you gain through the process will enable you to find and execute a successful growth strategy for commercial success — just what you need!