Innovation – Knowing the right question to ask
Catherine McGregor shares insights on innovation from general counsel and business thinkers around the world, in the first of a regular column.
Doing the Job
Publishing director – The Legal 500 In-house
Innovation has become a much-used (some might say abused) term. It’s certainly a familiar buzzword in the legal world.
In recent months, I have hosted a number of general counsel events where innovation has emerged as the central idea, and had the opportunity to ask GCs and business people what innovation really means to them.
Strikingly, they agree that innovation is founded on understanding: reaching out and listening to what your client really wants and needs. It means moving away from the ‘what’, to focus on the ‘why’. The question should not be ‘How can we make our widget better?’ but ‘Why should we make our widget better?’ and ‘How are customers using it in the first place?’ This approach can lead to innovations that fulfill actual – and sometimes surprising – needs.
As former Eurostar CEO, Hamish Taylor, illustrated during a few of our recent events, a key ‘aha!’ moment for him was the realisation that Eurostar was competing not in the business travel market, as he had assumed, but in the leisure travel space. Its rivals were not other modes of transport, but other things you might spend £100 on that weekend – perhaps a meal in a restaurant, or a new household item. This new understanding enabled Eurostar to refocus on partnerships with destinations such as Disneyland Paris. The breakthrough, the innovation, was grasping that they weren’t selling the means of getting to Paris, but Paris itself!
Clayton Christensen’s ‘jobs to be done’ theory, outlined in his latest bestseller, Competing Against Luck (co-authored with Karen Dillon, Taddy Hall and David S Duncan) encapsulates innovation as thinking differently about what customers are using your product for, and therefore what they really need:
‘The key to getting hired is to understand the narrative of the customer’s life in such rich detail that you are able to design a solution that far exceeds anything the customer themselves could have found words to request.’
We often equate innovation with technological or process advances, but the ‘jobs to be done’ theory dubs this thinking ‘stack fallacy’ – where engineers overweight their own technology and lose sight of the end use.
What does this mean for legal services? The rise of automation and alternative law firms are examples of ‘jobs to be done’ in action – they perform jobs to be done by the general counsel (or the company, or the CEO).
Contract automation is being employed by GCs for the job of freeing up lawyers to work more strategically and add greater value to the company – not as an end in itself. It also adds greater efficiency in cost and time. But, as one general counsel recently told me, programming algorithms to automate contracts also made his team think about why certain clauses were included in every contract if they weren’t needed. Here we see innovation as not just looking anew, but looking differently.
Alternative law firms are less about tech and more about talent – literally embodying ‘jobs to be done’, in the sense that a GC might need extra headcount for a specific project, but want in-house experience and perspective. Providers such as these also understand another important aspect of the jobs to be done theory: what you’re competing against. This may be as simple as ‘doing nothing’ by trying to do more with existing resources.
Legal teams are increasingly required to do more with less, which often inspires creative solutions. A global GC recently shared one such innovation with me. He had sometimes struggled to find talent for his legal team because of the process and organisational constraints of lawyers sitting at head office. He asked himself the question ‘What do we actually need?’ and recognised that what he needed was the best talent for a global company. He has now adopted a more flexible approach, focusing his efforts on hiring the best talent wherever it happens to be in relation to any of the company’s offices. The result is not only an influx of top talent, but a much more global perspective.
Similarly, Barclays’ general counsel Bob Hoyt reorganised his legal team around a question that his CEO might ask: ‘What am I spending on legal services, and why?’
Traditional law firms might also benefit from re-envisaging innovation as asking the right questions of their clients. This might yield a greater understanding of the client’s list of jobs to be done, not only by the legal team, but by the wider business behind that team – or the client’s whole story.
As many general counsel have told me, the pitch for many law firms contains too much ‘stack fallacy’ and infatuation with their own product. Perhaps the most innovative proposition would be just to understand what ‘job’ the client is really hiring for.