Breaking through the resistance: driving innovation across organisations

Author: Deborah Newberry, Corporate Affairs Director at Kennedys

This article contains statements, paraphrases and conclusions from Kennedys Fostering Innovation Panel, Driving Innovation in Your Business. The panel summarised the findings from Kennedys Innovation Month, a four-week series on building innovative business cultures across the professional services industry.

The success of the professional services sector over the past decades has been largely due to its flexibility and capacity to adapt to changing circumstances. Technological and organisational innovation has delivered consistent productivity growth within the City of London, and although it has slowed over the past decade according to the OBR, professional services have been the major beneficiaries of that long-term trend.

Revolutions in business come in waves. Professor Richard Susskind, a guest speaker during our recent Fostering Innovation series, warned us unequivocally: we are at the brink of a tsunami.

The list of risks to an organisation is growing. Today’s top risks include economic slowdown, supply chain disruption, damage to reputation, as well as regulatory changes. Failure to innovate is also a firm contender and frequently associated with a failure to meet customer needs, which, if not remedied, can translate to becoming obsolete.

To avoid obsolescence, we will need to fundamentally change how we do business, from the technology we use to automate straightforward tasks, to that most elusive element of the future economy puzzle: fostering a culture of innovation, enabling the disruptors within your teams, and ensuring you are as ready for change as your competitors will be.

Changemakers and chief resistance officers

An innovative culture enables an organisation to consistently make incremental changes, ensuring continued growth in performance over time. Incremental innovation is a core benefit of creating an organisational culture that empowers junior team members and people from a diverse range of backgrounds to speak up and suggest improvements. These “changemakers” need to be supported in the ongoing battle against the “chief resistance officers”, who stand in the way of innovation.  

 “Culture”, as Katherine Crisp, founder of Social Innovation for All, pithily put it, “eats strategy for breakfast.” By encouraging diverse cohorts of employees to think about innovation, we can help future proof our organisations – a far more effective and efficient process than enforcing top-down strategies.

The importance of fostering “changemakers” is already seen in creating an organisational culture that is truly diverse and inclusive. Those changemakers have not only helped ensure that diversity and inclusion are regulatory issues, but they have also helped encourage a cultural phenomenon. To properly challenge existing practices and operational procedures, requires diverse viewpoints: those who have never thought differently, are typically the most resistant to change.

Preparing for disruptive change

Incremental innovation enabled by these “changemakers” is also a safety net for moments when the white heat of the technological revolution overtakes stagnant organisations; those rare periods of disruption that determine how business is conducted for years to come. All our panellists agreed that the introduction of AI technologies, such as ChatGPT, will transform professional services and represent an inflection point.

That shift in mindset is not simple. We need to acknowledge our weaknesses. As Kennedys partner, Richard West, noted: our own legal profession suffers from a lack of both top-down pressure to innovate and simplify, and an unwillingness to trust those on the team who are best placed to drive change. Katherine Crisp, concurred, with other panellists adding that similar problems affect the insurance industry.

Finally, the loadstar for all change must always remain the client. Or, more specifically, the problem the client wants to see resolved, therefore requiring them to turn to a service provider. Whether this is purchasing insurance cover or resolving a legal dispute, organisations should pinpoint and focus on the value they add to clients.

Innovative organisational cultures will focus – simply and straightforwardly – on resolving client issues. Does ChatGPT provide an answer to the questions our clients and industry partners are asking?

Innovation never stops

Incremental change has already improved the efficiency and profitability of segments of the legal and insurance industries: wearables have customised underwriting, and parametric triggers have reduced the need for expensive, in-person loss adjusting. AI has already made it possible for many straightforward insurance claims to be handled without any human intervention.

However, the coming wave of disruptive innovation is going to further dislocate the legal sector, the insurance industry and professional services in general. Large language models, the most topical example, will bring efficiencies and streamline processes.

We need to prepare our organisations for it, and there is no better way than to ensure a culture of openness to innovation permeates throughout all our teams. It is time to empower the changemakers and help them overcome the chief resistance officers.