Businesses must innovate strategically. The challenge for small firms is in navigating the abundance of products and ideas selling new (but not necessarily improved) ways of doing things.
Businesses must innovate strategically. The challenge for small firms is in navigating the abundance of products and ideas selling new (but not necessarily improved) ways of doing things. Further, small firms likely lack a proper committee to analyze and vet new ideas. Strategic innovation requires deliberate decisions on the adoption of new ideas, methods and tools toward specific goals.
In a 2016 letter to shareholders, Amazon CEO Jeff Bezos provided a framework for approaching innovation. The framework supports Bezos’ approach to Amazon: “Day 2 is stasis, followed by irrelevance, followed by excruciating, painful decline, followed by death. And that is why it is always Day 1.”
Day 1 is the mindset of running your business as though it were in its infancy. To keep the Day 1 mindset alive, Bezos outlines the following framework: true customer obsession; resisting proxies; embracing external trends; and high-velocity decision-making.
Law firms of any size, even sole practitioners, can apply this framework to continuously improve and serve clients better.
True customer obsession
Bezos explains that businesses can focus on a wide array of things — from competitors to products to technology to business model, etc. However, he believes that being customer focused is the best way to keep the Day 1 ethos. This is because customers are always wanting something better and addressing this will force you to invent for the customer.
Law firms are inherently customer focused as all our work is for the customer. However, with the rapid advancement of technology and the intense competition in certain markets and areas of practice, there is an increasing pressure to “keep up,” as abstract a concept as that may be. This pressure can cause law firms to prioritize “keeping up” over properly serving clients.
Being client-focused can guide you when considering whether to adopt a certain idea, method or tool. Analyzing and appreciating clients' needs will force firms to develop ways to serve them better, whether it's technological innovation, management techniques or embracing the right resources to free a lawyer’s potential.
As businesses grow, they risk being consumed by proxies. Bezos gives the example of process as proxy. While good processes allow one to serve customers better, it can also lead an organization to be so process focused that the adherence to that process is the measure of how well clients are served.
As lawyers, we can relate to being process obsessed. However, just because we follow a process does not mean we serve clients well. Our job is not just to make sure processes are followed; it is to use processes to effectively assist our clients. Process facilitates results, but it should never be confused with it.
Embrace external trends
Bezos is a believer of quickly adopting external trends. While this may result in failure at times, it also gives adopters a tailwind to propel their business forward. Law firms are notoriously slow at adopting new trends and perhaps rightly so for certain trends. For small firms, the prospect of using machine learning and artificial intelligence may seem financially impossible at this time. However, the mindset should not be ignored, and certain trends such as hyper-awareness of cybersecurity, cloud-based storage and even something like using tablets at trial warrant consideration.
High velocity decision-making
Bezos believes that to maintain the Day 1 ethos, a business must make high-quality, high-velocity decisions. He states that most decisions should probably be made with about 70 per cent of the information you wish you had. Further, it is imperative to recognize and correct bad decisions quickly. To facilitate high-velocity decision-making, Bezos embraces the mantra “disagree and commit.” Within a group, there will inevitably be disagreement over a proposed idea. Despite disagreement, the team must commit to the decision made. The goal is not to abandon disagreement but to avoid wasted energy trying to obtain consensus. Lastly, Bezos encourages one to detect misalignment from the business’ goals early and escalate them immediately to a decision-maker.
One of the advantages that small firms have is that they can practice high-velocity decision-making as there are likely few decision-makers. What this means, however, is that small firms must develop the skills of recognizing and correcting bad decisions quickly. Whether it is a poor hiring decision to the adoption of a technology that is not working out, one must move quickly to minimize the disruption of such poor decisions. While there may not be the same opportunity for disagreement or misalignment that larger firms have, you may have staff members who are misaligned and their issues should be handled immediately rather than letting them fester into a negative work environment.
For small firms and sole practitioners, the prospect of adopting innovations can be daunting. However, by approaching innovation strategically and following guidelines such as those laid out by Bezos, we can innovate our practices effectively and with purpose.