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Over the last years I have spent significant time assisting professional services firms to drive innovation. This year I am finding that the economic climate is intensifying the focus on these issues rather than pushing them to the background.

The pressures that commoditize services are intensifying, local and global competition is increasing, and clients are seeking value in different forms than they have in the past. Another critical driver is the war for talent. Young, talented professionals show little interest in continuing to plough the furrow of long-established processes, however wax enthusiastic about creating new approaches to their work.

However there are many barriers to innovation in large professional firms, including billing imperatives, strong functional specialization, and often highly risk-averse cultures. Much of the management literature on innovation focuses on product development and design, and is not always relevant to a professional services environment.

I’ve written before about innovation in professional services, including the White Paper I wrote for SAP on Service Delivery Innovation and in Chapter 9 of Living Networks.

Here are some reflections on where I see the greatest potential for value-creation in the space.

DOMAINS FOR INNOVATION

There are several key domains for innovation for professional firms:

Services and products. In a rapidly changing business environment, providing the services that are most relevant to clients’ needs can provide real competitive advantage. The issue is not just in quickly generating new offerings, but also in packaging these so they can be readily communicated to clients by front-line professionals.

I caught up this afternoon with Chris Bayley of Buffalo Canyon Consulting and we had a very interesting conversation about Web 2.0 in organizations. Chris asked me about the role of pilots, and in our ensuing discussion I refined my thinking on this a bit.

Examining how to run pilots plays a significant role in our Implementing Enterprise 2.0 report, with a full chapter on pilots and many aspects of our coverage of user adoption related to pilots. The center of our Enterprise 2.0 Implementation Framework is ‘Iterate and Refine’. Pilots and agile methodologies are critical to the ability of organizations to do that. Some companies are good at piloting, but many need to shift their attitudes and approaches to enable effectively establishing, managing, supporting, and closing down pilot projects.

For many, many years I have felt that the vast majority of conferences were very poorly run, continuing to apply ancient, didactic approaches. That’s one of the reasons that a few years ago I started running events, organizing the Future of Media Summit, which annually links Sydney and San Francisco, the Enterprise 2.0 Executive Forum (the second annual event is on next week), Web 2.0 in Australia etc. Earlier events including what was at the time the extremely innovative Living Networks Forum in New York in 2003, using social networking technologies embedded in the event. Even though the events industry is vastly oversupplied, the majority of them are crap, so there’s ample scope for something better, as the consistent success of our events has demonstrated.

Certainly the last few years have seen the beginning of a transformation in how events are run, with in the US, Europe, and Australia (less so in Asia so far) many novel and highly interactive formats. However there is still a massive opportunity to create immense value with face-to-face events, and we’re currently looking to spin off our events business into a new company that will grow aggressively. News on that soon.

I am unusual in that a large part of my work is as a keynote speaker, speaking primarily on the future of business (including sometimes the future of events), usually within a traditional conference format. However at the same time I endeavor to create (or help my clients to implement) participatory formats that transcend the talking head syndrome.

Now the issue is getting mainstream media attention. News.com.au has released an article titled: Networking trend: the ‘unconference’, which examines the plethora of interactive events that are arising, such as unconferences, Lightning Talks, Ignite, and Pecha Kucha, and drawing on an extensive interview with me on where the space is heading.

The entire article is well worth a read. Below are excerpts of the direct quotes from me in the article.

I was recently interviewed on SkyNews about how mobile and web technologies are relevant to organizations today - the video of the interview is below.

A few points that I made in the interview:

* Technology should be focused on getting effective contribution and participation from staff, and building efficiencies and productivity.
* Critical technologies include mobility, web 2.0, and video.
* Business value includes discovering resources in the organizations, getting products to market quicker, and enabling richer business conversations.
* Today many larger organizations are seeking to tap the energy of their younger staff, who expect their employees to use current technologies.
* The key issue today is building collaborative, high-performance organizations that will be successful in challenging times and be positioned for the next economic upturn when it comes.

I just received my latest book shipment from Amazon.com - it's a tasty pile and I thought I'd share the list in case people are interested. Friendfeed is a nice way to share my various activities, but doesn't include book purchases, which I'd probably prefer to share on an ad-hoc basis anyway.

Below are the books, together with brief comments. In most cases I haven't read them cover to cover yet, but I'll offer my thoughts either through reputation or having had a browse.

The predominant themes of Enterprise 2.0 and influencer marketing are obvious. We are writing our own Implementing Enterprise 2.0 report, as well as running our Enterprise 2.0 Executive Forum soon, and it's good to see what else has been written on the topic. As any regular readers of this blog will soon discover, influence will be a major theme for my companies in 2009.

Enterprise 2.0
By: Niall Cook
A succinct report-style overview of Enterprise 2.0 from an executive perspective, written by Niall Cook of PR firm Hill & Knowlton.

ENTERPRISE 2.0 IMPLEMENTATION
By: Aaron Newman, Jeremy Thomas
An extensive examination of Enterprise 2.0 implementation. It is written primarily for technical people, including some code examples, though is certainly accessible to non-technical people.

The Wealth of Networks: How Social Production Transforms Markets and Freedom
By: Yochai Benkler
I've been long overdue to get this on my bookshelf. Already a classic, it covers the political and economic implications of a networked world.

As I wrote last week, I decided to use the design exchange 99designs for our new logo for Advanced Human Technologies. We received over 140 logo submissions, including many very high quality designs, going through a highly iterative process to get an excellent outcome.

Click here to see the submissions and winner (however quite a few designers have withdrawn their designs so they are no longer visible – the full field was a lot more impressive). The winner of the competition is below, created by designer kn. Note that this is not yet our official logo (that will be when our website is relaunched early next year) and may be tweaked further before it becomes our final logo.

Here are nine lessons we learned on how to get great results on 99designs:

1. Know what you are looking for
The questions asked when you post your contest, in terms of what you do and don’t want, are important to think through. To a certain extent that becomes clearer when you can respond to specific ideas, however the more you know beforehand, the easier it is. In particular for logo designs, you need to be clear on what identity and connotations are associated with your company.

Since virtual worlds commenced, the promise of using virtual worlds in corporate settings has been evident. The first wave of business involvement in virtual worlds was primarily about marketing and customer engagement – I have written about marketing in virtual worlds and was interviewed on ABC TV about virtual advertising.

From here, a key focus will be how to use virtual worlds for meetings. I have no doubt that in the next decade it will be extremely common to hold meetings in virtual worlds. However those virtual worlds will be a world ahead of what we have experienced so far, being closer to merging high-bandwidth telepresence conferencing with the experience of immersion in a room of people from different locations.

Second Life essentially hasn’t gained ground for eighteen months, maintaining a dedicated core of users, but gaining few new users. The latest news is that Reuters is pulling out its Second Life reporter. Eric Kangel, who used to play that role as Eric Reuters, has some solid advice for Linden Labs on how to grow, including the interesting suggestion to ‘abandon the idea that Second Life is a business app,’ mainly because Second Life is not robust enough for enterprise use.

Since Second Life has been experiencing it’s well-known challenges, I have expected that new companies would emerge to take the vanguard of corporate virtual worlds. This is not to write off Second Life quite yet, which recently launched a corporate meeting offering, but the odds are in favor of new participants taking the lead in this space.

Some of the emerging companies that are looking promising include:

In my blog post on financial transparency in start-ups a couple of days ago I referred to a blog post I wrote last year on how Path101 was becoming a 'naked start-up', blogging their Monday meetings and being fully open about their business. Nigel Burke pointed out in a comment that Path101 had soon discontinued this, and questioned how much of the supposed transparency was hype. Fair point.

I have put a comment on the Path101 blog to ask them about this - see below.

In short, certainly some of the shift to openness and transparency is rhetoric rather than reality (noteworthy being large companies that are nominally supporting initiatives such as dataportability but are in fact reluctant) . However there is still a very real ongoing trend to openness in business, including in start-ups. Balsamiq releasing its sales and Graham Dawson revealing his iPhone app revenue may be very small examples, but they are far from being alone in being willing to share. I absolutely believe that there are tangible advantages to what I call 'strategic openness', and this will be made clear by the leaders on this path.

Comment on Path 101 blog:

Hi guys,

I'm one of the people that blogged about Path101 as a 'naked start-up' back in October last year (http://bit.ly/aCeM).

I'd like to know, in what way are you a naked, transparent start-up now? Your blog is now just like any other start-up blog, sharing ideas and promoting yourself, but not giving any real insights into your journey as a company, or any details of your planning, fund-raising or anything else.

Blogging your Monday meetings was a very cool idea. So why did you stop doing that in December of last year?

Did you decide it was a bad idea, or did you just lose motivation to do it? I'm very interested to know.

There's nothing wrong with being like other start-ups, but it is disappointing to see your early rhetoric of transparency and sharing what you're learning on your entrepreneurial path quickly disappearing. Hopefully you'll resume on your original transparent path, or if not others will take the lead on this, demonstrating to others why it creates value to be open.

[UPDATE 1:] Nigel Burke of Rusden who pointed out that rhetoric is not always matched by reality says that he has decided make his start-up naked, at: http://rusdensupdates.tumblr.com/. He says:

Following on from my comments on Ross Dawson’s blog I am moving to becoming more “naked”

I’m hoping to post my objectives, stats etc here at least once a week. I am also opening up my project hub where I keep my to-do’s and milestones; email projecthub@rusdens.com if you’re interested in a log-in.

The aim of this site is to produce feedback and develop relationships with potential peers, suppliers and customers.

Would love to know what you think - email nigel@rusdens.com with your comments

Fantastic.

[UPDATE 2:] Charlie from Path101 has responded to my comment and I've replied again.

Following my post yesterday on financial transparency my brother Graham released complete sales and financial details for his OzWeather iPhone app. This should prove extremely useful to those who are developing iPhone apps or considering doing so.

Covered in his detailed post are daily revenue data since the app’s release, estimates of development costs, and comparison with advertising revenue from the initial web app.

The upshot is that Graham is currently earning around A$220 per day from the app, and if sales continue on current trends, he will get a pay-back on development costs of 2-3 months (though in this calculation he has used a per diem rate that is far less than a market rate for his skills).

Clearly the OzWeather app is a particularly high-quality app that meets a consumer need (though it has competitors).

Hopefully more iPhone and other software developers will release financial information, as Graham requests in his post. It makes it far easier for the entrepreneurial community to assess where they should be investing their energy, benefiting everyone.

When solo developer Peldi Guilizzoni launched web design mock-up tool Balsamiq in July, he promised to disclose his revenues, reports ReadWriteWeb.

He has just announced he has hit $100,000 in revenue in the last five months, with revenue on a very significant uptrend.

I am a big believer in business transparency, absolutely for public companies, and also in many cases for private companies. Transparency is one of the Seven MegaTrends of professional services I described in 2005, one of the Six Facets of the future of PR, central to investor relations, while the naked start-up is becoming more common.

Clearly Guilizzoni is going to make a lot more money because of his financial transparency, given the attention it’s attracting.

Secrecy has its place in business, but it is highly over-rated. In most cases there is no valid reason not to share information, just a disinclination to give away things. We are going to see transparent models increasingly favored moving forward. Certainly I find the reporting and accounts of many public companies to be extraordinarily opaque, giving little insight into the real drivers of business performance (a case in point being most non-US media companies). The most significant result is that investors shy away and shareholder value is lost.

‘Open book management’ is not a new idea, but the majority of companies are slow to shift on this front. I’m toying with the idea of a business model which includes publishing all company accounts on the web – hopefully this will be becoming more common by the time I get to this.

The Australian event industry is quickly getting better from what was until recently a very low base. There are more quality events than ever.

A few months ago I was planning to run an Enterprise Social Network Strategy event in early December. Then I found out that a very similar high-quality event was already set for the week before. As such I cancelled my event and rolled what I was intending to cover into my next Enterprise 2.0 conference. I then spoke to the organizers of the November event, AC Events, to see if we could collaborate. We have worked out a great arrangement whereby we are together bringing two highly complementary events to the market.

Online Social Networking & Business Collaboration World on 24-25 November 2008 is a two-day conference covering social media for marketing, enterprise and government, organized by AC Events. I will chair the plenary sessions and enterprise stream at this event.

Enterprise 2.0 Executive Forum on 24 February 2009 is an intensive one-day executive summit organized by Future Exploration Network on how to create value with Web 2.0 tools inside organisations. It features leading international speakers, Australian case studies, and highly detailed insights into implementation.

The current issue of MIS magazine Australia has an excellent feature on Corporate Web 2.0 titled Meetings of 2.0 Minds, introduced with the words: The social communication tools of the web are making their irrevocably into today’s enterprise.

The piece begins with the example of how Bond University conducted an audit of use of Web 2.0 technologies, and “uncovered a vast, organic network of technologies already being used…”

The article goes on to quote me:

The experience of Bond University is far from unique, says chairman Ross Dawson of events and strategy company Future Exploration Network, who researches Web 2.0 technologies. Whether companies realise it or not, Dawson believes there are already instances of Web 2.0 tools being used within every large corporation in Australia, usually without any managerial oversight.

“One of the important characteristics of Web 2.0 is that it emerged in the consumer space, and made its ways in the corporate space, whereas most technologies did the opposite,” he says.

A very interesting article in the Guardian today, US military targets social nets, describes new expertise location technologies.

Expertise location has always been a central ‘killer app’ first sought by knowledge management and now part of the promised of Web 2.0. It is a fundamental driver in any large organization being able to tap its own capabilities and take advantage of being large. This was always epitomized by the quote from Lew Platt, who as CEO of HP famously said “If HP knew what HP knows, it would be three times more profitable!”.

I wrote in 2005 about how Morgan Stanley was finding that blogging was trumping in effectiveness its years of efforts into dedicated expertise location systems. The next layer is tapping social network and content creation patterns to identify experts, as has been implemented in some content management systems (CMS) over the last couple of years. This can be taken further when used within online communities and social networks, as SRI International is currently doing:

I have just completed delivering keynotes in six cities as part of a national roadshow for Optus Business. Optus’ annual client event, this year titled Beyond 08, was a morning event for its clients and prospects in Sydney, Melbourne, Brisbane, Perth, Adelaide and Canberra. The sessions began with my keynote on Surviving and Thriving in a Connected World, followed by Optus executives presenting insight and client case studies on mobility and IP convergence. Each event included an exhibition featuring Alphawest, the ITC services firm Optus acquired three years ago, and a broad array of Optus Business delivery partner organizations.

Rather than try to run through my entire keynote presentation here, I thought it would be useful to include the key content from just one of the five sections, on the Driving Forces that are transforming a connected world. The rest of the keynote describes in detail what connected business looks like, winning strategies for organizations in a connected economy, and finally the action that needs to be taken to succeed.

The five driving forces of Connected Business are:

1. Connectivity

Increasing connectivity is an overwhelming force, shaping society and business. We have come a long way since the first mobile phones that weighed less than a brick in the early 1990s and the birth of the graphic web browser in 1993. As we shift to pervasive connectivity, giving us access to all the people and information resources of humanity wherever we go, entirely new possibilities are emerging on who we are and how we live our lives. As messages flow rapidly between us, the people on the planet are becoming connected as tightly as the neurons in our brains, giving rise to an extraordinary global brain in which we are all participating.

I set up my rossdawson Twitter account this morning. I know I’m very late to the party, but will now be exploring this space.

I’ve followed Twitter and its peers from the beginning as well as I can as a non-participant. My attitude has always been that my primary online presence is my blog – everything flows out from that. I don’t have enough time to write anything near as much as I’d like on my blog, so I felt that starting to Twitter would take away from the little time I have to devote to blogging. I do have a very intense schedule almost all the time, with major events, speeches, and deadlines succeeding each other in rapid succession, on top of a stack of travel. I consider it my top priority doing my client work and events as well I possibly can, and while creating content is a core activity for me, it can't take over other things (for now).

Clearly momentum has built over time in my intent to get onto Twitter, and have been playing with the idea for a while. I actually decided to get on after last catching with Shannon Clark in a San Francisco café earlier this year. He told me that Twitter was at the center of his life, and gave a compelling description of the benefits to him in being across and in the conversation.

However I’ve been so busy that I never quite found the time to get it going. I’ve certainly been active on FriendFeed, and using tools such as AlertThingy in fact has given me much of the functionality of Twitter, in allowing messaging across my activities, following Twitter feeds, and responding on FriendFeed.