When? who? what? where?

On 28 February 2019 Future Lawyers Belgium organised an “innovation café” keynote by the dean of Vlerick business school, prof. dr. ir. Marion Debruyne, on innovation in the Kortrijk co-creation hub HangarK.

Confrontation with innovation

The confrontation with innovation is not new. Just as one recent movie example Ms. Debruyne refers to the movie Hidden Figures in which “computers” are still people that calculate.

Confronted with innovation the choice is to undergo the change or the steer the change.

Innovation in 3D

Digital, data, disruption

Looking at the current innovation Ms. Debruyne classifies it with 3 D’s:

• Digital: this step was barely discussed as that was the focus / premise for the keynote
• Data: (note this differs from the x V’s of Big Data)
  • data has been available in factories for ages (one could say from Ford’s separation of tasks in the production process up to the measurement of every piece in kanban systems)
  • the recent change is the volume of data
    • creation has expanded with the proliferation of sensors (incl. smart phones, wearables, IoT, …) that are connected and thus deliver data real-time
    • storage is cheaper and easier (a.o. with cloud computing)
    • computing power to analyse the data is cheaper and easier to handle (a.o. with cloud computing)
• Disruption:
  • Schumpeter with his theory of “creative destruction” (1940’s) already described the concept of and need for replacement of the old by the new
  • Christensen with his theory of the “disruptive innovation” (in the book Innovator’s dilemma – 1997) already indicated that disruption is not sudden, but stems from the incumbent following his customers up the value chain (“better and better”), while new entrants service the customers that consider their product “good enough”

Impact of innovation

In broad strokes innovation can have three types of impact on the business

• it can replace the business and/or (some of) its staff
• it can enhance the business, its processes, and/or its staff
• it can transform the business model

None of those is per se good or bad. It matter how you deal with it: as a person, as a business, and as a society.

Detecting (disruptive) innovation

Dream your worst nightmare …

It is a misconception that businesses can detect (disruptive) innovation when it hits off. Typically innovation will be in a blind spot of the business, at best it can be detected with peripheral vision.

Disruptive innovation

• does not (per se) come from competitors in your field, but from outsiders. Uber is not a taxi company. Airbnb is not a hotel chain.
• is not (per se and initially) felt in a decrease in customers. Low cost air travel and Airbnb are not after the frequent traveller, but serves the people that only occasionally take a (short) trip.
• is not a premium product that delights customers. Certainly in the beginning disruptive innovation is a hassle, but for its target audience, it is “good enough”: low cost air travel with less leg room, no food in flight, etc. will not be the result of a survey of an premium air travel company on what the customer wants, rather the opposite (extra features like massage, fitness, … on board of long haul flights). By consequence: asking customers what they like, will not lead to detection of the innovation.

Quite often the above is the consequence of a conscious strategy of the disruptor, referred to as judo strategy or judo economics. The “attacking” startup company is therein advised

• to stay out of sight of the incumbent as long as possible
• to avoid openly going after the incumbents customers but rather to address “unserved” (or “underserved”) customers; e.g. Netflix servicing a Blockbuster public that did not want immediate access to the movie they rented from the brick and mortar store, but a public that wanted the comfort of being mailed movies from their wishlist on a subscription basis.
• to use the force of the opponent against himself; quite often this means being faster than the corporate decision making structure, being more open than an incumbent relying on closed and proprietary systems, avoiding applicability of legal requirements that protect the position of the incumbent,…

In short disruptive innovation happens in the fringes. Or as the slide stated:

When spring comes… snow melts first at the edges.

Given the low detectability, in the end, the advice, next to keeping your eyes open, is to “dream your worst nightmare”.

Prepare for (disruptive) innovation

Dream your worst nightmare, and then invest in it 

(Rosabeth Moss Kanter, WSJ, Nov. 2013)

Of course, detecting (disruptive) innovation is not enough. One should (re)act. As the say:

The best way to create the future is to participate in it.

There is quite some “cold water” to overcome to do that. Resources are scarce: what innovation is relevant for you to invest in? (Look outside. Partner up.) What if you bet on the wrong horse? (Wait.) What if you wait too long? (Accelerate.) What if you go too fast and the market is not ready?

Companies rarely die from moving too fast, and they frequently die from moving too slow

(Reed Hastings, CEO Netflix, 2011)

How should we apply that to education?

As the dean of a business school, clearly Ms. Debruyne is also confronted with the upcoming changes in education, which is often more and more searched for in online content on generic platforms like Youtube (founded in 2005) or specialised platforms like Coursera (founded in 2012) and EdX (founded in 2012).

One of the changes to the strategy is to develop online programmes: premium content specifically made for online consumption working with an off-the-shelf solution. The latter being important to avoid becoming dependant on the provider of the technical solution and thus losing the control over who captures the added value delivered to the student.

Another change to the strategy is to (co-)develop programmes for specific sectors or even with / for specific corporate partners.

How should we apply that to lawyers?

This is in the end the question that needs to be answered by “future lawyers”. Ms. Debruyne did not include this in her keynote. They idea was to discuss on that.

A few take-aways that I captured from the discussion are:

• Detect
  • Look at who provides solutions for your clients: accountants, belangenverenigingen (Unizo, …), ondernemingsloketten (Acerta, Partena, …), online fora (jureca.be), youtube filmpjes (ALWY), online contract creation tools (lawbox.be, juridox.nl,…),…
  • What potential clients are not served today: for whom is the cost of a lawyer too high, leading to that person not even bothering? Look for example at experiments with freemium models for advice, collection processes that aim to streamline and avoid taking from the capital amount (cf. unpaid.be, collectonline.be,…)
  • Look at business models that can be threatening, e.g. “no cure, no pay” which is not allowed for an attorney, but not for other service providers, subscription,…
• Act
  • As a lawyer, don’t focus on what you cannot control (or influence), like the organisation of the third branch of government, the courts. It can be frustrating that there is little movement in processes like summoning a counterparty, presence at the courthouse, exchange of briefs, duration of a court case, (ab)use of procedural loopholes,… Rather focus on what you can control (or influence), which is your relationship with the client, and the organisation of your firm.
  • Look at what tasks add little value and see if they can be automated, like (e)discovery, document screening, explaining basic principles and concepts of law to customers,…
  • Should you build something yourself, use an off-the-shelf product but install it “locally”, or jump on board of a platform?
    • Building is often not the solution, unless it gives you a competitive advantage that (almost) ensures you return on investment. In that, take into account that your client in principle can ask for his case file to be handed over or transferred to another lawyer (contract law), a copy of his personal data (art. 15 GDPR) and/or to port some of his personal data (art. 20 GDPR).
    • With the other solutions it is important to avoid technical, factual, and legal lock-in and/or dependency.

But of course, there is a lot more to think about.

To be continued.

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