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The majority of professional service firms do not offer incentives
and rewards to encourage people to engage in market-focused behaviors
such as innovation.
Professional service firms must be ready with innovative services
that meet their clients’ needs even before the clients know
what these needs will be. Leading PSFs are becoming increasingly
savvy about motivating, measuring and rewarding performance for
innovation. Some have even begun creating internal funds to sponsor
their own R&D projects.
- Only 31% of survey respondents reported they used incentives
to manage their professionals’ behavior, including (but
not limited to) cross-selling new business, implementing a firm’s
quality processes, and leadership in marketing initiatives.
- Of the above 31%, stimulating innovation appeared to be only
a distant thought. Examples included:
- An executive search firm which gave out “. . . an
award for idea of the month . . . This is typically a gift
certificate to a local restaurant.”
- A healthcare consulting firm that offered annual awards
for “innovation in service delivery.”
- A management consulting firm which had “an annual
innovation awards judged by an external committee made up
of clients and business management professionals.”
Case Studies
Deloitte’s Innovation Zone, launched in 2001, is a formal
R&D program that features numerous techniques to ‘prime
the pump’ for innovation: elements of a frequent-flyer point
system that supplements Deloitte’s existing rewards program
and includes an idea competition that recognizes implemented ideas
as well as those not adopted. It culminates in group awards and
a grand prize.
Mitretek Systems Inc., a scientific research and systems engineering
company, offers an Incentive Compensation Program in which employees
can be nominated by others for their innovations (among other behaviors),
and then be compensated directly for it. It also funds an annual
internal research program; since the company’s founding the
funding has averaged a little more than one percent of revenue.
These two programs have allowed Mitretek to attract and retain top-notch
talent, advance individual careers, and fulfill its mission to provide
technology in the public interest.
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