Adventure of Strategy

One of the likely consequences of Thomas Friedman's 'flattening world' is the professions being driven to redefine not only the boundaries between themselves, but at a far more fundamental level what constitutes a profession itself. This is being driven primary by IT, but also by the changing dynamic of the professional/client relationship. The time frame for significant and visible impacts may be more than five years in most places, but in the legal profession in England and Wales the Clementi-induced changes may prove to be a powerful accelerator. The final result could easily be the complete deconstruction and re-aggregation of what we today call the professions.

This makes it critical for the strategists that guide professional service firms to hone their skills in the gentle art of picking up and tracking these trends as early as possible, and in working through the "what-if" scenarios well before they become an issue. At which point, their firms will hopefully have solutions that they have already identified, if not implemented, while competitors are still in the starting blocks.

The early trend indicators are compelling and in many ways the evolution is already well under way.

INDICATOR 1 - BLURRING OF BOUNDARIES BETWEEN PROFESSIONS

It used to be that each profession operated within its own jurisdiction and there was very little doubt about where the boundaries were. Medicine was medicine; accounting was accounting and law was law and that was that. The explosion of the amount of new knowledge being generated and the increasing complexity of the overlaps between the different bodies of knowledge that underpin each profession is changing this. The result is an increasing blurring between the professions themselves and a pressure towards multi-disciplinarianism. In this context, different professions operating in independent silos is not the most efficient way of serving the market.

It is very obvious that the knowledge explosion is not going to slow down anytime soon. Neither is the increasing complexity of that knowledge. So it is reasonable to assume that the trend of blurring between the professions is likely to increase too, perhaps exponentially.

INDICATOR 2 - BRIDGING OF THE THE DIVIDE BETWEEN EAST AND WEST

China, India and the rest of the emerging (re-emerging?) eastern economies are enormously under-lawyered, as compared to the western world. This is not so much a sign of an immature economic system (it would be extremely arrogant to suggest that this were the case) as a completely different cultural approach to commercial arrangements. It is highly unlikely that western values regarding the autonomy and power of professions and the professionals that practice them are going to be wholeheartedly embraced in the east. Rather, it is more likely that as eastern influences impact more and more on global commerce, western professionals find themselves having to re-evaluate their roles and approaches.

The counter scenario to this is that the East indeed decides to embrace western approaches to law, accounting and other professions. So this "what-if" scenario needs to be considered as well.

INDICATOR 3 - BLURRING BETWEEN PROFESSIONALS AND NON-PROFESSIONALS

Bente Lowendahl (1997) defines the characteristics of a professional service as follows :

1)It is highly knowledge intensive, delivered by people with higher education, and frequently linked to scientific knowledge development within the relevant area of expertise;
2)It involves a high degree of customization;
3)It involves a high degree of discretionary effort and personal judgement by the expert/s delivering the expertise;
4)It typically requires substantial interaction between the expert and the client;
5)It is delivered within the constraints of professional norms of conduct, including setting client needs higher than profits and respecting the limits of professional expertise.

By this definition, the limits of professional services already include most of IT and several other industries and is steadily expanding further. Higher education, highly customized services, client involvement in the execution of the assignment and "putting the customer first" are by no means the sole domain of the professions any longer.

INDICATOR 4 - THE EMERGENCE OF THE EXPERT CLIENT

Throughout most of the 20th Century, professions relied heavily on the this- is- far- too- complicated- for- you- to- understand- so- you'll- just- have- to- let- me- do- it- for- you phenomenon. The internet and the increasing knowledge base amongst clients is changing all that. Today, a lay person can perform an appendectomy in Antarctica, being guided by a surgeon on another continent (or an online medical knowledge system.) Clients are increasingly educated about exactly the service that they require and the professional is increasingly being relegated either to the role of a specialist where unusual knowledge is required, or simply outsourced additional capacity.

What are the implications of all this? Well, not being a crystal gazer I won't make any predictions. I will however make a few observations:

These issues will exert pressure towards tearing apart the professions, as we know them today, over the next decade or two. Which is not to say that they will disappear; they will simply re-aggregate themselves in a different format. The Clementi process in the legal profession in England and Wales is an excellent example of this trend at work.

In opposition to these pressures are the considerable pressures to maintain the status quo. The professions represent enormous power bases in the global economy, economically, socially and politically. Evolution that diminishes that power will not be without very significant obstacles.

For those wanting to get their minds around these mega-trends in greater detail, I'd recommend Andrew Abbott's book The System of Professions and of course Thomas Friedman's seminal work, The World is Flat.

Ultimately, the market is the great leveler. What the market wants, it ultimately gets. Those firms that track the trends in what the market wants more accurately than their competitors, and who act on this knowledge, are more likely to retain that holy grail of sustained competitive advantage, than those that don't.

This post was inspired by a similar one, though with a different angle, on JP Rangaswami's blog Confused of Calcutta this morning. Thanks, JP!

As always, comments are most welcome and may be posted below.