Disruption and Vision: Allies of Innovation
By Pamela Rollo
Thus far, 2009 has been one of those Dickensian years—one where the only alternatives seem to be between bad and worse. It has been A Tale of Two Cities type of year. “It was the best of times, it was the worst of times, … it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us. …” Is it a coincidence that the weather was unusually dreary, at least where I live, throughout the first months of the year? I think not.
There are few people that this global recession has not touched. At midyear, Eurostat reported that the European Union’s 27 countries’ gross domestic product (GDP) constricted 4.4% during 1Q 2009 (as compared to 1Q 2008). The U.S. economy’s GDP constriction in 1Q 2009 was 5.5% in comparison to 4Q 2008, which was down 6.3% from the previous quarter. Unemployment in the U.S. is at 9.4% with hires in the professional and business services down approximately 61% compared to June 2006. The Organisation for Economic Co-operation and Development (OECD) reported an unemployment rate of 7.8% among its members, and in Euro-using countries the rate was 9.2%. The United Nations’ International Labor Organization, depending on the situation, projected a worst-case scenario at 29–59 million unemployed worldwide for 2009.
But is this recession truly a depression, or is it “The Great Disruption,” as proposed by Scott D. Anthony in his recent book The Silver Lining: An Innovation Playbook for Uncertain Times (Harvard Business Press, 2009)? Is this a time for innovation, to take advantage of the rifts in the status quo, a time for leaving old practices or learning to reinterpret a current one? Is this a time for improvisation?
Anthony says, “The biggest silver lining for innovation is that the scarcity that is sure to result from the current economic climate is actually a good thing for innovation.”
I was curious as to how our colleagues and their firms and organizations were meeting this challenge. Was this the environment that calls for Dickens’ character Jarvis Lorry to start a story?
While I did not want to overlook sectors, I contacted directors of information centers, knowledge management organizations, and solo practitioners in the financial sector (for-profit and nonprofit), consulting practices, and law firms. These are the information service infrastructure with which I am most familiar. I want to thank all those colleagues who took my call and agreed to reveal their thoughts, strategies, disappointments, enthusiasms, schemes, passions, and hard-nosed business acumen. For the most part, contributors were informed that they would be kept anonymous with no quotations attributed. This enabled them to speak freely and independently of their employers.
I asked our colleagues only four questions:
• What has been your biggest professional challenge this year?
• What has been your biggest personal challenge this year?
• Did you already possess the expertise and skills necessary to confront this challenge?
• If not, what new expertise did you need to develop, and what new skills did you need to acquire?
The following is a real-time capture, a balance sheet if you will, of the challenges, attitudes, drivers, variables, responses, and initiatives that are going on within segments of our profession during 2009.
Information Services within Law firms
Law firms adjusted by following the seemingly simple rules of supply and demand: If business constricted, firms altered their talent pools accordingly—but conservatively—and, in some cases, recalled that talent when business returned. There have been layoffs at law firm libraries/information centers, but they have not been to the same degree as layoffs of professionals that have taken place within the other sectors.
Directors in law firm information centers answered my questions in the following way:
Professional Challenges: While newspapers and professional journals report outsourcing at law firms, none of the firms that we consulted have chosen to outsource either attorney or information professional duties, with the exception of cataloging. Information professionals are still viewed as guardians of intellectual property and are seen as part of the firm’s corporate memory.
Staffing: Directors stepped into new roles when others were made redundant. As roles were cut in both management and resource negotiation, many colleagues had to catch up quickly and learn the important issues in order to continue to advise executive management.
Opportunities to hire remain frozen, and the current team must cover for those offices that have lost their information professionals.
Resource Choice and Value: Resource budgets have been deeply cut with some directors anticipating the need to trim budgets in 4Q 2009.
Personal Challenges: The challenge mentioned most often was personal job security—how to continue to do one’s best work and set the best example for staff.
New Skills Developed: Law firm information professionals cited three major areas in which they developed new skills:
• “Communicating up” more effectively
• Expanding knowledge and experimentation with technology
• Better time management with the assumption of additional roles
Law firms: The Take–Away
Law firms expect to be “recalled to life”; they were conservative in comparison to other professional service firms in the way that they reacted to the economic downturn regarding the changes made in libraries. While there have been layoffs linked to an overall head-count reduction, the work product and staff role has not changed demonstrably. Directors see this as a time of adaptation and adjustment and not reinvention.
Financial Services and Consulting Organizations
Information center directors in financial services and consulting organizations faced many of the same challenges, both professional and personal. Let me first address the conditions they share.
Both financial institutions and consulting organizations were faced with making layoffs, some deeply. Offshore outsourcing continued to be a disruptive strategy, sentiment that echoed a passage from Anthony’s book, “The disruptor didn’t target the most-demanding customers in the market. Rather, the disruptor found a happy home among customers who couldn’t use or didn’t want to pay for all the performance of existing solutions, or people who faced a constraint that inhibited their ability to consume existing solutions.”
Outsourcing became more than an experiment: It evolved into an ongoing staffing standard with big ramifications. Remaining professional staff saw a change in their roles and the work product. Content management and content cost were aggressively reviewed and, in some cases, renegotiated.
Professional Challenges: As with law firms, information professionals in the financial services and consulting sectors found challenges in staffing and resource choice and value. But they added challenges into the mix with work product.
Staffing: Centralized information centers dominate the model with some centers already embedding staff members within user groups. Regional information professionals continued to report into a central director. Most organizations, then and now, provide and manage content for end-user portals, intranets, and desktop tools to be used by front office professionals. Most of the interviewed organizations use offshore outsourced staffing, either on a contractual basis or as a captive organization.
A significant challenge lies in convincing the remaining professionals that they could make their best contribution not by pursuing the hands-on research that they loved and knew so well but by stepping up to advisory roles.
Directors need to coach professionals to proactively contact their internal clients to provide instruction, give advice, and tackle higher-level or one of a kind research needs.
In smaller organizations, creating the proper balance between working as a manager/leader and providing some hands-on help with research and internal client management becomes essential.
A reduced experienced onshore head count results in a knowledge vacuum and the imperative to raise the bar on offshore outsourced performance. This can be accomplished by writing new execution processes and standards for increasingly difficult research queries. Demanding and pursuing more accuracy and productivity from the offshore outsourced staff is also necessary.
Directors also found it challenging to align staff members with client work groups to create a team environment or to embed the information professional within the team.
Work Product: The work product for both financial services and consulting historically has three objectives: make the front office “get smart” quickly about a topic, help persuade customers to engage the firm, and provide due diligence to complete the transaction/engagement. It’s the “how they do it” that provided the interest.
Work that was completed by paraprofessionals and junior professionals in the past has now migrated to offshore outsourcing relationships. While error rates declined, there continued to be accuracy and performance issues within this practice.
Particularly in consulting practices, there is an emphasis on changing the work product and the work process by increasingly aligning with the business unit.
Financial services, while not radically changing the work product, are concentrating on new ways and roles to contribute to the bottom line through instruction and research advisory services.
Both sectors find it challenging to identify new internal clients to serve and create new work products with the staff and resources already available.
Resource Choice and Value: Given the global recession, information center directors are defining the tools and processes that demonstrate the bottom line ROI impact made by the information resources under contract. Does the firm get more deals or better deals based on this investment?
Tracking the usage of resources and determining if the resource is being used frequently, for the intended reasons, and by the intended audience (the prevention of password explosion and resource convenience) demonstrates real value.
Tracking end-user satisfaction with desktop resources to determine if user preference is based on real satisfaction or on a perception that what is provided is all that is available in the marketplace presents its own set of challenges.
As budgets shrink, educating users on the costs of resources and ensuring that users want to continue to make the investment becomes a priority, as does working with online and market data vendors to ensure fair contracts so that relationships and partnerships can continue after the crisis.
It is also necessary to communicate to vendors how they must help in the messaging about the value of their products.
Doing more work with less investment remains a concern.
Personal Challenges: In the financial services and consulting sectors, information professionals identified numerous personal challenges revolving around both people and technology.
Coaching and Mentoring: Maintaining and, if possible, improving staff morale are major objectives—it’s important to keep a level of security and normalcy among remaining staff members after layoffs.
Interviewees found that providing one-on-one coaching to professional staff members helps them transition into their new roles and provides the members the confidence to succeed.
Technology: New management tools to help adequately capture the use of resources (human and electronic) and provide the analysis that demonstrates the value and impact of electronic resources to the bottom line is something information professionals are looking for. Plus, they are building better online instruction and bringing more resources to the desktop.
Creating and Testing New Strategy: In the midst of managing the daily crises, leaders and directors struggle to find the amount of time necessary to define a new strategy to present to management.
Communication: In these sectors, communication has become more important, particularly developing the communication style and skills that inform staff regularly of both good and bad news, providing clarity as to how they can better manage their clients and their contributions; communicating clearly that staff can rise to the occasion, outlining the process steps taken to the new roles; and doing more internal marketing and connecting with individual user practices.
Decision Making: The amount of time to gather and analyze data has constricted, meaning major decisions are made more quickly and with less background information.
Personal Job Security: Echoing the law firm directors, maintaining one’s own level of enthusiasm and the calmness necessary to succeed is difficult. The ability and desire to continue doing one’s best as one’s personal morale booster was the key to everyone else’s security. One should demonstrate personal confidence, regardless of whether it was actually felt.
Continued Learning: Developing a reputation as a perennial investigator of new knowledge in an effort to make oneself more valuable to the organization and provide inspiration for new approaches is another personal challenge.
Pursuing Life/Work Balance: While working through a stressful time at work, family and friends are an important and necessary antidote; leaders who reminded themselves that they also had family responsibilities complemented this thought.
Financial Services: The Take-Away
This sector’s directors shared many of the same experiences and found many of these issues familiar in that they had been through several economic fluctuations before. The major difference was the dramatic call for the change in staff roles driven by offshore outsourcing. There were two other systemic conditions that negatively influenced information center services: static end-user information-gathering behavior and the would-be dearth of shrink-wrapped analytical tools for resource evaluation and tracking.
Layoffs in this marketplace were driven by an overall firm/organization decision to reduce the head count, the decision to relocate work process offshore, and/or the organizations’ decisions to leave lines of business. Nonmanagers and seasoned research staff seemed to have the highest survival rates. Those organizations in which offshore outsourcing has been in place continued to keep the offshore population size stable or expanded it; in one case, an entire information center was outsourced.
Managing resource expense at the desktop was a tremendous challenge as data costs became static overall or increased with a specific vendor. Subsequently, the need to reduce costs often meant walking away from resources or dramatically reducing access to them, sending some queries back to a still-standing but staff-depleted information center and/or its offshore support structure.
Our leaders experienced more autonomy and a better ability to maneuver in their organizations based on the firm’s culture. Information practices reporting to the front office enjoyed more control in shaping the right service for the current economic climate than those information practices reporting to centralized service or administrative centers.
Leadership in financial services, while incredibly adaptive, responded to mandates from management often within very short time frames and provided the best available solutions.
There was a dissenting opinion, however. Offshore staffing worked very effectively when it was part of a global strategy and when the team recruited was a team of information professionals (meaning degreed librarians and information professionals) working directly for and with the headquarters information center. When mentored and managed as another global regional office, this model, while still managing costs, effectively provided a more consistently accurate work product and a stable professional work force.
Consulting Firms: The Take-Away
Consulting firms increasingly embraced knowledge management practices. In addition to research support and managing online and commercial resources, staff has historically built client-specific intranets, managed the firm’s original intellectual property, and contributed to internal and external publishing.
A major difference in the approach to professional challenges between financial services and consulting practices was the commitment to a new vision. Rather than waiting for historical business to return, information professionals within consulting organizations saw the crisis as the end of something old and the beginning of something new—an opportunity, if not a mandate, to use this change as the springboard not only for new internal processes but also for new lines of business. Directors strove to reshape their knowledge management practices to demonstrate how their practices would support the firm’s desire to see current economic conditions as a disruption that would create new opportunities for business services.
In conjunction with the firm’s new positioning in exploiting the new economic reality, consulting firms’ information professionals began rethinking the role of the knowledge management (KM) service. They compared the current needs of the firm to legacy KM business plans and defined a new service. They then constructed a model of the new service and won executive support and concurrence.
Many directors responded, or anticipated, the call to rethink the services they offered. They engaged in a lightning round of reconnecting with internal clients and stakeholders to redesign and refocus their organizations, often after a reorganization of staff. Some pursued initiatives that had been historically explored but deemed too difficult or too foreign. This was the year that everything was on the table. In a substantive shift from being a support to the firm’s business, KM organizations are investigating how to become a line of business themselves.
To return to Anthony’s book, “Perpetual transformation is the only way to thrive during the Great Disruption.”
Not everyone I interviewed agreed. In notable cases, there were KM practices that did not make layoffs. One particular firm has the policy of not laying off staff but budgeting against the expectations of the business and the revenue it projects to earn. In a second case, the information center was able to demonstrate that closing the center was fiscally nonmaterial and, instead, has been able to hire more staff to pursue its new knowledge management goals of commercializing the information center’s intellectual property.
Reading between the Lines
The information professionals I interviewed reflected the type of organization in which I found them. All are recognized and talented leaders, and those leaders work in the confines or expanses of their firms. All have had to confront tremendous challenges during this very difficult time, both professional and personal.
A firm’s corporate culture and world view is an overriding influence in the capacity for change that the information professional can exert.
While we don’t know when the pendulum will stop swinging, financial services firms and law firms are preparing for a time when business returns. Financial services firms continue to analyze process and document performance in stark financial terms.
Consulting firms want to either adopt a new vision or adapt to a new vision. They are convinced that business will be different and that this crisis calls for change. The future for them is full of experimentation in addition to the well-managed lines of business they already support. Each of these firms has a distinct firm culture that differentiates them in our eyes.
Offshore outsourcing is here to stay and has made a dramatic impact on work product and staffing. Basic and traditional research skills that are taught during library science graduate classes and/or learned on the job (those traditional or repetitive and transactional tasks found in larger organizations) have gone offshore or to the end-user desktop. Historically expensive “learn by doing” tasks can only take place in less-expensive labor markets.
Manning the Barricades
There will continue to be frustration as those intermediate research functions that are performed easily and well by experienced information professionals are shifted to offshore outsourcing. These are questions that still demand evaluative expertise and still lean on experience and intuition. A decided push and pull as to what stays onshore or goes offshore will remain. The boundaries of the functions that are best done by people nearby and those seen day to day will be tested by those who are convinced that intellectual pursuits know no physical boundaries. This may be solved by selective onshore outsourcing.
The information professionals who will graduate and be recruited in the very near future will need a somewhat different education—and some experience—before they are ready for the new information services roles that are being shaped within professional services firms. The representatives who shared their challenges with me are experimenting with their current staff. It will be interesting to see where this evolution goes.
There is no doubt that a “Great Disruption” occurred this year, providing opportunities for organizations that have the desire and will to experiment. Disruption, by definition, breaks up what was and begs for reconstruction; it’s particularly interesting when definitions of quality and value are disrupted. In this Dickensian year, some information professionals are indeed finding a silver lining, deciding it is time to innovate, to take advantage of the rifts in the status quo, to leave old practices behind, and to improvise. Implications, both for established information professionals and for library science educators, are enormous.