Change & Stimuli
Organisations and people change in response to changing circumstances. The stimulus for change may come from external pressure, new opportunities, or a combination of both.
At the same time, resistance to change is a normal human reaction. Stability is comfortable. Established routines feel safe. When organisations have been successful for a long time, the instinct to continue doing what has worked in the past can be very strong.
However, resisting change also has consequences.
For professional service firms in particular, the ability to recognise and respond to change early can create a significant advantage.
The Beginning of Change
They say that change begins as a response to changing circumstances. These tadpoles begin the journey.
As individuals and organisations, change tends to occur when two conditions are present.
First, there must be a stimulus that makes change necessary or desirable.
Second, there must be a belief that the change is achievable.
Together these two forces overcome the natural tendency to remain with the status quo.
Pressure on Professional Service Firms
Professional service firms have enjoyed a long period of relative stability. The way expertise is delivered has not changed dramatically. Clients engage professionals, and those professionals apply their knowledge to provide advice and solutions.
Technology has certainly been adopted, but in many cases it has supported existing processes rather than transforming them.
This has allowed firms to operate within a model that has proven reliable for decades.
The question now is whether the environment surrounding that model is beginning to change.
Are Circumstances Changing?
Recent events have demonstrated that even significant disruptions do not always produce immediate transformation.
The Covid pandemic affected nearly every aspect of daily life. Within professional services it accelerated the use of video meetings and remote working. Yet the underlying structure of services remained largely unchanged. Clients still rely on expert professionals delivering broadly similar services.
However, gradual shifts are beginning to reshape the environment in which those services operate.
The Frog in the Pan
Consider the well-known metaphor of frogs in a pan of water.
If a frog is placed into boiling water it reacts immediately and jumps out. If the frog sits in cool water that is slowly heated, the danger is less obvious. The temperature rises gradually and the frog does not recognise the need to act.
Whether or not the metaphor is scientifically accurate, it illustrates an important point.
Gradual change is easy to overlook.
Professional service firms may find themselves in a similar situation.
The temperature around them is rising as several forces begin to apply pressure simultaneously.
The Emerging Pressures
Three developments are combining to create a compelling case for change.
Talent crunch
Competition for skilled professionals is increasing. This drives up costs and makes recruitment more difficult.
Industry consolidation
Firms are merging, expanding and repositioning themselves. Others must decide how they respond competitively.
Technology
Advances in automation and digital tools are creating opportunities to augment human expertise with digital capabilities.
Taken together, these pressures create a strong incentive for firms to reconsider how they operate.
Not All Change Is the Same
Change does not need to be disruptive in order to be effective.
In our article You Can’t Tell Me to Change, we explore the emotional side of organisational change. One important lesson is that people respond better when disruption to their routines is minimised.
Instead of attempting large, sweeping transformations, firms can focus on progressive improvements that deliver results quickly.
We describe this approach as small steps for quick wins.
This approach reduces resistance while still allowing firms to respond to changing circumstances.
Practical Examples
The pressures described above can often be addressed through relatively modest actions.
For example, many professional service firms find that between ten and twenty percent of human capacity is invested in tasks that could be automated or streamlined. Addressing these tasks can quickly increase the productive capacity of the team.
Firms can also take a deliberate position on consolidation within their sector. Some may decide to pursue consolidation and maximise valuation. Others may reinforce their independence by focusing on the qualities that make them distinctive.
Technology offers another opportunity. Rather than viewing advanced tools as a threat to employment, many firms are beginning to introduce them into existing processes in ways that enhance the work of their professionals.
In each case the response involves manageable steps rather than disruptive transformation.
Moving Forward
Professional service firms will increasingly face decisions about how they respond to changing circumstances.
Those that recognise the pressures early and respond deliberately are more likely to maintain control over their future direction.
Planned, progressive change is almost always preferable to change that is forced by external pressures.
PSOut helps professional service firms navigate these challenges. Our specialist outsourced services allow organisations to introduce targeted improvements without disrupting their day-to-day operations.
Sometimes the first step is simply recognising that the water in the pan is getting warmer.
