Innovation & the professional service firm: Insights into the Locus, Patterns, and Tensions of Innovation in a Fast-Growing Information Technology Consultancy in New Zealand

Abstract

This research investigated the locus of innovation through a time-frame of ten years for a fast growing, privately-owned New Zealand information technology professional service consultancy firm. Emergent patterns related to the firm’s innovations were analysed along with the classic consultancy conundrum - the management of tension between future-focused innovations or present-day profits. An in-depth single case study approach was employed where the units of analysis were each innovation of the firm. Semi-structured interviews of 23 current employees involved in innovation activities across all levels of the organisation were conducted. This led to the discovery that less innovation occurred at the inception of the firm where the priority was to sustain the business in the short term. As the firm matured, the rate of innovations increased. The locus of innovation shifted from Top-down to Bottom-up as the firm grew. Further analysis showed that Top-down innovations had a higher likelihood of resource allocation and scaling at the firm. The consultancy conundrum is a constant tension that will continue to exist for the firm. The firm employs a number of “semi-structures” both formal and informal in nature to manage that tension. The findings of this research present a case for an inverse pattern of innovation for privately-owned professional service firms – where innovation occurs at the later stages of the firm’s growth life-cycle.