Edited by Markus Reihlen and Andreas Werr
Chapter 11: New practice development in professional service firms: the role of market sensing
Although professions are often not associated with novelty and change (Greenwood, Suddaby, & Hinings, 2002), recent research has emphasized the importance of innovation to PSFs (Anand, Gardner, & Morris, 2007; Gardner, Anand, & Morris, 2008; Heusinkveld & Benders, 2002, 2005; Morris, 2001). Theorists suggest that, as with any organization involved in product or process innovation, constantly being involved in “new practice development” efforts is crucial for PSFs if they are to keep their expertise in tune with market demand, build an innovative reputation, and enhance the performance of their services to their clientele (Benders, van den Berg, & van Bijsterveld, 1998; Kipping, 1999). This involves the development of a repertoire or distinctive base of expertise that supports performance of their services in a specific area (Morris, 2001; Morris & Empson, 1998; Werr & Stjernberg, 2003; Werr, Stjernberg, & Docherty, 1997). However, it is argued that a major complication in the case of new practices is that they lack a material component (Heusinkveld & Benders, 2002) and therefore knowledge-based innovation is considered as particularly challenging for PSFs (Anand et al., 2007). The emerging literature on new practice development in PSFs has provided important insights into the different key activities and “pathways” that may lead to new practice creation (Heusinkveld & Benders, 2002; Suddaby & Greenwood, 2001). In addition, various empirical studies revealed a number of important factors that may influence the legitimacy and embedding of new practices within PSFs (Anand et al., 2007; Gardner et al., 2008; Heusinkveld & Benders, 2005; Morris, 2001). For instance, these studies emphasize that developing innovative types of expertise does not necessarily fit with established organizational practices and does not automatically enjoy the support and collaboration of people within the knowledge entrepreneurs (see also Dougherty & Heller, 1994). While these accounts have furthered our understanding into the intra-organizational processes and impediments to new practice development, the linkages with the client and the market for professional expertise received scant attention in current discussions on the process of developing new practices within PSFs (see also Chapters 4 and 5). Indeed, theorists in this emerging research area stress that the client plays an important role in the possibilities for concept development in consultancies (Fosstenløkken, Løwendahl, & Revang, 2003). Also the broader literature on knowledge commodification considers “sensing incipient preferences” (Abrahamson, 1996: 264) of the knowledge consumers as vital in the development of new services that can be exploited on the market (ten Bos & Heusinkveld, 2007; Suddaby & Greenwood, 2001), but this literature still lacks comprehensive theorizing about how exactly this takes shape in PSFs.
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