Career pathing and innovation capacity in professional service firms

Abstract

In this paper, we start a new conversation about how career paths affect innovation capacity in professional service firms (PSFs) that face escalating pressures from clients to deliver more ingenious solutions plus enhanced efficiency. Using top-tier law firms as an illustrative case, we demonstrate how career path changes, initially made to address these work-life balance concerns, had the virtuous side effect of enhancing innovation capacity. Our study fosters dialogue between PSF research and broader innovation theories, based on four contributions. First, we build much needed conceptual clarity about what innovation means and the forms it takes in the context of PSFs. Second, we show exploration and exploitation are not orthogonal, but connected and mutually reinforcing in PSFs. We conceptualize an Innovation Loop that captures the continuous morphing of one into the other. Third, we draw attention to the neglected role of career pathing as a determinant of innovation capacity by facilitating seamless transitions between exploration and exploitation. Finally, we demonstrate how changing career paths are not a ‘necessary evil’ but create win-win solutions to both accommodate work-life preferences of staff and enhance innovation capacity for the firm.