Innovation in agencies is coming like a ghost town
A view from Nadya Powell

Innovation in agencies is coming like a ghost town

If agencies wish to remain a valued partner to business, as opposed to simply a supplier of communications, they must help business innovate or die.

Five years ago the advertising industry introduced a new job title – the chief innovation officer – and at the height of the fervour some 50 agencies in London boasted a "CIO".  

But today innovation people are leaving the industry in droves. The individuals formally known as chief innovation officers are still in the innovation business but they are no longer working within agencies.  

Now let’s be clear, I am not saying innovation is dead. Innovation is critical to the lifeblood of any business – in a world where change happens at the speed of a Kardashian’s headlines you have to know where you’re going next and how to commercialise.  

And, as the membership of Innovation Social demonstrates, innovation leaders in brands are multiplying and start-ups have become scale-ups who drive innovation every day.  But within agencies, innovation is suffering a resounding death knell.

Why is that? Because many agencies were not serious about innovation in the first place as Anthony Mayfield of Brilliant Noise makes clear "The brightest people in the innovation space were used as window dressing for old business models, to affect a sheen of digital or future thinking".  

Even worse they expected clients to change but did not themselves change as pointed out by an anonymous previous agency innovation leader: "We ask clients to take risks on new services and products but we resolutely refuse to innovate internally and instead continue chasing down short term revenue undermining our ability to get anything innovative done".

What’s more it’s way too easy for talented Innovation leaders to jump ship and if you’re constantly being sidelined why would you stay?  

A current Innovation leader, again anonymous, points out: "It’s hard to work in a declining industry and just constantly not be taken seriously. The environment has changed considerably; literally anyone can start-up as raising money is so easy. Tech platforms are great to work for as they are at their very core innovators, they have cash and resource and are open to experiment and try new things."

Yet within brands, innovation is going from strength to strength with the innovation vertical burgeoning. This is largely due to a very clear imperative: "What brand can’t afford to invest in out-innovating the competitors?" asks Tom Ollerton from We Are Social.

Additionally they are designed to innovate, as Lizzie Shupak, ex-innovation lead at DigitasLBi, makes clear: "They are generally not service businesses so are used to some degree of R&D and product and service development…their pockets are also deeper and their culture of investing in their organisations stronger.".

The result? Rather than brands learning from agencies, in the Innovation space agencies can learn from brands.  

Understand that innovation does not mean adding digital or social to your communications, it means creating new products and services that deliver commercial return. Change your business model to enable investment in long-term, strategic innovation methodologies to be part of your product and service stable. Make innovation the 100% responsibility of one team and at the same time the 25% responsibility of everyone and link remuneration to this.  

And agencies need to learn fast. It may be just a coincidence, but as agency networks issue profit warnings, the consultancies are rising. The consultancies have often been subjected to the sneer of "they don’t understand creativity" but they most certainly do understand how critical innovation is to business success and are successfully driving business change across the globe.  

The agencies where innovation is thriving, often digital businesses such as R/GA, have modified the consultancies methodologies to embed innovation practices and married them with their strengths in consumer insight and creativity. Others have simply decided to go all in and be bought by them.

The agency chief innovation officer in its current guise, an isolated agent of change within a business not really wishing to change, will undoubtedly die. Innovation as a methodology to create competitive, commercially-driven new products and services will continue to flourish. If agencies wish to remain a valued partner to business, as opposed to simply a supplier of communications, they must help business Innovate, or die.   

I hear agency leaders responding with a resounding 'we know we need to invest in innovation' cry. Well get on with it then, because right now all you seem to be doing is losing your innovation people in droves. In the, slightly adapted, words of The Specials: "Innovation is coming like a ghost town". 

Nadya Powell is co-founder of Utopia, a business change consultancy, and Innovation Social, a network of Innovation leaders and thinkers.