Solv­ing the In­no­va­tor’s Dilemma

Campaign UK - - CONVERSATIONS - This in­ter­view has been edited for clar­ity.

Con­sult­ing may seem counter to what mar­ket­ing brings to mind. But more and more, con­sul­tan­cies are dab­bling in cre­ative work, grab­bing up small dig­i­tal agen­cies and lever­ag­ing their data know-how for solv­ing clients’ busi­ness chal­lenges. Though it seems the ad in­dus­try has only re­cently taken no­tice—for its 2016 Agency Re­port, Ad­ver­tis­ing Age named Ac­cen­ture Dig­i­tal’s In­ter­ac­tive unit as the largest and fastest-grow­ing dig­i­tal agency net­work in the U.S. and world­wide—r/ga has been pay­ing at­ten­tion for some time. With the launch of its own Con­sult­ing prac­tice, in 2012, the agency has been ahead of the curve, of­fer­ing a new ap­proach in which ex­perts have the abil­ity to put the­ory into prac­tice and ex­e­cute the so­lu­tions they pro­pose. Tara Moore: Ev­ery­one’s talk­ing about con­sult­ing as though there’s this dooms­day sce­nario. Is that all just hype? Sa­neel Ra­dia: I don’t know if I’ve ever re­ally be­lieved in dooms­day sce­nar­ios. But it turns out that com­pa­nies that are at least aware that there is a prob­lem tend to per­se­vere. The first step—ac­cept­ing that a chal­lenge ex­ists—is a hard one, though. When I look at the con­sult­ing in­dus­try, I can’t imag­ine talk­ing to tra­di­tional man­age­ment con­sul­tan­cies and have them not ac­knowl­edge the gap in their cre­ativ­ity and ex­pe­ri­ence think­ing. Yet if you look at all the ac­qui­si­tions the tra­di­tion­ally de­fined man­age­ment con­sul­tan­cies have made, they’ve all been in those spa­ces. They’ve tried to buy up dig­i­tal, ex­pe­ri­ence, and other cre­ative en­ti­ties. So they cer­tainly have a lot of chal­lenges ahead of them be­cause there’s still that cul­tural gap—how to ac­tu­ally bring con­sult­ing and cre­ativ­ity to­gether, ver­sus just check a box. Moore: What are some of the things com­pa­nies get wrong about in­no­va­tion? Philip Rackin: In­no­va­tion can’t hap­pen from a de­fen­sive crouch. Com­pa­nies have to be open to try­ing new things; they have to be open to dif­fer­ent ways of think­ing. One of the things that we’re see­ing with cer­tainly younger gen­er­a­tions in both the work­force as well as a cus­tomer base is that they’re much more adept at as­sem­bling a lot of dif­fer­ent types of in­for­ma­tion. And when com­pa­nies start to put peo­ple in th­ese boxes and th­ese hi­er­ar­chies that may have worked in a clas­sic man­age­ment ap­proach, they don’t get the kind of re­sults that they’re re­ally look­ing for. If you look at the com­pa­nies that are suc­ceed­ing, they are the ones that are open to a lot of change. Some of that change is go­ing to come from the ex­pec­ta­tions that peo­ple have as both con­sumers and em­ploy­ees, of what is go­ing to be avail­able to them, what types of in­for­ma­tion will be avail­able to them to very quickly make de­ci­sions and then act on them, see the re­sults, and make an­other de­ci­sion based on that. The more we keep things in reg­i­mented struc­tures, the less op­por­tu­nity there will be to ar­rive at dif­fer­ent ways of think­ing. Peo­ple are also com­bin­ing things in their daily lives to get jobs done in an al­most pointil­lis­tic way. They’re cre­at­ing whole en­vi­ron­ments and ecosys­tems out of com­pa­nies and ser­vices that don’t nor­mally talk to each other. When they get into the work en­vi­ron­ment, sud­denly ev­ery­thing is locked down. They have to use only the tools they’re given; they can get their hand slapped for try­ing some­thing dif­fer­ent and out of the way. The more we can do things in a way that fos­ters a “Let’s see if this works, let’s have the free­dom to run down a dead end and see what we get out of this” ap­proach, the more op­por­tu­nity there will be for peo­ple and or­ga­ni­za­tions to find what is go­ing to be next for them. Ste­fanie Hoff­man: We were work­ing on a project with a client re­cently where we had to dig into what makes a com­pany ready to in­no­vate, and one of the things that we learned was that com­pa­nies ac­tu­ally fos­ter­ing a growth mind-set were the ones that re­ally in­no­vate most suc­cess­fully. A com­pany that nur­tures and en­ables their peo­ple, with the right tools, the right skill sets, and the right sup­port sys­tem to take risks will be bet­ter equipped to in­no­vate most suc­cess­fully. But if a com­pany has a fixed mind-set, it prob­a­bly won’t be tak­ing the risks that are needed to do the things that are po­ten­tially game-chang­ing. Moore: What are some of R/GA’S key dif­fer­en­tia­tors in the con­sult­ing prac­tice? Ra­dia: We’re con­sul­tants that ac­tu­ally make things. R/GA is fa­mous for hav­ing world-class de­sign­ers, tech­nol­o­gists, and ex­pe­ri­ence folks, and th­ese are ex­actly the peo­ple who work on the con­sult­ing en­gage­ments we have. That said, be­ing able to ap­pro­pri­ately pack­age that up to­ward a broader busi­ness ob­jec­tive, as a part of a broader trans­for­ma­tion road map with a strong un­der­stand­ing of how busi­ness mod­els are chang­ing, how dig­i­tal ecosys­tems have al­tered the way con­sumers ex­pect things from what­ever brands they are en­gag­ing with, how dif­fer­ent tech­nolo­gies im­pact the core busi­ness of a com­pany, that’s what it’s re­ally about. The idea that we can ap­pro­pri­ately ad­dress a client team’s prob­lems while lever­ag­ing this great ex­pe­ri­ence and di­verse, cre­ative tal­ent is our se­cret sauce at the mo­ment. Hoff­man: The other thing that’s pretty crit­i­cal, too, is help­ing to re­de­fine how com­pa­nies think about in­no­va­tion. We talk about it as new and rel­e­vant, and there are prob­a­bly three dif­fer­ent ways that you can think about it. First, most com­pa­nies, es­pe­cially within the CPG in­dus­try, think about it as R&D, with in­no­va­tion as a new fla­vor or new bot­tle, for ex­am­ple. Then there is how to ap­proach a spe­cific brief that asks us to help cre­ate a new and in­no­va­tive com­merce web­site or chan­nel, or a new way to sell a prod­uct. The third is in­no­va­tion that is com­pletely blue-sky. For in­stance, a client might say, “We have this prob­lem; there is a dis­rup­tion that is hap­pen­ing. Help us come up with in­no­va­tive op­por­tu­ni­ties to cap­i­tal­ize on.” That dis­rup­tion can come across as a cou­ple of dif­fer­ent things. It could be a busi­ness model dis­rup­tion, up­end­ing the way that we do busi­ness. It could be a com­mu­ni­ca­tions dis­rup­tion, or the way that peo­ple think about data, for in­stance. And then lastly, it could be a com­merce dis­rup­tion. They may not want some­thing in par­tic­u­lar, but they do want our help to fig­ure out what that thing is in or­der to help them suc­ceed in the fu­ture. Rackin: One of the things that makes R/GA re­ally strong and dif­fer­ent is that we sell by out­put, not by time. So we’re giv­ing new ad­vice, de­liv­ered in the right way for

clients who need to act in dif­fer­ent ways. The more that we can keep in­no­vat­ing in that re­gard, and how we ac­tu­ally op­er­ate, the bet­ter we will be for our clients, be­cause we’re not just preach­ing it, we’re ac­tu­ally liv­ing it. And I think that has given us a lot of edge. We’re com­pet­ing not against agen­cies, not even against the in­no­va­tion arms of tra­di­tional agen­cies. We’re ac­tu­ally com­pet­ing against ei­ther the big tech con­sul­tan­cies or even the very high-end man­age­ment con­sul­tan­cies that are there to help the C-suite feel bet­ter about the de­ci­sions they need to make. That R/GA is able to play in those spa­ces is a tes­ta­ment to our own abil­ity to change, not just our abil­ity to say in­ter­est­ing things. Moore: How do you all view the cur­rent state of agen­cies? Ra­dia: Agen­cies have had to be­come much more ac­count­able around ac­tual busi­ness-driv­ing ideas, ex­e­cu­tion, what­ever their role is. How are you draw­ing the line di­rectly to busi­ness? Now that they have got­ten a lot more in­dus­try ac­knowl­edg­ment around the di­rect con­nec­tion be­tween cus­tomer ex­pe­ri­ence and bot­tom line, agen­cies ac­tu­ally have a bit of a life­line to start climb­ing up into what the man­age­ment con­sul­tan­cies pre­vi­ously owned. Mean­while, the man­age­ment con­sul­tan­cies that are hurt­ing are buy­ing up shops very late in the game. Most of the big four hold­ing com­pa­nies bought up many of the no­table dig­i­tal and cre­ative en­ti­ties a while back. This has led to this meet­ing in the mid­dle of dif­fer­ent com­pa­nies start­ing with what they think they can do but pretty quickly at­tempt­ing to move into oth­ers’ back­yards. Rackin: If you look at it from just a struc­tural per­spec­tive, the con­sul­tan­cies have come in and said, “We have th­ese top-level re­la­tion­ships we should be able to ex­tend down.” And the ba­sis for that ex­ten­sion ex­tends no fur­ther than the re­la­tion­ship. The agen­cies, and I’ll in­clude R/GA as an agency in this con­text, have a much stronger point of view for mov­ing into other ar­eas of busi­ness, be­cause cer­tainly at R/GA we make things. We op­er­ate things. We know what it means to make a de­ci­sion and then live with the con­se­quences. We un­der­stand con­sumer be­hav­ior and chan­nel dy­nam­ics. Cer­tainly, if we don’t know th­ese things, we’re not able to help our clients. As we move up the food chain, we’re not do­ing it based on hav­ing just a re­ally good per­sonal re­la­tion­ship with the C-suite; we’re do­ing it be­cause of the ef­fi­cacy of our rec­om­men­da­tions and our im­ple­men­ta­tions. Ra­dia: That’s a re­ally good point. In­no­va­tion is un­for­tu­nately still used as a buz­zword, but the early in­no­va­tion era was a lot of this “fail fast, fail of­ten, ex­per­i­ment here.” There wasn’t much ac­count­abil­ity, but now, it turns out that if you make things, you are by def­i­ni­tion held more ac­count­able. So the agen­cies are say­ing, “We un­der­stand how to make things that are ef­fec­tive.” That is a core ad­van­tage and they can dress it down how­ever they want or claim that they can ac­quire it, but that is a dif­fer­ent men­tal­ity. It’s a dif­fer­ent skill set and it takes a dif­fer­ent cul­ture. Hoff­man: For us the ac­count­abil­ity is ob­vi­ously to our clients, be­cause that’s who we want to serve. But I think in­trin­si­cally, too, it also ap­plies to the rest of the agency, and we want to make sure that the things that we’re do­ing ac­tu­ally lead to pos­i­tive, smart, and re­ally in­no­va­tive work. That has to come through in ev­ery­thing we do. Moore: Are there any in­dus­tries you be­lieve are about to get dis­rupted? Hoff­man: We’ve just started to re­ally tap into a small por­tion of the hos­pi­tal­ity in­dus­try, but be­yond ho­tels, flash back to 50 years ago and sit­ting in a restau­rant: That ex­pe­ri­ence is ex­actly the same as it’s al­ways been. There’s a lot more op­por­tu­nity across a num­ber of dif­fer­ent ter­ri­to­ries within hos­pi­tal­ity be­yond ho­tels. Rackin: We’ve worked in the past with a num­ber of au­to­mo­bile man­u­fac­tur­ers, but mainly on the mar­ket­ing side. That is an in­dus­try ripe for trans­for­ma­tion on so many lev­els: the prod­uct it­self, the con­ver­sion from a prod­uct men­tal­ity to a ser­vice men­tal­ity, and the way the prod­ucts are distributed and sold, par­tic­u­larly in the United States but also glob­ally. There’s so much change hap­pen­ing there, and no­body knows what’s re­ally go­ing to un­fold. Ra­dia: There are al­ways stages of change. Put aside the word dis­rup­tion, be­cause in­dus­tries change for other rea­sons as well. The one thing ev­ery­one would agree is that ev­ery­thing is chang­ing faster, in any in­dus­try. The one that prob­a­bly held out longer than any­one would have ex­pected is fi­nan­cial ser­vices, and it’s now in the midst of a tremen­dous amount of change. The most un­der­hyped in­no­va­tion of to­day is blockchain. It is world-chang­ing in ev­ery way, be­cause it is so fun­da­men­tally dif­fer­ent: This idea that the way to keep things safe was to hide it—the def­i­ni­tion of a safe. Blockchain, on the other hand, sug­gests that the safest place in the world is out in pub­lic. Just a pub­lic ledger, one that cre­ates trust among anony­mous peo­ple. I love the idea that one of the most pri­va­tized, black box–driven in­dus­tries in the world is ac­tu­ally ques­tion­ing, Should we em­brace this non–pri­vately held tech­nol­ogy? There has never been any­thing like this be­fore. The tech­nol­ogy has yet to be fig­ured out, but I’d say fi­nan­cial ser­vices is about to un­dergo some of the most dra­matic change in the his­tory of any in­dus­try.

From left: R/GA’S Philip Rackin, Ste­fanie Hoff­man, Sa­neel Ra­dia, and Tara Moore.

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