The Paradox of Hiring An Experienced Agency In A Time of Disruption

 

Long ago there were agencies—mostly in advertising—who would be invited to pitch for a client’s business, and as part of that process would design creative campaigns to present during the pitch.  I actually participated in some of these for a brief period in the 1990s before moving on.

I don’t have to waste a lot of wind about the stupidity of a client asking an agency to present creative in order to become an agency partner.  This is about as silly as someone inviting a group of strangers to prepare storyboards about how good a spouse they would be if they got married.

Still the paradox remains, how does a client select an agency?  If the relationship is intended to be long-term there certainly should be a courtship on both sides.   The people from the agency team should talk with the people from the client team and make sure there are a good fit of values and work styles as well as common understanding of where the client wants to take product design, marketing and sales.  The leadership of both organizations should meet to make sure business issues are clear.

Clients still want to see some kind of thinking about their business from prospective agencies, if not full blown Don Draper-approved storyboards of creative.  The problem is that this has as much chance of being a bad idea as a good idea.

Say you’re a major financial services company, a business unit focused on serving businesses who need different kinds of insurance.  That’s a specific marketplace with certain regulations as well as customs.  You and your team are likely to look for an agency with experience in this marketplace.  Not just financial services, but B2B insurance.  An agency who has worked with the consumer side of the same financial services company gets no credit for that—you want a B2B agency with insurance experience.

This results in the rise of mediocre agencies in specific niches.  “They get direct response mail,” or “they’ve got a client list as long as your arm with SMB software companies with license models.”  The problem is that these agencies are hired for their familiarity, not for their ability to deliver outstanding work.  If their work is competent and can credibly be offered as “solving the kinds of problems we have,” they’re the right agency for you.

But they’re not—for so many reasons.  There’s almost no market that’s not going through some disruption today.  Large companies have a lot invested in current business models, financially and emotionally.  In times of disruption the irony is that these companies become more conservative  not more innovative.  “Let’s get back to what we do best,” is the mantra.

Meanwhile a dozen little start-ups are searching for new business models they can scale in and around your markets.  Today they don’t amount to much, but soon they’ll become to you what Google is to Microsoft or what Apple is to Kodak (and Warner Brothers, and…)

Incrementalism” says the smartest thing an executive can do for annual planning is come in with a plan that shows 8-13% incremental improvement over last year.  Base your plans on how you did things last year, with a few new whistles and bells.  Eventually you may be forced to confront a disruptive force like e-commerce or social networks, but until that day just keep the growth curve positive.

All this is planning by looking in the rear view mirror.  And that kind of planning is why Barack Obama is President of the United States—and not Hillary Clinton or John McCain.  Who would you have bet on at the start of 2008?

So picking an agency comfortable in your market niche with reliable looking people is like voting that innovations will not happen in your marketplace.  And if innovations do happen, they will be incremental and easy to copy.   None of which is true.

Innovation has never been so cheap to discover and scale.  Whole vast pieces of infrastructure and venture capital are available to rent as soon as an upstart needs them.

It’s difficult to listen to an agency or design partner discuss new strategies for innovation.  How can you decide if they’re going to be right or wrong?  And if they’re wrong, how big a mess will that be?

The answer is to look for partners who can help you be lean in the planning process and agile in development.  Lean strategy is the idea that by directly engaging with customers we can find dozens of possible paths to innovation and by a clear and rigorous process of exploring those cheaply we can find the most promising possible innovations.

By making a few small bets and revising them rapidly through direct customer engagement and use we can build a consistently improving product and service model.

Innovation should be easier for larger companies to accomplish—because of more resources and expertise, as well as the resources to offer to new talent.  The problem is that companies are often lousy at thinking beyond the box, let alone acting beyond the box.

It requires a kind of courage to prepare the organization for a time of risk and uncertainty.

Of course that pretty much defines the times we live in now, right?

 

 

Enhanced by Zemanta

About Rohn Jay Miller

I'm a strategic designer who works with clients who are transforming their business models because of change brought on by the Internet. Solving disruption is often a problem and an opportunity at the same time. Previously I was a founding partner of Ikonic/USWeb in San Francisco, and Senior Vice President--Product & Technology for Knight Ridder in San Jose.

, , , , , , , , , , , ,

Comments are closed.