Structuring your agency for innovation

If you’ve ever thought to yourself “why am I the only one who seems to be thinking seriously about [new technology]?”...this one is for you.

Our people work within a structure.

For our agencies to be able to innovate, we need to create a structure that allows our people to be entrepreneurial. That means we need to make sure our incentives and people decisions reward the right behaviours and don’t penalise them.

The entrepreneurial - the new - has to be organised separately from the old and existing. When we try to crowbar an innovative project into an existing function, we usually fail. Our existing functions usually work on billing cycles: what needs to go out of the door for us to feel good about sending the invoice this month?

…but the time horizon for most new technologies is much further away than ~30 days.

If the entrepreneurial person spends time researching and developing the new - with no pay-off within the next 4 weeks in most cases - they watch their old work pile up, waiting for them at the weekend…or they’re interrupted by the direct supports who still need them to supervise the work that pays the monthly bills.

Maybe we’re giving one of our leaders responsibility for innovating: let’s say for ease that it’s about our use of AI...that leader has to be far enough removed from the existing business to be able to create something new and not just modify what’s already being done. This is why most agencies are using AI only to speed up things they are already doing (which is creating pressure on our margins).

If you want your agency to be innovative, here are some of the things you need to bear in mind:

• Make innovation, or R&D, someone’s responsibility and decide how you will measure their progress, just like any other staff member (I’ll often run through a function accountability chart with an agency leadership team early on in the engagement and it’s one of the two functions on the chart that, in most cases, has nobody responsible for it - the other is talent development and learning)
• When deciding who’s going to be made responsible for innovation, don’t choose someone currently responsible for running and improving part of the existing business, like your Operations Manager…choose someone who can remove themselves from the “delivery” mindset and think freely (typically this will be someone in Strategy or Client Service…perhaps even Marketing or Sales)
• A common error within agency structures is to continually pile new responsibilities onto the managers that are perceived as “the best” because they are successfully running large departments already: all this will achieve is strain on - and perhaps failure of - the existing departments. Remember, this has to be new and separate
• It’s not uncommon for an agency management team to include a “fixer”: a smart person who’s proven themselves time and time again as capable of solving a troublesome department or creating a new one (my Branded3 colleagues will remember how then-Head of Insights Alan Ng was interim Head of Search before I took on the role; then interim Head of Development; and now, somewhat inevitably, is Chief Innovation Officer at connective3). The best members of your leadership team are the ones that could do anyone else’s job pretty well…they’re “Head of This” but, you catch yourself thinking, they’d be a better “Head of That” than the person currently in that role. This is fine, as long as they can divest themselves of whatever they were fixing before in order to take on this new challenge
• Finally, and most importantly, agency owners need to remember this: if the right structure isn’t in place (you don’t have someone who’s responsible for innovating; or you do have that person, but you haven’t cleared their plate enough for them to do it) then the task of innovation falls to you. If you want to do it, that’s lucky! If you don’t want to do it, then you probably won’t do a good job of it.