In a recent Adweek article, Jason Alan Snyder - an accomplished inventor - broke down why agencies are doing ok at inventing, but not necessarily at innovating. Snyder is also the Chief Technology Officer at Momentum Worldwide. He's authored many patents to successful inventions like the award-winning "Luci" product, an all-in-one solar lantern and flashlight.
Snyder explains how the invention is the start and pure form of the idea. But the innovation, that comes in when you apply that same invention to make a difference in the business world, industry, or culture to make money. He simplifies it by saying, “Invention is seen as the conversion of money into ideas. Innovation is viewed as the conversion of ideas into money.”
Snyder says that he appreciates the agency projects he works on as they can feel both energizing and challenging, they have opened him up to opportunities that he may not have gotten otherwise. But in terms of innovation, he says, agencies can be quicker on their feet. They create the ideas, patent them, but then grow afraid to take the leap from there.
Why is that? Take big companies for instance. If they have a monopoly on a certain product category or technology, they don't have incentive to push out those new technologies as soon as they're ready because they want to keep their profits coming in from their existing products. What ends up happening is they hold off pushing their new technology until it is too late and change to category is inevitable. For example - Kodak sitting on new digital camera technology, while they continued to make profits from film. And we all know how well that strategy worked out (badly!).
Agencies face a similar issue as these companies, even though they're not dealing with specific products in the same way. Instead, agencies have compensation systems that are about hitting certain revenue projections for their services, and may be reluctant to experiment with non-billable time to develop their own inventions and innovation strategies. Snyder remarks in the article that, "Agencies reward managers for making their numbers, not for building new businesses. Who wants to risk their bonus for an upstart technology that threatens the cash cows?"
So what's the solution? He says that we need to encourage taking these risks from the highest executive levels to support those experimental creative teams with budget and expertise. It could take as little as two percent of a company's own money towards innovative solutions for agencies to re-invent themselves. Now that makes the future of agencies feel bright.
Original article posted about on Adweek.
* Disclaimer: Jason Alan Snyder is represented by Sovrn State management.