A presentation at the Google Firestarters event on why innovations in environment and culture are not enough. We need innovation in business models.

1. THE AGENCY INNOVATION CONUNDRUM:
Why innovative = innovation
Patricia McDonald, CSO Isobar UK
@patsmc
Thursday, 18 April 13

2. IN RECENT YEARS, AGENCIES HAVE BECOME
OBSESSED WITH INNOVATION
Thursday, 18 April 13

3. THE CIO DEBATE THE RISE OF THE LAB
Thursday, 18 April 13

4. THIS HAS BEEN A VERY GOOD THING, IN TWO KEY WAYS
-Embracing new technologies
-Creating more connected,
more highly networked organisations
-Placing a premium on
experimentation
-Designing environments,
and processes, that facilitate
serendipity
CREATING THE
CONDITIONS IN
WHICH INNOVATION
CAN FLOURISH
MAKING MORE
THINGS, IN
MORE INNOVATIVE
WAYS
-Rapid prototyping
-Test and lean
-Agile
-Lean
-Hacks
INNOVATION IN
ENVIRONMENT
INNOVATION IN
PROCESS
Thursday, 18 April 13

5. THE POWER OF THE RIGHT ENVIRONMENT:
“IDEAS RISE IN CROWDS, AS POINCARÉ SAID. THEY RISE IN
LIQUID NETWORKS WHERE CONNECTION IS VALUED MORE
THAN PROTECTION...YES, THE MARKET HAS BEEN A GREAT
ENGINE OF INNOVATION. BUT SO HAS THE REEF.”
Steven Johnson
Thursday, 18 April 13

6. -94, 154 LAUNCHED PROJECTS
-39, 457 SUCCESSFULLY FUNDED PROJECTS
-£567 MILLION DOLLARS DONATED
THE POWER OF THE RIGHT PROCESS
Thursday, 18 April 13

7. INNOVATING IN THESE AREAS HAS, ARGUABLY, GIVEN RISE BOTH
TO US HAVING MORE IDEAS AND TO MORE IDEAS BEING REALISED
CREATING THE
CONDITIONS IN
WHICH INNOVATION
CAN FLOURISH
MAKING MORE
THINGS, IN
MORE INNOVATIVE
WAYS
INNOVATION IN
ENVIRONMENT
INNOVATION IN
PROCESS
MORE IDEAS
MORE DIVERSE
IDEAS
MORE IDEAS
COMING TO
FRUITION
Thursday, 18 April 13

8. BUT THERE’S A GAP.....
CREATING THE
CONDITIONS IN
WHICH INNOVATION
CAN FLOURISH
MAKING MORE
THINGS, IN
MORE INNOVATIVE
WAYS
INNOVATION IN
ENVIRONMENT
INNOVATION IN
PROCESS
INNOVATION IN
BUSINESS MODELS
CREATING
RADICALLY
DISRUPTIVE
STRATEGIES TO
TRANSFORM OUR
CLIENTS’
BUSINESSES
MORE IDEAS
MORE DIVERSE
IDEAS
MORE IDEAS
COMING TO
FRUITION
MORE BUSINESS-
CHANGING IDEAS
Thursday, 18 April 13

9. BUT THERE’S A GAP.....
CREATING THE
CONDITIONS IN
WHICH INNOVATION
CAN FLOURISH
MAKING MORE
THINGS, IN
MORE INNOVATIVE
WAYS
INNOVATION IN
ENVIRONMENT
INNOVATION IN
PROCESS
INNOVATION IN
BUSINESS MODELS
CREATING
RADICALLY
DISRUPTIVE
STRATEGIES TO
TRANSFORM OUR
CLIENTS’
BUSINESSES
MORE IDEAS
MORE DIVERSE
IDEAS
MORE IDEAS
COMING TO
FRUITION
MORE BUSINESS-
CHANGING IDEAS
THE HOW: ITERATIVE, FLUID, EXPANSIVE
THE WHAT:
RIGOROUS &
REDUCTIVE
Thursday, 18 April 13

10. INNOVATION IN BUSINESS MODELS IS WHAT THE
WEB DOES BEST
MORE CONNECTED PEOPLE MORE CONNECTED DEVICES
+
INNOVATION IN
SUPPLY
INNOVATION IN
DISTRIBUTION
INNOVATION
IN RESOURCING
INNOVATION
IN PRICING
Thursday, 18 April 13

11. INNOVATION IN BUSINESS MODELS IS WHAT THE
WEB DOES BEST
MORE CONNECTED PEOPLE MORE CONNECTED DEVICES
+
INNOVATION IN
SUPPLY
INNOVATION IN
DISTRIBUTION
INNOVATION
IN RESOURCING
INNOVATION
IN PRICING
IF WE ONLY BORROW THE “HOW”, WE’RE MISSING OUT
Thursday, 18 April 13

12. SO HOW DO WE DO IT?
1. START BY UNDERSTANDING THE CURRENT BUSINESS MODEL
HOW DOES THE
BUSINESS MAKE
MONEY?
Sales
Subscriptions
Metered usage
AddedValue Services
Data
Advertising
WHAT IS THE
BUSINESS MOST
INTERESTED IN?
Revenue/Acquisition
Profit/ARPU
HOW CAN WE HELP
DRIVE
REVENUE?
HOW DOES THE
BUSINESS MAKE
PROFIT?
Increase frequency or penetration
Drive trial
Seed or sample services
Incentivise data capture
Increase page views
Make switching effortless
Direct sales vs third party
After 18 months of subscription
When customer service is delivered
online vs by phone or in branch
When usage exceeds X
Create a direct path to market
Drive ongoing usage & perceived
Create a compelling online service
proposition
Create new use cases
HOW CAN WE HELP
DRIVE PROFITABLE
GROWTH?
Thursday, 18 April 13

13. A USEFUL TOOL:
Thursday, 18 April 13

14. 2. THINK ABOUT HOW YOU CAN DISRUPT IT
REDUCE
CREATEELIMINATE
What factors should
be reduced well
below the industry’s
standard?
Think Easyjet-no
assigned seating Which factors should
be created that the
industry has never
offered?
Think Orange-per
second billing
Which factors should
be raised well above
the industry’s
standard?
Think Virgin Atlantic
Which factors can you
eliminate that your
industry has long
competed on?
Think Amazon-
eliminating the need
for a store
Source: Blue Ocean Strategy
Read more: http://www.game-changer.net/2010/04/28/an-analogy-for-using-the-blue-ocean-
strategy-framework/#.UP_l7Wi6VSo
RAISE
BLUE OCEAN’S FOUR ACTIONS FRAMEWORKPORTER’S FIVE FORCES
Threat of new entrants
Bargaining
power of buyers
Threat of substitute
products or services
Bargaining power
of suppliers
Rivalry among
existing
competitors
Souce: Michael Porter
Read more: http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1
SOME USEFUL FRAMEWORKS
Thursday, 18 April 13

15. 3. THINK ABOUT HOW CONNECTED PEOPLE AND CONNECTED
DEVICES CAN HELP
MORE CONNECTED
PEOPLE
MORE CONNECTED
DEVICES
+
REDUCED
RELIANCE ON
PHYSICAL
LOCATION
INCREASED
ABILITY TO
OFFER
DYNAMIC
PRICING
INCREASED
ACCESS TO
ADVICE AND
CONSULTANCY
MORE
DISTRIBUTION
POINTS
A MORE FLUID
WORKFORCE
MORE
OPPORTUNITIES
FOR PERSONAL
CURATION +
RELEVANCE
Thursday, 18 April 13

16. • OUR PREOCCUPATION WITH INNOVATION HAS, FOR THE MOST PART, BEEN A VERY GOOD THING
• WE HAVE SEEN SIGNIFICANT INNOVATION IN AGENCY ENVIRONMENTS AND PROCESSES,
CREATING MORE OPEN ORGANISATIONS AND MORE ITERATIVE WAYS OF WORKING
• IN THEMSELVES, THESE CHANGE THE OUTPUT-LEADING TO MORE IDEAS, MORE DIVERSE IDEAS,
AND MORE IDEAS BEIND BROUGHT TO FRUITION
• BUT THERE’S STILL A GAP- A GAP IN OUR ABILITY TO APPLY INNOVATION TO BUSINESS MODELS
• THIS IS WHAT THE WEB EXCELS AT BEYOND ALL ELSE-CONNECTING PEOPLE AND CONNECTING
DEVICES TO DISRUPT BUSINESS MODELS
• IF WE ONLY BORROW THE BODY LANGUAGE OF THE WEB, WE’RE MISSING OUT
• SO HOW DO WE DO IT?
• UNDERSTAND THE BUSINESS MODEL-> THINK ABOUT HOW TO DISRUPT IT-> THINK ABOUT HOW
CONNECTED DEVICES AND CONNECTED PEOPLE CAN HELP
IN SUMMARY
Thursday, 18 April 13