How to innovate like an innovation agency, and 21 tips on evaluating an innovation agency
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Should we hire an innovation agency or can we do it ourselves?

My accountant will tell me I'm crazy.

Writing an article on eliminating the need to book an innovation agency just like this agency - Ideas With Legs.


She's kind of right, but we've found that this counterintuitive approach has helped us secure Fortune 500 clients and gain project work around the world with leading innovative companies. 

The reason is simple. 

People don't like wasting money. If the company can innovate internally to a similar level of success as an innovation agency without wasting time, money and resources, then any CFO would tell you that it's a no brainer.

Do it yourself.

In this article, I'm going to share…

How you can innovate like a world-class innovation agency, and my top 21 tips on evaluating an innovation agency (if you need some innovation consultancy help).
First up, what's an innovation agency and what do they do?
Generally, people use one of five terms for external experts who innovate for companies. They are:

  1. Innovation Agency
  2. Innovation Consultancy
  3. Innovation Company
  4. Innovation Strategy Consulting
  5. Innovation Consulting Firms

And well, they all pretty much mean the same thing. 

While there might be some differences in their approach to innovation, the goal is the same. To help you create a product, process or service innovation that improves the results of an organisation. 

The most significant difference between these five groups would be Innovation Strategy Consulting. 

This is where a consulting group focuses only on the strategic plan and strategy of where and how they should innovate, but without giving them step by step support or implementation. 

It's like being given an unfinished Ikea instruction book to build your innovation. 

For the technically minded, it's a great help, but for others, it just creates frustration.

For ease of writing, I'll refer to all innovation agency variations with the inclusive name of Innovation agency. 

Why use an innovation agency?
Most people will use an innovation agency when they have a problem they haven't been able to solve themselves.

  • The problem might be having an ailing product that no longer has the market's attention, and sales are dropping continually.
  • A new competing product may have entered the market that is superior in several ways and is outcompeting with their products.
  • The aesthetics of a product has lost customer appeal, and sales are being affected.
  • An organisation's product or service is indistinguishable from its competitors. They are now competing on price at the cost of losing profits.
  • The quality has dropped.
  • The organisation is not identifying or capitalising on emerging trends or technology.
  • The customer journey or user experience is not streamlined and causes complaints versus referrals or additional sales.
  • A company has hit the ceiling with their results and can't see any new ways to create growth.
  • The organisation's processes are not as effective as they could be.

Gee! There are a few, and there are more, but that gives you a good overview.

Now, an innovation agency is not the only one that can solve these problems. You can. Yes, you can, with a bit of help from me.

What makes an innovation agency so good at solving your problems is that they have a diverse group of professionals who look at your situation from a different perspective.

In fact, I wrote a book on the most common Innovation Archetypes that exist. While there are 12 such Innovation Archetypes, the great news is that you can learn the critical innovation behaviours that these professional innovators use.

Here are some examples. 
Want to pick the next emerging trend to capitalise on? 
Then think like a Futurist and apply the STEEP method of environmental scanning to find the next trend before your competitor does.

Want to know what you're customer is really thinking? Step into the shoes of a Behaviourist and identify the key motivators and triggers that will influence their behaviours and spending.

Need to make sure your next product is stronger, lasts longer and is more powerful than ever? 
Take a leaf out of the Engineer archetype and create constructive ideas using a list of idea-generating prompts such as SCRAMBLE™️.

Are you terrified that your next product or service will be a flop because no one wants to buy it? 
Learn how to validate and build experiments like a Scientist to test that a market is willing to pay for it and that it effectively solves the problem you set out to solve. 

Test that the market is willing to pay for it. First, build a standalone landing page for your future product. Then create some cheap social media ads promoting it. You'll soon see how many people are keen, validating your idea for a couple of hundred dollars before even building the product.

Stressed that your marketing team doesn't have the time to create a launch or build a tribe to help get your product out there
Think like the Marketer archetype. Look at what story you can use to share your promise of how the product will change the customer's status. Next, invite the customer to join a tribe worth belonging to, which can help to spread the word virally about your new product.

You can probably begin to see that there are several professional mindsets, methods, and behaviours we can borrow. 

Or, you could employ them individually to join your organisation (very expensive) or hire an innovation agency to do it for you (expensive).

I probably shouldn't be so dismissive of my fellow innovation consultancies. 

After all, they're just in business like you are. 

This is why innovation agency fees can easily range from a hundred thousand dollars into the million-dollar range. 

Think of it this way: you're already well into the million-dollar price range if you had to hire 12 new high-level staff for 12 months.

However, innovation agencies' fees are small compared to the profits they can create. Look at how the most innovative companies in the world over the last 15 years consistently delivered a higher shareholder return than the rest of their global market. A whole 2 percentage points, every year. 

Innovation pays dividends.
Whether you want to innovate on your own like an innovation agency or want to go and hire one, there are four critical areas you want to consider.
  1. INSIGHTS & STRATEGY - discovering emerging trends to capitalise on and identify unmet or ignored customer needs, desires, and frustrations. This stage includes your traditional innovation strategy, what you stop doing, and what to continue and start next.
  2. IDEATION - creating lots of ideas to solve problems and create superior alternatives and better outcomes.
  3. VALIDATION - testing that a market is willing to pay for a solution, testing that the problem is worth solving, testing that your solution effectively solves the problem.
  4. COMMERCIALISATION & EXECUTION - Constructing, pitching, marketing, and distributing the finished innovation most cost-effectively.

Innovation consultants might throw words like Innovation Gateways, Innovation pipelines and innovation workflows at you. Still, in general, all of them will follow these four phases. Innovation Strategy Consulting firms tend to work in just the first phase with some potential pathways to take for validating.

Here are some of my best methods for innovating in each of these phases. If you'd prefer to hire an agency, skip to the bottom section to discover what you should ask for and expect from them in each of the four innovation phases.
PROVEN INSIGHT & STRATEGY METHODS YOU CAN USE FOR YOUR ORGANISATION (IF YOU DON'T WANT TO HIRE AN INNOVATION AGENCY LIKE US)
Proven innovation strategy generation method 1. The Stop, Start, Continue Method. 

Identify four or five key categories you want to base your innovation strategy around, such as:
Build—the steps you go through to build either a product or a service you offer 
Sell—the actions you take to sell your product or service to others 
Process—the steps you take in creating a process or the procedures you have to conduct business or your business model 
Deliver—the steps you take to deliver either your product or process 
 
Create a chart with the categories drawn as rows, and the stop, continue, and start sections as columns. 
Create a section for the implementation challenges identified. 
Get a diverse group of people in your organisation to help you identify specific behaviours, processes, or procedures and write them on sticky notes. Make sure every person has their own pile of Post-it notes and place them on the chart. Now you have created a starting point for your innovation strategy. 


Proven insight generation method 2. Trend spotting.

Futurists use a simple acronym called STEEP to help prompt their trend scanning: 

  • Socio-cultural 
  • Technological 
  • Economic 
  • Environmental 
  • Political 

When you search through your media and research information, you don't want to get caught up reading everything. You need to filter so you can get to the juicy trends fast. When scanning, ask yourself, "Will this emerging trend impact my customer, industry, supply chain, me, and organisation?" 

Let's talk about some other scanning tools. Many of the best futurist software search tools are pricey. Yet, many have a free trial, which is long enough to get some valuable intel. (I've listed some futurist tools and software for you to access at my website www.ideaswithlegs.com/resources.

You'll find a free trial for an excellent AI futurist tool on the ShapingTomorrow.com website. This is an incredible search engine for discovering trends, implications, and ideas. 

Search for Google Trends and head to the page to conduct trend searches. The search trends identified are based on all the Google searches people perform every day. This can be an insightful tool to determine what people are searching for and whether interest in that search term increases or declines. 

Proven insight generation method 2. Scenario planning
Many people think that futurists make predictions. In reality, they anticipate potential scenarios so their clients can prepare for them before the competition. 

Scenario planning starts with identifying the key drivers and uncertainties that will affect the world you will be reinventing in. This is followed by selecting the most critical ones to use as an X and Y axis, which will enable you to create a quadrant you will use to create scenarios. 

Based on your trends research, identify your key uncertainties and drivers and create a quadrant model using the axis's critical risks. 

Proven insight generation method 3. Future World Scenarios

Construct what each scenario could look like and the implications and opportunities each scenario presents.  


Select a time frame for your scenarios, whether that's twelve months or twenty-four months or longer, if you prefer. Part of this activity is to act as if you are a writer. You need to write about each world as if it is believable. 
 
Consider the following: Step into the shoes of your future customer in this future world: 
  • What are customers buying, what do they expect, what do they need or want? 
  • How is the business being conducted, and how are people working? 
  • What is the business environment like based on the trends, drivers, and uncertainties? 
  • Where are the opportunities and new markets? 

Proven insight generation method 4. Contingency plans
Now that you have a good idea of what's likely to happen, your next step is to create contingency plans to deal with each scenario.  

In creating contingency plans, I ask my clients eight simple questions to help them establish their contingency plans. 

Answer these questions to create your contingencies for each scenario to the best of your ability. You may discover that parts of your strategy can be repeated in other scenarios:

  • What type of product or service will enable you to succeed in this scenario? 
  • What kind of business model would be best suited for this scenario? 
  • Which market would we have the best business outcome for this scenario—business to business (B2B), business direct to customer (B2C), business to government (B2G), or business to non for profit (B2NFP)? 
  • Where should you compete geographically—locally, nationally, or globally? 
  • Do you want to compete on price?  
  • Or do you want to compete on product differentiation? 
  • Which processes and systems would you require in this scenario? 
  • Which people skills would you need? 

Proven insight generation method 4. Bottlenecks
If you have a bottleneck in your customer journey or internal processes, they will likely create some pain. By identifying the bottleneck, you then have the ideal place to reinvent. Everything flows smoothly again once you can alleviate the bottleneck, meaning happy customers and happy teams. 

Consider these questions as you find the bottlenecks:  
 
  • Are there any intersections that create friction? 
  • Are there any stress points or processes that get overloaded easily? 
  • Where do we find we get the most misunderstandings
  • Where do our customers, or do we make the most mistakes
  • Which areas have the most complexity for either our customers or us? 
  • When we have a surprise problem pop up, where and when is that most likely to occur? 
  • Where do we have to provide the most assistance to our customers or our own teams? 
  • Where do we get the most prominent objections
  • What's the biggest fear a customer has about using our product or service? 

Proven insight generation method 5. The insight ladder
Identify any beliefs and values that have been ignored or have changed for the customer. For example, are there any false beliefs a customer might have about your industry?
Identify any experiences and aspirations that your customers may encounter that have not been capitalised on or addressed. 
Can you identify any needs that are being ignored by your business or industry?
What typical feelings are your customers encountering? And what new behaviours are they doing as a response?
PROVEN IDEATION (IDEA GENERATION) METHODS YOU CAN USE FOR YOUR ORGANISATION
Proven idea generation method 1. Substitution
What could you substitute in your business product, process, or service solution that would improve it? E.g. "What material or process could I substitute when building my product?"
  
Proven idea generation method 2. Combination
What Could You Combine in your business product, process, or service solution that would improve it? E.g. "Could you combine one material with another?"  
"What products could be bundled together to sell that you haven't considered before?" 
  
Proven idea generation method 3. Adaptation and addition
What Could You Adapt or add to your business product, process, or service solution to improve it?
E.g. What could I add to improve the visibility or usability of this product?
What could I adapt to automate a part of our service?
What could I add that will increase efficiency?

Proven idea generation method 4. Elimination
What Could You Eliminate in your business product, process, or service solution that would improve it?
Take a moment to think of the untouchable tasks or thinking you could dare to eliminate: 
  • A lawyer who can no longer charge by the hour 
  • A restaurant that can no longer have diners 
  • A butcher who can't cut meat 
  • A beautician who can't touch a customer 

Yes. I know these seem far-fetched, yet the elimination method will force you to make new neural connections when taken seriously. 

Proven idea selection method 5. Sorting

Sort and assess your ideas using the following scale. Score each idea accordingly.


A common problem organisations encounter with insights and ideas is not having a fair and transparent way of selecting the best ones. Many innovative programs and initiatives have crashed because ideas were approved or given the axe without explanation. Even worse, countless times, favouritism has led to one person's idea being selected over the others. 

The three criteria you can use to objectively categorise an idea are:

1.Tactical: "How well does your idea respond to an insight? Is this a market problem people want to be solved and is this a strategic fit for our business?" The better your idea responds to an insight you've discovered, the more the problem is one the market wants to solve. The more strategic it is, the higher the score out of 10. 

2.Technical: "How many unknowns are there? Do you have the technical skills to solve this?" If your idea has hundreds of unknowns or you don't have the technical expertise to solve them or the money to get expert help, then the score out of 10 would be very low. 

3. Financial: "How deep are the pockets of this market? How big are the rewards compared to the risk involved?" If the market you will tap into is cash strapped and the market isn't massive, your rewards are likely to be small, and then you'd have a low score out of 10.  

Total up your score for each idea, and you now have a clear, transparent way of assessing ideas.
PROVEN VALIDATION METHODS YOU CAN USE FOR YOUR ORGANISATION
Proven validation method 1. Insight Merit:

Validating the insight merit will reveal how much interest people have in a problem solved by either measuring an action they do or have done. For example, one way to test the merit of your insight is to write a blog post about the problem you are addressing. Suppose the readership figures for a blog post you wrote about a problem you are addressing has increased by 30% compared to your average. You now have some reliable data to validate that you've got a problem worth solving.

 
Top Five Ways to Test the Merit of Your Insight
  1. Fake door testing/feature stub 
  2. Spoof landing page 
  3. Smoke test (test advertisements) 
  4. Classified advertisement 
  5. Product demo video

Proven validation method 2. Market Appetite: 

Validating the market appetite will verify the customer's willingness to pay and tests the level of commitment someone has relative to the effort of behaviour required. For example, visiting and browsing a website takes little effort or commitment and isn't a sufficient validator for a willingness to buy. But making an effort to click a buy button, or fill out a survey, demonstrate a commitment and effort that translates into a willingness to buy. 

Here are the top four most effective ways to test whether your customers are ready and willing to pay for your solution.  
  1. Run a paid event on problems and solutions. 
  2. Create a buy now simulation. 
  3. Collect pre-orders. 
  4. Look into crowdfunding. 

Proven validation method 3. Solution Effectiveness: 

Validating the solution effectiveness will inform you whether your solution effectively solves the problem. Rather than building the whole prototype, you create a fast, inexpensive prototype to test one component for your solution. 

For example, you might make a paper prototype to show how a user might experience your designed app. You then have something you can quickly test on someone and use to elicit helpful feedback.

The Top Five Ways to Test Your Solution Effectiveness
  1. Paper or cardboard prototyping 
  2. Mashup 
  3. Five people test 
  4. Quick exposure memory test (five seconds test) 
  5. Sean Ellis product-market fit survey 
PROVEN COMMERCIALISATION AND EXECUTION METHODS YOU CAN USE FOR YOUR ORGANISATION
Proven Production, Quality and Logistical prompts
  • Ability: What could you alter to make it easier to use? 
  • Viability: What will make your product or service better able to perform in various conditions from extreme to favourable? 
  • Durability: What will make the product or service last longer or sustain the effect for longer? 
  • On-demand: What other ways could you build each product when an order comes in? 
  • Storage: Where and how will you store materials or products or service teams? Is there a better way of storing, arranging, and accessing it? 
  • Packaging: How can you package goods or services more appealingly? What will create a magical opening experience? What will protect the product? In what ways can the wrapping reflect your brand? 
  • Remote manufacturing: How could the product be remotely manufactured closer to each customer to eliminate or reduce transportation costs? 

Proven Design prompts
Never underestimate the power of design and aesthetics. The more beautiful or appealing it is to the eye, the more likely people will want to use and engage with it. 
  • Proportional: What composition feels like it's in proportion? Is there too much information, or should there be more imagery or white space (or maybe nothing)? 
  • Physical: What colour, shape, texture, material, or reflectivity will make this more desirable? 
  • Quieter/louder: What will make this sound better or more interesting?
  • Shinier/duller, brighter/darker: Will changing the lustre or luminescence help the appeal? 
  • Closer/further: What if you made the location closer to …? What if you moved that button closer to …? 
  • Smoother/rougher, tougher/softer: What textures will more appeal to the customer? 
  • Sustainable: What will make this more sustainable, either environmentally or economically? 

Functionality prompts
Here are some simple prompts to improve your product or service functionality: 
  • Repairable: If something breaks, could the user fix it, or could it be repaired elsewhere? 
  • Faster: What would make it function more quickly? 
  • Slower: What could you slow down to make it safer to use or more comfortable to use? 
  • Stronger: What can you add or replace to make it more durable and more robust, less susceptible to wear and tear? 

Outsourcing prompts
Is there anything you could outsource in the construction of your innovation?

Here's a snapshot of when you should outsource:  
  • Beyond your technical expertise and skills 
  • When you don't have the time 
  • When it's not cost-effective 
  • When your skills can be better spent on a task that no one else can tackle 

Pricing/ Affordability prompts
Affordability is a big part of the success of a reinvention. It isn't always about having to make it cheaper. Making it more expensive can work for an exclusive luxury product or service.

Try some of these prompts: 
Cheaper:
  • What will be the highest cost in building this sucker? 
  • What could you construct cheaper? 
  • What materials could you use that are cheaper? 
  • What can you use that is cheaper but maintains the same quality? 

Dearer:
  • What could you mark up in price that will help create more exclusivity?
  • What could you do to make your product or service appear more exclusive? 

Payment frequency of financing:
  • How could you alter your payment system or structure to make it more affordable? 

Creating a Unique Value Proposition (UVP) prompts
If we take too long to get our point across, people will switch off, and we lose out on a potential community member. An effective UVP will help you get your point across.

The What, Why, How UVP 
This simple and minimal yet effective UVP focuses on the what, why, and how of your product. <Our productis the <standout wayto <create a benefit >.
 
Here's an example from one of my service offerings from my business, Ideas with Legs: Reinvention Sprint is the fast, easy way to discover more profit. 

Help Someone Do Something Special UVP 
This UVP method allows you to consider how you help someone accomplish something special by using your product. Our product helps <target market> accomplish <activity or outcome> by <action>. 

Here's an example for my business, Ideas with Legs: We help vigilant companies innovate by turning ailing products into leading industry reinventions. 

Community/ tribe building prompts
Understand that a market is a community, and each community needs to be reached a certain way. The three elements to building a community are: 
  1. Clarifying the targeted communities 
  2. Accessing a community 
  3. Building a community 

People join communities when they feel there is a sense of belonging. If you don't feel like you belong in one, why would you join a community? Continually share with your community your cause. Why are you doing what you are doing? 
  • Ask people what they want to hear. Your job is to lead and serve your community, and asking them what they need help with is the easiest way to do this. 
  • Make your members the topic. One of people's favourite topics is themselves. A simple way to do this is to run a live activity with one of your members and capture it. People learn more and connect more when they see themselves in a situation. 
  • Be clear about what you are not. 
  • Human vulnerability and professional capability. People love vulnerabilities but not at the expense of your professional ability. 
  • Help your community to create content. User-generated content (UGC, as it's known in the marketing biz) can also be a powerful tool to build community and create talked-about stories for conversations with your community and beyond.

Distribution, partnership prompts
  • Are there any new ways of distributing the product or service you haven't considered before? 
  • How could other people process orders and deliver goods to the customer on your behalf? 

The top 21 things you should ask and expect from an innovation agency
Use this list to help evaluate the capabilities of your potential innovation agency.

Here are the top 4 things you should ask and expect from an innovation agency in the insight and strategy phase
  1. A comprehensive list of emerging trends that will significantly impact your customer, industry and sales.
  2. A future world scenario plan that identifies the four most likely scenarios that will play out due to the emerging trends and future drivers (usually drawn as a quadrant). 
  3. A contingency plan to capitalise on each potential scenario.
  4. A list of the most ignored or unmet customer needs, frustrations, or desires that can be capitalised on.

Here are the top 3 things you should ask and expect from an innovation agency in the ideation (idea generation) phase
  1. An extensive list (minimum 100) of ideas that respond to a customer or future trend insight. This may be a new product or service idea, an improvement or a process rethink.
  2. An ideation sorting template/ tool that enables you to objectively quickly assess ideas based on i) tactical criteria (how well the idea responds to an insight), ii) Technical criteria (how many unknowns are there and do we have the technical skills to solve them?), and iii) Financial criteria (the depth of the market's pockets, and the rewards versus the risks).
  3. A shortlist of the ideas based on the ideation sorting criteria.

Here are the top 7 things you should ask and expect from an innovation agency in the validation (prototyping) phase
  1. A list of their suggested ways to validate that the problem has been identified is one that the market truly wants solved.
  2. A list of their suggested ways to validate that the market is willing to pay for a solution to the identified problem (objective data based on visitation numbers etc.).
  3. Creation or assistance in creating and running validation experiments to test demand.
  4. Suggested plans to validate/ prototype that chosen solution/s effectively solve the problem.
  5. Creation or assistance in the construction/ outsourced construction of a prototype
  6. Objective user testing with observation and non-biased interview questions after use of prototype (min 5 test users per trial)
  7. Feedback improvement suggestions and retesting, including UX improvements

Here are the top 7 things you should ask and expect from an innovation agency in the commercialisation and execution phase
  1. Production, Quality and Logistical recommendations/ support
  2. Technical recommendations/ support
  3. Outsourcing advice/ evaluation
  4. Pricing/ Affordability structure and ROI timeline
  5. Creating a Unique Value Proposition (UVP) for the product
  6. Community/ tribe building strategies
  7. Distribution, partnership opportunity identification
CONCLUSION
You can innovate as consistently, predictably, and effectively as a professional innovation agency like ours. It won't happen overnight, but it can happen if you follow the proper steps. Primarily covering the four critical phases of innovation.

You could hire across a range of Innovation archetypes and have them work together to create innovation. This is easier than you might think. We have a diagnostic tool if you are interested to see what skills and behaviours your team may be missing and need.

You could hire an innovation manager to implement an innovation strategy and facilitate innovation across the critical four phases of innovation…

But very few innovation managers end up in the role with any real innovation training. That means they're winging it and that the innovation never eventuates in any serious returns. 

If you're an innovation manager struggling to understand innovation but don't have the budget for an innovation consultancy. Consider our innovation mentoring or our innovation membership group called the Reinvention Club.

You could hire an innovation agency like ours. We'll teach you how to innovate from scratch. We'll show you how to create innovation strategies that work. We'll share our 60+ innovation techniques documented in simple to follow flow charts, videos and workshops. These flowchart methods cross all four critical innovation phases and enable you to continue innovation happening for many years to come.

If you choose to go with an agency, whoever they may be. Be clear about your expectations and use our list of 21 things you should expect from an innovation agency to ensure you get the service and support you deserve.

Cheers,
Nils

PS If you liked some of the innovation hacks I shared you'll love my latest book The Reinvention Sprint.


Nils Vesk
Founder of Ideas with Legs
Innovation Keynote Speaker

Author
Father

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About Nils Vesk


He's the founder of Ideas With Legs.

His  clients call him a Reinvention Renegade. Nils Vesk is an international authority on innovation and the inventor of the ‘Innovation Archetypes Process’.

Around the globe, leading companies such as Nestle, HP & Pfizer turn to Nils to share his proven innovation techniques for formulating commercial insights, ideas, extraordinary customer experiences and irresistible products.

Nils unpacks the million-dollar innovation principles used to create rapid growth for the future.

Nils is the author of a number of books including "Ideas With Legs - How to Create Brilliant Ideas and Bring Them to Life", and "Innovation Archetypes - Principles for World Class Innovation".

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