*3.2.4. Agency innovation*

competitor activity, regulatory change, and social/cultural influences. Most importantly, the innovation cycle explores how customers' needs are changing and their "jobs to be done."

All these inputs are then the fodder for generation of ideas for new customer propositions which are then developed, filtered, and tested. The output from the innovation cycle will vary from an articulation of high-level opportunity areas through to headline business plans and

Most organization leaders recognize that different resources, capabilities, and processes are needed for innovation. Where they differ is in their approach to handling innovation alongside "business as usual." Detailed below are some of the archetypal approaches we have observed, from the rudimentary to the more sophisticated. Notably, none of them fully

The organization is entirely preoccupied with short-term performance and next quarter's results. Topics such as strategy and innovation only make it onto the annual awayday agenda as afterthoughts. They are discussed in an unstructured way and get sidelined if anything else overruns. No individual is specifically accountable for innovation; it is deemed to be a little bit

Real innovation happens either at the whim of a senior manager who has seen what a competitor is doing and thinks "we should be doing that" or in a state of panic when the organization faces existential crisis from, e.g., a new disruptive competitor or the loss of a major customer.

The CEO has read somewhere that innovation is everybody's job, which encourages suggestions from across the organization. The majority of suggestions will be about fixing operational issues and dealing with everyday gripes. If the suggestion box is supported by working groups to pick up the ideas, this can be a great way to channel a flow of improvements.

However, the usual outcome from such schemes is an initial flurry of enthusiasm and ideas,

The main limitation of "suggestion box innovation" is that it will primarily provide incremental performance improvement ideas, which is really better considered as an underpinning of

The importance of innovation has been recognized, and somebody (usually a middle manager) is assigned responsibility for it, in addition to their regular core business responsibilities. It is supposed to be 50% of their time, but because of the prevailing power structure and

address the inherent tensions between bridging performance and innovation.

of everybody's job, which of course ends up as nobody's job.

followed by organizational indigestion, silence, and disillusionment.

the performance cycle rather than the innovation cycle.

implementation pathways.

8 Marketing

*3.2.1. Awayday innovation*

*3.2.2. Suggestion box innovation*

*3.2.3. Side-of-desk innovation*

**3.2. Current approaches to innovation**

In a fast-moving industry, the organization recognizes that it needs external help to stay up to speed with what is happening in the world outside. Disruptive thinking is outsourced to an expensive innovation agency that is fantastic at idea generation and beard cultivation—but would struggle to boil an egg.

While they may be steeped in the language of design thinking and agile project management, they know little of the realities of business and what it takes to cross the bridge from idea to delivery.

Recently, technology and business process outsourcing consultants have been acquiring innovation agencies in the hope of owning the entire customer experience, leveraging digital technologies and getting into space that has traditionally been the domain of the large advertising groups. We are skeptical of treating core innovation as an outsourced service.
