Episode 427

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Agencies are under more pressure than ever to be innovative. While it used to be easier to solve your clients’ problems and wow them with a great solution, these days, it’s much harder to do that with the bar constantly moving. This is why it’s essential to develop an innovation strategy.

Wouldn’t it be nice to bring a lofty, innovative idea to a client and have them be over the moon and excited to be a part of the process? With the right innovation strategy, that dream can be a reality.

An innovation strategy can help your team jumpstart the creative and problem-solving process while leaving room for co-creation and collaboration with your clients. This streamlines the creative process and takes the pressure off you and your team to have all the answers while you search for the solutions to their problems.

Tune in to learn how your agency can become problem-solving and innovation experts by asking the right questions, enacting decisive decision-making, and building out a creative workflow.

A big thank you to our podcast’s presenting sponsor, White Label IQ. They’re an amazing resource for agencies who want to outsource their design, dev, or PPC work at wholesale prices. Check out their special offer (10 free hours!) for podcast listeners here.

innovation strategy

What You Will Learn in This Episode:

  • The hardest part of innovation
  • Collaboration is key for driving innovation
  • Boiling down the “how” of problem-solving and innovation
  • Creating an upstream methodology — the question-asking stage
  • Getting a client to buy into an innovative idea
  • The importance of collaboration and outside input for an innovation strategy
  • The landmines to be aware of in the upstream production stages
  • Workshopping ideas to produce quicker outcomes

“You must identify the right questions, get to the bottom of them, and draw the right conclusions to create a shared understanding. That's what unlocks alignment in decision-making.” @atifatif Click To Tweet
“I think the hardest part of innovating is actually making the unknowns actionable.” @atifatif Click To Tweet
“Over time, it's become a little less about the big vision and more about how teams think through the idea down to the process of unlocking alignment and decision-making. Collaboration is the key there.” @atifatif Click To Tweet
“Many executives are in a situation where they literally have minutes to make big decisions. And that's why some human factors like fear and thinking small can kick in.” @atifatif Click To Tweet
“The risk as a senior person is that people will do exactly what you say, and that's very dangerous.” @atifatif Click To Tweet

Ways to contact Atif:

Resources:

Hey, before we get to the show, I just wanna remind you that we have created a private Facebook group just for you, our podcast listeners. There are almost 1500 agencies, agency owners, inside that Facebook group every day talking about what’s going on inside their shop, asking for resources, gut checking decisions, talking about everything from pricing to hiring, to biz dev. All kinds of things are happening there. We’re starting conversations. You guys are starting conversations. What I love about it is the community’s coming together and sharing resources, encouraging each other, and just sort of having a safe place to talk about what it’s like to own an agency. So all you have to do is head over to Facebook, search for a Build, a Better, Agency Podcast group, or Build, a Better, Agency Podcast.

And you’ll find the group. You have to answer three questions. If you don’t answer the questions, we can’t let you in. But they’re simple. It’s, do you own an agency or do you work at an agency? And if so, what’s the URL? What are you trying to get out of the group? And will you behave, basically? So come join us. If you haven’t been there for a while, come on back. If you haven’t joined, join into the conversation. I think you’re gonna find it really helpful. All right, let’s get to the show.

It doesn’t matter what kind of agency you run, traditional digital media buying, web dev, PRR brand, whatever your focus, you still need to run a profitable business. The Build, a Better, Agency Podcast, presented by a White Label IQ, will expose you to the best practices that drive growth, client and employee retention and profitability, bringing his 25 plus years of experience as both an agency owner and agency consultant. Please welcome your host, Drew McLellan.

Hey everybody. Drew McLellan here with another episode of Build a Better Agency from Agency Management Institute. Super excited to bring this guest to you. He is got a really interesting methodology that I think would be fascinating to experiment with clients on. So I’m excited for you to have that opportunity to meet him and learn a little bit more about him in a couple minutes. But first, you know, this is airing in December, and 2024 is right around the corner, and it seems foolhardy to go into 2024 without some sort of a plan. And I know that annual planning can be offputting. I know it can be sort of paralyzing.

It feels big. And you know, like it has to be some sort of three ring binder with all kinds of charts and graphs and data. And while you certainly can approach it that way, we, we propose a much simpler methodology. So over the years we have, we have created and revise what we call very simply the a MI one-page business plan. And it really does force you to really sort of drill down into the most important things for you to think about and for you to focus on in the new year or whenever you use it. But since we’re coming up on a new year, we might as well think about it that way.

And so I would love for you to go and download that. It’s absolutely free. We would love for you to have it simple to find. And it’s agency management institute.com/and this is all one word, one page business plan. So again, agency management institute.com/all one word, one page business plan. So help yourself dig in, work with your leadership team. We’d just love to have you start the new year with a vision of where you wanna go. Alright, lemme tell you a little bit about our guest, then. I wanna spend as much time with him as possible, so we’re gonna get right to it. So Tiff Rafiq has a fascinating career.

He has worked for startups in Silicon Valley, he’s worked for Amazon, he’s worked for McDonald’s. And his role in all of those organizations was to be a change agent, to bring innovative new ideas and to bring those ideas to life and to execute against them. And so you can imagine the, the variety of experiences one would have and have with, you know, going from a startup to McDonald’s and trying to get both of those organizations to be innovative. So he’s written a book called Decision Sprint. And the book, the subtitle of the book, is The New Way to Innovate into the Unknown and Move from Strategy to Action. It’s a Wall Street Journal bestseller.

It’s a fascinating book and a fascinating methodology, and I’m really excited for you to meet a tiff and to learn more about it. So let’s get to it. Welcome to the podcast. Thanks for joining us.

It’s great to be with you, Drew.

So I’m excited. Innovation is such a hot topic always. But right now, you know, I think everybody is a buzz with the topic. So tell everybody a little bit about your background, how you came to develop sort of this methodology or strategy around innovation. And then I have a ton of questions for you.

Sure, Drew. Well, you know, I’ve worked on innovation from many different aspects of a business. You know, I kind of grew up in Silicon Valley at very innovative companies, including a place like Amazon where an innovative founder is at the helm. I’ve also, you know, ran a venture back startup, you know, in my twenties. So kind of created a company from scratch. So, you know, innovation has kind of been in my blood career-wise, you know, starting from from the beginning. Now, what’s interesting is I made a pivot about 10, 11 years ago to, you know, be in the c-suite of large organizations, incumbents generally less, less about innovation or about incrementalism, and kind of came into organizations like McDonald’s, Volvo, and MGM resorts to catalyze innovation.

So I’ve looked at it from a few different corners and, and it kind of brought me to the, the notion of like, what’s the common denominator to get innovation? Right? Right. And, and I found a common denominator, even though it might sound like, well, you know, you know, what could be in common between, you know, Silicon Valley and, and incumbent companies, but to do innovation well and problem solve, you really need to be able to navigate the unknown. And, and that’s why I wrote a book about that subject.

So tell us a little bit about the book, why you wrote the book. What, what are the takeaway? What are we gonna walk away from if we read the book? And then I, again, I have a, a lot of questions about, I think the methodology that you describe in the book.

Well, I think the hardest part of innovating is actually making the unknowns actionable. What I’ve found is that organizations have typically have one or two reflexes around unknowns. And just to back up a second, you know, I assume, and I think people will, it’ll resonate with, with everybody that to, you know, create value in companies, you need to get into new territory, right? And new territory comes with more questions than answers. That’s what I refer to as the unknowns. And the reflexes I’m referring to are generally either fear, which is, wow, this is a, this is a lot of, you know, a lot more questions than answers, so let’s water it down to the known commodities, right?

And when that happens, companies tend to ship something small and, and don’t realize their ambitions. Or, you know, the other end of the spectrum is being cavalier about the unknowns, where, you know, it’s a little bit of wishful thinking, and that can lead to waste and disappointment down the road. So neither are, you know, ideal. So the sweet spot is, is is a way to make the unknowns actionable so that you can navigate this process. So saying, okay, well, you know, we have a lot more questions than answers. How do we identify the right questions, get to the bottom of them, and use what the, the detective work we’ve done to draw the right conclusions and get that shared understanding?

That’s actually what unlocks alignment and decision making. And you can go better from idea to action.

Yeah. And you know, I think from the agency space, we’re expected by our clients to be innovative, to be be the idea generators, to bring them new things. And especially as you and I were talking about, you know, before we hit the record button, especially with AI, now, you know, our clients are looking to us to figure out all these new things and how to use them and leverage them for their business. So, so the timeliness of this conversation in your book is, is spot on. So talk to, talk to us a little bit about the idea this common accelerator. ’cause you’re right, when you think about McDonald’s and Silicon Valley startup, you don’t think, oh, I bet they operate the same way. So talk a little bit about maybe how you discovered this commonality and, and what it is.

Well, and the way I discovered it is, you know, I had a very large mandate to, you know, to drive transformation, let’s say in my first c-suite role at McDonald’s, where I was the chief digital officer of the company, actually the first CDO of the history of the Fortune 500. And within 45 days in joining, I was in front of the board. And you know, you don’t appear in front of the board to say hello. You appear to, you know, put something big on the table, a stake in the ground.

Well, especially as the first ever of something, right?

Exactly. Like, what is digitization? What does it mean for the future of McDonald’s? So right. I went up there and I said, look, you know, this company had been around 60 years, but really it’s about three things, taste, value, and convenience. I can’t help you with the first two, but I can really help you with the third one. Yeah. And so we’re gonna reinvent the notion of convenience and digitization as the way to do it. And then we were more specific about, you know, what that means as a consumer experience in terms of, you know, our restaurants and how they work and our staff and, and pulling all that together. So they, they loved it. And I thought, you know, we could just go ahead and start building,

Right?

But I was in for a surprise, which is basically, you know, trying to pursue new ideas in an execution culture is slow, right?

Right.

And so the realization I had, the learning I had is basically there’s the what and the how, by the what I mean, you know, the problem you’re trying to solve for the business or the customer,

Right?

And the how is, you know, the way in which collaboration gets done, the way in which, you know, teams work together to achieve that. What, and you need to pay just as much attention to the how as the what. So interestingly it, you know, over time for me, it’s become a little less about the big vision. How do we reimagine resorts or cars or, you know, a quick service restaurant like McDonald’s and more about how do teams actually, you know, think through, you know, the going from idea down to the process of unlocking alignment and decision making. I think the collaboration is really the key there.

And so I had to figure out a new way forward on the how for McDonald’s. And I learned a lot in that process.

So did you find that the, how changes dramatically based on the size of the organization or the culture of the organization? Or could you boil it down to this is how every organization can do this?

That’s a great question, Drew. I mean, I think at some level, you know, if you’ve got a dozen or two dozen people, you know, it’s pretty nimble. Yeah. And people sort of, you know, you don’t have functions and divisions and you know, those silos aren’t there, for example,

Right.

If you’re, you know, if you’re new, you know, you don’t have that institutional knowledge, well, you know, I’ve been here 20 years and this is what worked in the past, so I know

Right? We’ve always done it this way. Yep.

All of that, the know it all mentality, you know. So I think it, you know, once you get to functions, you know, you’re talking about over a hundred people, couple hundred people, and you’ve been around a little bit, you’re gonna need a system because otherwise you’re leaving it to chance and personality.

Right. And

Unless you have a Jeff Bezos at the top, you know, that’s probably not a good, you know, kind of hit rate for, you know, for being successful. So I think you need a system. And, and the book, what I talk about is a couple things. First is identify that there is something called upstream work, which is the stage where, you know, you’re not ready for execution. And teams do spend weeks and months trying to navigate through the unknown, trying to come up with trying to explore the subject matters, trying to put recommendations on the table, trying to get alignment, trying to unlock decision making. That is all part of what I call the upstream wor world. It happens before downstream execution.

So first we have to Label and name the thing, otherwise we’re not

Gonna right. And agree that we’re gonna do it, that we’re gonna leave room and time and energy and resource to do it.

Right. And interestingly, quite frankly, teams do it anyway. They just don’t have a name for it, you know? Right. That’s why they spend weeks and months before there’s a decision point, or yes, no, or buy-in, or lack of buy-in, they’re still putting the time and energy. So my, you know, what I offer is a way to actually have a method behind the madness to do it smarter and, and more streamlines.

Well, and I would also assume that having a method that everyone is, that everyone understands and agrees that, yep, this is how we’re gonna do the, how re removes some of the friction of the, just that early banging around against each other as you’re sort of trying to stretch and test ideas.

A a hundred percent. And lemme give you an example, you know, often you get in the room and there’s a new idea, idea presented, there may be a rush to judgment, right? Right.

The

Alternative is to offer like a method where you say, Hey, let’s, let’s do exploration. Before we do alignment, of course, we need to align. We need to, you know, draw a conclusion like, Hey, is this a good idea? Is it gonna work, make money for the company? And should we put time and energy to it? Absolutely. But how we done the right exploration, oh, okay, well, what’s that? Well, those are the kinds of things I elaborate on in detail in my book where I talk about how to build and run an exploration, how to start with a problem statement, how to source story questions to explore that problem statement, how to get to the bottom of these questions, and then how to use that work to draw conclusions.

Because if your conclusions are drawn, you know, on high quality information, well now you’re ready for alignment. And we know that that is just gonna be a better way forward than just going with your raw instinct or rushing to judgment based on blind spots, for example.

Right. Okay. So, so we have an idea, we wanna do the upstream work. So talk about sort of the methodology of what are the first couple steps?

Well, in building and running an exploration, you know, the first step is to craft a problem statement. So let’s take an example. Let’s say you’re Netflix. You, you’re in a meeting with the CEO and, and Reid says, boy, have we seen to have a problem with password sharing? You know, two people leave the room, one person says, I, you know, I had a meeting, I, I was with the CEO, and he said, we need to crack down on password sharing. Another person heard a different thing. And what they articulate to the team is, you know, Reed wants us to help us figure out how to balance between the needs of the user and the business. Those are two different starting points. Right.

And I guarantee you, you know, if you put the team on one mo versus the other, they’ll come up with different recommendations on the table.

Yeah.

The first thing is to, you know, craft the problem statement. Like, what’s the core fork in the road that we’re navigating? A second step is basically to actually dedicate time to source questions. I think the, this is the highest, this is how we get input from the organization. Like, what are the key questions that we need to be wrestling with, sort of the unknowns. And even spending two or three days giving the team time to, you know, source these suggest, suggest questions is very powerful. Because as an executive in a, in a company, if a team spent a few days and came back with a list of questions organized by subject matter, no answers, I’d be really confident that eventually we’re gonna get to the right spot.

And at this point, are you only sourcing questions from internal, your internal audience?

Correct. I mean, most organizations have the collective intelligence, whether they tap into it as a different question, right? They often, they don’t, because, you know, there, there’s human factors here. I mean, part of it is, could be silos, but part of it is, well, if you know a little bit of fear, if I ask this person, like, you know, they’ll, maybe they’ll tell me what they think is the answer, but Right.

Or shoot holes in it, or they’ll Yeah. They’ll torpedo the idea before we explore it or

Exactly Right. That happens all the time. Right? So the way to avoid that is to pick something neutral. And I look at questions as neutral and objective. Like, you can take a skeptic and ask them for questions. And what the questions do is basically they parse out the judgment. You strip out the judgment, right? And the skepticism, you’re left with questions, questions are actionable. You can actually say, okay, thank you very much. I think these are your top questions. Build that into your exploration. Do the work, work, come back and say, it wasn’t as hard as we thought. Right. You know, addressing some of the questions that came up. And that’s actually the way to unlock the alignment because that skeptic, even though they’re skeptical, they were able to put, provide input, which means their stamp is on the work in a good way.

Right?

Okay. So I’m gonna have a problem statement so that we’re all clear that the problem is the same for everybody. Everyone understands it the same. I’m gonna reach out to my constituency internally and say, Hey, here’s the problem statement. What questions do you have around this? What questions, if we’re gonna try and solve this problem, or if we’re gonna explore this, then what do I do with those questions?

So now you’ve sort of built the exploration and, and this is actually where teams spend, you know, weeks and months is right, the, the deep diving, you know, and it doesn’t need to be weeks and months. You know, it’s a matter of basically assigning someone to be point to answer a question and, and maybe one or two others to review it. And essentially developing these FAQs, which is kind of what Amazon refers to ’em as, you know, in the end it’s, you know, a two or three page document. It’s got the key questions organized by subject matter, and it’s got, you know, some answers which don’t always have data, but they at, at a minimum have some reasoning process and you can see it.

So if, if you build and run this exploration, I mean, it might take you, you know, one to two weeks, something like that, you now you’re ready to draw conclusions. So if you had, you know, based on this information, what conclusions would you draw? And, and then you’re ready to kind of craft and come up with some recommendations. And the beauty of this is you have the red thread between what you’re recommending and the work, how you got there, you know? Right. And that’s very powerful. Now you’re ready to do things like socialize your recommendations with, you know, executives or sponsors. Right? Because one of the frustrations for sponsors, and we’ve all been there, is like in a 45 minute meeting, you spend 40 minutes trying to understand how they got to the recommendations and all only five minutes sort of interrogating the qu those recommendations,

Right?

And many executives, you know, are in a situation where they, they literally have minutes to make big decisions. And, and that’s why things can, some of the human factors like fear and thinking small can kick in.

Okay. So I, I want to take a quick break then. I want to talk about sort of what is the best way to socialize an idea? And, you know, one of the things that’s changing in our business is, you know, if you were working in an ad agency and, you know, the eighties or nineties, for the most part, you were expected to have the answers. And we made recommendations. And clients either followed those recommendations or didn’t, or, you know, signed off on the plan, whatever it was. But today, with technology, and especially around ai, the reality is reality that in a lot of cases, we don’t know the answers. We, we are innovating on the fly with the client. And so I’m curious about how do we socialize ideas that we wanna experiment with, with a client when we’re not sure how it’s gonna work.

It really is still the exploration stage. So I wanna take a quick break, and then I wanna ask you about how do we as agencies, when we’ve got an innovative idea that we have to take to a client, how do we present it when it’s outside of our own organization and it’s gonna cost somebody money to do, right? And it’s not our money. So I’m just wonder, I’m curious about that. So we’ll take a quick break and then we’ll, we’ll chat about that. Hey, just wanna take a quick minute and tell you about a resource that we have on the website that I don’t talk about as often as I should. So it’s an exercise called My Future Self. And the reason why you would do this exercise is if you are in planning mode, and this is really for you as either an agency owner or an agency leader, but you really wanna think about what your future looks like, not the agency’s future, your future.

I find so many agency owners struggle with how they are spending their days, and is it fulfilling and is this what they wanna do? You know, in five years that we created an exercise, and I, I will tell you a a very brief story, but I first did a version of this exercise probably 15 years ago, and it basically walks