In this edition of Innovation Inside, Samuel Tait interviews Mutant’s Daniele Fiandaca on defining innovation and its roles within culture, execution, commercialisation and success.

As European CEO, Daniele Fiandaca helped transform Profero from 22 people London into a truly global business with 10 offices worldwide. He is the co-founder of Creative Social, a global collective of creative and agency leaders and co-founder of Innovation Social which is going to be launching at a global level this September in New York.

As head of innovation for Cheil he helped re-engineer the agency from a one-client business to become one of the fastest growing and most interesting agencies in London. Recently he has been helping drive innovation as a course leader at Hyper Island and through his consultancy Mutant he supports brands and agencies coming together to drive change and grow through collaboration, creativity and innovation. Samuel Tait speaks with Fiandaca about defining innovation, and its roles within culture, execution, and commercialisation through to how he was involved in developing a pre-cursor to Tinder.

 

Samuel Tait: What is your definition of innovation and how have you approached it within your career?

Daniele Fiandaca: If you look at the definition of innovation, it’s finding new and better ways to solve problems and open up new opportunities. I would argue that since I joined the advertising industry, that’s what I’ve been doing.

When I was CEO at Profero, we were always finding new ways to deliver to clients. A lot of my role was looking at how we could build a culture, but also how we could grow internationally and create a different type of network. If you look at the DNA of the culture that we created at Profero, I’d say my role was actually creating a culture that supported innovation.

Often, if you examine the role of someone that is involved in innovation, it doesn’t necessarily mean they have to always be delivering the innovation themselves. All they need to do is deliver a culture in which innovation flourishes.

Innovation, for me, therefore is looking at being creative. I’ve seen a definition that states, ‘Creative is coming up with new ideas, innovation is actually doing them’. Where innovation become a much bigger part of my life was the three years leading change at Cheil as the head of innovation. Part of that job was firstly looking at creating new things. Most of the role was empowering people, getting people excited, getting them inspired, but also making sure we had the right infrastructure to deliver.

That means hiring the right type of people with the right mindset.

 

ST: What type of culture best supports innovation?

DF: It’s a culture where people know they can have ideas – brave ideas – that will be supported. It’s a culture that is extremely agile. At Profero we developed a programme around ‘boundless creativity’, and were always looking for new ways to actually train our people. We gave them platforms to be more creative.

For example we wanted to increase the profile of Profero so we introduced a program where for the first three months, account executives and any junior creative that came into the business were put on a project that we called the ‘PR Project’. For three months they analysed our PR and actually compared us to our competitors. They then presented to the whole agency a summary of that PR; how we came across against our competitors and also a set of recommendations.

It highlighted the importance of PR and people being proud about what we talked about. Also, those account executives became account managers who then became account directors. It became ingrained within our business. They cared about our business.

When we first launched our social media offering, it was actually launching a social media offering that in itself was innovative. I remember we put out a very cheeky press release saying, “Profero have not launched a social media department”. We actually integrated it globally. We recruited 50 people who then became part of this thing called ‘The Hive’. It became integrated into our business.

 

ST: It was once said that you can’t call it innovation unless you execute. What is your perspective on innovation as a combination of ideas plus execution?

DF: I don’t think they can be divorced. I think they have to be put together. I’m currently working with an innovation agency. What I love about innovation agencies is that a lot of the work they’re doing at the moment is actually helping businesses to change.

Sometimes that is by creating labs that help them deliver products that they can then feed back into the business, but, actually, the ones that work the best are the ones that actually dovetail with change management. Therefore an innovation lab, for me, should be a part of a wider change management programme.

What I like about that definition in regards to having to execute is that it shows how the digital agency has been traditionally better at innovation than traditional advertising agencies, because traditional agencies haven’t historically made stuff. Innovation is the doing, the delivery, the execution of an idea.

I wrote a piece about the key differences from my experience of digital versus traditional agencies. The piece that I missed out – because I hadn’t really been in a traditional ad agency – was the making and doing. I hadn’t realised how far away they had become from actually making stuff.

It’s now all outsourced. Production is outsourced. You might turn up on set, but that’s not making it yourselves. The job that we had to do to re-engineer Cheil was a bit easier than it would have been in a traditional ad agency simply because we had the shopper marketing and the retail design capabilities as part of the business. It was actually used to making stuff.

 

ST: Do you therefore think of innovation as a process rather than an output?

DF: That’s a really interesting point. I’ve looked at things like Ideo, Frog Design and those businesses. They are extremely process-driven. Sometimes, looking from afar, it feels too process-driven and maybe lacks some of that creativity. I think it’s a combination of the two.

 

ST: What is the role of the customer in innovation?

DF: I think the customer is fundamental. Ultimately, a lot of the innovation that is happening in tech are not actually driven by human behaviour. For example, The Bakery, is an accelerator for predominantly tech companies in the marketing space, a lot of their challenges are that they’ve come up with an innovative way of looking at, and analysing data.

Their innovations are extremely advanced but they don’t understand what the use of that technology actually is. It’s because a lot of them are excited about tech, but real innovation happens when you find a solution to an existing problem, and something that actually ties into real human behaviours.

There’s some stuff that I just look at and think, ‘That’s just not going to work – it just isn’t rooted in human behaviour’. I still don’t think we have quite worked out how mobile is going to add the most value to our lives – sticking phones in people’s faces, capturing a gig rather than actually living it and always checking your phone during dinner is not adding value to our lives.

At the moment, we have too many people on mobile phones the whole time. I think we’re seeing a backlash with some venues and events banning mobiles phones. Some people could argue that the Apple Watch is trying to fill that gap of being less intrusive, although I am not convinced.

 

ST: What is the role of change management in innovation?

DF: The key point from change management is that you need to take people on a journey. It’s a journey that they have to go on themselves. There’s something called the ‘change curve’. We talk about it quite a lot when we’re doing Hyper Island training.

When you ever face a big change in your life, the first thing that happens is that you’re scared. There is denial; there are barriers. When I do Hyper Island training at an agency level, it’s really quite hard.

We did one for a big network. It was really interesting. There was one person in there who was completely in denial – you could see it on their face. They just didn’t want to be there. They were extremely disruptive. They left after the first day. It was the best thing for the group to be honest.

Whereas when you do an open master class, people have already gone through the denial stage. They’ve accepted they need to change. It becomes an absolute delight, but at the heart of Hyper Island is learning by doing. I think that’s also a key part of innovation. This is why I don’t think you can split the ‘doing’ from the ‘having ideas’.

We now live in a world where you have to do. You absolutely learn by doing.

At Cheil we talked about being digital first and implemented a digital first strategy. It actually put everyone’s backs up, because at the time they weren’t the most digitally savvy agency. It made digital feel more important than anything else going on and that’s not the case. Even terminology, the words we use are really, really important. Looking back, probably saying ‘digital at the core’ as opposed to ‘digital first’ would have made a big difference to helping the organisation change its mindset.

 

ST: What is the role of commercialisation in innovation?

DF: I think the role of commercialisation in innovation is taking those ideas through and actually delivering them, and then building on them and understanding what value it can create and getting it in the hands of people.

I was talking to someone today about the fact that I once came up with something that could perhaps be seen as a precursor to Tinder. We built something called ‘Take Me, I’m Yours’, about four years ago.

Fundamentally, the insight was that when people first meet, they are shy. I watched it happen in front of me when I was in Sydney. I introduced two people that I thought would get on. They met the first night and there was obvious shyness, but the first thing they did was to connect on Facebook. Then, nothing really happened.

Then, it reminded me. I went, ‘Wait a second’. I think about when I was at school. Before Facebook, everyone had friends about which people used to say, ‘Oh, come on, when are you two going to get it together?’ They never did because they got to a stage where they become platonic friends.

It was that embarrassment of one of them turning the other one down. I thought, ‘Okay, so how could Facebook solve that issue?’ We just built an app where you could scroll down your Facebook friends and you could choose anyone that you secretly fancied and you could write them a note but they would never get that note unless they then used the same app, picked you and wrote you a note.

Then the minute that you both matched each other, you would each get that note. The reality was I did it as fun. We didn’t have a budget behind it. We got PR, and some articles on PSFK. But we left it at that. ‘Okay, we built it, it was fun.’ We should have built on that insight to commercialise the idea. Only then would you be able to call it innovative.

 

ST: Risk is an inherent part of innovation, especially when you’re doing things that haven’t been done before. Is there any secret you have learnt in how to mitigate risk?

DF: No secrets. Although I do think that understanding what risk is, is hugely important. I think a lot of the time people forget that you also have to look at the level of investment you’re putting in. When we first started Profero, we had a disproportion of agency and client eyeballs and time for the amount of investment.

It was very easy to start off with a one-million pound budget for a TV ad, when, actually, no one really knew what the results were. Instead everyone would spend a huge amount of time on the 50,000 pound digital budget and it’s results. There was no perspective in relation to the investment.

Therefore perspective is really important – to look at that perspective and understand it from the outset. I think that is a great way that you can mitigate risk.

 

ST: How do you think innovation should be measured?

DF: Fundamentally, it should lead to tangible business results. There should be a return of investment. Sometimes it’s harder to put a number on that immediately. As mentioned previously businesses find it very hard to have perspective. Why is it that the advertising industry is so very slow – and continues to be so very slow – at innovating its own business and business model?

Primarily it is because it is an efficient engine that is making TV ads that actually make the business good money and at the moment it’s not going away. The lack of innovation is been driven by that – there is no immediate crisis.

Blockbuster Video would have been the same. Kodak would have been the same. The music industry was definitely the same. They had a model that worked for them. Why change it? Then, someone comes along and disrupts it. They say, ‘Oh, my god, my business has vanished.’ The trends were there, they just didn’t care, or didn’t want to go through the pain of change.

If we look at manufacturing now, manufacturers need to be looking at 3D printing. ‘What impact is 3D printing going to have on my business?’ If you’re selling cars, you need to ask, ‘how is the sharing economy going impact my business, and how can I open up opportunities through the sharing economy?’ In 10 or 20 years’ time, what is 3D printing going to mean for Ikea.

Interestingly enough, a business like Ikea that is quite innovative and forward-thinking, you’d like to think they actually understand what 3D printing means for them and have plans to exploit it.

 

ST: As a course leader for Hyper Island, what do you see as the value of external expertise in delivering innovation?

DF: It’s fundamental. Collaboration is fundamental. If you look at Cheil, Samsung Mobile was our biggest client, but purposely, we didn’t build a big mobile delivery agency simply because when you go out into the marketplace, you realise that mobile is moving in so many different directions, you have different expertise and internal capability.

Why compete? Why not just collaborate? If I want to do something in virtual reality, I know that the first people I’ll go to is Unit9 because they’ve developed a virtual reality specialism.

Having said that I do think all agency businesses need to have an internal technology director. I think that’s really important because tech is so important, so fundamental to the delivery of anything, especially if it’s innovative. Innovation doesn’t mean technology. I think innovation doesn’t have to be technology, but there’s no doubt that technology facilitates a lot of innovation.

 

ST: What are the process or tools that you think best support innovation?

DF: Some of the best innovation actually happens face to face. Being collaborative. Using collaborative tools, different ways of actually working in teams, trying to get away from email, some real basic stuff.

If you look at some of the smartest people who are running advertising agencies today – they haven’t properly tackled a business problem with their clients for years. One of the tools we have developed is a product called a ‘mutation’ session, which is all about supporting agencies to work more collaboratively with clients.

It’s iterative brainstorming with a different mix of people in the room, including the client. Everyone has to go in, do the homework, and give their point of view on what they think the challenge is. Again, it’s learning by doing. We’re not connected enough to the people that we’re actually looking to engage with so how can we innovate when that is missing?

 

ST: What do you see as the biggest challenges facing marketers right now?

DF: Connecting with the right audience in the right way. If you look at the younger generation coming through – they appreciate the value of brands. Brands actually have a role in their lives. That’s really positive for marketers. But then marketers have to understand the best way to connect.

This issue they are dealing with is market fragmentation, and all the different possibilities available, and the different agencies that are giving different advice. They also have to understand who to take the best advice from, and they have to be brave enough to actually do things differently.

Marketing also doesn’t have the same power in the boardroom that it once had. I think marketing needs to reconnect itself to business results.

 

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Innovation Inside is an interview series that goes behind the hype to talk realistically with leaders of innovation, what they do and how innovation works within their companies. The interview series has been developed in partnership with Samuel Tait of innovation consultancy I/O. Do you want to recommend someone for to interview? Get in touch to suggest an interviewee.