Are You Ready For The ‘in-house Era’?

Tom Davenport, a fellow of the MIT Center for Digital Business, gives his view on automation, jobs & the future of work in the a16z podcast. I share his theory that businesses are going to start taking a lot of the work in-house, which has been traditionally outsourced in the past decade too agencies. I wanted to get a deeper understanding of this trend, why it is happening and what that means for brands and businesses. It is clear that the indicators for this shift have been blinking for a while now. Furthermore, the opportunities this trend presents for industry and marketers are significant. So what are the indicators? With any major shift, changes don’t happen overnight. A number of businesses have been built to help brands bridge the gap to the in-house era. Companies like Oliver are designed to build in-house agency teams working “at the very heart of the organisations”. A major challenge for brands has often been idea creation and innovation. Traditionally, agency partners have done a lot of this work, but we are seeing this model change. A surge of brand innovation initiatives, brand based incubators/accelerator programs and labs / studios are being built in house (John Lewis, Visa, Shop Direct, Capital One, Unilver etc…). Brands are taking back control of the process to design more focused, relevant and owned solutions. They aren’t doing this on their own, companies like lmarks are serving this need to execute this work. The surge of innovation has also bred a new type of agency that is more consultative, transformational and entrepreneurial (excuse the buzzwords). From agencies developing their own incubators (Lucky Generals’ Lucky Enterprises) to companies like IDEO, a design and innovation consulting firm, that is recognised as number 2 in the global top 50 ad agencies by online presence. The 21st century agency is a different breed (Postshift). When talking with global brands, it feels like a lot of their work is based on engaging their audiences on non-proprietary platforms like Facebook, Instagram, Twitter, Just East, Deliveroo etc… These platforms are also making a conscious effort to engage directly with brands as well as agencies. With brands developing a robust understanding, and subsequent plans around their target audiences on these platforms, the traditional role of the agency comes under threat. With supplier development services (and now design) becoming increasingly commoditized, the freelancer economy may be growing quicker than forecasted. Brands are building freelance but in-house teams working on brand projects and products. This could be driven by the value of proprietary products and IP, and, how the process of creating value has become easier (not easy). Consumers adopt technologies far quicker than businesses and brands can. Brands either have to react as quickly as possible to consumer behaviour, or predict how behaviour is going to change. Using partners and agencies adds an extra layer of decision-making, alternative agendas, management and ultimately bureaucracy, which is likely to slow down brands reaction and delivery times. Don’t believe me, check out this video on the what the digital services team do at Direct Line group. The volume of platforms and combination of options available to brands and marketers to achieve their objectives is vast. Whilst there is a risk of cognitive overload (LOOK AT THIS!), most of these platforms are designed to help people do their jobs more effectively and more efficiently. Platforms follow users and users move quickly, driving are requirement for a more adaptable work force and flexible products. Supplier agency partners often focus on their own specialisms, which is a good thing, but I think they will start to struggle unless they develop propositions that fully embrace and capitalises on the demand for platform based solutions. So what does this mean for brands and marketers? Brands will have to become responsive and adaptable. Beyond websites, mobile applications, dynamic ad-serving, media planning/buying, conversation UI, chat bots, IoT etc… it’s the core business behind the brands that will have to become organisationally responsive. Those who don’t won’t have the team, strategy, culture or skillset to respond to the pace of consumer behaviour change. Marketers will start to use platforms and technologies to augment, rather than automate, jobs and tasks. Augmenting will allow marketers to reduce the mundane tasks within our roles and focus on how technologies can be used to be more creative, entrepreneurial and enterprising. Businesses will have to provide management styles that support people, not employees. With more pressure to deliver, increasing change of job augmentation (and automation), flexible workforces, new ways of working, the people (not employees) we work with will require more support than ever before. Brands will need to be more purpose-orientated, rather than task orientated… Establishing a clear, human, purpose that defines an adaptable vision and mission will be increasingly important to attract and retain customers, staff and partners. Those that don’t will be in a race to the bottom. I.e. if a consumer sees you and all your competitors on Facebook, building an app, delivering a great customer service — how would you differentiate yourself? It will become harder for brands to find the people that fit the role, culture and organisation, and it will be harder for people to find the role, culture and organisation they want to work for. However, when teams are established around purpose, culture, agility and vision, teams will be more stable, for longer. As you can imagine, insights and the ability to uncover insights from focused and qualitative data will be more important to brands than ever. Brands will have to look beyond the data derived from platforms. To identify opportunities, understand audiences, plan projects, use platforms and improve products/services to build a better brands and business. We will need to find quicker and more accurate ways of gathering, analysing and utilising data. For another comprehensive and articulated perspective take a look at Jules Ehrhardt’s article — State of the Digital Nation 2016. With all this ahead, how are you going to adapt to and capitalise on the in-house era?