The role of procurement is increasingly growing to an end-to-end business partner, that is expected to have broad knowledge in a variety of disciplines. And with innovation budgets increasing year on year, it is crucial for any procurement professional to be able to evaluate potential innovation agencies, before partnering up.
Let’s dive in, and take a look at the main criteria for evaluating an innovation agency.
What does an innovation agency do?
Innovation agencies typically provide a mix of the following products and services:
Strategic consulting: how to define and position innovation in an organization; from setting an innovation mission, to translating it into objectives and creating a supporting governance framework.
Business design: building and validating new products and business models; from ideation to the first prototypes in a variety of formats.
Coaching/training: uplevel innovation skills across the organization. This is usually a mix of training on design thinking, lean start-up, and agile.
Open innovation: supporting organizations in collaborating with an external ecosystem of partners; from start-ups and universities to established technology providers.
7 criteria for evaluating an innovation agency
Here are seven criteria to help you evaluate your next innovation agency and partner in the best possible way. This selection of assessment criteria is specifically designed for evaluating an innovation agency, and goes beyond the generic business partner evaluation criteria.
know which skills you are looking to add
Since innovation consultancy, like any other form of consultancy, comes down to the people you work with, make sure you know what kind of skills you are looking to add to your organization. Depending on the type of products and services you are looking for, you will need different profiles:
- Strategic consulting: strategy consultants with a business background who understand how to navigate the corporate landscape.
- Hands-on entrepreneurs: ideally you can find an agency that has a mix of entrepreneurs that have worked in fast-paced environments such as start-ups/scale-ups, combined with intrapreneurs that have a background in corporate innovation. This will allow you to bridge the gap between a great idea and an implemented one!
- Coaching/training: consultants with a background in learning and development understand that innovation training is not an isolated event, but a long-term learning journey that someone in your organization goes through.
- Open innovation: similar to the hands-on entrepreneurs, you want to look for profiles that have experience with open innovation from the start-up/scale up world. Ideally these profiles also have a technical background, allowing them to better assess potential partnerships coming out of the open innovation programs.
Offerings can vary, make sure you ask for use cases
Innovation is an official contender for the buzzword of the decade… It’s being used in increasingly many contexts, causing confusion around the actual meaning of the word. The ambiguity of the word makes it even more challenging to select the right innovation consultancy. Additionally, every consultancy has its own way of translating their services into generic innovation terms. So how do you make sure you are selecting the innovation partner with the right offering, when their offering does not align 1 to 1 with your definition of the word innovation?
- Go broad enough when launching your initial RFP
- Ask for use cases, to get an idea of approaches and wording
- Find out where in the innovation process the provider has most experience, and see if it aligns with your needs
3. Local understanding
evaluating an innovation agency that has local market knowledge
As innovation often involves validation with local customers and markets, knowledge of local context and a strong network is imperative to success. This is especially true if you are looking to add hands-on entrepreneur skills to your innovation project.
4. Flexibility / room for ambiguity
Define clear deliverables but builD in flexibility in the approach
Working in innovation means dealing with ambiguity. By design, it is almost impossible to make 100% fixed scope proposals as you’ll rarely take a straight route to the finish line. This is especially the case in business design where you start from a business challenge that needs to be validated within a new market. This validation process will inform your project to continue, pivot or stop. The ambiguity of the project will let you either land under budget, if you invalidate quickly, or over budget in case you need additional proof points. A tip here is to split up proposals into a fixed budget and a time and material budget, to leave room for flexibility.
5. (Adjacent) Industry experience
Select an innovation consultancy that understands your industry, but do not expect deep industry expertise
Which other adjacent industries does this innovation agency work with? As an organization, you will likely have certain strategic adjacent industries or markets that you want to explore. Therefore, assessing your potential innovation partner on their experience in these industries, that are currently outside your core industry, will help you gain adjacent market insights and valuable input for future ideation sessions. An innovation partner with a broad portfolio of industries will be able to bring a lot of fresh ideas from non-obvious markets into your innovation initiatives.
6. Way of working
Look for an innovation consultancy that has a flexible, hands-on, and collaborative way of working
While many agencies have their own view on the innovation process and how they execute their services, this is also a good point of assessment. In a time where there is an innovation tool or methodology for nearly everything, asking your future innovation partner for their tool stack will contribute to the future efficiency and effectiveness of the collaboration. Make sure to align the internal process and tool experience with the experience and approach of your future innovation partner.
Look for an innovation agency that wants to understand how solving the brief will impact the business
Methodologies and industry experience are useless without ultimately making an impact with your initiatives. Impact can take different shapes and forms, like business impact, customer impact (NPS) or social impact where an agency has experience with bringing the UN sustainability development goals (SDGs) into an innovation strategy and implementing the right frameworks and processes. Assessing your future partner on the impact they helped create in the past is a great way to find a fit with your organization. Use cases and work portfolio is one way of assessing the real impact.
These criteria are not exhaustive, but are meant to serve as a source of inspiration when you are evaluating innovation agencies.
We are also very interested in hearing from your experiences what assessment criteria work(ed) best for your organisation. Let us know in the box below!
Let's get in touch!
After you fill in this form, one of our experts will reach out to you.