5 Reasons Why Research and Development is Essential for Digital Agencies
We often associate Research and Development with product companies or large enterprise organizations. In many situations, organizational word association with Research and Development would lead people to think of groups like Microsoft, Boeing, or Dyson. In most cases, few would associate digital agencies with this type of initiative.
Many digital agencies are missing out on the key opportunities that a Research and Development investment can bring. Initially this might not seem like it fits. Why would an organization dedicated to consulting work with clients find value in a process or practice that does not seem to be tied to its core business model? After pondering this issue for the past few years, I have identified five core reasons why this is both a worthwhile and fruitful investment that every digital agency should seriously consider.
For digital agencies, Research and Development can be defined as any internal initiative which does not directly benefit its main line of business.
1. For some ideas, an agency simply should not be limited by the client’s scope, budget, timeline, and vision.
Every project for a digital agency has constraints: time, budget, scope, resources, etc.. When dealing with client projects, one of the biggest constraints is the constraint of vision. In most cases clients have a vision of where the next waypoint will be for a project, and the agency’s job is chart a course for that point. While there is certainly flexibility in the path, the end destination is generally set.
What if the vision were solely in the agency’s hands? What if an idea could be formed, manipulated, and massaged by the team that is creating it? Many in product development are used to this kind of freedom, but in those cases they are limited by scope. The overall effort must still fit within the vision of the product as a whole. What Research and Development offers within the context of a digital agency is the opportunity to create and build with complete freedom of both vision and scope.
This allows the agency to take the input of the best and brightest that they employ and craft a vision that can be truly groundbreaking. Most employees at digital agencies have experience solving complex challenges across multiple business verticals, technical platforms, and design mediums. This makes their input for this collective vision an absolutely essential element of the R&D process. Even in Research and Development projects there will be constraints such as time and budget, but the freedoms of vision and scope allow the digital agency to explore areas that were previously off limits.
2. It benefits the agency’s clients.
One of the benefits associated with Research and Development is that the freedom from the vision constraint the agency’s clients can expand the clients’ view of what is possible. In many cases Research and Development can lead to new initiatives with clients in areas they would simply have not pursued or even thought of. Time and time again I have seen new projects, new clients, and new types of experiences that have come about through clients vision being expanded solely by an R&D project which served as the catalyst.
In many situations where the client sees an agency’s capacity to help sculpt something extremely innovative, they are more open to bringing an agency in at the strategic level to breathe innovation into their own processes.
3. Research and Development will lead to alternate streams of revenue.
The collective knowledge of a digital agency is powerful. With the combined experience of designers, developers, and strategists who solve problems for multiple organizations, clear areas of need within the industry will emerge. In many cases, if these areas of need are capitalized upon, there can be additional streams of revenue that develop.
This can take many different forms. It could be licensing software that the agency used as a part of the internal development process. In addition, it could be creating a product that streamlined the creation of digital experiences. It could even be creating an application that exists in one of the public app stores. Whatever the form it takes, it is a new stream of revenue that would not have been possible without dedicated time to foster new ideas in the context of Research and Development.
Some streams of revenue can only be realized when the agency breaks out of the traditional billable initiative paradigm.
4. It allows the agency to sculpt where a technology, trend, or strategy is going.
At any digital agency there are areas of specialty which are unique from other creative organizations. In these areas an agency may be able to see farther down the road of that technology, paradigm, or strategy than others. In these areas the agency has the power to help guide the entire industry down that path by showing others what is possible when moving outside the bounds of what most think possible. In some cases, this can become a vision that influences an entire industry.
In few situations are the kind of transformative ideas fully realized in client projects. There can be bits and pieces, but in most cases the agency is still limited by constraint of the client’s vision. In the digital agency’s Research and Development environment, these ideas can thrive and be brought to fruition exactly the way they were intended.
5. Research and Development will allow an agency to attract amazing talent that has a desire to work on cutting edge initiatives.
The truly great designers, developers, and strategists want to be somewhere where their ideas have room to breathe and grow. In addition, they want to work with others who have amazing ideas and have a track record of building amazing experiences. Nothing creates a beacon for this rare type of employee like a thriving Research and Development practice.
Another benefit of this is that as the agency attracts this type of talent, it grows the knowledge base from which it can pull for its overall Research and Development vision. In the end this can become a symbiotic relationship where these employees can thrive in an environment where their ideas are valued and the organization can benefit from new areas of exploration that benefits their clients and create new sources of revenue.
Research and Development is an investment for digital agencies. It is not something that has the tangible immediate benefits of client projects, but its long term effects can dramatically affect an organization’s culture, perception, and even revenue. For those that are in a leadership role at a digital agency, it may be time to consider what is being lost by not investing in an environment where internal ideas can grow and thrive.