Matt Isaacs is Founding Partner of Essence, which picked up Econsultancy’s 2009 Most Innovative Digital Agency award.

I’ve been talking to Matt about what innovation in digital, and how to foster this innovative culture within an organisation. 

Matt will be speaking at Econsultancy’s Future of Digital Marketing event on Wednesday (there are still some places available). 

Can you give me some background on Essence?

Essence is a digital agency founded in 2005 serving clients across media, creative and design & build arenas. While we are based here in London and currently have just one office, more than 70% of our business is actually outside the UK, primarily on large Europe-wide accounts. Clients include Google, eBay, Expedia, Betfair and Cancer Research UK. 

Our background is perhaps a little unusual since none of the founders come from agencies and we started life through a very entrepreneurial exclusive deal with a single very large client, Carphone Warehouse Group. We acted as internal agency for CPW and almost digital troubleshooters across the Group. We had previously done a very similar thing within LloydsTSB Group (as was).

What makes something innovative?

Something that changes consumers’ perceptions of the ‘status quo’ or accepted principles. From Ford’s Model T to the iPhone.

What are the characteristics of great innovators?

I’d say four things:

1. Curiousity. They collect information from seemingly unconnected arenas, just because they are interested

2. Lateral thinking. They use that information to see connections between things that others don’t see as connected – such as applying business principles from one industry to another (like Ford taking the processes used in meatpacking factories (“disassembly lines”) and creating the first mass assembly line for car manufacturing)

3. They are often mavericks who don’t like to accept the status quo and are always looking for different ways of doing things (there’s no greater challenge to an innovator than ‘that’s just the way it’s done’)

4. Persistence. Not giving up at the first hurdle, they keep going against advice. For example, Dyson is said to have had 5,000 prototypes before launching the breakthrough Dual Cyclone vacuum cleaner – and it was rejected by every existing vacuum cleaner manufacturer.

How do you build an innovative company?

Innovation comes from people. So to build an innovative company you need the right kind of people. But beyond that I feel strongly it’s about deliberately creating an environment where you put people with very different skillsets into the same space and seeing what comes about.  

We put marketers, creatives, media specialists, technologists and analysts into the same space and just see what happens. It’s not about forcing them into a particular process – you don’t get innovation through ‘innovation workshops’.  It’s about the conversations that are overheard around someone’s desk, around the watercooler or more often than not over a beer.

Obviously it also helps if you’re working on the kind of work that has the potential to be innovative. As an agency, that means working with innovative clients, and we’re lucky enough to work with some very forward thinking clients.

Are most clients happy to go along with innovative ideas, or do you have to work hard to persuade them to take chances?

As I say, I think we are very fortunate. Many of our clients are at the forefront of their industry and are perhaps a bit more tolerant of risk. But there are definitely times when you meet real resistance.

I try to always keep in mind that our role is to build a compelling case for any initiative. The reality is that if we can’t convince a client to do something it was either a bad idea or we’re not doing our job properly.  

Having your ideas dissected and spat back out is an invaluable learning experience – you learn where the weaknesses are and come back stronger next time. And for the clients, it’s critical to remember that when you’re doing stuff that’s a bit more cutting edge sometimes it just won’t work – so if your client doesn’t feel comfortable taking the risk that’s absolutely their prerogative.

Can any company become innovative? What are the barriers to innovation within organisations?

Of course, organizations are capable of radical change but in practice it is very hard for a company to be innovative unless driven from the top. Many large corporates tend to build teams of similar minded individuals in the belief that they will collaborate better and therefore be more efficient.  

But innovators tend to deliberately create teams with differing skillsets and with inherent differences of opinion/view. They use that tension as a catalyst for more challenge, greater creativity and also as to spur on both new thinking and the drive to make it a reality.  

It’s not always comfortable, but it is more likely to drive innovation. The ‘mixing skills’ principle obviously often goes against traditional company organisational structures that represent an obvious barrier to innovation.  

Keys to success include:

• Loose organizational structures.

• Creating mixed skillset teams.

• Deliberately get people to do things outside their ‘role’.

• Encouraging differing opinions and debate.

• Giving people ownership of initiatives.

Why is innovation so important in the digital arena? Is there still plenty of scope for new innovation?

Digital is the only environment I can think of where marketers, technologists and analysts have to work together to make things happen – in many other arenas it can be useful but it’s not a requirement. That’s why innovation is so important in digital. To deliver, we need to get people who may not even “speak the same language” to collaborate in new and interesting ways.

In my opinion, the opportunity for innovation is growing not diminishing. The pace of change continues to accelerate and convergence of media, telecoms and technology will give rise to ever more new opportunities.

What are your top three innovations for 2010?

1. Android. It’s coming to a mobile, computer, TV or set top box near you soon. It is open and collaborative, but is it a mini operating system revolution?

2. 3D won’t make a big impact this year but perhaps the start of a virtual reality revolution.

3. Semantics. The most fundamental change in data management and manipulation since the creation of relational databases.

What do you see as the major trends in digital for the next 12 months?

  • Android apps is one, and 
I reckon the number of Android apps will overtake iPhone apps within 18 months. 
  • Another thing is digital partnerships; 
we are seeing a move amongst major digital advertisers, such as Expedia, to move beyond standard display into partnerships with major media players. It gives access to inventory and advertorial that is otherwise just unavailable.
  • Video
 is not new but it’s going to be a big year for video as the players move from prompting consumption with on demand services to trying to figure out the new revenue model for their entire entertainment industry.
  • Data/APIs/Mashups. We are just touching the tip of the iceberg in terms of what can be done with data and APIs and Mashups.
  • Brand metric measurement. 
Its not new but we are seeing renewed interest in brand (and other) metric measurement for digital campaigns as advertisers look beyond the last click.
  • Facebook advertising. 
We were one of the Alpha test partners for the platform. It’s evolving rapidly but fundamentally the opportunity is huge as ROI is very strong and the scale is growing. Anyone that doubted Facebook could make money, forget it. Google, watch out.

What do you have up your sleeve for the next Innovation Awards?

That would be telling ;-). But we’ll be keeping up with the latest trends of course. Watch this space!