The study, conducted in association with H+K Strategies, provides both a snapshot and a somewhat longer view of the profession relative to its creative path.  But as with any study, the real insights are when the results of similar questions are considered together.

This year’s study included the question “Do you think the PR industry is set fair to deliver and lead creativity in the next five years, in terms of …?”. Respondents had four categories to respond to: Talent (hiring, training, diversity of workforce), Innovation, Agency Business Model, and Leadership.

Here’s how the responses netted out:

Unfortunately, this question wasn’t included in last year’s study, so there’s no way to know if there’s been a change. But there are both insights and dichotomies when the responses to this question are compared to the response to others.

Take talent for instance. Responses to a separate question about how agencies reward creativity indicated less than half (45.7%) do so as part of an annual performance review and a third don’t reward it at all. Taking that into account, how then could the industry as a whole be well positioned to hire, train and diversify for creativity into the foreseeable future? How many people – regardless of age group – will want to continue to work in an industry that says it values creativity, but your chances of being rewarded for it are less than 50 percent?

Let’s move to innovation. The greatest percentage of respondents to this question believes that the industry is poised to lead in this area. That’s all good, but when compared to the 50% of respondents who rated the current quality of creativity as ordinary in a separate question, there’s clearly a lot of work that needs to be done to get the industry to a leadership position in innovation over the next five years.

The Agency Model received the lowest percentage of yes votes relative to the long-term view and the highest number of no’s. Should we be surprised? The model has been in question for some time now, yet no one seems to know what to do about it. Unfortunately, when these numbers are combined with the fact that Leadership got the second lowest number of yes votes and the second highest number of no’s to this same question, it’s not difficult to see that the industry may be stymied in its efforts to be more creative.

Clients and agency personnel alike are providing some possible solutions. When asked if they could only do three things to improve their own or their company’s creative capabilities here are the top five responses:

–       Improve use of insight

–       Ability to take more risks

–       Educate clients

–       More budget

–       Clearer client briefs

Three of the above require more direct money and two require more time, which equates to more money. With money involved, change in the agency model and leadership mindset will be necessary to address all or most of these.

In other parts of the report, client input suggests they’re willing to spend the money on innovative ideas, but not if there’s no data to back up the approach. Advertising agencies have never had a problem with this. They create ideas, test them, iterate on the results then present concepts based on data. Brainstorming might have gotten them to the initial idea, but the results of the brainstorm typically don’t go immediately to the client without some kind of data to back it up. That’s a model that PR firms aren’t used to operating within but may need to get comfortable with.

It’s encouraging to see that the industry as a whole is continuing to move toward a greater focus on being more creative. This has been a conundrum that has affected PR for decades. But verbalizing what you want to be and proving it are two different things. Rather than pointing to ad agencies and wondering why they get to wear the creative mantle, PR needs to take a clue from them and mimic what’s allowed them to do so. It’s going to have to start with agency and in-house leadership – their future and the industry’s may depend on it.

Every chapter of Living Networks is being released on this blog as a free download, together with commentary and updated perspectives since its original publication in 2002.

For the full Table of Contents and free chapter downloads see the Living Networks website or the Book Launch/ Preface to the Anniversary Edition.

Living Networks – Chapter 5: Distributed Innovation

Intellectual Property in a Collaborative World

OVERVIEW: Innovation and intellectual property increasingly dominate the economy. As technology advances, no firm has the resources to stand alone, and collaboration with others is becoming essential. This means that new business models are needed for developing intellectual property and sharing in its value. Open source software provides us with valuable lessons that can be applied to many other aspects of business and innovation.

This chapter on innovation and intellectual property was one of the most important in Living Networks, I thought, and is absolutely as relevant today as five years ago. Innovation is the source of the majority of value-creation in a networked world, and how we deal with intellectual property can either enable or block human progress, on every level.

The nature of the intellectual property landscape is that the structures are highly rigid, by definition being set by legislation. However attitudes are rapidly changing, and new approaches such as Creative Commons have gained enormous traction over the last years. Certainly innovation is seen more today than as something that happens across boundaries, though most organizations are still hesitant to open up. The critical next phase is in innovation in innovation models.

The chapter begins by explaining a few basic shifts:

* Innovation and intellectual property increasingly dominate the economy.

* Greater complexity means collaboration is essential.

* Changing flow is reshaping the role of intellectual property.

* We need new business models.

It goes on to explore the role of intellectual property, beginning with a telling anecdote:

In 1421 the government of Florence awarded the world’s first patent to Filippo Brunelleschi for a means of bringing goods up the usually unnavigable river Arno to the city. He demanded and was duly awarded legal protection for his invention, being given the right for three years to burn any competitor’s ship that incorporated his design.

Fast forward almost six centuries, and the global economy is dominated by intellectual property, and the flow of information and ideas. This “property” exists in the space of our minds rather than under our feet, yet it is by far the most valuable economic resource that exists today.

The key issue is the fluidity of intellectual property. One of the developments over the last years has been the growth of so-called patent trolls. The negative impact of the patent landscape on innovation is gradually being exacerbated.

The chapter then goes on to look at the open source movement, and how the principles can be adapted for other commercial ventures. I used the story of Goldcorp, the gold miner which opened out its geological information in order to get better insights on where to drill. Don Tapscott’s book Wikinomics, coming out four years later, opens with the same example.

I also discussed Creative Commons, then a new idea, as a way of increasing the fluidity of ideas. I am delighted that this has gained enormous ground since then, now being a staple of the Web 2.0 world of blogs and content sharing.

The last section of the chapter focuses on implementing distributed innovation and value creation. This is still an issue I spend much of my time on, as this is going to be one of the most important economic issues of the next decade. If we can find effective ways to create and share value from innovation across diverse and distributed groups, the global economy will be transformed. I offer five key principles, followed by the example of how Hollywood does it, as they’ve been successfully using business models for distributed innovation since the 1930s.