For most of my early career in the 90s and 2000s, design agencies were the leaders. They could attract the best talent, they had the most mature processes, and they had the ability to try new things and break new ground that internal teams (who were then still small and new) couldn’t muster.
Then I co-founded my own agency, Adaptive Path, and we built our business around that same value proposition to tremendous success. We were never a big company, but we had an outsized impact thanks to our willingness to keep pushing that value as far as it could go.
But things changed for design agencies as internal teams became more mature, and organizations increased their investment in their own design capabilities rather than seeking outside support. The state of the art of the work seemed to have moved in-house, with best practices and the best talent pools being defined by enterprises more than agencies.
But I can see a new future emerging for design agencies with the advent of AI. Once again, internal teams find themselves at distinct disadvantages that create market opportunities for nimble, AI-engaged agencies. The pressure is on for companies to develop strategies for AI and take action on them, but they may not be able to get there without outside support.
Internal teams cannot move fast enough. I’ve heard in conversation after conversation with in-house design leaders that they’d love to engage their team in the broad experimentation necessary to define an AI strategy—if they could only pry the team away from the seventeen urgent priorities already in front of them. Internal AI initiatives end up pieced together from side-of-desk time rather than driven by the strategic focus of an externally-driven process.
Internal teams are distracted by external pressures and distinctly overwhelmed, providing a distinct advantage to an external team that can stay focused on what’s most strategic. External teams can also help a leader shift the perceived priority of a particular initiative among stakeholders, essentially using a scope of work as a lever to force decisions.
Internal teams often can’t take action on their findings. Synthesizing discoveries into strategies and then plans for action would seem to be design strengths—and they are—but many internal teams have not hired for these skills and have not built out reliable processes for this work. Agencies can build strengths here that would be slow to develop internally.
Internal teams are not set up for risk and experimentation. As with the early periods of the web and smartphones, this is the time to try new stuff even if you’re not sure where it’s going, recombine ideas that otherwise wouldn’t go together, and be willing to take a hit on a metric to take a chance on a new direction. Internal teams are often too large and/or politically encumbered to absorb that kind of risk. But an external partner can.
Internal teams are often not incentivized to consolidate and grow knowledge. Building and sharing knowledge is vital to sustaining the value delivered by an agency, but in-house politics and communications practices can incentivize knowledge hoarding and turf wars. This means an enormous advantage for agencies in getting better than their clients, faster, at the new techniques and technologies.
The truth is that the dynamic exploration and formalization of process this phase requires plays directly to the strengths of design agencies. For agency leaders, the challenge is to develop an internal environment and culture that creates the space your in-house clients can’t create, for experimentation, discovery, and synthesis of best practices.
The opportunity for design agencies is to reclaim the value proposition they offered before design shifted in-house: We’re already learning this stuff on a deeper level than your team. We’ve already made the mistakes you can’t afford your team to make. We’ve already collected the skills and the methods to get you there.
Having seen the incredible progress we made the last time agencies took the lead, I’m excited to see the pendulum swinging back the other way. In my leadership coaching and AI strategy consulting work, it’s been genuinely fun to help agency leaders take ownership of this moment.
Jesse James Garrett 