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Stephen, welcome to the AW360 podcast. I’m so pleased to have you on today.
Richard, thanks for having me here. So you are founder and CEO at Engine Digital. So to kick things off, tell us about Engine Digital.
Yeah, that is right. Well, I come from a strategy and design background, and that’s predominantly what we’ve built over the last 23 years. So we operate in that sort of blurry space between digital agency and consulting partner. And a lot of times we’re working with our clients upstream, we’re helping them with strategic ideation at that sort of invention level, and then downstream into end-to-end design and engineering. So more generally, I think what we like to say is we help our clients bring new digital products, services, and experiences to market. And that’s really about serving their end customers. Sometimes it’s serving their employees. For government clients, it’s serving constituents. We’re really a team of thinkers and builders. And at the end of the day, what we really like to be doing is helping our clients invent their future.
Very cool. Well, you work with then organizations at pretty much all stages of digital maturity. What is the most common roadblock that keeps innovation efforts from getting off the ground?
Yeah, I mean, it often starts with just a cultural challenge. I think whether or not innovation and sort of this ambition is built into the culture. I like to sort of flip that question around and think about what are the things that organizations need to do to get beyond these challenges, right? And this really starts from the support at the most top of the organization, right? And so having your C-suite buy into this notion that this kind of work is critical. And with that comes the right level of funding and the right level of empowerment. I think bringing the right trusted partners, having a process in place that makes sense, and just really embracing this as a critical part of moving a business forward and finding those opportunities for growth.
When it comes to that, especially the cultures that resist risk, how can you work with leadership to start to shift that mindset then within a legacy organization?
Well, the tricky thing is we’re not always invited in. So I think some of that change really has to start from within, right? And so there’s a lot of things that sort of can be done from the inside to really kind of break through some of the noise. I think it’s bringing the sort of idea of a desire to solve. Typically, organizations are interested in finding solutions to problems. They have less of an appetite to build. And so trying to sort of educate and inform, energize, and really sort of bring that energy across the organization. There’s a lot of things that I think people can do to introduce the methods. I think introduce some of the ideas, some of the things that are happening, whether that’s in their direct industry or adjacent to it, to sort of inform, you know, this is what we need to be doing as an organization to actually move some of these things forward.
As a partner, I think, you know, when you’re invited in, again, it is about the same sort of three things. It’s how do you inform, identify opportunities, and energize. Some of that comes through with just the basic notion of pulling people out of their day-to-day and putting them in the environment where a lot of that sort of intellectual IP that exists across an organization just has room to breathe. I like to think, you know, facilitating the right kind of workshop gets people thinking, gets people participating, and you’d be surprised at what exists inside of an organization that just doesn’t really have the venue for shareability or exploration. And I think, you know, as an outside partner, I love to see that energy happen. But you can often tell it’s not happening without our presence.
Well, let’s kind of dive into that just a little bit. You know, when it comes to existing assets that a company may have, what are some of the underutilized assets that you often see getting overlooked?
Yeah, I think it’s a really important question because I think a lot of organizations are sitting on assets that are just idle. They’re unused. They’re not generating any value to the business. That could be anything from content. It could even be something a little bit more theoretical, like the narrative of the business. Is that story being told? Are we actually leveraging the history that we have as a business that is part of our differentiation? And how does that actually live online? Does it live in some sort of digestible, consumable format that our customers or end users want to have access to? Maybe we haven’t considered that yet. You know, we’ve seen clients sitting on domain names, which sounds pretty trivial, but at the same time, you know, a digital experience that supports something that exists in the physical world that allows you to take that moment that typically, you know, in real life is like a day or a weekend and turn it into a 365 brand experience of some kind. Those are real assets that exist that I think if you can really figure out what the opportunity space is around that asset and then figure out the business case. And, you know, if we invest X, we will maybe achieve Y over time by putting the right experiencein front of our customers. That’s really powerful stuff that I think a lot of organizations, and unfortunately, just don’t have time to explore and sometimes just forget about. Let’s move from time to money for a moment. You know, innovation doesn’t always fit neatly into a budget line, unfortunately. How should companies think about investing in these initiatives without it feeling too much like a gamble?
Yeah, I mean, I like to think about it as two parts, right? There’s investing in sort of developing the backlog, managing the backlog, and just sort of enabling that upfront work to really figure out what are opportunities and what do we want to really explore as an organization? What problems do we want to prioritize that might already exist? How do we start to dig into understanding the real needs, the unmet needs that our customers might have? So there’s the investing in that piece of it, right? And so I think oftentimes that means making sure you’re allocating the right amount of capital towards the internal team that you need to actually facilitate a lot of that work and really own it within the business.
And then there’s the partnership side. So it’s making sure that there’s capital allocated to bringing in the right kind of partners, whether that’s a research partner, it could be more of an innovation partner, a design partner, whatever those sort of different groups might be that help you move some of these things forward.
The trickier question, right, is it was, you know, what is this going to take to build? Once you start to like solve for a problem, what capital is required to develop this concept? I think the biggest missing piece often isn’t just the cost to build, but it’s also to operationalize that idea. And that’s really the hard part. I mean, there is no really clear answer for that, except for, you know, how do you think about allocating some portion of your operating budget towards an annual spend where you’re going to actually move some of these ideas forward on an annual basis? I’d sort of compare it to, you know, what percentage do you allocate to marketing? Well, what percentage do you also allocate to really defining what the future state of your business needs to look like?
You mentioned partners. What makes for a good external partner for these organizations? And how should they decide who to bring in to help them, for lack of a better expression, take the leap?
It always depends. I think the first thing, you know, I think from an agency perspective, the first thing that’s always critical is chemistry, right? I think to do the best work together. And this work really does take co-creation. It’s really hard to bring in a partner and assume they will come back with a solution independent of any of that sort of intellectual IP that exists in the business. So the chemistry is critical because co-creation is critical. So I think that’s sort of step one.
The other, I guess, side to that, the other side to that answer is it really depends, right? Because there are certain categories where deep expertise is absolutely critical. And, you know, we’re talking about regulated industries or, you know, industries that just have deep, complicated histories where if you haven’t worked in that space, you don’t understand the pre-existing problems. You might have a hard time navigating towards solutions that are actually feasible and will make sense in a real world sort of application. So there are cases where deep category expertise is obviously critical. Some of those spaces, obviously healthcare, health and wellness, very complicated space, financial services to a degree. There’s a few others.
I think on the flip side, and something that we talk a lot about is just this idea of category cross-training. And, you know, you see from time to time, a lot of brands in a category all feel very similar. They’re all doing the same things. And to really break through and do something different, we like to talk about that idea of cross-training. How do you bring thinking and experience from other categories that starts to sort of disrupt some of that sort of built in the paradigms that might exist that if you’re not bringing outside thinking, you’re really not getting away from the standards and the approaches and the this is just how we’ve always done things sort of approach.
And so, you know, innovation takes one part knowledge and experience and one part, you know, the ability to ask the dumb questions that sort of break through some of the clutter of, you know, these are the standards that we just have to follow in a typical scenario. So it really depends. But I think it definitely starts with that sort of idea of how do we create together? How do we make sure we’re on a mission together and we’re working towards this sort of same understanding of insights and the same objectives? And that really stems from that sort of like shared culture and sort of shared motivation.
Would you consider those, you know, chemistry, deep expertise, et cetera? Would you consider those sort of the non-negotiables that an organization would need to commit to in order to build and sustain an innovation pipeline? Or are there others?
Yeah, I think so. But I think I would add to that too. I think, you know, the right way to think about innovation inside of an organization is it touches every aspect of the business, right? So you’re gonna have a lot of different partners that you’re looking at, whether it’s how are we tackling logistics challenges? Who do we need that has that expertise? Or, you know, how do we actually address some of the issues that might exist in our sort of retail ops side of the business? There’s, you know, innovation can sort of live in a lot of different places. Oftentimes it’s thought of as business innovation and certain groups inside of an organization might have access to consultingpartners. Oftentimes it’s also thought of as more of a digital thing, right? And so you have certain groups inside of an organization that might have direct line of sight to digital partners. I think the challenge is within an organization, how do you make sure all of your business units, all of your different areas of your business have a line of sight to some partners that can help move some of these things forward? And you don’t end up in a position where challenges exist that could be addressed by something like service design that, you know, frankly, any of these partners could help solve. But these business units might not know that that’s a tool that they’ve access to. So it’s more about like thinking about the breadth of how you’re trying to optimize the business in various different ways. And how do you actually create the right bench of partners where there’s some proactive relationship things happening, right? There’s a lot of learnings that are coming into the business by way of that relationship. But there’s also just this sort of understanding that different capabilities might make sense to address problems in different ways.
You’ve worked with everyone from media giants to pro athletes. Could you share a success story that illustrates what it looks like when innovation gets done right? And bonus points if it’s on the pro athlete side. I would say one of the biggest challenges with innovation work is sometimes measuring its success can be challenging. It’s not as a straight shot like a marketing campaign where we’re looking at metrics and performance data and we’re saying, hey, this idea made sense in market because we saw this result. A lot of cases, the challenge with innovation work is you can spend a lot of time, you can go deep, you can spend a lot of money, you can bring in a lot of partners and deliver a lot of value in a short period of time. The reality is some of this work doesn’t see the light of day for years, right? And some of it gets caught up in regulation, auditing and whatnot. So I think for us, maybe the measure of success, I think it really starts with understanding the needs of the team on the client side at the very beginning of the engagement, which is always different, right? In some cases, it’s we’re trying to move this forward culturally inside the organization. We need to prove out some wins. So we need to show that we can make some progress. And a lot of times what that means is just making sure that at the end of this sort of journey together, you’re delivering the value that they’re able to sort of shop around and socialize internally. And I think for the folks that live inside of large enterprise that want to make change, that are change makers in those businesses, they need those stories to help prove out the value of these efforts. And so I’d say in some cases, the win is we gave them what they needed. They were able to tell the story. And hopefully we’re getting buy-in to move these ventures forward. That always depends on a lot of different factors, right? Depends on the market. It depends on the sort of risk profile at the given time. It depends on where we are in the fiscal year. There’s a whole lot of factors that go into whether or not some of these new venture type projects actually move forward. Sometimes they’re just too complicated, right? Like the idea is there. We delivered good value in that first phase to really sort of bring some visibility to what this sort of new product or service might do for the business. But there really isn’t a stakeholder willing to put their name against the risk factor of investing millions of dollars into taking something to market. And sometimes that’s just, you know, the internal organization doesn’t have that expertise, right? So there are challenges around front. I would say on the flip side, you know, when we work with startups, I think it’s maybe even a little bit easier to quantify, you know, the success is if we led a new venture engagement up front that helped sort of clarify and concept and ideate and test and prove out that there’s value in this venture, you know, is this group able to go raise funds? And we’ve seen that happen several times. It’s really rewarding when you see that the concept work, the research work, the testing work that we do provides that sort of checklist that I think an investor wants to see that, hey, this is the right risk to take for us. Let’s move this forward. So that’s kind of like a couple of ways to look at it. I think with enterprise, there’s a lot more challenges that can move some of these things forward. But yeah, those are some of the ways that we might look at, you know, the success factor.
When you ask almost anybody in the industry right now what the most innovative things are, you’re undoubtedly going to have a lot of people telling you that it’s artificial intelligence. You probably knew this question was coming. Is AI something that you’re using at Engine Digital? And if so, how? And what are your thoughts on it? Yeah, I mean, absolutely. I think what first off, as an organization, yeah, I mean, it’s embedded through everything we do. So we’re writing code using AI tools. It’s kind of an interesting point in time, I think, for a lot of organizations where, you know, you’ve got a bench of engineers and you’re trying to sort of balance the right use of their time versus, you know, does it make sense to build this using a no-code platform or for an AI tool? So that’s kind of like creating this interesting tension where it’s like, well, it sort of justifies theidea that from a strategic level and engineering level, like we want to be using our human capital to solve bigger, more challenging problems that require a little bit more sort of experiential nuance than I think we can expect out of AI. We’re looking at it as an unlock. I think in the space that we occupy, I mean, it’s less of a, I think, a threat to our business and more of a, I would say, an enabler for us to do more and broader and more inclusive work, deeper work, more sophisticated work, more with less effectively. So that’s great.
I think what we’re going to see for a long time going forward is AI is going to drive just a large share of innovation activities that are happening within organizations. I think that’s kind of a good thing. I think it’s kind of also a little bit of a risk. And I say that because working with large scale enterprise organizations, I guess a couple of things:
We as a humanity have a tendency to sort of attract ourselves to the latest, greatest thing, the shiny object. We’re driven to it.
AI is a little bit different than some of the recent trends, or maybe I should say a lot different. I think it’ll have a much greater impact, obviously.
The tricky thing when it comes to business and leveraging some of these new emerging technologies is don’t let the technology lead. That might be, again, a little different in the case of AI where we should be looking at what’s the application across the business in a lot of different ways.
However, I would say there are still a lot of problems to be solved where AI might be a component of the solution, but it shouldn’t necessarily be the leading factor. Working with large scale organizations around the world, we’re still 2025 struggling with some of the basic stuff that we’ve been struggling with for 20, 25 years from a digital or experience perspective. So a lot of problems to be solved. I think AI is an unlock absolutely 100%. But I just would stress that absent of AI, there’s a really good product and service innovation work that a lot of organizations should be investing into that, again, AI can help. It could be an enabler, could help us do more with less, but not necessarily always being that sort of leading factor.
And looking ahead down the road for our industry over the course of say the next year or two, what sort of challenges or opportunities or even both do you see probably not taking that same seismic shift role that AI has, but things just coming down the way that you’re excited about or dreading, I guess. Hopefully not that. But what kind of things do you think we’re going to see?
Yeah, I mean, we’re obviously in a very uncertain market at this point. So there’s a lot of big questions, I think, from industry to industry on what the next several years are going to look like. If we’re going to see a decline in the market or things are going to tick up. I think the challenge I think for a lot of organizations is like, what do you do during those periods of uncertainty? Do you capitalize on it or do you sort of sit back and sort of wait for the smoke to clear?
And I think historically, if you look at the data and organizations that continue to invest in marketing and innovation, all those things, when there’s uncertainty, they take advantage of the moment and maybe even exponentially so. So I think what I’m most interested to see, and I think we are starting to see this, is a little bit of an uptick in interest in spending in the unknown at the moment. There was a lot of that sort of post-COVID. It sort of slowed down for a period. I think we’re seeing a return to that. We’re seeing, again, this sort of appreciation and demand for design as a really important tool in moving business forward.
So I guess like for me, the uncertainty is about like really understanding how do people capitalize on the moment? And for us, I think we continue to push this as one of our core areas of focus because we believe there’s just a lot of value if you can unlock it within an organization.
So what I’m interested to see over the coming couple of years, obviously, what’s going to be the real impact of AI once we get beyond the sort of like button that’s being added to every single product right now. And it really becomes this sort of like enabler under the hood. We don’t look at it. We don’t see it. But it actually just provides us a lot more value.
So from an AI perspective, interested in that. I’m interested in a lot of the things that are happening with robotics right now. There’s a lot of really cool stuff happening on that side of the world and obviously driven by AI and machine learning. But really interesting to sort of follow what’s happening in that sort of like the sort of overlap of physical hardware meets AI and technology that’s sort of enabling a lot of things that really were sort of sci-fi maybe 10 years ago are becoming reality.
If one wanted to find out more about Engine Digital, where should they go? Best place to go is enginedigital.com. We’d love to chat with you if you’re looking for any support in moving some of these things forward. We’d love to hear from you.
Well, Stephen, thanks so much for taking part in the podcast today. This was fantastic. Thanks a lot, Richard. Talk to you soon.
