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The 8 Essentials of Agency Growth
Some key principles on scaling any agency in the marketing, creative, digital and communication space

Ever noticed the sheer number of mediocre blog articles that have titles like “The 5 Most important drivers of business growth”, “The 9 Secrets off business success”, “7 ways to…”  etc., etc. 

If only it were that simple.

So its with some reservations that this paper is entitled “The 8 Essentials of Agency Growth”. So I invite you to put this article to the test.

The subject matter below  is actually quite vast and whilst it goes into a lot of detail and provides some instructions, it’s scope is to give you an in-depth understanding of the concepts; enough for you to take action.  

What’s in this paper and why is it relevant to you?

The information in this paper is not stuff that I’ve read up on in books. It the product of actual experience and accumulation of knowledge working with people like you.

During the course of my business career, I have covered a lot of ground. I have started a couple of business from scratch, sold one and publicly floated another. I have also bought and sold several businesses and was managing director of an operating subsidiary of a large multinational for over 10 years. In additional to owning my own agency for 12 years (before selling), I have also coached over 140 clients over a period of 18 years. During that time, I  primarily focused on the creative, marketing agency space, working with agencies in many different disciplines.

Each section of this article contains some instructional observations and information, and some instructions. I have included the stuff I give my clients – no holding back. You can use it as you please.

Like any general publication, it’s not written with your specific business in mind and so there are bound to be some points that are not relevant to you. The area that I have the most impact on with clients, is developing my clients understanding of, and approach to business. The intention is that they come away with a great deal of business acumen and confidence as businessmen and women and as leaders. They are then empowered to use their knowledge and ability in the furtherance of their business lives in anything they turn to. This cannot be achieved by following an over simplified, step-by-step formula, as attractive as that may sound. 

On that basis I have been fortunate to have had a number of very successful outcomes, with several of my clients selling their businesses for very respectable amounts and at high profit multiples. 

The most notable success story of my coaching career, from a pure growth  point of view was Reactive Media. This company was a team of 8 when we first met. The engagement went on for 6 years, ending in 2008 with the advent of the worldwide financial crisis, by which time the team was approaching 80 members. During the course of this article I will refer back to Reactive Media for illustration purposes.

The Typical Agency Client Profile

 Whilst they obviously vary a lot, the typical profile of most of the agency clients I have worked with is:

  • First business for the owner
  • Owners have no management or entrepreneurial experience
  • Owners have limited sales experience and have had no formal sales training
  • The businesses usually has less than 10 employees

The motivation of the owners engaging a coach is mostly to help to get the business onto a sound footing and to position it for growth. In many cases, there is a lot of work required to get the business to the point where growth can be pursued. I place a lot of importance of this because pushing forward with a growth agenda is extremely frustrating, if at all possible,  when the underlying business fundamentals are weak, not to mention risky.

Essential no 1. Inspirational leadership

The growth that any business achieves all comes back to its leadership. Leadership is what drives the business’s vision and its ability to execute. It drives innovation, customer service, competitiveness etc. etc. It’s what gives it the potential to be good and to achieve and make money. Without leadership no organisation can make progress in the competitive markets we operate in today.

If you look around at successful businesses, they all have strong leaders. But leadership is a concept that not many people are clear about.  Most people view leadership as a special personality trait; an element of charisma that you either have or do not have. They can’t define it but claim to be able to recognise it when they encounter it. Not true.

Leadership is not a monolithic concept. It can be broken down into components that can be much  more easily dealt with and so it’s most definitely not something that you need to be born with.

Consider these four components of leadership::

  • Set Direction & Strategy
  • Oversee Activity
  • Resolve Issues
  • Provide support 

These are all things that can be developed through learning, experience and training. They are straightforward and you can see that they could quite easily be tackled in an almost ‘mechanical’ way

But there’s not much in the way of inspiration there. If we think of the great leaders in history, we think of profound thinkers and great orators; able to unite people and mobilize them.  

In a business context, that’s not something you can ignore.

The best definition for leadership that I have found in this context is attributed to Dwight D Eisenhower : ‘Leadership is the art of getting someone else to do something you want done because he wants to do it.’

Let’s extend this to the plural and analyse this statement

 

Sentence part Interpretation Application
The  art Definition of art: :application of human creative skill and imagination to produce a pleasing result. Art has an element of indeterminateness to it as in: not everyone has this attribute. In a business context we seek to make it definite. So we can create certain constructs that will contribute to the result in a deterministic fashion.  A set of principles, values and standards
getting someone else This means enrolling people into something not of their own thinking and inspiring them to take action Convincing people through the power of your communication
to do something Something could be anything. It could also be multiple things; It could also be multiple actions that produce one or many results Execute specific actions i.e a plan
Because he wants to do it As a result of self motivation Ideas that result in mobilisation

You can see from this analysis that we can produce a set of predetermined constructs that will go a long way to actualising the definition and producing inspiration.. 

Even simpler yet, you can use this checklist of elements to support the human components of leadership;

  • Displaying enthusiasm
  • Showing care
  • Earning trust
  • Avoiding criticism
  • Building people up
  • Admitting your mistakes
  • Be a curious and active listener
  • Treat everyone equally and with respect
  • Remain cool and calm
  • Acknowledge the contribution of others
  • Remain humble
  • Do what you say and keep your promises
  • Stay true to yourself
  • Explore other people’s ideas
  • Never put people down

For most people, some coaching on these aspects will quickly produce a noticeable result. There are of course plenty of books to read on this subject. The most down to earth, practical, useful and easy to read of these in my opinion is ‘How to Win Friends and Influence People” by Dale Carnegie. An oldie but a goodie!

You can probably see how we would go about producing a high standard of inspirational leadership in your business that if followed, could have a transformational impact.

Essential no 2. A clear plan

A clear plan in this context means a plan that it is 

  • properly and thoroughly thought through
  • well documented
  • effectively communicated and ‘bought into’ by all stakeholders and execution participants

This is an aspect of the agency growth essentials that is generally extremely poorly done and the main reason for lacklustre outcomes. Everyone kinda knows that they need to have a plan, but in general, it is conspicuously absent. 

Plan Prerequisites

A plan is not something that you can sit down and do without first completing the plan prerequisites, which is what so many agency owners fail to understand and perhaps why they never seem to be able to a plan completed.

Here’s the definition: A plan is a sequence of activities or steps with details of timing and resources, used to achieve an objective

So before you can put together a plan you have to have defined your objective(s), otherwise known as your goals. The lack of formality of many business owners goals is the root of the problem. Even for those that do have goals, their goals are not well conceived or articulated in terms of S.M.A.R.T. goal criteria; which would be essential to ever getting them achieved.

Planning process

Anyone who has built a house knows that the planning involved is very non-trivial. When you build a house, one would normally collaborate with an architect or draftsman. They understand the regulations and the intricacies of the planning process and with their help, after a lot of work it gets finished. Without them you’d be lost. Your plan would most likely never get finished and if it were probably not be able to be executed . Thanks to the rigour of this process, most houses are completed as planned and you get what you wanted.

Most first time business owners have no real understanding of business planning. Some think a plan is superfluous. After all they know exactly what they are doing,don’t they! 

Those that realise that they need a plan either are too busy (usually after they’ve started the business) or if not, sometimes download a template and spend a couple of hours trying to understand how to fill it in, get frustrated or distracted and it goes onto the backburner, never to be looked at again. Meanwhile the business is plodding along, usually without purpose or result. So needless to say, this is not a scenario one would normally associate with healthy agency growth. 

It’s not to say that it is impossible. But it’s pretty rare. You see there are just too many variables, too many pitfalls and gotchas to get it right first time all by yourself. But that doesn’t really matter all that much, because by putting yourself through the process rigorously, you will learn a lot and do a much better job next time round. 

The core piece of the plan, that which demonstrates the business’s viability are the financial projections. Like a house plan, the fine detail only comes together when the detailed drawings are done. There’s no other way of getting it properly worked out and ready for building. In the business context, the financial projections serve the same process.

Other Planning Elements for Great Agency Growth

Aggressive targets and big rewards

Most first time business owners do not really understand the power of aggressive targets and big rewards and it is rare for agencies that are not run by highly experienced entrepreneurs.  

Part of the motivation of successful career sales people is the money they can earn. In a  good agency with aggressive targets prepared to pay what top notch sales people want to earn, this is what will happen:

  • The best sales people will be attracted
  • They will win the biggest deals for the least amount of sales management effort
  • The agency will win the best clients and get a great reputation
  • This in turn reinforces the attraction for the best sales people and you have a magnificent virtuous cycle

When you observe the occasional agency rising rapidly  – within the space of 3-5 years, hiring people and winning all the big deals, what is described above is happening.

In most agencies, revenue is the primary responsibility of the owners. They have too much on their plates to do as good a job as a really good sales person would. But they are trapped in a mindset that does not permit paying a great sales person substantially more than they are able to take from the business for themselves. Even though this is the path to much greater profits and much greater income in the long term.

A well conceived and executed Go-To-Market strategy

Your go-to-market strategy forms the basis of your plan of how you will present and deliver your value proposition to clients and achieve competitive advantage.

A well conceived G-T-M strategy will focus on a niche, where competitive pressure is far less and your service is unique or at least highly differentiated, so that you are not forced to compete on price. 

There are other advantages:

  • It’s easier to target your ideal clients
  • It’s easier to qualify your opportunities
  • It’s easier to make sales
  • It’s easier to hold on to your clients

This is all very basic marketing. Most of the time, however, it is not done to a high enough level, with enough commitment and conviction. 

In conceiving and conceptualising your G-T-M strategy you need to be extremely objective, exacting and thorough. All to often, the decision on the niche and supporting background research work is carried out with insufficient rigour. So the resulting strategy  is often not quite good enough to deliver the expected outcomes. And so it can become very frustrating and demoralising when the results elude you.

You should also be revising and refreshing this on an annual basis, because if you are any good, copycat businesses will appear and start to gnaw at your market or even perhaps your clients. So you have to sharpen your tools every so often.

In relation to your plan, the G-T-M strategy forms the basis of it. Only once you have the G-T-M strategy locked down, can you actually complete your plan. Its that central.

What do you need to do

In broad brushstrokes, these are the steps you need to go through to develop your G-T-M strategy:

  1. Identify the core abilities that your firm’s G-T-M will be based upon
  2. Rough out a Unique Selling Proposition. This means get it conceptually right but without developing the precise final form wording
  3. Identify your target market and ascertain the depth of the market potential
  4. Do a competitive analysis to see how much competition there is for your U.S.P in your chosen niche
  5. Develop your positioning and value proposition in relation to your U.S.P. and target market and align you brand with it
  6. Develop the client acquisition components

The process above is not necessarily linear. If for example you get to step 3 and you determine that market is not there, then you will have to iterate back to the start. You may need to do several iterations before you are happy with your G-T-M strategy. 

Well defined organisational structure

The name of the game for a growing agency is being efficient. You see growth requires investment and that obviously needs money. If the money you are generating from the work you are doing is insufficient to fund your growth, then guess what? You won’t grow.

Organisational clarity is where it all starts. This includes roles, duties, responsibilities, etc. Every single thing that needs to take place in your organisation needs to be owned by someone, who is in turn accountable for that. Clear and simple. If that is not the case, there will be distractions, buck-passing and general inefficiency. Clients will inevitably be affected as will team morale. This is obviously not good and it will not take care of itself.

What do you need to do
  1. Start by making an exhaustive list of everything that has to take place in your organisation.
  2. Group these logically and assign them to roles.
  3. Use these roles to develop an organisational chart.
  4. Assign people to the roles
  5. Produce and issue the positional documentation for the roles to your team

Now everything that takes place in your agency is owned by someone.

This probably sounds like a big effort. And it is. But there is a good reason big companies all have this and you probably don’t. That’s why they are big. 

You see the management overhead of a business does not grow linearly with size. It grows exponentially. It’s possible that you will reach the practical limits of your ability to manage at a smaller level than you wish to grow to. So everything that you can do to improve the manageability of your form is going to help. Your organisational design will be a big part of that.

Well defined capability road map

Cut down to its bare essentials, business growth in any type of business comes down to selling more stuff to more customers. Once you are established, the broader the capability you have, the more you will be able to sell.  

High growth agencies are very clear about the capabilities they need to invest in, in order to be in a position to capitalise on revenue gaps within their established customer base. You may be thinking that you can outsource specific skills to cover this. But we are not talking about skills alone. We are talking about capability. A capability you will include as part of your core repertoire is something that will make a sizeable contribution to your bottom line over along period of time. Outsourcing does not do that.

You need to do this with purpose, gradually adding to your capabilities within the confines of your defined target market’s requirements. The capabilities you will be building out are typically going to be substantive. They will require people, process and management. By building a capability roadmap, you will be giving yourself and your team a vision of where you are going and potentially what role they can play in helping you get there. Unless you approach this in this way, it becomes something that you simply never get any traction with.

What do you need to do
  1. In your regular meetings with your team as you discuss individual clients and their needs, include an agenda item called “Unaddressed Needs”. Every time you come across something that seems to have potential, write it down in a special list called “Future Capabilities”
  2. Every quarter, go through the list, tidy it up and pick the top 2 ideas
  3. Every year, discuss the top 4 capapability ideas at your annual planning meeting, decide on which will be the best to implement
  4. Get ‘er done’

Final words on “A Clear Plan’

Think of that house plan again. Imagine the chaos when the builders team all turn up for work and they don’t have the plans. No one knows what they have to get on with. So they wait for an instruction for what to do. And then the next instruction, and then the next.  Clearly a hopelessly shambolic approach that will cost much more than it should.

That’s why you need a clear plan for your agency. Let everyone not just get on with their work, but take initiative and operate more independently. They’l be more productive and you’ll make more profit.

Essential no 3. An engaged team

If you haven’t already made this realisation then here it is: “Business success is a team sport”.  Getting your team engaged is an extension of and a corollary of the leadership discussed above.

For growth to be achieved easily, the load must be shared. The effort needs to come from the team. If the team is not engaged, they won’t put in the effort. If there is no team effort, you can’t have growth. So there you have it.

Employee engagement is the result one gets from creating an organised  environment with the right conditions that produce high levels of commitment, passion, and loyalty. The more engaged an employee is, the more productive they will be and the more synergy generated

Organisations with engaged teams have strong and authentic values, a culture of  trust and fairness based on mutual respect. At the heart of it is the informal social contract, where promises and commitments – between employer and employees and employees and employer – are understood and fulfilled.

 Employee engagement requires that each member feels that they are accepted as a full member of the team, whose focus is on achieving clearly understood common goals. 

They will be

  • trusted 
  • empowered
  • receive regular, constructive feedback
  • supported in developing new skills 
  • recognised for achievement
  • thanked for their effort
What do you need to do

As challenging as this may sound, like leadership, getting your team engaged can be reduced to a system. But unlike many other systems that can be simply an easily introduced, this requires a lot more understanding and personal involvement on the part of the business leader.  Without a well developed sense of genuine emotional intelligence your efforts may not succeed.

If you decide to tackle this on your own, you will need more than an article or a few blog posts to guide you. Read a few books on the subject, get fully familiar with the principles and then tackle these:

  1. Develop a ‘culture statement’ or a ‘code of honour’. This needs to be taught to all members and regularly repeated.
  2. At a new members induction, take them through all of the business’s core propositions: its values, purpose, vision and mission. Introduce the culture statement to new members. Reading through it is not enough. Discuss each point; they need to interact with it until they fully understand and identify with it.
  3. Introduce rituals. Rituals produce a form of symbolic bond that has emotional content and which promotes a sense of belonging

Sound too challenging?

I eat this stuff for breakfast. 

Let me tell you about what happened at Reactive Media. Tim O’Neill and Tim Fouhy where in there mid to late 20’s when we started working together. They had only had one job in their lives thus far, at a company called Sausage Software. The company was a catastrophe. It was in all the papers at the time. Needless to say, they did not learn much there.    So this was a whole new world to them. If you had met them at the time, you would have been struck by their humility, reservedness and quiet dispositions. But they were up for it. They did the work, built the team, empowered them and let them do their jobs. The rest is history!