7 Reasons You’re Not Winning Your Endgame – Wrong Growth Focus

  • by Christie Pearson
  • Thursday, November 2, 2017

Remember some months ago when Gianni Infantino set forth the ingenious idea that the World Cup would be even better if the tourney were to beef up to a mighty 48 qualifying teams? As the council voted, approving the expansion, fans and FIFA members alike joined together in a spirited chorus of…

Protest.

It turns out loads of people are already wise to the adage “bigger is not always better.”

The immediate argument against growing the tournament was a dilution of quality. More teams qualifying must mean some less-than-stellar squads make it in. To be fair, this overlooks the possibility that on any given day the best can be beaten by upstart rivals who’ve developed smart strategy. That could actually push everyone to work harder - or backfire spectacularly.

Many suggested the decision was purely financial, and incredibly short-sighted even at that. While theoretically more teams involved could lead to higher revenues, if there’s less excitement and passion about the tournament and you’ve made it tough for fans to “get their money’s worth,” revenue over the long term could suffer incredibly. Also, the cost to be involved in, much less host, the tournament is prohibitive for all but a select few powerhouses.

It’s not that no one believes Gianni’s heartfelt testament to the development of the world’s most beautiful game. And there’s nothing inherently wrong with growing, especially if it means becoming more inclusive.

Rather, the plan to grow seems to be what we refer to in German as a Schnapsidee. Quite simply, there doesn’t seem to have been a lot of consideration for the long game or attempts to lay proper foundations for growth. Granted, it’s still possible for FIFA to lay some groundwork before the rule takes effect, but it remains to be seen whether they can and will.

The good news is, there’s still time for you to rethink your agency focus on becoming the biggest, baddest, agency this side of Luzhniki.

Growth is not cost-free. Making growth a priority requires tradeoffs. Are you ready for the consequences of being big?

World Cup Bigger Not Better

Headcount overdrive

There’s a common misconception that simply having more derrieres at desks to power through more client work will translate to agency growth. What often happens is the opposite.

For starters, staffing decisions motivated solely by a mandate to grow are made hastily, typically with a focus on covering the kind of work you have now, without careful consideration of potential shifts in demand, technology or industry conditions.

That kind of myopic overconfidence leaves you naked to the wolves called client fluctuation and economic contraction. Having too many people doing the wrong things is difficult to correct without a huge blow to client confidence, team morale, and agency reputation.

Even if you rationalise that it would simply be “trimming the fat” down the road, everyone outside your head sees it as a flashing red light that something’s wrong.

The thinking (wo)man’s approach is to make a couple key hires that align with your vision for the agency’s future, and find a good strategic partner who can both cover a current uptick in work, and adjust down, if (and when) necessary.

Don’t read this as advice to outsource, because in choosing a partner, it’s critical you have consistency and shared commitment to long-term goals and values. We’ll talk more about how to do this well in an upcoming article in this series.

Off-roading is not recommended

Off-roading

Taking a lesson from our social impact division, Happy Porch, we know that bigger often doesn’t equal greater ability to solve problems. Getting caught up in growth undermines the ability to lay proper foundations.

The engine of your agency’s future growth is the people on your team now. Too many times the quest to grow results in the established team being taken for granted, as well as the processes they use to communicate and effectively GSD.

Reduction in productivity has been documented in large teams. Whether you attribute it to social loafing or negligence by leadership to provide adequate infrastructure to support a higher headcount, it is avoidable if you act before actually having a problem.

Author and agency exec, Ray White, explains “To scale we have to build the digital infrastructure to keep those brains engaged, excited and productive, especially since we can’t always be there in person.”

The infrastructure, systems, and processes you use for a five person team may or may not work for a twenty, fifty, or two hundred person team. One thing is guaranteed though - if you don’t pave the way for them to evolve and for new team members to get thoroughly educated on practices and standards, you’re heading straight for a bumpy ride that’s likely to wreck the productivity and success of your whole agency.

Badly designed organisations sabotage the best performers.”

– Dan Rockwell & Dean Meyer

To properly fuel up the growth engine, you need to systematically review your communication and collaboration tools and processes. How are they used now? What capacity can they handle?

Immediately replace those that can’t grow with you, so they do not become part of your agency’s culture before you increase your headcount - internally or through partners.

More money, more problems

One of the surest signs that you’re focused too heavily on an endgame instead of winning the long game is a singular focus on growing revenue. It’s where many agencies misstep, leading them to overpromise outcomes well outside their expertise and take on clients they hope to interact with as little as possible before pushing their project out the door and collecting a bit of cash for the agony in between.

While certain public figures are intent on proving there is no such thing as bad publicity, you’d better believe that the same is not true for growth.

Economics teaches us that at a certain point, growth will produce diminishing returns and increasing costs. In fact, economist Simon Kuznets provides the most timeless and relevant advice.

“Goals for ‘more’ growth should specify more growth of what and for what.’”

Using revenue growth alone as a measure of agency health leads many agency leaders to fall into the trap of simply throwing money at problems when they arise. Without a balanced perspective and long-term planning, more money often spurs poor resource allocation, exacerbating the underlying causes.  

A sensible thing to grow is your project profitability. There are heaps of metrics you should be tracking to improve your agency’s overall profitability. But, if you aren’t already doing that and you need a place to start, simply begin tracking all of the hours your team spends for each project. We don’t recommend hourly pricing structures, but tracking time is key to determining which clients and types of projects are worth pursuing for sustainable growth. It also helps identify process inefficiencies.

Any number of time tracking tools will give you the basic data you need here. You could consider an all-in-one agency management solution that includes time tracking, like Agency Core, if you’re looking to simplify multiple duties and are ready to make a meal of implementing change.

When a bigger agency is not better

When size matters

What sort of agency you are and where you’re operating weighs on what size you optimally need to be, in terms of headcount, client roster, and revenue. Consider in sport that the “right” body for distance running is not same as for swimming.

Bigger tends to necessarily involve more bureaucracy and requires more power to overcome organisational inertia. If your agency positioning relies on innovation, evolving technology or breathtakingly original creative, a smaller agency size is likely to afford you better reaction times and help you stay nimble to adjust to changing conditions.

If your dream is to build an agency that pumps out high volumes of commercially processed unicorns to the Fortune 500, then bigger may well be better.

Outside of those cases, the best size and right growth target for your agency is whatever you can realistically manage.

Just remember, scaling requires standards, structure, and strategy. Without these critical pieces, efforts to grow will constantly be plagued by employee churn, squeezed profit margins, and constant firefighting to meet client demands.

Next time we’ll talk about those magical client relationships that will help you meet your growth goals.

Go for the goal

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This post is the fifth in our series examining the 7 reasons creative agencies are not winning the long game and what they can do to overcome those obstacles.

Here's our roadmap.

  • Bad client relationships
  • Process debt
  • Not seeking & optimising partnerships
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