Insights.

Once your agency achieves the right blend of senior talent, you don't have long to capitalise. Setting your change agenda needs to happen at pace. It's a cliché that an agency's most important asset is its people. And while I'm not wild about the word 'asset', it's certainly true that good CEOs carefully curate the right mix of skills, aspirations and personalities - especially at Board level.   Whether you're evolving a single discipline agency or fine-tuning a group offer, finding the diamonds and exiting the naysayers is essential.  Once you've achieved that nuanced blend, a starting pistol gets fired. There's a hunger for focus and an impetus for change. Everyone needs to be aligned - from company strategy, down to who's doing what to make it happen.  Right now, speed matters. If the moment passes, then new hires' hopes fade, staff develop 'initiative fatigue' and your rocket ship stalls on the launchpad.  So with your window of opportunity closing fast, how can you quickly bring strong personalities together to agree an actionable roadmap for change?

Finding deeper differentiation 

Creating your CX Roadmap

1. Strategy – e.g. differentiation, value proposition, internal buy-in, purpose, target audience
2. Leadership – e.g. collaboration, innovation, togetherness, delegation, self care & team care, organisation
3. People + culture – e.g. people strategy, diversity, equity & inclusion, talent attraction, selection & recruitment, learning & development, succession planning, performance management
4. Marketing – e.g. effectiveness, consistency, thought leadership, website, campaigns, upstream prospecting
5. Sales – e.g. sales culture, share of wallet, client data, partnering, value-based selling, pricing innovation.

1. Agreed strengths, weaknesses and blind spots
2. Achievable priorities
   • ranked for importance vs. urgency
   • clear owners, actions and deadlines
   • clarity on how success is defined.

"The Agency CX Roadmap process was incredibly useful for Engine, giving us a meaningful new focus and energy. By serving up independent, considered and rigorous insights, it sparked frank debate about our future strategy. That impartiality helped us get elephants out of the corner, creating a space of openness and trust where everyone felt comfortable to reimagine or reinvent, without feeling protective of the status quo. I would recommend it highly."

Jim Moffatt, CEO Europe & Asia Pacific, Engine

Set your course for growth

Image: Hans Peter Gauster

For agency founders, the pandemic has accelerated the emergence of a more sustainable perspective on life, success and cashing in their chips. Ever since the holding company model became established, the idea of selling out has powered a million fantasies. But like the lottery, your odds of hitting the jackpot were never great.  And for those founders who did grab the dangling chequebook, many found that not only were earnouts fraught, exhausting and often unsuccessful, but also life in their newly acquired agency fell someway short of the dream.  But in recent years, founders have become more measured. Selling out is no longer the default vision and they’re open to a more bespoke conversation about success. And since Covid-19, in amongst far-reaching changes to the market, this transition has accelerated - toward a more balanced and achievable set of motivations.  To unpack why, I picked the brains of Paul Allen, formerly a partner at M&A advisory firm SI Partners and now the founder of his own consultancy, Red Dots.  Hi Paul, how are founders’ attitudes changing when it comes to exiting?  Skepticism about traditional exits to a larger agency has been steadily growing. There are plenty of horror stories about earnouts failing and the new parent company killing your culture or retiring the brand you’ve spent years building. That was always part of the risk of cashing out, but founders are also getting more savvy about needing to be happy with the price on completion, rather than relying on earnouts - especially now that they’re more like 4-5 years in network agencies, rather than three.  The pandemic has changed things too. More people are questioning what they want from their career - and it turns out that it’s not just a big payday. There’s more desire to be in control of your destiny - especially given that so much can go wrong with a traditional exit, from relationships and mismatched culture, to another black swan event like Covid-19.  How else has the pandemic affected founders’ mindsets?  It’s certainly shaken up a lot of lifestyle businesses. If your agency’s been going ten years and grown slowly to 10-20 people, only to suddenly find yourself going from a healthy profit to barely breaking even, it’s a big ask to spend another ten years getting back to where you were.  Plenty of owners don’t have the appetite for that, so are open to offloading their agency for much less that they’d hoped. That’s certainly more attractive than liquidating the company and letting your people go.  Unsurprisingly, there are plenty of buyers out there right now who are buying broken agencies on the cheap. They’ll happily take the revenue and offload any duplicate resource, so sadly some people may only keep their jobs for another six months or so.  On the flipside, there are plenty of agencies in good shape - do they have a new perspective on exiting?  Absolutely, having survived Covid and realised that no-one knows what’s round the corner, they want to grow more quickly and exit sooner.  Of course, many people want to build and sell without a risky earnout, but that takes a good two years of planning. Founders are getting smarter about this - like not running key accounts and also making themselves less essential to new-business.  As well as reducing a buyer’s need for them to stay on, they’re also locking in top talent, ensuring the next generation of management are incentivised to stay on once a deal is done.  Is this why we’re also seeing more Employee Owned Trusts?  EOTs were introduced by the government to give employees greater autonomy. And although this is often still the case in agencies, it’s also an attractive option to founders who can cash out without paying capital gains tax, albeit at what is often a lower valuation than the open market. No wonder EOTs are often portrayed as the best of both worlds - but for a start, the team you’re selling to needs to be ready, right?  If you want to leave a legacy - to move on and leave a healthy, thriving agency - then your succession plans need to be solid. It’s easy to assume that talented people will make great owners, but it doesn’t always follow. Being a thick-skinned entrepreneur is very different from being an effective employee. Your next layer of management may not want to run an agency.  So while it’s certainly appealing, an EOT - or indeed a management buyout - isn’t easy. In fact, in some ways it’s harder than selling out to a larger parent company.  To get any kind of multiple, you need plenty of cash in the bank. And of course, like any exit, you need to ensure that profit levels continue or grow. Although you retain the autonomy to make that happen, had you sold to a larger player, you might also have a new set of services to upsell with and a wider pool or clients to go after. You’d probably get a higher upfront cash payment with a traditional exit too.  Let’s turn to agencies that are aggressively pursuing growth - how has the pandemic impacted them?  It’s definitely a good time to be a founder who’s willing to invest. In the past, to secure funds to power growth, your bank would’ve insisted on personal guarantees. But with the Covid-19 bounce back loans, the government has taken on the role of guarantor.  That means as well as low rates and long terms, there’s no personal risk. So why wouldn’t you; it’s nearly money for free. This allows you to fund expansion without needing to use up the rainy day money you have in the bank.  You get to invest in top talent, a better office or new capabilities, but you still have six months costs covered, so you can sleep at night. You’re no longer gambling with your own money.  Which agencies are best placed to prosper from this cheap money, rather than taking the long walk down the organic growth path?  Not surprisingly, many digital disciplines are in a good place. That’s not just because of increasing demand and often having more retained relationships. It’s also easier for them to add new capabilities.  In contrast, as well as being more project-driven, creative agencies find it much tougher to bring in technical skills than vice versa. Most advertising, PR and design agencies, for example, have histories and cultures of awards and subjectivity. That’s why hiring a new creative lead is often such a risk for them - they’re more fragile and driven by personality. How are agencies approaching acquisitions now?   Instead of having the ambition of building one large agency, which can be unwieldy and not that profitable, founders are increasingly looking to build mini groups of a handful of agencies of 20-25 people, each of which can retain a more boutique-y feel.  We’re seeing growth in a couple approaches to this model - neither of which are new. One is pretty organic, where a founder - often with private equity backing - brings complementary agencies together and potentially lists the group.  The second model is closer to the traditional build-and-build, where there’s a rollup of agencies into a group. There’s an exchange of equity instead of cash, so the founder swaps his or her agency shares for a stake in the group business. Then everyone co-owns a multi-disciplinary group, with access to shared resources, cross-sell opportunities etc.  Compared with growing a single agency from, say, 12 to 25 people, which could take a couple of years, both of these approaches gives you scale faster and the potential of selling sooner for a larger amount - especially if the group is deliberately shaped to fill a gap in the portfolio of a larger company.  So this is another best-of-both-worlds option - you get the scale and the potential upside, but you’ve also spread your risk?  Exactly. There’s safety in numbers, so you derisk by being part of something bigger. Obviously given the pandemic, this is pretty appealing. Of course if you’re an agency owner within one of these groups and the worst happens, then your equity will likely drop in line with contribution to overall profits. But it’s certainly possible to negotiate away some of that risk - like paying more for a fixed rate mortgage.  Thanks Paul, this has been fascinating. To wrap up, what advice would you give to founders who are ready to be more progressive with their growth ambitions?  Primarily, to really grow your business, you need to have a unique and functional idea or concept for the products and services that you plan to offer.  Ask and listen to your clients to assess how you need to innovate to meet their requirements.  Identify your ideal client’s needs and inspire yourself to devise and offer viable solutions, whether that’s by building it yourself, forging strategic partnerships, or through acquisition.  Finally, the use of technology and data to enhance creative output will see many of the recent start-ups overtake the more traditional communications agencies.

Image: Ryan Oswick

Whether your agency is thriving or rebuilding, the pandemic has created new playing conditions and accelerated the need for a more progressive business model. ‘Necessity’, we’re taught, ‘is the mother of invention’. This evolved from Plato’s belief that “our need will be the real creator”. And whether you’re a Socratic scholar or, like me, were today years old when you learnt that, we can all agree that Covid-19 has proved him right. No wonder, then, that six years of transformation occurred in the first six months of the pandemic. For agencies in particular, change wasn’t just constant - it was full-on and mission-critical. As clients scrambled to react to lockdown, you ploughed through tough questions in double-quick time under unique working conditions. So what now? How are you feeling? And whether your agency has thrived or faltered, how can the year’s learnings accelerate your progress? 

Back to the hamster wheel

Can you even do this anymore? 

Old world or new? 

• Be brave. Strongly attract the right clients and don’t be afraid to repel the rest. Say ‘no’ daily. Have a point of view. Be liberated by the reality that ‘specialising’ isn’t small or limiting. 
• Be decisive. Get serious about differentiation - have a strategy, not just a strapline. Define the problem you solve, use clear language and avoid the pitfalls of repositioning.
• Be holistic. Live and breathe your proposition every day. De-commoditize your entire agency Customer Experience so that everything you say and do demonstrates your unique expertise.

New market, new mindset

Image: Gia Oris

What are the learnings when a senior client, an intermediary and a global chief growth officer get together to debate where agencies have created most new value in the last 12 months?  With client needs evolving at pace during Covid-19, agencies have been forced to innovate. And by pivoting services as well as marketing, selling and managing relationships in new ways, many agencies now find themselves closer to clients than ever before. So with the pandemic passing and confidence returning, the big question for 2021 is how much we’ll return to normal - and which new habits, mindsets and ways of working we should aim to retain. This was the topic we explored for BIMA’s recent Innovations for Agency Growth panel, which I was well chuffed to chair. Joining me were Somo Global’s Rebecca Crook, Alchemists' Angus Crowther and former eBay, Sky and Virgin marketing director Rebecca McKee. Two big themes emerged…

Firstly, no excuses - it’s time to get the basics in place: 

• Stop saying the same things as every other agency - it’s not ‘just how it is’
• Create a meaningful proposition - be benefit-led and tell clients stuff they don’t know; standout comes from expertise not capabilities
• Define a specific target audience - ‘CMOs with money’ won’t cut it
• Be more selective - ask clients better questions and say ‘no’ more often; not just when a brief arrives.

Secondly, don’t get left behind - what was seen as progressive is now mainstream: 

• Make meetings about clients not creds
• Develop an ownable point of view - it’s the easiest way to stand out
• Profit comes from solving a problem - being ‘specialised’ isn’t small / sector based
• You have to monetise your thinking - you can’t expect to ‘make the money later’ on production
• The most effective agency leaders are empathetic and commercially savvy
• Differentiation goes much deeper than straplines and websites
• There’s a huge opportunity to accelerate ethical change - from D&I and sustainability to flexible working - clients are increasingly demanding better practices, so this is a commercial imperative as well as an ethical one.

• The new rules for post-pandemic growth
• Co:definery's Transformation & Leadership Expert role at BIMA
• More on BIMA - the UK's largest digital and tech community.

Image: Martin Sanchez

Successful agencies often say ‘we’ve never really needed to look for new-business’. But don’t confuse growth with strategy, because you might not like where you end up. (This article first appeared in The Goods - the global business development magazine)  Like passing your driving test or going away to university, the independent thrill of launching an agency is hard to beat - especially when growth comes naturally.  With luck, you had a founding client or two. And of course you rattled through your contacts, calling your mates, chasing down past clients and hitting up your ex’s cousin’s cat’s lodger, who’d just been appointed chief of something at somewhere.  With talent and hard work, you grew. Key clients stayed and spent more. Others changed jobs and got you in there too. Maybe word of mouth and an occasional award earned you some inbound leads.  Eventually the wild west matured. You became operationally solid, with decent structures and processes. Your unique culture emerged and your leadership, finance and people skills evolved. Maybe you even got round to writing job descriptions.  This agency lark isn’t so hard! 

Beware your black book’s half-life

Don’t jump to execution

Don’t do too much  

Don’t do too little 

Don’t be a hostage to fortune 

Plot your own course

Image: Sushobhan Badhai

Despite the demise of network agencies being greatly exaggerated, to thrive in 2021, marketers still need to choose their agency partners more carefully than ever. (This article first appeared in Marketing Week and was written for a Marketing audience) From cats vs dogs and Blur vs Oasis, to a certain referendum - the specifics of which escape me - we all love a binary debate. Either pick a side and fight to the death, or grab some popcorn and watch sparks fly. And of course, it's all good, clean fun - until it's not. Things turn ugly, livelihoods are lost and families get torn apart. And that’s just over pop music. So given the ongoing challenges that marketers face in 2021, let’s explore another great debate of our age - network agencies vs independents. 

Are network agencies obsolete? 

Agency ownership matters

Breadth of capability

The role of quality

Agility and independence 

The leadership factor 

Rise of the adaptables 

Advice for choosing wisely

Image: Marketing Week

When agencies come together, everyone demands immediate clarity and impact. So creating alignment and setting priorities needs to happen fast. Whether you’ve acquired or you’re the acquirer, bringing two agencies together creates tension - alongside a healthy excitement, there are also plenty of concerns.  Many people are looking for value, while others seek reassurance. In either case, an absence of clarity creates a dangerous vacuum that sucks in goodwill, optimism and momentum.  Despite this obvious truth, it’s all too easy for new owners to neglect integration and for the newly acquired to feel like they’re drowning in ambiguity. No wonder the promised land prophesied in the press release often falls short of expectations.  Of course, it’s not always this dramatic - especially with mergers - but even with the best planned deals, there are many questions to answer. What changes and what stays the same? What’s the shared story? How will you combine cultures and establish shared proof points and language?  In short, the clock is ticking. So how can you quickly bring strong personalities together to define an actionable roadmap?

Finding deeper differentiation 

Creating your CX Roadmap

1. Strategy – e.g. differentiation, value proposition, internal buy-in, purpose, target audience
2. Leadership – e.g. collaboration, innovation, togetherness, delegation, self care & team care, organisation
3. People + culture – e.g. people strategy, diversity, equity & inclusion, talent attraction, selection & recruitment, learning & development, succession planning, performance management
4. Marketing – e.g. effectiveness, consistency, thought leadership, website, campaigns, upstream prospecting
5. Sales – e.g. sales culture, share of wallet, client data, partnering, value-based selling, pricing innovation.

1. Agreed strengths, weaknesses and blind spots
2. Achievable priorities
   • ranked for importance vs. urgency
   • clear owners, actions and deadlines
   • clarity on how success is defined.

"The Agency CX Roadmap process was incredibly useful for Engine, giving us a meaningful new focus and energy. By serving up independent, considered and rigorous insights, it sparked frank debate about our future strategy. That impartiality helped us get elephants out of the corner, creating a space of openness and trust where everyone felt comfortable to reimagine or reinvent, without feeling protective of the status quo. I would recommend it highly."

Jim Moffatt, CEO Europe & Asia Pacific, Engine

Set your course for growth

Image: Tsvetoslav Hristov

To adapt for growth as Covid-19 passes, agencies must develop their own unique customer experience. Step one is to prioritise what needs to change. Even before the pandemic, the traditional agency business model was creaking at the seams. Clients had changed how they buy - and from whom - and many agencies were struggling to adapt.  Now Covid-19 has accelerated the need for meaningful change. Whether you’re rebuilding or capitalising on new demand, the urgency has risen sharply. And with many agencies undertaking M&A activity or fine tuning their senior teams, alignment has never been more important. So with the right people and capabilities in place, how can you quickly create a bespoke roadmap for change?

Finding deeper differentiation 

Creating your CX Roadmap

1. Strategy – e.g. differentiation, value proposition, internal buy-in, purpose, target audience
2. Leadership – e.g. collaboration, innovation, togetherness, delegation, self care & team care, organisation
3. People + culture – e.g. people strategy, diversity, equity & inclusion, talent attraction, selection & recruitment, learning & development, succession planning, performance management
4. Marketing – e.g. effectiveness, consistency, thought leadership, website, campaigns, upstream prospecting
5. Sales – e.g. sales culture, share of wallet, client data, partnering, value-based selling, pricing innovation.

1. Agreed strengths, weaknesses and blind spots
2. Achievable priorities
   • ranked for importance vs. urgency
   • clear owners, actions and deadlines
   • clarity on how success is defined.

"The Agency CX Roadmap process was incredibly useful for Engine, giving us a meaningful new focus and energy. By serving up independent, considered and rigorous insights, it sparked frank debate about our future strategy. That impartiality helped us get elephants out of the corner, creating a space of openness and trust where everyone felt comfortable to reimagine or reinvent, without feeling protective of the status quo. I would recommend it highly."

Jim Moffatt, CEO Europe & Asia Pacific, Engine

Set your course for growth

Image: David Przybyla

Armed with a new perspective on accountability, marketers have an opportunity to be more innovative, get more done faster and help create a healthier industry. (This article first appeared in Marketing Week and was written for a Marketing audience) They say nostalgia’s not what it was, but I disagree. It’s a joy to look back and see how far we’ve come. Bum bags and white denim, anyone? And remember when we were all legally obliged to mime air quotes whenever we said ‘working from home’? Ah, crazy days. That was in March. Now we’re debating post-pandemic change, it’s clear that we can be productive away from the office. No-one’s saying it’s easy – hashtag: homeschool – but it’s totally doable. That’s created a healthier, more trusting version of accountability. If the output’s great, then it doesn’t matter where we are or, crucially, whether it took five minutes or five hours. In which case, given that marketers and agencies expend so much energy on ratecards and timesheets, might there be real value in refocusing from inputs to outputs?

The limitations of time

A culture of innovation

Help agencies to help you

Embedding positive change

Image: Marketing Week