Insights.

22/04/2021

Act fast once you’ve built the dream team

Act fast once you’ve built the dream team

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...

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 

Your goal is sustainable growth and that increasingly relies on differentiation across your entire Customer Experience (CX). So whether that means serious transformation or more nuanced optimisation, you need to define priority improvements across what you do, not just what you say.  That’s why Co:definery has partnered with creative leadership specialists Curve to develop the Agency CX Roadmap - a clear, actionable plan for business-wide change. 

Creating your CX Roadmap

Taking your leadership team through a short series of immersive workshops, the process grades your collective aspirations and progress against five pillars of agency Customer Experience: 
  1. Strategy - e.g. differentiation, internal buy-in, value proposition, purpose, target audience
  2. Leadership - e.g. collaboration, innovation, culture, delegation, self-care and team care, organisation
  3. People + operations - e.g. people strategy, employer brand, diversity, inclusion, talent attraction / development, financial health
  4. Marketing - e.g. thought leadership, consistency, owned media, campaigns
  5. Sales - e.g. metrics & reporting, client development, share of wallet, partner collaboration, upstream targeting, conversion, pricing.
Keeping things structured and fast, we combine your views with our own experience and recommendations to create the following deliverables: 
  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.
Disagreements are resolved, everyone learns a lot and the actions are agreed in the room, so you’re ready to get moving straight away.  And where you need outside help to maximise momentum - and make change stick - then Co:definery and Curve design a bespoke programme of consulting, coaching and mentoring support. 
"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

In an uncertain and fast-moving competitive landscape, smart agencies are embracing the need for fundamental change. That requires decisive action - especially once you've got the right people in place.  And because clients are demanding deeper, more demonstrable expertise, building a differentiated Customer Experience is essential.  So the Agency CX Roadmap defines your shortest course to sustainable growth and empowers you and your team to deliver lasting change.  The process creates a safe space to resolve difficult issues. And because you take those decisions together, the shared commitment makes everyone accountable for change.  From there you can accelerate growth with clarity and conviction. Find out more by getting in touch.
Image: Hans Peter Gauster

21/04/2021

Why founders are rejecting the traditional exit 

Why founders are rejecting the traditional exit 

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...

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

13/04/2021

The new rules for post-pandemic growth

The new rules for post-pandemic growth

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,...

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

With forethought, strong leadership and no little luck, many agencies have prospered under the pandemic. They’re feeling the ‘Covid bounce’ (in the UK at least) and optimism is high.  But with the client demands, relentless pace and daily compromises between work and home, many agency leaders also admit to asking ‘is this all there is?’. Buying into the default lifestyle and version of success is no longer a given. For network agencies, the constraints feel more constraining and there’s a growing sense of jeopardy within the endless pressure to hit your numbers. And for independents, the traditional dream of selling to the highest bidder feels more distant, so founders are interrogating their aspirations in search of a more bespoke and controllable course.  So even if you’ve continued to prosper, existential questions still hang heavy in the air. 

Can you even do this anymore? 

If you’re running an agency that’s really suffered under Covid-19 - many of whom were simply too far from a chair when the music stopped - then you’re probably even more exhausted.  As well as the heightened everyday pressures and profound responsibility to protect jobs, you’ve also had to watch this thing you built - your baby - regress to a stage you powered past years ago.  If you’re questioning your motivation to rebuild, then please know that many others feel the same. To lose, say, six years’ progress in six months is hard enough. But it’s nigh on impossible to feel energised at the prospect of another six years’ toil, just to recreate the same fragility. There has to be a faster route to a better business.

Old world or new? 

Changes in the agency marketplace have been accelerated. So whether your agency is rebuilding or capitalising on a new wave of demand, you’re standing at a fork in the road. You can stick to the familiar practices - those that served you well in the past - or you can retool your agency to reflect changes in how clients buy. From Tokyo to Glasgow, New York to Newbury and Munich to Manchester*, Co:definery has spent the last year helping agency leaders challenge conventions, embrace their opportunity and adopt lasting change.  These are the prevailing shifts to make: These are mindset shifts as much as strategic imperatives. So embed big picture change into everyday structures, processes and behaviours. Don’t let legacy beliefs slow you down. As a case in point, for all your pandemic-driven innovations and fresh ways of working, which new habits will you retain? In particular, which will you staunchly defend when clients ‘encourage’ a return to normal?  Your opportunity is to focus - choose the right path, back yourself and double down on the changes required. 

New market, new mindset

It’s often said that history is written by the victors. But even though business needn’t be a zero-sum game (i.e. for you to win, I must lose), you still aspire to being one of the success stories of the 2020s - whatever the decade may hold. And although there’s no real evidence that the network agencies are dying, there are plenty of reasons why the likes of Dept, S4 Capital, Croud, MSQ and others are thriving. They’re not riding high solely on demand for digital services - there’s also a progressiveness in their strategy, leadership, people and growth culture. So regardless of how your agency has fared or how much energy you’ve got left in the tank, if you want to accelerate towards a healthier, more sustainable form of growth, it’s time to be bold.  Focus and conviction were often dismissed as impractical luxuries for the privileged few, but now more than ever, they’ve become a necessity for all.  (* sorry - went a bit ‘Hit Me With Your Rhythm Stick’ there)
Image: Gia Oris

09/04/2021

Innovations for agency growth in 2021

Innovations for agency growth in 2021

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...

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.
Here's a video of the full session - including a pretty average University Challenge joke that I ran into the ground. Thanks for organising a great session, BIMA - especially Holly, Alise, Anthony and Rachel! And if you're interested in some wider resources and recommendations:
Image: Martin Sanchez

31/03/2021

Growing your agency when you’ve never done New-Business

Growing your agency when you’ve never done New-Business

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...

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

By now you’re thinking, next stop: global domination, selling up or working a four day week. Congratulations - you’ve cracked it.  Except you haven’t. Suddenly things slow down. Your pipeline isn’t quite so plump and juicy. You realise that your black book had a half-life and its power is spent.  Fair enough, you think - time to get proactive about growth: let’s do some marketing and lead generation. Except you’ve never done it and you’ve got no idea how little you know about the breadth of options you face. Worse still, people offer vague and contradictory advice, like ‘it’s a numbers game’ or ‘it’s all about inbound’.  So where on Earth should you start? And in particular, what are the pitfalls to avoid? 

Don’t jump to execution

Like getting your driving license, many agencies see lead generation as a box to be ticked. But like taking your driving test, rushing it won’t get you very far. So simmer down, hot shot - think ‘measure twice, cut once’.  What are you actually selling? As the saying goes, nothing kills a bad product faster than good advertising. It’s the same with lead generation. A generic strapline that demands explanation is very different to a meaningful proposition that communicates a discrete market fit.  So if you’re in BD and your CEO can’t articulate the difference, then go polish your résumé.

Don’t do too much  

In contrast to rushing in, another risk is holding back. It’s tempting to chase perfection - the ultimate marketing and lead generation machine. This often speaks more to fear than ambition. We love telling ourselves we’re moving forward when in fact we’re delaying a task we don’t relish. Like adding ever more mundane tasks to your to-do list (‘have lunch’), the illusion of progress provides comfort. The slow quest for lead generation perfection creates a complex, lumbering beast. And because sacrifice is the essence of strategy, doing a bit of everything, for everyone, in every channel, is like nailing jelly to a wall. It’s unlikely to stick and it certainly won’t be efficient. Welcome to exhaustion city, in the great state of hate-my-job.

Don’t do too little 

So is going minimalist the antidote to unwieldy perfection? Not quite. It’s seductive to stick to the basics - especially if your agency’s running lean - but that rarely creates momentum.  The noble intent to focus often produces a plan that lies dormant until a pipeline emergency. Lacking muscle memory, you wheezily splutter into action, exacerbating the natural peaks and troughs of demand.  This ad hoc malaise is most common in agencies where ‘new-business is everyone’s responsibility’. So take Michael Caine’s advice in Get Carter: “with me, it’s a full-time job”.  And if you’re the first business developer that your agency’s hired, beware being hailed as a super-human panacea. It’s nice to hear, but you’re not the messiah. 

Don’t be a hostage to fortune 

All this not-too-fast and not-too-slow might sound like Goldilocks is setting the rules. Does all this nuance really matter? You bet it does.  If you don’t embrace lead generation - because it never feels mission critical - then you might become a terminal coaster. You make so-so money on the back of ever more dominant clients - until you wake up one morning and realise that two of them deliver 90% of the revenue and make 90% of your decisions. Potential acquirers would run a mile. This slippery slope away from autonomy also happens at large agencies. Relying on intermediary relationships and global client inertia makes them just as much of a hostage to fortune.  In each of these cases, the daily grind obscures the bigger picture. With no agreed direction, your ‘strategy’ defaults to an echo of your reputation; a lagging indicator of what you’re known for. Which is fine if you want to do the same thing forever and client needs never evolve. Spoiler alert: you don’t and they are.

Plot your own course

Although headspace might be in short supply, a clear business strategy remains the key to effective marketing and lead generation. Sadly too many agency chiefs confuse ‘strategy’ with metrics or aspirations - like being the ‘best’ or doubling in size. That’s dereliction of duty.  To thrive long-term, you need clarity - on the discrete audience opportunity you’re best placed to address, as well as on how helping them will get you where you want to go.  It’s remarkable how few agencies can articulate this. Not only are they unclear where they’re headed, their target audience is counterproductively shallow. If yours is defined solely by sectors and job titles - or worse still, as essentially any budget holder with a pulse - then you need to go deeper.  Ultimately, many agencies jog along making a decent living; comfortable at a certain ceiling. And that’s okay. But imagine a world where you keep on winning the kind of work you’ve always dreamed of. To power this kind of sustainable growth, you need scarce in-demand expertise. That requires deliberate action.  Or to put it more bluntly, lacking a strategy or lead generation plan won’t be instantly fatal, but any growth will be in spite of yourself - and you’ll be storing up problems for later.  Remember that hot-blooded thrill of newfound independence? Don’t let it evaporate in the lukewarm glow of early success. 
Image: Sushobhan Badhai

18/02/2021

Why network agencies aren’t dead yet

Why network agencies aren’t dead yet

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...

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? 

A popular refrain is that indies are agile and networks are slow. It’s certainly true that 2020 saw indies snaffle some big name client wins. In contrast, being publicly listed, the holding companies’ understandably challenging numbers were very visible. So it’s been easy to sustain a ‘demise of the networks’ narrative.  But how real is that? And what are the implications for marketers? My consultancy, Co:definery, teamed up with creative leadership specialists Curve and research agency BAMM to ask marketers how they viewed network and independent agencies. We also spoke to a range of agency CEOs to get their take. So fetch a cold one, get comfy and let battle commence. 

Agency ownership matters

First up, is indie vs network even a thing? After all, no ‘networks’ or ‘indies’ are created equal. And clearly no two holding companies are alike either. Alongside the size difference between, say, Dentsu and Omnicom, the cultural differences are vast too.  At the same time, although all agencies are facing headwinds, perhaps network shops are enduring more resistance. Because they skew larger than indies, any decline in retainers will be more disruptive for them. Likewise, the bigger the agency, the more that structure and process become a necessary evil. No wonder unhappy network agency clients often cite scale as a perceived reason for dissatisfaction.  Aside from the relative health of indie and network agencies, our research demonstrates that marketers do care about ownership status. Only 15.7% said it wasn’t a factor in agency selection - less than half the amount who said the distinction was critical. And these trends were even more pronounced for higher spenders.  Interesting, right? Let’s unpack why.

Breadth of capability

Network agencies often trade on breadth of service. In response, indies point at competing P&Ls and a thriving, multi-disciplinary freelance market; not least the various ‘collectives’ being formed by top talent exiting big agencies.  Natalie Graeme, co-founded independent Uncommon Creative Studio after leaving WPP’s Grey. She told me: “Although no agency has a load of people sitting there ready to go, networks like to tell clients that they have a ‘man that can’. But that ‘man’ is often just a warm body, rather than the best person for the job. It's about finding the right talent, not just the most available." Sara Tate followed the opposite path, leaving independent creative agency Mother to become CEO at Omnicom’s TBWA in London. She said: “Whether it’s independent or owned by a holding company, no type of agency has the monopoly on assembling the perfect client team; it’s about having the right attitude and process.” Long-time network agency leader Tim Bonnet is now President at Unlimited, an independent group (albeit private equity-backed) that’s larger than many local network agency offices. He points to a cultural difference: "Network agencies focus on keeping client spend within the company or within the holding company’s current offering, but indies have a culture of looking outside for new innovations." Whether essential skills come from inside or out, network agencies’ ability to deliver a breadth of service was endorsed by our research. At 33.2%, this was marketers’ top answer when asked what makes network agencies attractive. In contrast, at 17.6%, breadth of service was only a middle ranking quality of indies.

The role of quality

Regardless of breadth, surely quality and talent are all-important? That’s why agencies love that hackneyed maxim, ‘our people are our most important asset’. Publicis-owned Leo Burnett CEO Charlie Rudd - himself a product of a pre-acquisition BBH - told me: “When you’re running agencies, the only thing you need to worry about is your talent - getting the best people and keeping them motivated, happy and able to do their best work.” But can network agencies really do this? Larissa Vince suggests not. CEO of independent creative agency Now - having joined from Publicis’ Saatchi & Saatchi - she says: “Being handed arbitrary, multi-market pay freezes stops you from rewarding the people who are nailing it.” Interestingly, our research showed that ‘quality of people, thinking and work’ was only a middle ranking feature of network agencies’ appeal. And for bigger spending brands, this slipped to less than a third of the importance of breadth of service.  So are network agencies safe and solid one-stop shops? Not necessarily - quality of people, thinking and work was a similarly middling quality in indies too.

Agility and independence 

If marketers place similar importance on talent in networks and indies, then perhaps how people work matters more? After all, ‘agility’ looms large in this debate.  Many indies claim to be more nimble, suggesting that running a network agency can feel like a straitjacket. As Uncommon’s Natalie Graeme puts it: “Holding companies value predictability, which means less flexibility on models and less commerciality within account management.” Matthew Saunby is the executive creative director at creative agency 2050London. Having worked at networks and indies from AMV and TBWA to BBH and Forever Beta, he’s well placed to offer a balanced view on hierarchy and flexibility:  “There may be extra layers in network agencies, but that rigour can also lead to better work. And although the process can feel quicker in indies, it’s sometimes an illusion, especially if you’re throwing dozens of ideas at the client. If you’re not careful, this ‘agility’ becomes over-collaborative and leads to the safest, most familiar work.”  Our research makes a similarly nuanced case. For the biggest spending brands, 38.5% of marketers cited ‘speed, flexibility and agility’ as a compelling quality in network agencies - second only to breadth of service.  In contrast, while speed, flexibility and agility was just as highly prized within indies, it became less valued by higher spenders.  That’s a plot twist, right? Not only is ‘agility’ far from the sole preserve of indies, bigger spending brands find it more often in network agencies. 

The leadership factor 

Another trope is that indies get closer to your business than network agencies. Is that real? And is it what you actually want?  While the input of founders is surely a given in small indies, perhaps any sense of ‘closeness’ is heightened by the cachet of the owners working on your account. After all, with other people running IT, HR and their building, a network agency CEO might actually be more available.  Regardless of ownership, maybe this boils down to how important you feel to your agency. Are they focused on making money for you or for themselves?  Former ITV marketer Simon Orpin is now CEO at independent media agency Electric Glue. He says: “Indies can focus more on their people, which improves the client product and in turn drives profit. In network agencies, these priorities sometimes run the other way round.” Our research revealed that management style is marketers’ biggest frustration with both indies and network agencies. However, they describe network agencies as being too hands-on and indies not being hands-on enough.  Who saw that one coming? Nope, me neither. 

Rise of the adaptables 

Alongside some nuanced surprises, our research uncovered just as many similarities. After all - newsflash! - difference is relative and preference is subjective. Case in point: as TBWA CEO Sara Tate put it, “if we’re competing with Accenture Interactive, then who’s the indie?”  So what’s the bigger picture for marketers right now?  We found that since the onset of COVID-19, the agency qualities that have increased most in importance were pretty consistent across networks and indies - namely ‘sector experience’, ‘quality of thinking and work’, ‘speed, flexibility and agility’ and ‘stability’.  Ultimately, you need innovative solutions to novel problems. So all agencies need to adapt - quickly. And judging by the transformation briefs they’re bringing to Co:definery, they hear you loud and clear - although be a mate and keep saying it, yeah?

Advice for choosing wisely

The anthropologist Margaret Mead famously said: “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has.” This applies to agency ‘citizens’ within both networks and indies. In 2021, clearly choosing the right agencies has never been more important. And with brilliant, motivated and well organised teams found in myriad places, you need to choose more wisely than ever. So what should marketers bear in mind?  Once the pandemic passes, maintain the new spirit of partnership. Saatchi & Saatchi London’s managing director Sarah Jenkins observes: “COVID-19 has brought us much closer to client problems, so trust and honesty have increased, which has enabled us to be more instinctive.”  Don’t just hire an agency for now. Or as Wunderman Thompson’s UK CEO Pip Hulbert put it: “Understand how the world and consumers are changing, so treat your agency like a marriage and make sure you can grow together.”  If you need ‘agility’, then self-awareness matters. "Knowing what you want is the best way to access speed. You don't need to be big or small - on the client or agency side - you just need to be clear". Wise words from McCann London CEO Sheryl Marjoram.  And having delved into one distinction, here’s one more - from Colenso BBDO chief strategy officer Rob Campbell. “Rather than indie vs network, it’s more a case of whether the agency wants to be at the business end of creativity or the creative end of business. The former is a greater focus on revenue and the latter is a commitment to the power of creativity. Clients just need to understand which kind of agency they want.” So there you have it. In a world where polarised views rarely promote progress, marketers need more nuance and clarity than ever. Let smart agencies challenge you, then seek out the perfect fit, wherever that may be.  If independence or network ownership is mission critical, then follow your chosen path with confidence. Just don’t be guided by preconceptions. After all, with any binary choice, your decision only matters when it really matters.  And for the record, it’s Blur by a mile. ‘Roll With It’ sounded like the theme tune to Only Fools and Horses. Don’t @ me. 
Image: Marketing Week

15/01/2021

Act fast to avoid the post-M&A vacuum

Act fast to avoid the post-M&A vacuum

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...

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 

Regardless of the nature of the deal, your goal is accelerating the right kind of sustainable growth. That increasingly relies on differentiation across your entire Customer Experience (CX). So whether that means serious transformation or more nuanced optimisation, you need to define priority improvements across what you do, not just what you say. That’s why Co:definery has partnered with creative leadership specialists Curve to develop the Agency CX Roadmap - a clear, actionable plan for business-wide change. 

Creating your CX Roadmap

Taking your leadership team through a short series of immersive workshops, the process grades your collective aspirations and progress against five pillars of agency Customer Experience: 
  1. Strategy - e.g. differentiation, internal buy-in, value proposition, purpose, target audience
  2. Leadership - e.g. collaboration, innovation, culture, delegation, self-care and team care, organisation
  3. People + operations - e.g. people strategy, employer brand, diversity, inclusion, talent attraction / development, financial health
  4. Marketing - e.g. thought leadership, consistency, owned media, campaigns
  5. Sales - e.g. metrics & reporting, client development, share of wallet, partner collaboration, upstream targeting, conversion, pricing.
Keeping things structured and fast, we combine your views with our own experience and recommendations to create the following deliverables: 
  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.
Disagreements are resolved, everyone learns a lot and the actions are agreed in the room, so you’re ready to get moving straight away.  And where you need outside help to maximise momentum - and make change stick - then Co:definery and Curve design a bespoke programme of consulting, coaching and mentoring support. 
"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

Despite it being a cliché to describe the integration of two businesses as changing the wheels on a moving bus, it’s easy to underestimate how complex it can be - especially if it’s your first time.  For the acquired CEO in particular, the workload, new opportunities and mix of expectations can be overwhelming. So the process of alignment and priority setting requires decisive action.  And because clients are demanding deeper, more demonstrable expertise, building differentiation through a shared Customer Experience is essential.  The Agency CX Roadmap defines your shortest course to sustainable growth and empowers you and your team to deliver lasting change.  The process creates a safe space to resolve difficult issues. And because you take those decisions together, the shared commitment makes everyone accountable for change.  From there you can accelerate growth with clarity and conviction. Find out more by getting in touch.
Image: Tsvetoslav Hristov

18/11/2020

Don’t lose the race to higher ground

Don’t lose the race to higher ground

Change is essential to accelerate sustainable, post-pandemic growth, but agency CEOs need to shortcut the soul-searching and act fast.      As Elvis Presley once famously asked, “who...

Change is essential to accelerate sustainable, post-pandemic growth, but agency CEOs need to shortcut the soul-searching and act fast. 
 
 
As Elvis Presley once famously asked, “who doesn’t love a misattributed quote?”. And in business, no-one’s words get mis-deployed more than the patron saint of consultants, Peter Drucker. So it’s no surprise that he never said ‘what gets measured gets managed’.  Worse still for those who live by that maxim, the full quote (by academic V. F. Ridgeway) actually warns against it - “What gets measured gets managed - even when it's pointless to measure and manage it, and even if it harms the purpose of the organisation to do so.” So now that the pandemic has made change a priority for agencies, how can you create a roadmap for growth, without getting bogged down in options, numbers and initiative fatigue? 

The accelerating revolution

Step one is to recognise the scale of the challenge. While a tough market is nothing new, the pressure and urgency you face is growing by the day - especially in larger agencies.  With many CMOs looking to build their brands from the bottom up, their vast demand for content is increasingly being met by in-housing.  At the same time, global production specialists are winning blue-chip clients with a compelling promise of cost efficiency and speed. And independent agencies have Network agencies in their sights.  Then there’s COVID-19 - disrupting client spend, accelerating societal change, and redefining the workplace and talent market.  And as if that wasn’t enough, these tectonic shifts also enable the press to maintain a polarised narrative, with smaller agencies cast as ‘agile’ and those they see as traditional labelled as ‘embattled’ or ‘beleaguered’.

Rising internal pressures 

It’s similarly tricky inside the agency. For Network shops in particular, whether you’re still hitting your numbers or not, delivering more of the same is no longer enough. Unfortunately, despite the opportunities created by clients facing ever more complex problems, you’re under-resourced, organic growth is maxed out and new-business is a bloodbath of agencies cutting their own throats.  So giving ideas away and making your money back later is now a non-starter. And there’s only so far you can manage costs downwards.  All this makes further agency consolidation inevitable. And even where the strategic rationale makes sense, let’s not forget that a merged entity can only have one chief.  Without a distinctive three-year growth plan, your destiny will be out of your hands.  So what’s stopping you? 

Get out of your own way 

For too long, agencies have maintained habits, beliefs and cultures that are at best outdated and at worse actively hamper growth. For example, many so-called propositions are no more than straplines that offer clients no meaningful differentiation. And beyond listing their non-conflicted sectors, many agencies can’t even name a discrete target audience.  The age-old obsession with pitching is also self-limiting. There’s plenty of talk about agencies becoming more consultative to get ‘upstream’, but few make the necessary changes to their decision making and commercial model, not to mention their mindset, skills and process.  Similarly, for all the woolly talk of being ‘partners’ to clients, not enough is done to cultivate the conditions required. No wonder the classic ‘land and expand’ approach to new-business often leaves you in a tactical pigeonhole that makes account growth harder.  Ultimately, failing to change these ingrained habits - like chasing any CMO with a budget - makes you complicit in your own commoditisation. 

Define your roadmap to growth

In this context, there’s never been a greater need to reinvent differentiation. But this is about far more than just packaging - it’s about strategy, leadership and company-wide change. Ultimately, clients are now demanding that agencies demonstrate deeper expertise, so building a differentiated Customer Experience (CX) is essential.  Whether that means serious transformation or more nuanced optimisation, you need to define priority improvements across what you do, not just what you say.  That’s why Co:definery partners with creative leadership specialists Curve to deliver the Agency CX Roadmap - a clear plan for holistic adaptation.  Through a short series of immersive workshops, we assess your strengths and weaknesses, identify blind spots and agree prioritised actions, owners and timelines.  By addressing your agency’s unique psychological, operational and cultural hurdles to change, you create a virtuous circle of commercial gains and demonstrably effective leadership. 

Your window of opportunity

The pandemic has heightened the need to address fundamental issues that have been looming for years. But to thrive as the market recovers, you must be decisive.  Transformation can no longer languish in the ‘too hard’ pile and an ‘initiative’ or two won’t cut it. You need to set the right course and bring people with you.  Thankfully, turning the tanker doesn’t mean boiling the ocean. Instead, fast-paced change prospers through targeted intervention. And because every agency is unique, there is no ‘average’, ‘best practice’ sets the bar too low and ‘ASAP’ is too slow. So your roadmap needs to be bespoke - and you need it now.  Our Agency CX Roadmap defines your shortest course to sustainable growth and empowers you and your people to deliver lasting change.  As Elvis sang, ‘a little less conversation, a little more action’. He definitely had agency transformation in mind.
Image: Alejo Storni

07/10/2020

Find your shortest course to sustainable growth

Find your shortest course to sustainable growth

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...

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 

The goal is a return to sustainable growth. This increasingly relies on differentiation across your entire Customer Experience (CX). So whether that means serious transformation or more nuanced optimisation, you need to define priority improvements across what you do, not just what you say.  That’s why Co:definery has partnered with creative leadership specialists Curve to develop the Agency CX Roadmap - a clear, actionable plan for business-wide change. 

Creating your CX Roadmap

Taking your leadership team through a short series of immersive workshops, the process grades your collective aspirations and progress against five pillars of agency Customer Experience: 
  1. Strategy - e.g. differentiation, internal buy-in, value proposition, purpose, target audience
  2. Leadership - e.g. collaboration, innovation, culture, delegation, self-care and team care, organisation
  3. People + operations - e.g. people strategy, employer brand, diversity, inclusion, talent attraction / development, financial health
  4. Marketing - e.g. thought leadership, consistency, owned media, campaigns
  5. Sales - e.g. metrics & reporting, client development, share of wallet, partner collaboration, upstream targeting, conversion, pricing.
Keeping things structured and fast, we combine your views with our own experience and recommendations to create the following deliverables: 
  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.
Disagreements are resolved, everyone learns a lot and the actions are agreed in the room, so you’re ready to get moving straight away.  And where you need outside help to maximise momentum - and make change stick - then Co:definery and Curve design a bespoke programme of consulting, coaching and mentoring support. 
"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

To thrive as the global economy recovers from the pandemic, agencies must stand out in an uncertain and fast-moving competitive landscape. That requires decisive action now.  And because clients are demanding deeper, more demonstrable expertise, building a differentiated Customer Experience is essential.  So the Agency CX Roadmap defines your shortest course to sustainable growth and empowers you and your people to deliver lasting change.  The process creates a safe space to resolve difficult issues. And because you take those decisions together, the shared commitment makes everyone accountable for change.  From there you can accelerate growth with clarity and conviction. Find out more by getting in touch.
Image: David Przybyla

05/10/2020

Stop paying agencies for their time

Stop paying agencies for their time

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...

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

Everyone agrees that lawyers suck. Even their mums. Not least because they sell time. And although that puts a ceiling on their revenues – agencies, take note – it also means that their clients bear all the risk. In short, lawyering takes as long as lawyering takes. As I say, they suck. Marketers often feel the same frustration when buying agencies on a time-and-materials basis. As the former RBS CMO David Wheldon neatly put it to me, “you’re paying agencies to get it wrong, when it would cost you less if they got it right”. Having said that, many agencies lack the lawyer’s backbone. By regularly over-servicing and failing to re-scope, they’re effectively giving you a fixed price, so the risk flips back to them. This is most common on short-term projects, but the risk shifts again within retained relationships. Overruns often resurface later on, when the agency waves their timesheets at you, arguing for a fee increase. You might be relaxed about both of these scenarios. After all, de facto fixed fees are the agency’s problem, whilst deferred pleas for more money can be dismissed with a ‘talk to the hand that feeds’. So why bother refocusing on buying outputs? Because modern marketing requires unprecedented scale, breadth and urgency of communications. You need speed, volume and quality – not a futile struggle to measure the hours spent doing it. Handling content production or programmatic media in-house might help, but external thinking from great agencies is still essential. So if they’re struggling to make enough money – regardless of whose fault that is – then you have a problem. And the more you squeeze their ratecards, the more you’re chasing them to the bottom when you need their brains more than ever.

A culture of innovation

Agencies know that their work is like art – it’s the deliverable, not the time spent. They’ve all scrawled game-changing ideas on the back of a napkin. And yet many struggle to track time, defend rates and monetise thinking. But it doesn’t have to be like that. MediaMonks, part of Sir Martin Sorrell’s S4 Capital, doesn’t use timesheets, so they couldn’t sell time even if they wanted to. Founder Wesley ter Haar talks about embracing ‘scar tissue’ – they accept the risk of pricing based on outputs, knowing that if they get it wrong, they’ll apply the learnings next time. Think about the cultural difference that creates. From risk-averse covering of costs, to embracing risk and powering innovation. The latter requires confidence, as well as a different commercial model, pricing stack and mindset. Agencies don’t find this transformation easy – especially when they’re under ratecard pressure. But it’s a quicker route to margin growth than competing with management consultancies for technology infrastructure projects. And more to the point, marketers would really value the innovation.

Help agencies to help you

For agencies to evolve in this way, change needs to be systemic – from how they market, sell and price, to how brands choose, pay and evaluate. Clearly everyone on the client side needs to contribute. As Adidas’s global senior director of marketing procurement Barry Byrne told me: “To truly maximise value, the answer is to align marketing, procurement and agencies behind a unified set of KPIs. This ensures all parties work together to deliver the required outputs.” So it’s timely that the World Federation of Advertisers’ Global Sourcing Board recently launched Project Spring, its call for a “revolution” whereby procurement becomes a “trusted partner of brand investment strategy”, not least by pursuing KPIs beyond savings. Encouragingly, they’ve embraced ‘partners’ – aka agencies – as part of that journey too. Turning to marketers, David Wheldon – who’s involved with Project Spring – believes that you have a big role to play: “There are relatively few marketing procurement people that understand both disciplines, so good marketers can educate them on what agencies do and the value they bring.” So if you embrace procurement and help all parties align around business value, then great progress can be made.

Embedding positive change

Being stuck at home during this awful pandemic has made us more mindful of our mental health and productivity. At the same time, we’ve still delivered, despite no-one peering over our shoulders. Building trust, confidence and accountability, this is a hugely positive shift of perspective. Switching the client/agency conversation from inputs to outputs can help make that change stick. To be clear, this is about fixed fees for agreed outputs. Talking about outcomes and payment by results is a different conversation. So let’s leave metrics, attribution and ‘skin in the game’ for another day. Moving away from rates and time spent creates an environment where agencies can thrive. With strong propositions – and clarity on where their expertise begins and ends – they can work smarter, improve margins and attract the best talent. At the same time, you and your procurement colleagues would get breakthrough thinking faster, as well as certainty of price and deliverables – and who doesn’t need a little less uncertainty right now? With any luck, perhaps before long we’ll look back on billable hours with a wry smile, wondering what planet we were on. A bit like with bum bags.
Image: Marketing Week

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