The four leadership shifts agency owners need to make to adapt to an evolving workforce with Heather McGowan

Speaker 1:

Welcome to the Agency Management Institute Community where you’ll learn how to grow and scale your business, attract and retain the best talent, make more money, and keep more of what you make. The Build a Better Agency podcast presented by White Label IQ is packed with insights on how small to mid-sized agencies survive and thrive in today’s market. Bringing his 25 plus years of experience, as both an agency owner and agency consultant, please welcome your host, Drew McClellan.

Drew McClellan:

Hey, everybody. Drew McClellan here from Agency Management Institute back with another episode of Build a Better Agency. Super excited to be back with you this week. Thanks for coming back. If you are not a new listener, and welcome. This is a great episode to join us if you are a new listener.

So, a couple of quick things before I tell you a little bit about our guest. Number one, I want to remind all of you that we have some great workshops, some AE boot camps coming up. The Advanced AE boot camp is at the end of March and the regular AE boot camp is at the end of April. Both of those are in Denver, Colorado, so head over to the website and check those out. We won’t run them again until September and October, so grab a seat while you can. We always love to see your people and help them be successful and support your goals, so love to see them.

Also, I want to remind you that, of course, the Build a Better Agency Summit is May 16th and 17th. Getting really excited about it. It’s falling into shape in a lovely way. Really wonderful sponsors, great speakers, and the attendees are going to be off the charts and we want you to be one of them. We will sell out, so please grab a ticket while they are still available and go to the website at Build a Better Agency… Sorry, I lied. Go to the website at agencymanagementinstitute.com and then in the upper left, you’ll see BaBA Summit. Click on that and you can click on the registration button to buy your tickets before they either sell out or get more expensive. So, grab them today if you can.

One of the speakers that’s going to be there is a woman named Jamie Roberts. And Jamie owns a company that helps agencies recruit and sort of assess before they hire creative talent to make sure that they are the right creative talent for your shop. So, it’s not all about their book, it’s not all about the awards they’ve won, but they have to fit your shop’s culture, work, work style, and she has a really interesting methodology for figuring that out. So, she’s going to be there talking to us about that methodology, so how we can hire the creative department better and we can attract people who are going to be longtime great producing employees. So, come out to the summit and check that out and she’ll be one of the breakout sessions, so you’re going to love her. She’s also really lovely, but super smart and you’re going to love learning from her.

All right, let me tell you a little bit about our guest. So, Heather McGowan is a fascinating woman who has been studying basically human work and how we work and how we work together for a long time. And she has written a great new book that is coming out, actually, it came out yesterday when you’re listening to this, if you’re listening to it live on March 6th. The book came out on the 5th, and it’s really all about how we have to change our work environment and culture to attract and keep and retain and get the most value out of today’s employees.

And I know for a lot of you, you’ve been struggling with this. It would be really great if you were to check out the book, but this next hour is going to be an amazing preview. So, Heather is going to download for us all the ways that the workplace has changed and we’re feeling a lot of them, but she’s going to talk about why they’ve changed. And what we can do to get the most out of that workforce and what we have to do as leaders and owners to really embrace some of these changes and to make our work environment something that people are really drawn to. So, without further ado, let’s get to this conversation because I’m really excited to learn from her and I think you’re going to love this conversation.

Heather, welcome to the podcast. Thanks for joining us.

Heather McGowan:

Hi, Drew. Thanks so much for having me.

Drew McClellan:

So, give everybody a sense of your background and how you came to have the expertise that you have and what led you to writing the book.

Heather McGowan:

Complete and total accident. That’s the honest answer.

Drew McClellan:

Well, you know what, everybody listening for the most part is an accidental business owner, so they understand. Yeah.

Heather McGowan:

Yeah. If you’re looking at your career and say, “I don’t know it was an accident,” share that story with young people, who are so trying to tightly define their future when it has never been moving more quickly or with greater ambiguity.

Drew McClellan:

When they’re 18 and they’re supposed to know what they want to do for the rest of their life.

Heather McGowan:

When their prefrontal cortex hasn’t even fully formed and they can’t even make those decisions.

Drew McClellan:

That’s right. So, how did you accidentally become the expert that you are?

Heather McGowan:

Yeah, I know, so I used the title Future Work Strategist. It was coming out of the reality that I had been doing speaking and writing, and people kept saying to me, “Well, how do I introduce you? What do I call you?” And so, a friend of mine went on one of those websites. It was like pick something from Column A, Column B, Column C and came up with this term future work strategist. Now, I look on LinkedIn and other people are calling themselves that as well. It’s a completely made up title.

It came from the fact that I was trying to knit together some dots that I think should have been connected. I had worked on the demand side and the supplies side of human talent. And I have an undergraduate degree from RISD in Industrial Design and MBA from Babson in Entrepreneurship. I’ve worked in everything from product design, design strategy, boutique investment banking, academia. So, I had worked in this all these different functional areas and I think now looking back on it, I was just trying to understand what humans do at work.

And along the way, I discovered we were not creating the workforce we needed, so I would spend about a decade in academia. I built a new college focused on innovation. I built a curriculum for the future of work. Done a variety of things like that. And then on the demand side, I was working in white space exploration and product design and realizing we didn’t have humans geared towards the exploratory work we needed them to do. And so, I started explaining it both to my academic clients and my corporate clients, and then it spun off and became its own thing. I’ve written a couple of books on it and I speak about 75 engagements a year for companies all over the world trying to explain to them really the now of work, what’s happening, and how they should better prepare for the moment they’re in.

Drew McClellan:

And so, then the world turned upside down and you were like, “Oh, my gosh, this is my moment. I can help people figure this out.”

Heather McGowan:

I had written a book that I took a long time to find a publisher and an audience called The Adaptation Advantage: Let Go, Learn Fast, and Thrive in the Future Work. That came out April 2020 when we were in the height of our chaos and it ended up being sort of an accidental guidebook of how to get through the pandemic, even though I knew I did not know that I eerily precedent.

And then I remember talking to a friend of mine who had run an agency most of his life, and I said, “Ed,” Ed, if you’re listening, talking to you, “Ed, what the hell am I going to do? I mean, I basically spit on people for a living. I mean the respiratory droplets business, it’s all shut down.” He’s like, “You’re going to sit back, you’re going to watch, you’re going to pay attention. You’re going to connect the dots. You’re going to come out of this with greater insights, another book and a whole another leg you’re speaking to.”

And he was absolutely right. The book that we wrote that comes out March 5th is called The Empathy Advantage: Leading the Empowered Workforce. It’s really your Guide to the zeitgeist. And we wrote, Chris Shipley and I wrote it in about 100 days because after three years of giving a couple of hundred talks to companies and working with companies and seeing what they were all struggling with, I was like, “Whoa, the zeitgeist has changed and they need a guide.” And so, we just wrote it to meet the moment I think folks need right now.

Drew McClellan:

Our clients, our listeners, they have been, my gosh, they’ve been struggling so much. During the Pandemic, as you know, it was about how do they keep their employees calm and focused and feeling safe and completely changing the way we worked in terms of how we worked, where we worked, how we communicated. A lot of agency owners for the first time we’re dealing with a lot of stress and mental health issues that for the first time, their employees were much more bold about talking about, or they were so profound they couldn’t hide them anymore.

And then as we were coming out of the heart of the pandemic trying to find talent. I mean, agencies were hiring anybody who could string together a sentence and was still breathing and upright and then struggling with what is putting somebody who’s the wrong person or the wrong fit into an environment and what does that do with the culture. And now, I think there’s been a lot of course correction around that, but still what employees want today and how they want to work, and all of that is unprecedented for most of the people listening to this podcast.

And it’s not that they don’t want to be great employers, and it’s not that they don’t care about their people, they literally are, they look at me and they go, “Drew, what the hell? Like I don’t know what to do anymore. I used to know what to do and now, I don’t know.” So, is that common with what you’re seeing?

Heather McGowan:

Yeah, yeah, yeah, 100%. So, what’s happening is if you are a leader today, an agency owner, you were trained in a certain environment with a certain set of expectations. That have fundamentally evaporated, and you’re looking for your people to respond the way you responded to leadership that led you, and I’m sorry, it’s simply not going to work. So, you were trained to be an unquestioned expert to make decisions on certainty, to lead your folks sometimes a little bit of domination or fear or sometimes even humiliation. You used extrinsic motivational pressures like punishment, threats and rewards. You called the shots. People worked for you.

That’s not how it operates anymore because we’ve gone through a fundamental transformation on how the relationship between individuals and organizations. We once traded loyalty for security. That security started to evaporate and then it became an existential crisis in the pandemic. And folks were saying, “I don’t want to do this anymore. What am I doing with my life?” And they want to work for other reasons. We once worked for our survival, then identity and status. And now it’s “I want values, I want purpose, I want lifestyle, I want meaning.”

And the workforce is empowered and the workforce is empowered because of five greats, the great resignation, the great retirement, the great reshuffle, the great refusal and the great relocation and all happening at once. The great resignation was initially purely understood. People thought it was a phenomenon between 2021 and 2022 until they saw in 2022, more people quit than in 2021.

Drew McClellan:

So, they thought it was really just a symptom of COVID, right?

Heather McGowan:

Yeah. And then you look back and it started in 2009. That’s when quit rates started to increase. And so, why did they start to increase? They started to increase because it was no longer required that you spend X number of years with an organization. That is no longer a pressure or a conventional wisdom. It started to accelerate even more with 15 years of digital disruption and job creation. Job destruction was happening at such a rapid rate in terms of what skills were required, how humans worked together, that jobs were just morphing and changing.

And then you’ve got a series of other pressures where folks were saying, “I’m just not doing this anymore. I’m going to do something that fits my lifestyle better.” So, you got the greatest resignation. And Gardner thinks that’s going to be up 20% going forward because we have labor shortages. And one of the reasons we have labor shortages is the boomers are leaving the workforce or starting to leave the workforce. Not all of them, and I’m not saying they should. I think we need to think of better ways of engaging folks throughout the lifespan, but 75 million boomers are going to turn 65 between now and 2030 and leave the workforce. We should have been prepared for that.

The great reshuffle or reskilling is when folks say, “Listen, I don’t want to do this kind of work anymore. I don’t want to be in the travel industry, or I don’t want to be in IT, or I don’t want to be a teacher or a nurse,” what have you. And we have real shortages in some areas of the workforce. 53% of people who moved between ’20 and ’21 went to different occupations. I mean, that’s a profound shit in the workforce.

Drew McClellan:

Yeah. It’s crazy. Right, right.

Heather McGowan:

The great refusal is on two fronts. It’s folks who are at entry wage saying, “I’m not getting punched in the face for $7.25 an hour anymore. You can’t humiliate me. I’m not doing it.” Way behind on paying people fairly. If we had kept to pre-pandemic inflation, we’d be looking at about $23 an hour for minimum wage. We’re way off that. And then working parents, and particularly, moms, working just to pay for childcare, after you’ve been through an existential crisis, I don’t think so. So, we’re seeing a lower labor force participation rate with one.

And then the great relocation is 19 million people according to Upwork saying, “You know what? I’ve always wanted to live in Denver, Colorado or Gulfport, Florida or the Colorado Rockies or Manhattan,” or whatever it may be. “And I’m going to go to that location and then figure out how to work because there’s greater ability of remote and hybrid work, or I’m just going to be in gig work and figure it out.” So, those combined forces give out some great reset. Your workforce is empowered. No more mandates and dictates. You need to listen to them and engage them, but if you do, I think this is a tremendous opportunity.

Drew McClellan:

There’s the silver lining to all of that because that was all sounding horrible.

Heather McGowan:

Yeah, yeah. No, but if you look at what we’ve been doing over the last couple of decades, we’ve got unprecedented level of burnout, mental health issues, and Gardner’s been tracking engagement for 20 years. We’ve made almost no progress. This is our opportunity to humanize the work and to make it more of something that we all want to engage in. So, we have higher levels of engagement and happiness,

Drew McClellan:

Which also does increase loyalty and make people want to stick around.

Heather McGowan:

100%. I mean, the companies that are on the best places to work list actually have higher performance. So, it’s not success that will make you happy. If you’re happy, you’ll be successful. We’ve been a little backwards on that.

Drew McClellan:

So, somebody has owned their business for 20 or 30 years, like you said, A, they grew up in the workforce in a very different way. I was talking to somebody who was in her early 50s, and she was like, “In our business particularly, everybody wanted to work at an agency. It was a very sought after job and so, you had to prove you wanted it. And the way you proved you wanted it was you worked long hours and you worked nights and weekends and you worked, whatever.” And she was like, “You just knew that you were going to pay your dues for X number of years before you were credible and all, you got promoted, and all the things.”

And she was like, “Now, 5:00, 4:30, whatever the quit time is,” she’s like, “my folks are out, and there is none of that.” And she’s like, “I get that that’s healthier and better for them. I do. I wouldn’t wish what I went through on anybody, but I built my business based on that model.”

Heather McGowan:

That model.

Drew McClellan:

Right?

Heather McGowan:

Yeah.

Drew McClellan:

So, how do I change that model?

Heather McGowan:

Yeah, I talk to law firms and accounting firms, it’s the same thing. How do you become partner? It’s a sacrifice privilege. There will be some people who still buy into that hustle culture and maybe there’ll be enough of them to keep the partner track running and keep the agency model going and the accounting model of billing, 150% of the hours you actually have in a day. But there’s a lot of folks who were saying, “You know what, I don’t think the quality of my work is that good when I’m ground to a stump.”

Drew McClellan:

That’s right.

Heather McGowan:

So, there’s that piece of it as well. I mean, I think we’re going to see this shake out in some interesting ways. I don’t think we’re going to see the end of hustle culture for everything. We’re going to have hustle culture put back in the place. Hustle culture should be when there’s a tremendous opportunity and I am dying to get it done because I want to get to the market or to the client before anybody else, or I’m scaling a startup. It’s not every day all the time, which is what it turned into.

Drew McClellan:

That’s right. And I will say I do think our industry has seen that, that we know this week is going to be a grind week. We’ve got a big RFP due. This is a huge opportunity for us. People will rise to that occasion. So, and I also think-

Heather McGowan:

And then it becomes, what do you do the next week to make sure if they’ve just drained the gas out of the tank or the battery, how do you help them recharge the next week? It’s not, “Okay, now this is just another week.” We have to think about like an athlete. An athlete goes out and runs a marathon or lift weights and chairs, muscle fibers. They don’t grow back stronger without rest. So, you have to think about it that way and the recovery period as well.

Drew McClellan:

So, let’s talk about, again, most of agency owners have been in the workforce for a while, and I think we just assumed that we would do it the way we’ve always done it, which is a fallacy in it of itself, of course. So, what’s the first thing I, as a business owner, need to wrap my head and heart around before I can even make some of the changes that I’m going to ask you about in a minute. Because it sounds like it’s a mindset and a heart set, first and foremost.

Heather McGowan:

Yes.

Drew McClellan:

And then it’s about making the changes. But if you do it grudgingly or pissed off about it, then it’s not really going to have the impact you want. So, where do I need to get to as a business owner to be ready to make the changes in my organization that makes me a place that people want to work?

Heather McGowan:

So, I say there are four shifts that leaders need to make. The first is a shift in mindset. You are coming out of the idea that everybody works for you, you’re the boss, you’re the unquestioned expert and so, you manage people and processes. Now, you don’t anymore. You enable success because chances are good people at every level in your organization have skills and knowledge that each leader doesn’t have. That used to be true, the CEO only or the agency only. Now, it’s happening in the middle layer and sometimes even on the frontline. So, that’s a shift in mindset. You work for your people instead of them working for you in service to them, but in service to your own success.

The second is a shift in culture. You used to pit your people against each other to compete for your attention and your praise. Now, they often have skills and knowledge that’s not only something you don’t have but unique to each other. You need them to act as collaborators. You need to set that collaborative rather than fiercely competitive environment. There are places, of course, for competitions, sure, but overall much more collaboration than competition.

Approach used to work to get folks to with extrinsic pressure, punishments, threats and rewards. You’re not going to get people to learn and adapt to these changes at the speed, scale and scope we need through punishments, threats, and rewards. So, you got to move to intrinsic motivation, which means you have to know your people. Understand your people, get to know them as humans, so that you can help them become self-propelled, which comes from their own intrinsic motivation.

And then finally, it’s a shift in behavior. You can’t myopically drive productivity or the hustle culture with fear, domination, sometimes even humiliation. You got to create effectiveness through inspiration, which means caring about them, loving them, creating belonging. And those four fundamental shifts that’s where you got to begin.

Drew McClellan:

I want to dig into those four fundamental shifts. First, let’s take a quick break and then we’ll come back and have you unpack that for us. And give us some starting points for each of them of how we can begin to make the shift. All right. We’ll be right back guys.

Hey, there, just a quick interruption. I want to make sure that you are aware that you are cordially invited, not just invited, but cordially invited, to join our Facebook group, our private Facebook group. All you have to do is go to Facebook and search for Build a Better Agency and you’ll find the Facebook group. You have to answer three quick questions. You have to put in the agency URL, yu have to talk about what you want to learn from the group, and you have to promise to behave yourself, and that’s it.

And then we’ll let you in and you can jump into the conversation with over a thousand other agency owners and leaders, and there’s a robust conversation happening every day. People are sharing resources and best practices and discussing everything from work from home policies to maternity and paternity policies, to biz dev strategies, so come join us and jump into the conversation. All right. Speaking of conversations, let’s head back.

All right, we are back and we’re talking about how we have to transform our workplace to be the kind of environment, the kind of agency where our people want to be. And I know that one of the most valuable things we can have is longevity of employees, where people who are invested, who care about the business the way we do. I have been super fortunate in my business. Somebody’s been with me 20 years and I think about the value of that person exponentially over time.

So many of us have experienced this revolving door for the last few years once the pandemic hit. Most of you have had turnover you’ve never had before, and you know that it reeks havoc in your organization. It freaks your clients out. It is not profitable. So whether you love the idea of transforming the workplace or not, there is a very practical business reason why we need to do it.

All right, Heather, walk us through. You set us up before the break. There’s four fundamental things we have to do to change. Take us through each one of those and unpack it for us.

Heather McGowan:

Sure. Let’s start with mindset, because that’s where you got to begin. Now, think about your people as you would as a parent or a coach. So you’ve got Kevin, Benita, Duncan, and Lisa, and all of them on your team are individuals. You used to focus on their negative behaviors, trying to dial those down, trying to squeeze more performance out of them. Now, you focus on how would I make each and every one of them as successful as possible in their own right? How do I help them become the next best version of themselves. If that becomes my focus, developing them rather than the product or service you’re developing, product and service is going to work itself up. Focus on developing the people. That’s a mindset shift. So, if you’re enabling their success, you’re focused on their own development, first and foremost.

Drew McClellan:

What does that look like to the employee? How do I demonstrate that?

Heather McGowan:

So, if you’re talking to your people and can you give me a, for instance, like a project and then I can work into it that way? A project that you have in your own agency or?

Drew McClellan:

Let’s say, I was just talking to somebody today and he has been charged with the idea that they need a project management system to keep track of all the projects and due dates. So, he’s got to find a tool that will help them do that and then implement it throughout the organization. Train everybody, and then get everybody to do it the way that they’ve been taught. So, big task.

Heather McGowan:

Okay, so rather than we tend to pick the tool that “I like this tool. This is what we’re going to use. Everybody has to learn it.” You have to bring in, like say bring in two or three tools and say, “These are the two or three tools we’re looking at. Which ones are natural for you to use, or you can wrap your head around it or you can change your behaviors to use these because they’re going to collectively make us more effective?”

It becomes much more of a group think project, so when you’re looking at enabling success, you need to make sure everybody is all in on using the tool as opposed to one person picks it and forces it on everybody else.

Drew McClellan:

So, I as an agency owner, so I’m not the person doing this project, but I’m asking one of my lieutenants to do this project. So, what I’m going to say to him or her is I’m going to encourage them, “Hey, let’s make this really collaborative. Let’s get some key stakeholders. Let’s test out some tools, and then you guys come up back with a recommendation and then we’ll make a decision.” Yes?

Heather McGowan:

Yes. I want you all to be successful. It’s not about me driving productivity by picking the cheapest or supposedly inspected tool. I want the tool you all will use. I want to enable your success.

Drew McClellan:

In day-to-day reviews with employees where we’re talking to employees, what other language do we use? A lot of this is we can make the mindset shift, we can make the heart set shift, but we’ve behaved a certain way for a long time, and so, we’re going to have to prove that we are really changing. So, I think our actions are going to have to speak for us in a lot of ways. So, what’s some other language we would use or some other instances where we would be able to demonstrate that we are making this shift?

Heather McGowan:

Here’s another way that I learned this from Rishad Tobaccowala, who is somebody who’s gone into organizations. He’s done a lot on the agency side, a lot of digitization of a company’s work. And he says, “You begin meetings with one of four questions and you can use all four of them.” The first by saying, “How are you doing? What’s on your mind?” It’s very simple. Instead of starting with, “Where are you at this? Where are you with that?” Instead of a obligatory “how are you” where you really don’t even want the answer and you go right into the task.

“What’s on your mind?” And if the person says, “I’ve really been struggling with this. I need your help thinking about that,” you show you’re caring, you’re showing empathy, you’re becoming in some ways a little bit vulnerable.

Another question you can use is, “How can I help you? How can I help you be more successful? Is there something that, is there an obstacle I can remove? If you have resources to give, can I give you resources? Is there something I can take off your plate? How can I make you more successful?” Basically, communicating that.

Then asking for help. Since many leaders have people working for them with skills and knowledge they don’t have, saying, “Hey, you know what, I’m working on this project over here with Benita and she’s got all the skills and knowledge I don’t really understand. Can you help me figure out how your piece fits into her piece?” Learning from your employees also shows vulnerability and caring.

And then getting in the practice of regular feedback. “Can I give you some feedback? Can you give me some feedback because I want to course correct.” That is a real humanization. It shows empathy. It shows caring. It shows vulnerability. And it’s a shift in “I want you to be successful. I want to be more successful. You can help me grow. I can help you grow.” It becomes much more of a collaborative rather than a task based and it becomes actually more motivating, too.

Drew McClellan:

I think a lot of agency owners say, “Hey, open door policy. Come in and talk to me anytime, yada, yada, yada.” But that doesn’t necessarily have people knocking on their door coming in and talking to them, particularly about giving them feedback. So, how can we do that better?

Heather McGowan:

I interviewed this person for, actually, my last book and her name is Carol Leaman, and she runs an organization called Exonify up in Canada, and she had off-the-charts Glassdoor use. And I was like, “Why? You seem like a nice person, but why does everybody love you?” And she said, “It’s my fifth time being CO, and I finally figured out that the more human I am, the better.”

Smaller organization, every two weeks she do an “ask me anything” session. “You can come in, and because of investors, there’s some things I cannot answer, but anything I can answer, I will including mistakes I have made, what I’m doing about them. I own them as soon as I do.” And she’s like, “I have a mortgage like everybody else. I go home to a family. I have stresses. I am just like you with different patterns-”

Drew McClellan:

Different job responsibilities, right?

Heather McGowan:

Yeah. So, “Ask me anything and I will be as authentic and vulnerable as I can. And people started to see me as a human.” And then they were more apt to, you can say you have an open door policy and not really mean it, but if you have an open door policy and you mean it, you demonstrate it by some behaviors that show that door is open, then you’re better on the path.

Drew McClellan:

Next one to unbundle.

Heather McGowan:

Next one to unbundle is that peers as competitor versus peers as collaborators. If you say we’re a collaborative organization, but here’s our forced rankings and we need everybody below. We need a certain percentage of a million people below 2%, so we can take a cut whenever the economics fall.” Then you don’t really mean it.

If you have a collaborative environment, you reward teams. If you do projects and bonuses, you give teams bonus, you give teams recognition. I know this happens more in the agency world, which is great. It doesn’t happen in every industry. So, rather than pitting people against each other, you make it really clear you’re supportive of what happens in the team as opposed to individuals against each other.

Drew McClellan:

Yeah, that’s probably one we’re better at as an industry because the work we do requires such collaboration. It’s very hard for one person to finish a complete ad campaign or to do a PR effort or whatever. We have to work together, so we’re probably better at that, but that doesn’t mean we can’t improve.

Heather McGowan:

And then the approach from extrinsic to intrinsic motivation, you may do some of this stuff already by nature. Creative is a calling, generally, so people who are brought to it because it is self-expression, but it’s much more of work as self-expression. I mean, one of the stories I tell is I worked in higher ed. I was an assistant provost. My provost, when we were building this new college, I realized that, “I just hate meetings. And I’m not particularly helpful unless you need me in that meeting.” So, he just took all the meetings off my calendar.

And he was like, “You’re really good at this.” And he just sculpted my job around all the things I liked to do and that I was good at, and I was ultimately much better. I created better value because he had the ability to do that. I think agencies can do that because you’re usually small and nimble enough and you can put your people on teams and let people go to those behaviors.

I also remember the story of when Phil Jackson was coaching the Bulls. He knew that Dennis Rodman was an exceptional athlete, but he also knew he had a lot of mental health issues. He had ADHD. He gets distracted easily. So, he came to an agreement with him and he said, “Listen, I know getting to practice 90 minutes before the game is really hard for you because it distracts you, it stresses you up, Bubba. But I can’t break the rules for you without consequences. So, you can show up,” I think it was like “60 minutes before, instead of 90 minutes before. You can go to the locker room during halftime and ride the exercise bike because I know it will keep you primed, but I have to punish you for it.”

And the punishments were all financial. So, they came to an agreement and said, “You’re going to be financially penalized for these two things. I know it’s going to make you a better player that will ultimately make you more money, but I have to come to these agreements to accommodate you.” And I think that that’s a great model of trying to figure out-

Drew McClellan:

That’s interesting. It’s not without recognizing how…

Heather McGowan:

It was fair.

Drew McClellan:

… I serve you. I have to also be fair to the team or the workforce, so let’s figure out how to do this, so I can still honor my word and have integrity. But also, I can recognize that you need something different.

Heather McGowan:

And transparency, too, because everybody knew that Dennis was getting charged X amount of money because he came to the game 60, and 70, 90 minutes. But he also knew Dennis played a whole lot better at that game when he wasn’t completely stressed out.

Drew McClellan:

Which benefited the whole team.

Heather McGowan:

Exactly.

Drew McClellan:

That’s really about, I was having a conversation with an agency owner the other day, and they were building compensation for some folks that had been really superstars, and they immediately went to paying them more money. And I said, “Do you know that’s what they want? Is that the thank you that would mean the most to them?” And because it was what the owner valued most. And again, he was trying to be generous. He was trying to do the right thing.

And I just said, “Have you ever thought about asking them like, ‘Hey, here’s a basket of choices. It’s an extra week of vacation, or it’s this or it’s that or it’s $10,000 in salary, which one would you like?’” And he was like, “Well, he’s going to take the money.” And I said, “Well, let’s see. Let’s see what happens.” Didn’t take the money. Took the week extra week of vacation, which didn’t cost hardly anything to the owner versus the $10,000 a year, so everybody was happy. So, it’s really about understanding your folks, right?

Heather McGowan:

Yeah, because this whole humanization of the workforce is have having an agreement with folks. So, your workforce is empowered and that means they want an agency they want to trust. They also have accountability., so you have to meet them with an agreement. That’s what we’re doing.

Drew McClellan:

All right. What’s the fourth one?

Heather McGowan:

And the fourth one is behavior. You used to make decisions on certainty and myopically drive productivity, and you treat people the way you were treated. And this is a hard one for folks because they were like, “I showed up every day and I got into my spot because I didn’t see my kids’ soccer games. And so why is it so important you see your kids’ soccer games?” It’s a different workforce.

And if you want to motivate them, it probably didn’t motivate. You sacrificed and you might be a little annoyed that you put in those sacrifices and now, nobody else has to, but that’s just the way it works. I mean, if you want to motivate this workforce, we don’t have good outcomes. If you look at engagement or burnout or mental health, that excessive hustle subculture and sacrifice privilege stuff didn’t really help create better value.

Drew McClellan:

If I’m making these changes or I’m trying to make these changes, and first of all, should I tell them I’m trying? Again, getting back to being human and vulnerable, should I say to my team, “Look, I am realizing that today’s workforce and today’s workplace is different, and I am trying to recognize my old habits and my own assumptions and make some corrections to make this an even better place for you to work.”

Heather McGowan:

Yeah.

Drew McClellan:

“Here’s what I’m working on. I’d love some feedback.” Should we be that blatant with our team?

Heather McGowan:

I think they’d love it because I think that that is one of the things, if you look at all the studies that were done through the pandemic in terms of what people complained about was they were asked for their input and then nobody did anything with it. So, they would take a poll and I would say, “I want this,” and they never responded.

So, if he was a leader saying, “Listen, I get it, the workforce has changed. You want different things. I want us to create the best agency. We can’t create the best session agency unless it’s the best place to work. If it’s the best place to work, that’s about you, not me, so I’m trying to change my behaviors so that you are happier. You have higher performance. You have higher levels of engagement. You have higher levels of happiness.”

“I know this is going to be a trial and error, but I’m trying to change my behaviors because I know that the way that I went through in your spot really wasn’t the best. And even though I sacrificed through it, I don’t want you to. I want to make this a better place to work.”

Drew McClellan:

So, we are that transparent and we start to make some changes. How will we know if it’s working? What will we see?

Heather McGowan:

I’m a fan of taking polls on your workplace, but not by anybody internal because they’re always suspicious. So, use an external group and say, “How are you feeling?” Take a pulse on level of burnout, exhaustion, et cetera, at the beginning. Take a pulse six months later. Take a pulse a year later and say, for the folks who have been here through it, “How are you feeling overall? How do you feel that your creative process is going? Are you feeling more creative? Are you feeling more engaged? Are you feeling better balanced in your lives?”

I mean, they did this when you look at all the studies on the four-day work week, whether it was what they did in Iceland or what they’re doing in Europe. They took a beat on how people were in terms of performance, mental health, how they were spending their time, and they saw huge increases. They found people were wasting a lot of time in meetings and stuff they didn’t need to be in. And then so that’s how most of their data from that was. There were some of it that was measured productivity, but a lot of it was self-reported.

Drew McClellan:

I think one of the challenges, I’m curious what you’re seeing companies doing around this, we, for the most part, all lived in brick and mortar buildings. And a lot of our culture was that physical togetherness and it was gathering around the layout table and having bagels in the morning or it was things we did together physically. And now, for many of our listeners, not only are they not in an office building, even if they’re in the same city, but their employees are now scattered, in many cases, all over the country and sometimes in multiple countries. How are you seeing organizations successfully build culture in this new environment?

Heather McGowan:

I don’t have a strong opinion on where work should take place because I’m a believer that we need to study this and we haven’t. We got through a pandemic with pretty good business continuity even in a crisis, so I think there’s a lot more we can do remote. And I think we’ll make better tools, but that doesn’t necessarily mean that’s what we should do. Humans run a connection. People like to be with each other.

Now, does that mean we’re going to go back to the office five days a week or three days a week? I don’t know. It may be that we create third spaces where you go into co-working spaces or coffee shops, or you have groups you meet with and you come into your office six times a quarter or something. I don’t know what it’s going to look like. I know we need connection. I know we need to come together, but I also think there’s a lot we can do on our own.

What I think happened in the pandemic that we haven’t really paid attention to is, and I’m going to draw it because I think in the picture, so we had this circle over here that was smaller called our personal life. In our personal life, we had agency over it. We were the master of our personal life. And then our professional life was over here, bigger circle, eclipsing the smaller circle, we had no agency. And what happened in the pandemic was these two circles came together, overlapped. The personal circle got bigger, the professional circler got smaller, and we had integration. We had agency, we had autonomy, we had your trust, and we performed.

And then a lot of folks are saying, “Well, what about the real estate? What about the office?” I believe we can drive culture better. And it hasn’t actually been proven. The data has got like the last week, The Slack forum on the future work found people felt better culture when they were remote. They felt better connection when they were remote. Another study just came out that said, “Actually, we think the decline in productivity, which we had in the last year, the first one since the ’70s, was due to meeting people back in the office, economic uncertainty and layoffs of people completely distracted and overwhelmed.”

So, we’re focusing on the wrong stop and we really want to unleash human potential. What is the environment you want to create whether it’s virtual, whether it’s in-person? What is a message you want to send, so that people want to be part of you, which is something that’s being bigger than themselves? That’s what we need to focus on, not where it takes place.

What is it that you want to be part of? How am I part of something bigger than myself regardless of where I am? Then when do we come together to reinforce some of that social capital? How do we make it virtually? I think we’ve gotten very binary about where it takes place rather than being deep about it.

Drew McClellan:

The organizations that you see, actually, in a virtual or hybrid environment that are creating that connectivity, I think a lot of owners are struggling with it was easy. It was Taco Tuesday, we all went out to the bar together. It was the physical gathering.

And I hear what you’re saying, which is it starts with me saying, “Here’s why this organization, here’s why our agency exists. Here’s the work that we do. Here’s why it’s important. Here’s what we can take pride in together.” I think we can do all that. So beyond that, because people do want connection with each other, how do we create opportunity for that? What are you seeing that’s working?

Heather McGowan:

Some organizations have off-sites. Some have meetups in different cities depending on how large the size of the organization. Some have required days a week, which unless you have a curated event, beyond taco Tuesday, like a reason for people that come together in person and around people’s schedules. Again, they had agency over their personal life. They’ve got elderly parents that take care of or the kids, and they got used to being able to do that. So, how do you work around that?

And then to why your organization exists? Who are the clients that you serve? How often do you need to see them? How often do you need to see people like them to think about them? How often do you need to see each other? Those are the questions you should be asking more than “How often do we need to get together to drive culture?” Because it’s like we don’t really know yet, but what are the inputs we need to have to the creative process?

If you’re an agency that know does creative work for a hospital system, how often do you have to familiarize yourself with that hospital system? How often is it more time in the client realm than the office realm, or is it more time in? So, there’s a lot of different ways that present teeism or in-person stuff. Where and when does that need to take place and for what purpose?

Drew McClellan:

Well, and even more so what can we be doing that doesn’t require physical presence that creates presence and connection?

Heather McGowan:

Yep.

Drew McClellan:

And so, I think that’s what a lot of agency owners are struggling with. They know they want to do that. They just don’t know what that looks like how are people do creating virtual connection and presence in the way that we used to do it physically. And I don’t mean we all play trivia together online. That’s not what I mean.

Heather McGowan:

Well, when people were telling me, and this was before the pandemic, before this stuff happened, people were like, “Well, we can’t have remote teams.” And I was like, “Okay, well why?” And they were like, “We can’t create social capital.” And I’d be like, “Okay, where did you meet your spouse or partner? And if you were below a certain age, or if you’re like me, part of the LGBTQ Plus community, more than 50% to 80% met them online.

And if you meet someone online, by the time you go out on a physical date with them, you’ve had many intimate and emotional conversations. You’ve created social capital. People do that in good and bad ways through social media. So, we do have ways that we can create it. We just have to get much more intentional about doing it. Because we have a couple of decades now of people meeting their partners completely online, and that is forming some of the most intense social capital out there.

Drew McClellan:

If you’re willing to marry somebody you met online, you probably can get with a coworker and create connection.

Heather McGowan:

Exactly.

Drew McClellan:

So, as you are continuing to study this and you are continuing to pay attention, how is leadership changing inside an organization? You used to, in agency world, honestly, part of that paying the dues was how I paid my dues and how I worked late and worked weekends. I got promoted because I did that. So, how are new leaders being grown and groomed today? And what are you seeing that’s different around that whole idea of leadership inside the organization if everybody’s empowered? Is it leadership more just democratically spread across the entire organization? Talk to us about that evolution.

Heather McGowan:

The way we were creating leaders in the not so distant past was the person who wanted to be the boss. It was the ambition was enough to be a leader. And ambition plus talent was even better, so if you were the best marketing person, or you were the best at selling media, or you were the best PR person, then you’re going to be the boss.

Well, was that really ever a good idea when it comes to managing and motivating people, which is what a leader fundamentally does makes them better, as Frances Say says, in their presence, so that it lingers into their absence. That was never necessarily a good idea. And now it’s becoming more of a liability because you get people who want to be the boss because of their ambition. Sometimes, it’s ambition and it’s security. It’s that need to be the unquestioned expert, which is actually a liability.

So now, we’re seeing a leadership profile that was less about that domineering fearful person and much more about the person who’s empathetic, who can listen, who figure out how to activate people. Much more of a coach profile. And then when it comes to leadership, overall, we used to, and we still do, reward people for the results they drove today, well, that’s great. But with this much churn in the workplace, it’s not just the results you grew today, it’s the pipeline you developed, it’s the people you developed. So if you’re gone tomorrow, there’s no loss in business continuity. So, it’s much more of a leadership about performance, but really about legacy and succession.

Drew McClellan:

Huge changes. So where do you suggest people start? Because I think for a lot of folks listening, they want to do this and they may have already started, but if they’re listening and they’re going, “Oh, God, I got to do all this.” Where do I start? Because it is daunting.

Heather McGowan:

Yeah. Well, I mean, first step is just wrapping your head around it. I mean, the first step is wrapping your head around it and going, “Okay, I think I need to do that.”

And then the next step is to look at your behaviors and ask people for feedback. If you’ve got people in your inner circle that you can ask and say, “Can you honestly tell me where I am on these in terms of my mindset, my behaviors? Where do I fall right now on this and where do I need to move to?” Because you’ve got self-awareness, but you may need some external help in getting a sense of where you are in terms of changing all those behaviors.

Drew McClellan:

The task is ahead. I actually think a lot of agency owners will like making these changes. I rarely meet a business owner in our world that doesn’t want to create a great workplace. That doesn’t want to reward their people and recognize them. That doesn’t want to create a collaborative, encouraging environment. We just have to figure out how, and I think you’ve given us a good roadmap of how to get started on that.

Heather McGowan:

Yeah, and if it wasn’t motivating enough to create an excellent firm, an outstanding firm by changing these behaviors, here’s just one more motivator. Two studies came out in the last week, which I think are fascinating. One is that your impact on your people in terms of mental health is greater than their doctor or therapists and equal to their partner.

Drew McClellan:

Wow.

Heather McGowan:

Yes.

Drew McClellan:

That’s a lot of pressure.

Heather McGowan:

That’s a lot of pressure. And you may be impacting their children and their children’s success, so thereby-

Drew McClellan:

That’s a lot of pressure.

Heather McGowan:

So, not only are you building the performance of your organization, you have an impact on today’s society and you may be having an impact on the next generation of workforce. So, if you are not motivated to do this already, I really think it’s a societal imperative.

Drew McClellan:

But I mean, imagine if you are a positive influence in those ways…

Heather McGowan:

It truly is hard, too.

Drew McClellan:

… the legacy of your work is so much greater, right?

Heather McGowan:

Yes, absolutely. And that should drive any ego out there. You can drive this workplace and this society, and the next generation workforce. Who wouldn’t want to do that?

Drew McClellan:

And it’s good for business, so it’s a beautiful combination. It’s good for your people, it’s good for society, good for business. Heather, this has been great. If people want to learn more about you, about your work, if they want to reach out, what’s the best way for them to track you down and create a connection?

Heather McGowan:

Okay, so first, the new book is called The Empathy Advantage: Leading the Empowered Workforce. You, of course, can get it on Amazon, but I love to support the independent bookstore, so you have one in your neighborhood or your city, hit it up. Those guys are struggling. Those folks are struggling.

My personal website is heathermcgowen.com, M-C-G-O-W-A-N. I’m very active on LinkedIn, which is my learning community, and I welcome you to be a part of it, so hit me up on LinkedIn. Join my community. Tag me in something you’ve read that you think I should read. I may tag you on something that I’ve read that I think you should read. So, join my learning community. You will make me smarter because of it and I thank you for that in advance.

Drew McClellan:

Awesome. This has been a great conversation. I am super glad that we met. The book is fantastic, by the way.

Heather McGowan:

Thank you.

Drew McClellan:

I read the preview when it was sent to me, so I’m anxious to get the whole thing, so by the time this airs everybody, the book will be in bookstore. This won’t air before March 5th, I don’t think so. The book is available today, so we’re recording mid-February, but by the time you hear this, the full book will be available in your local bookstore. Many of whom, by the way, have websites, so you don’t even have to go to the bookstore if you don’t want to. You could still support them. But great book, great read.

And a really great mix I think of practical, tangible advice and what you’ve heard Heather do for the last hour, which is validate her recommendations based on studies and other things that she’s learned and knows, so there’s a lot of validation. I would also say this is probably not a book for you to read in isolation. This would be a great book for your whole leadership team to read and talk about.

Because I think one of the things that we have to remember is we’re so used to being the boss and making the decisions, but this is wholesale change in our organization. Some of you are further along in this than others. But this is something you should really involve your team and say, “Hey, this is our opportunity to change our work environment, the better for all of us. So, let’s talk about how we might want to do that together.” It doesn’t have to be something you do by yourself.

Heather McGowan:

Yeah, and the book, by the way, is designed for skimming. It should be an easy read in a few hours, and it’s got a lot of graphic frameworks because my background is in design to help you understand things. If you prefer to absorb things visually, you can do that as well.

Drew McClellan:

Yeah. Awesome. Thank you so much, Heather. This was great. This was a great conversation.

Heather McGowan:

Thanks so much for having me.

Drew McClellan:

You bet. All right, guys. So, Heather gave you a lot of very practical next step advice. I would love for you, A, to read the book, but B, to really think about do an assessment, where is your organization at today? Where are you in terms of the old guard of doing business and how we treat employees in this new, honestly, it’s not a revolution, it’s an evolution. We’ve been seeing it coming. We’ve been feeling it. In many ways, I think we’ve been ahead of the curve in terms of how we treat our employees in the work environment that we create.

So, this should be right up our alley, but we have work to do. As an industry, we have work to do. You individually may have this dialed in, but for most of us, we have some work to do. And I think you have a great roadmap of how to begin to explore this to think about it. And again, get your head and heart in the right place first, so it doesn’t come off as you being resentful or frustrated, but it’s really a genuine desire of yours to make change. So, this might be an episode you have to listen to a couple of times, so take some notes and think about it.

And then again, like I said, involve your leadership team and invite them to be a part of the change. I think they’re going to be super excited about it, and I think you’re going to love how they respond to you and that you want to make these changes. So, I think it’s good for everybody. And for the love of God, like Heather said, you’re affecting their children, so let’s make some changes.

All right. Quick shout out and thank you to our friends at White Label IQ. As you know, they’re the presenting sponsor of the podcast, so they make it possible for us to hang out every week, so super grateful to them. Go check them out at whitelabeliq.com/ami. As you know, they do white label design, dev and PPC. And they’re building out all kinds of things, databases, apps, websites, the PPC campaigns. Many, many agencies are finding that they are a very profitable partner to have. As I’ve told you before, White Label was started by an agency, so they get how we make money. They understand that their pricing model has to work for us, and they’re lovely, lovely, smart people that I think you’re really going to enjoy working with. So, check them out.

And I will be back next week with another guest to get you thinking a little differently about the agency and your work and your life, and hopefully help you make some course corrections that make all of those a little better. All right? I’ll see you next week. Thanks for listening.

That’s a wrap for this week’s episode of Build a Better Agency. Visit agencymanagementinstitute.com to check out our workshops, coaching packages, and all the other ways we serve agencies just like yours. Thanks for listening.