The trends that affect agency owners and employees in 2024 with Drew and Danyel McLellan

Hey, everybody. Drew here. You know, we are always looking for more ways to be helpful and meet you wherever you’re at to help you grow your agency. It’s one of the reasons why we’ve produced this podcast for so long, and I’m super grateful that you listen as often as you do. However, there are some topics that are better suited for quick hyper-focused answers in under 10 minutes. That’s where our YouTube channel really comes in. For quick doses of inspiration, best practices, tips and tricks, head over to youtube.com/the at sign Agency Management institute. Again, that’s youtube.com/the at sign or symbol.

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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 the money you make. The Build a Better Agency Podcast, presented by a White Label IQ is packed with insights on how small to mid-size agencies are getting things done, bringing his 25 years of experience as both an agency owner and agency consultant. Please welcome your host, Drew McLellan.

Hey everybody. Drew McLellan here with another episode of Build Better Agency. Welcome back. Thanks for coming back. We appreciate you listening every week. This is one of our solo casts. So this is us no guests, just Danielle and I talking to you about some things that are on our mind. And this is part two of the Trends podcast that we started last month in May. So if you remember in May, we talked about the trends that were impacting sort of agencies in terms of money clients and biz dev. And this month we’re gonna look at the trends that are impacting agency owner and their employees. So we’re excited about doing that. But before we do that, of course, with every solo cast, we like to start that solo cast by celebrating the fact that we’re giving away a free seat at a workshop or at the summit.

So just a reminder, the way you get in the drawing for this free seat is pretty simple. All you need to do is leave a rating and review wherever you go to download this podcast. Just go leave a rating and review and then take a screenshot of that rating and review. And the reason why we ask you to do that and then we ask you to email it to us is because we read all the reviews and we’re super grateful for them. But a lot of times, most platforms require you to have some sort of username. And depending on when you got your username, maybe your actual name was taken or, or you just wanted to call yourself Fire starter oh three or whatever you, your,

I think I was, your name is, I think it was Yellow Danielo at some Wow. I know oppressive, right?

Admit to that. I I

Do. I do. I

Was never anything like that. No rhyming for me. Drew McLaughlin. So anyway, we don’t know who you are, And, we don’t know your agency. And, we don’t know how to get ahold of you ’cause we don’t have your email address. So we need you to take the screenshot of the review or the rating and then email it to me at [email protected]. So again, super simple, [email protected], and then your name goes in the drawing and your name never leaves the drawing until you win. So sooner or later you’re gonna win and you’re gonna win a free ticket to a workshop that, or the summit that’s worth about two grand. So it’s worth nothing.

Not too Shay,

It’s worth it to take three minutes to leave a rating and review, right? Yes. And obviously we are super grateful for that because it helps more people find the podcast.

Absolutely.

So we, it’s our way of saying thank you for doing that, but it’s also our way of saying, Hey, you can experience a workshop or the summit for free, which makes us happy too.

Love to see you live.

Yep, we would love to do that. So this month’s winner is Ann Smith. So Ann owns an agency called A Wordsmith. So

Nice, nice little. Love that as a true wordsmith. Yep. Congratulations.

So, Ann, I’ll shoot you an email and let let you on and tell you which workshops you’re eligible to attend. But in the meantime, for the rest of you could be your turn next month. So get that rating and review in and hopefully we’ll be calling your names. So let’s talk about the trends that are facing agency employees and the owners.

Yes. Well, we’re gonna jump in with the owners first. I think that again, we, we talked about last month a lot of different things were happening in the marketplace and there’s some things that are happening with owners that sort of reflect what’s been happening. Yep. One of the things that we, that we’ve been seeing and the data shows is that owners are trying to find more support and shifting responsibilities within their agency to address what they might not be as good at what they need. Some a thought partner in instead. They don’t

Like to do

Things that they don’t like to do. And, and it kind of goes back to the visionary integrator mix. So a lot of agency owner are looking for a COO role and and doing it even when they are a smaller agency. Yeah. So this is still, this is a trend for small to midsize agencies that they’re deciding to hire a high value COO. And I will tell you,

Or director of ops, they might call that

Director of ops. Right, exactly. Or operations manager as a starting point if you’re a smaller agency. But the, the COO role is so critical in so much of what we want to do with owners and envision with owners that that it’s become just a role. And I will say from my experience from my agency in the past, the COO role was really critical in making some big shifts in directions that were happening within the agency. And they also align a lot of the metrics that go along with the decisions you make in the agency. So the COO role has been really critical and it’s one of the reasons we decided at a MI to create the COO networking group.

Yeah. Because it’s such a critical role for so many agencies. And even if you don’t have it as a full role, understanding what that role does and how important it is for an agency and what it looks like and what impact it can have was a priority for us. So. Well,

And a lot of times, but in fact all the time in an agency, A COO or a director of ops or an operations manager, they’re usually, there’s usually only one of them in a shop, right. And so we were hearing from a lot of agency owner that they wanted their COO to talk to other agency COOs to sort of develop more exposure to best practices. And so again, that’s why we created that group to sort of help them find their people.

One of the great things about having A-A-A-C-O-O like role in your agency is that it really makes a difference to your bottom line. I mean, all the things that we’re trying to manage within the business and the backend, having a COO that really understands the vision and the strategic direction that you set out as an owner is influential in all in the money in your profit. And especially if you’re making changes and growing and scaling a COO role could absolutely be the right choice for you.

Yeah. So if you’re under 10 people, it’s probably not the right choice for you. But if you’re 15 plus people, it may be something worth, worth thinking about. Some of you, it starts out as a project management role and then they evolve into sort of a broader scope of things that they oversee. And so this is probably, for most of you, it may be something you evolve into. Yeah. But we’re finding that a lot of agencies and a lot of agency owner are finding that sort of that thinking partner on how the work gets done in terms of systems and processes. For a lot of agency owner, that’s not their bailiwick, that’s not what

They love

To talk about or think about. So again, as we’re saying that we’re seeing a lot more of this sort of operational role, whatever the title is, popping up in agencies. Yep,

Yep. Absolutely. Another trend that we’re seeing is that there’s a lot of m and a interests more than ever, both from the external sale and internal sales. So after Covid and after a lot of the big changes that we’ve had to go through, the great reset, the great resignation, a lot of agency owner are either burnt out and ready to move on to other things or they’re actually energized and ready to reset and grow. So there’s a lot of m and a interest and both

On the buying and the selling side,

Both both of the buying and the selling side, which is really exciting to see that because a lot of agencies that are looking to acquire another agency are really excited about growing and changing and and addressing sort of the next generation of their agency life. And there’s other agencies that have run their course and they’re ready to be able to sell, they’re ready to move on to the next chapter of their lives. So it’s very exciting to see a lot of interest. And the venture capital space is also on fire right now when it comes to agencies. So some agencies are being rolled up into others because there’s a lot of interest in having a marketing agency arm in a lot of different niches.

So we’ve been seeing a lot of that and not across the broader landscape. And also with the agencies that a MI serves.

And interestingly, a lot of, I think a lot of agency owner mistake the idea that they can make the most money if they sell to private equity or venture capital. Right? And the truth is, that’s actually where we’re seeing that make the least amount of money that they get, they have to discount more, right. For that, that that really the most profitable sale is an internal sale right. To employees. And then the next one is an agency buying another agency. And the, and the greatest discount is when you’ve got a PE firm that’s in the mix. So again, your mileage may vary. It’s all very unique. And one of the reasons why we love doing this work is because it’s very custom to each agency’s circumstance, what matters most to the agency owner.

And the important thing is that there’s a lot of m and a activity now because those agency owner were smart enough to think about it three to five years ago. Right? Right. And start making choices that made their agency more attractive for acquisition or put themselves in a position to have cash to make a purchase. Right. So this is not a short term decision. This is you thinking about it now about something you’re gonna do three to five years from. Right.

The longer the runway the more freedom you have to make the decisions that you want to have. Right. One of the exciting things about acquiring another agency that you should consider if you are in a cash rich position and are growing quickly is that acquiring another agency can be a quick way to add value for your growth and clients And clients Yeah. Without organically growing that piece. So, so it’s, it’s a really exciting trend that we’re happy to

Be a part of. Yeah. Be a part of. For sure.

So one of the things that we’re also seeing is there’s a lot of misguided expectations for an agency sale. So although we’re seeing a lot of movement in the m and a space, we’re also seeing a lot of owners that are misguided maybe is the word in what they are thinking as their agency is worth or how quickly they could escalate their business and to a place that would be attractive to a buyer going back to the longer run. Yeah. Right. I, I know we’ve heard this was, there’s always really surprising is that a lot of agency owner will say, well, I need $2 million to be able to sell, so that’s what might put a price my agency And.

we often say, but that’s not what the value of the agency is.

The valuation says 1.2. Right,

Exactly. So this goes back to something that a MI has said from for a very long time is that it’s really important that you take money outta the business and grow your money outside of the business. Yep. You’re not reliant on the sale of your business. It, it can be a very disappointing day as an owner to realize that you’re ready to sell, you’re ready to retire, and your agency isn’t really that that great for somebody else to buy. So a lot of misguided expectations. Also, we see, one thing I would like, one thing is that agency owner also think that selling is the right final decision.

That no matter what, no matter where they’re at, that I wanna sell in five years. Where sometimes it could be that you should just run the agency as well as you have for five years and you can make just as much money. Yeah. In those five years that you could, if you were selling that agency today just by taking out and running your agency well and taking out the profits and building outside of the agency. Yeah.

You obviously run your agency differently if you’re priming for a sale in terms of how much profit you leave in the business, how much retained earnings you hold. But I think, I think what we’re seeing is that probably for most agency owner, when they get the valuation, they’re a little disappointed. Not because it’s not a big number ’cause it usually is a pretty big number. Absolutely. But it doesn’t equate to the 25 years of Right. Sleepless nights and blood, sweat and tears and that you didn’t get paid for six months and all the things. And so at a MI we, we really profess a couple things. Number one, build your wealth outside of the business while you still own the business. And number two, you need to have a plan for how you want your exit.

So to your point, it may not be a sale at all, or it may be what I have built my wealth, so I’m gonna sell it at a deep discount to somebody because I want the legacy of my name to continue. It’s very personal. Absolutely. How you wanna wrap up your agency’s or your involvement in your agency. Again, your agency may go on beyond you, but you sort of want to make sure that you’re thinking about what that legacy looks like for you and what matters to you.

Right. We’re big believers that part of the reason we own a business is because we want the freedom of how we’ve been able to construct our lives around our business. And for your last, the final business chapter. Yeah. To have to be put in a position where you don’t have as many freedom of choices is a very sad moment. So enabling yourself, going back to the long runway to really open yourself up to different possibilities that could still serve your family and you in the way that you need to is, is a priority. It’s important for most of us that we wanna feel good about how our last agency chapter looks.

So taking the time to really invest in that is important. And another thing would be for the misguided expectation is that you, you need to be able to show the growth for at least five years and to grow beyond just numbers on the p and l. It takes investment. You will not be as profitable when you’re scaling up and growing, generally speaking. So again, misguided expectations on what it will take to grow to the number that you want it to versus the effort, time and adjustment it’s needed inside, internally, the agency to make that happen.

Well, and for a lot of agencies that have been around for 20 or 30 years, they’re past the growth stage. They’re at the stable stage. So again, that’s a great place for you as an owner to be making great money. But in the last year or two, if you’re gonna sell it, well you have to replace you, you may have to replace the buyer. So there are, there are surprise costs, right. That sometimes you don’t think about. So the bottom line of this is, number one, you have to know that your agency is worth what the valuation says it’s worth regardless of how much money you’d like to sell it for. And number two, the earlier you start thinking about this and sort of putting a plan in place, to your point, the more paths you have open to sort of explore different ways of sort of wrapping up that chapter.

So what

Do you usually say that I wanna be six foot two,

I wanna be six foot four. But that’s not gonna happen, say, right. I mean you can wish in one hand Right. Perspective is

Important.

Yeah. So, so being mindful that your agency is worth what it’s worth and your job right now is to get the money out of the business. So how much ever you can sell the agency for is gravy. Right. And that’s just money you’re grateful for, but it’s not money that you and your family are gonna have to survive on. Right.

Right. And one of the things that will just because it’s a segue into the next thing we’re going to talk about, another misguided ex expectation is that owners think that they, if they don’t take a bigger salary, that it actually makes it look better for the business. But that is absolutely not the truth. Somebody who is buying your agency doesn’t wanna buy a job or they don’t want to just buy a business that’s operating, they want a business that is making money. And to show that you’re making money is how much that you are taking for yourself. So your compensation is really key. And one thing we,

It’s amazing how much it influences the valuation.

Absolutely. Influenced the, the, the, the valuation numbers and as we talked about in last month’s podcast is that a lot of agency owner last year took less money. And we’re gonna talk a little bit about that again today. And it’s important that we have to get back on the path. You as owners need to take a good salary, good dividends, have good pass throughs. So you can show that your agency is something that another person would want to have for themselves

Because they wanna buy a business where they can build Well absolutely. Outside of the business. Absolutely. And if they only can take their salary, and by the way, a lot of you pay yourself 60 or $70,000 in a lot of cases, you as the, as the owner take less salary than some of your key employees.

Right, right.

And and you think that you’re sort of playing around with payroll taxes and other things, but what you’re actually doing is diminishing the value of your agency.

Yep. Absolutely. So this goes on to the other trend we’ve seen in 2023, which is that you sacrificed your salary to keep good people. And this isn’t a judgment, but this is again, a decision that most of you consciously made because you had less money to give to other people and you wanted to keep your exemplary team. However, now is the time to get back to a course Correct. With your compensation. So you’re able to show that you’re making money at the agency. So again, time to get back to the best practices of what you as an owner should make. For sure. Another thing that we’ve seen is that you have comp, you’ve really compromised many of your rules to survive.

Yeah. Not just your salary. Yes.

Not just that isn’t the only thing that you’ve compromised a lot of the metrics that you’ve used to gauge the, the health of your agency. You’ve kind of put those to the wayside in 2023 just to get by and to survive. And 2024 is the time that is back getting back to honoring your rules and making very conscious decisions of what you’re doing with your money, with your staff, with your clients, so that you’re actually getting back to best practices to reset in the way that you need to reset. Right. To keep your agency strong.

Well, and we’re halfway through the year, so we’re hoping that by now you have already started to do this. Correct. That you are kind of getting back to best practices, back to the KPIs back to 55, 25 20 and you’re driving towards double digit profit, all the things that you kind of gave up in 23. But if you haven’t done that yet, what we’re saying is you only have six months left, so now is the time to get back to really honoring those rules.

Right, exactly. Or making the hard decisions that you had not made right in the beginning half of the year because you had, as we owners are, we’re optimistic, we have seen, oh, if we just get this next client, if we just get this next thing, everything will be okay. Right. But it’s really this place where you’re not a strong agency because you’re very reactive and you, you’re making decisions of fear as opposed to making decisions that are going to stabilize the agency and make your business strong for the long term. For sure.

Alright, before we get into the trends that are impacting employees, let’s take a quick break and then we will come right back. Hey everybody, just wanna remind you before we get back to the show that we have a very engaged Facebook group. It’s a private group just for podcast listeners and agency owner that are in the AAMI community. And to find it, if you’re not a member, head over to facebook.com/groups/baab podcast. So again, facebook.com/groups/ba podcast. All you have to do is answer a few questions to make sure that you are an actual agency owner or leader And. we will let you write in and you can join over 1700 other agency owner and leaders.

And I’m telling you, there’s probably 10 or 15 conversations that are started every day that are gonna be of value to you. So come join us. Alright, we are back. Welcome back to the solo cast where Danielle and I are talking about the trends that we are seeing that are impacting agencies in 2024 and beyond. So we just kind of wrapped up some of the trends that are impacting you, the agency owner. And now we wanna talk about some of the trends that we are seeing with employees. So pre covid, pretty much all of us, some of you were early trendsetters and you were completely virtual or dispersed as we now say. But for most of us before covid, we were in the office five days a week and Covid obviously changed all of that.

And I think we were already seeing a lot of trends where agencies, especially if you’re in a second tier market, it’s tough to find all the talent you need when you’re in a smaller market. And so agencies were starting to explore remote employees and things like that. And Covid of course blew all of that up. And, we all learned very quickly how to work from home, whatever that meant. And then post Covid, we started coming back into the office at some sort of mix or hybrid. One of the things we saw in 23 and we’re seeing continuing in 24 is that many agencies are adding additional days back in the office. And so a lot of agency owner really were really, were staying completely remote for a lot of different reasons, but one of them was that they were afraid that their employees would not tolerate coming back to the office.

And what we’re seeing is that as we’re in 2024 And, we’re looking at 2025, agency owner are like, you know what? There’s a lot of things about this work from home that I like, but there are some things that aren’t working as well as I want And, we need more face time together, we need need more collaborative work time. This is a team sport. We need to all be kind of on the same playing field at the same time. So we’re seeing a lot of agencies add office space or expand office space. And many of them are now asking the team to come back into the office more than they were prior. So for a long time it was two days in and three days out and now it’s flipped. Now it’s really three days in and two days out for the hybrid agencies.

There are some agencies that have been virtual, either pre covid or post covid that are just saying, you know what, this is working. And so, right. So they might not even have an office or they might re meet at in a co-working space once a month or something like that. But the agencies that have been hybrid are leaning into more in-office time and more time where everybody’s in the office on the same days, but they’re also being a lot more thoughtful about how they use that time. Right. So if everybody’s in an office working on their computer, that doesn’t really feel like, well why am I here in the office exactly for this? I could be doing this,

Why didn’t I drive 30 minutes? Right. Right. So, and, and this is actually a great trend to think about overarchingly, regardless if you’re all in office, if you’re all remote, right. All hybrid. But to really understand how people are using their time most effectively and to be able to adjust to what it means to be collaborative in office together versus what it means to be working from home. So I think that that cog just having the intention and being cognitive on, okay, if we are in office, this is where we do all of our kickoff meetings during this, the three days or this

We’re brainstorming.

Brainstorming and then allowing for there to be some more deeper work done in some of the time that maybe they’re not in office. So understanding that a lot of agencies are adjusting, they’re in office versus remote, but they’re also doing it in a way that’s intentional to add to more of the value for the team and for the clients. Yep.

So one of the things we talked about is the agencies kind of went into the end of 23 kind of heavy in terms of staff, but what we’re seeing in 24 is that many agencies are actually at a lower head headcount than they were a year ago. So when somebody left, we didn’t replace them And, we didn’t add a lot of new roles in the last year. So as new business is kind of gearing up a little bit, as we are getting more optimistic, we’re starting to see a little more hiring. We didn’t see a lot of hiring in 23 And, we didn’t see a lot of hiring in that first quarter of 24. We were content to be a little smaller. But now as new business is starting to, pipelines are more full, agencies are actually winning business and they’re actually getting to start the work.

Yeah. Which is a refreshing change. Now we’re starting to see agencies think about do they need to staff up? And of course a lot of them are having the conversation, do I want FTEs, do I want employees or do I wanna staff up with a mix of contractors or employees? Right. To kind of mitigate that risk. Because

One of the things, again, when you, we did not replace the rules of the people that have left, there still was enough work that we needed to address what that role did. Right. So I think one of the things we’ve been seeing is there’s been a lot of more contractor work or freelancer work to like subsidize basically the work that’s been going in. So people are a little less anxious to hire new bodies for the full-time employees. So a lot of agencies are adjusting to that.

Well I think now having contractors on the team is so normal. Right? Right. I mean I, I can’t think of, can’t think of more than a handful of agencies that don’t have some contractors that don’t outsource some part of what they do for clients. Right. And so it is easier to sort of leave that as a variable cost that’s sort of easier to shed than a full-time employee is. Exactly.

So I think the ratio is really changed

Actually. Yep. For sure. So in fact, 75% of agencies actually decreased headcount or have held steady. So if you’re sort of feeling like you’re a little smaller or you sort of haven’t hired anybody in a long time, that’s kind of the norm right now. So you’re, you’re kind of in good company. You And, we talked last month about the focus on billability and utilization, but one of the things we didn’t talk about in that podcast is the impact of really paying attention to a doing time sheets daily, which I’ve done a whole podcast on that we’re big proponent of that. Yes.

Accuracy is key. Yep.

And, and you can’t be accurate if you don’t do it every day. But daily time sheets and the focus on people really doing the appropriate amount of billable work that actually translates to a, to an invoice that’s had direct impact on employee retention and the psychology behind that is fascinating. So when you have a bunch of a players who are busting a hump and they’re working hard and they’re driving great value for clients and they look around and they see that maybe everybody on the team isn’t working that hard or working that often, or they’re kind of yaba daba doing out right at five o’clock, they’re not available after five. You’re rock stars and your superstars get frustrated that they are bringing their A game and not everybody is.

And they look at you as the owner and say, Hey, are you not noticing the discrepancy here? Right. I, it’s not fair that I’m working as hard as I am and I’m driving all this value and you’re allowing somebody else to really be mediocre. And so when an agency starts focusing on daily time sheet compliance and holding everybody accountable to the appropriate amount of billable time, that gets translated accurately to an invoice because we’re not over servicing clients. It has a direct impact on keeping all of your employees, but in particular your best employees because they now feel like it’s fair. Right. And so they feel like you’re holding everybody accountable to the same rules.

That’s right. And they also are feel that you are all looking at their workload and understanding how hard they’re working and you’re making conscious decisions to that for them if they are extremely billable and they have been for a long time that it’s time to hire. So they feel like you as an owner are taking care of them and also allows them to be more engaged in employees because you, they’re ready to work for you and they know that you’re watching the people that aren’t

Yeah. Performing for sure. One of the things on the employee front though is that a lot of employees, I thought this was sort of fascinating, a lot of employees are self-reporting fatigue higher than during covid. And so I think that a lot of what we’ve gone through in the last four or five years, a lot of the political unrest here in the US and around the world, there’s just a lot of weight. I think a lot of people right now. And so it’s not just work fatigue, I just think it’s life fatigue.

Yeah. Right. Inflation, what’s gonna happen.

Yeah. All of those. All of those things. Yep. So, but fascinating that they’re self-reporting it that is higher than they were feeling it during covid. So for the agencies that have recognized this and have sort of sought cures for this, there are some things that are working right to really relieve that sense of fatigue to get employees excited about coming to work Again, one of them is that they’re actually right sizing the staff. So we think about that we’re, we think we’re doing our employees a favor by not cutting staff and not doing layoffs. But the reality is our team knows when we’re overstaffed they can, they can see that there’s not enough work and that triggers worry for them, right?

Because they worry that

I, the next person

That’s gonna see, right, they’re gonna, sooner or later they’re gonna have to cut staff as my head on the chopping block. Right? And so actually right sizing your staff and people feeling busy is actually one of the cures for that fatigue,

Not only busy but valued, right? That they actually made the cut that you see value in them and their work can really go a long way. And also really, and it connects them to your agency. So they feel again, more invested. More invested.

Right. Another thing that is curing that fatigue is you as the agency owner or leadership team really focusing on the agency’s mission and values and talking about them, making sure they’re woven into the daily interactions of the agency that is part of your decision making set that people are being evaluated based on those for, for reviews, raises, things like that. And then the last one that we know is an amazing cure for that fatigue is FaceTime. So we talked earlier in the podcast about how important it is that if you’re gonna have in office time, you use that time wisely and well. But even if you are completely remote, your team needs to have relationship with each other and there is no substitution for actually being in the same room and looking at someone, right.

Having a drink with someone, collaborating with someone. So agencies are investing a lot more time and energy into retreats and bringing the whole team together, even if they’re dispersed. So even if you’ve got people scattered all over the globe or all over the country, that you’re bringing them together at least a couple times a year to spend a couple days together doing work together, but also doing team building exercises and other things that allow them to actually have a personal relationship with their coworkers. Right. Super important.

And it’s especially important when you’re bringing new people on your team. A lot of agencies that have been doing this successfully, they create this moment when new team members come on that they do come in the office more and they make it almost like a rally around a new person. And being able to not only onboard them and have the new person start adding value, but also that a community creates this sense of community with the new employees coming in and people are coming in and kind of surrounding themselves around the new employee. It makes onboarding go a lot quicker. It makes the new person feel in integrated in your team. Yep. It also allows your new team members to feel excited about new energy coming into the, to the organization.

One thing I’d like to add to this too, that a lot of the research now that’s showing with this fatigue is that some of it has been because we’re, our team has been just in again respond, responding mode. They’re not actually feeling like they can control their time or their space. And a lot of agencies have successfully put in some parameters around when people coming into the office, again, going back to collaborative time together and being able to have deeper, deeper work time. We’ve all been there when we go from meeting to meeting to meeting to meeting and during covid, yes there was fatigue, but they felt like a moment in time and now it feels like that’s their day to day.

It’s just one one. So allowing for some kind of blocking of the time and allowing people to have a little freedom within that is really great for the fatigue that they’re suffering. Yeah.

So you may be seeing this amongst your employees. It’s a great conversation to have. What, what, what, what is causing, what’s the source cause of that fatigue? And again, remember some of it is not on us. Absolutely. Some of it’s just life and their family and all the other things that we deal with. But if you can create some relief in their workday, then I think what you’re gonna find is a more connected and happy workforce and obviously happy people who feel invested in the agency do better work. Right.

Much more productive. Yep.

So interestingly on this topic, when we talk to agency owner about where they’re going to spend more energy and time and money in 2024, the theme really is I’m gonna spend it on my team. So I’m gonna spend more money on employee education. And that’s, that’s both sending them to things like our boot camps and things like that. But it’s also doing internal lunch and learns. It’s, it’s learning what your team members know and how they can teach each other things. It’s more collaboration. It’s more mentorship inside your organization. So don’t think you have to spend money all the time. Right. To educate your people. But also other places where we’re gonna invest is on upskilling culture.

Back to that retreat, more face-to-face time wellness for the team, focusing on that whole employee and also really thinking about how do I reward my, how do I recognize and reward my employees for performance? Right. So clearly 2024 is sort of the year of the employee.

Yeah. And it really can align to some of the strategic goals of your agency. When we talk about being more innovative, we talk about me being more productive and using, utilizing ai, we talk about teaching our team how to be more strategic and how to add more value to our clients. Those are ways that we can share and teach and, and grow our team and cultivate some talent in a way that we know is always going to add to the bottom line in the long run. And if we think about how important it’s for employees to feel invested in and the direct tie it has with their engagement to the agency and their productivity level, this is the perfect place to start investing in. Yep. Not just with money, but with the thought and a plan around what that looks like and allowing the talent and your A players and your superstars and rock stars to feel like they’re at the right place and that they wanna be able to engage even more to add value.

Yep.

So the research we did a few years ago where we talked to agency employees, I thought, tied to this trend, two key facts. Number one, the number one reason why an employee told us they don’t wanna leave their agency is because they believe the agency owner is investing in them. Yeah. Is helping them grow professionally so that they can continue to provide for their family and get better at their job. And number two, one of the ways they wanna grow the most is they wanna spend more time with you. The agency owner, they wanna learn from you, they look at you and they’re, and even even on your worst day, you’re thinking, I’m not showing up as well as I could. They’re thinking I wanna be like him or her someday.

And so again, it doesn’t have to be dollars. It really could be time or effort or focus or attention or even conversations where you’re just exploring how and when and where they wanna learn. All of that is super valuable to them. And

The fact that you actually see them and their talents is, is priceless to them. Right. So for you to see them at their as the whole person and what they’re doing well beyond their job description is huge. And one of the things we’ve talked about at the importance of this, of an owner not getting into the weeds of the work, this is where you should be spending your effort and time as an owner besides new business, besides looking at the bottom line is really your one asset is your team. So understanding how to continue to foster your team and engage your team is a direct correlation with productivity and your bottom line.

Absolutely. Which also then allows you to focus on, if you’re not focused on client work, ’cause you’ve got a strong team that’s doing that. One of the other trends we’re seeing is agency owner and leaders are recognizing that they need to be focusing on operational improvements. So we talk a lot about sort of what it takes to scale the business and to grow the business and all of the things that got you to a certain size, all your systems and processes that got you to a certain size can’t bear the weight of the new size. Right. And they break and you have to rebuild them. A lot of agencies are finding themselves in that place right now. So they’re focusing on operational improvements, building to scale, and of course leveraging AI in some cases on in the ways that they’re doing that.

Right. And I think one of the most important things is that agencies that are most successful with AI are understanding of it. It, it’s not just, let’s look at all the tools, but really looking at how to operationalize AI in different sectors of their business. And they’re allowing for experimentation to be happening in a very controlled scientific way where they’re like, these are the boundaries. This is what we’re trying to achieve. These are the metrics that we’re going to try to see if it impacts our agency. Right. So it’s much more concise than, than just putting a task force together saying, let, let’s look at what AI does out there. Right.

Yeah. I I think we’re past that stage. Yeah, exactly. I think agency owner and, and their task force or leadership, which is why we also are creating this fall, right. A peer group for folks who wanna explore what innovation and technology and particularly AI can do for their agency. And so we’ve, that’s actually a members only benefit that we’re putting together this fall where agencies can put people in that group so they can learn from each other. And some of the challenges that they’re gonna tackle are operational. So when we’ve talked to agency owner about the kinds of operational challenges they’re facing, a lot of agencies are struggling to keep projects on budget. And a lot of these are not new challenges by the way.

These are just sort of the priorities. We’re also struggling to keep projects on schedule. And then we, again, back to, so a theme we’ve had for the last two solo cast, this idea of billability and utilization. So are our people spending the right amount of time in the right places that we can get paid for.

Yep. And I think also what we’ve said the other tr client tr the trends that clients and prospects are really looking for things to be able to be more agile and to be able to be a little faster here. And, and it’s not about working harder per se. It’s been about working smarter and utilizing AI tools to be able to align with some of those client and prospect needs in a way that will, will put your agency ahead of other agencies. Yeah.

So as, as we wrap up this episode, and I sort of think the theme is it’s time to get back to sort of paying attention to the KPIs and the basics. So we, we’ve endured all of us a, a bumpy year in 23. We are halfway into a better year in 24 for most agencies. So it’s time for you as owners to start thinking about you’ve gotta right size the team. If you haven’t done that already, you need to rightsize compensation if you haven’t already done that for yourself. And you need to recognize that investing in the team that you have and growing those folks so that they can continue. One of the things I always think interesting is how often agency employees, especially in small to mid-sized agencies, think they have to leave an agency to grow professionally.

That they don’t, they don’t have a clear understanding of what’s possible for them inside the agency. Right. And I think we do such a disservice to ourselves as owners, but also to our employees when we don’t paint the picture of here’s where you can go professionally. There’s a lot of runway for you at this agency. Even if you’re only four or five people, there’s a lot of runway for you to keep adding more value. I wanna invest in you and help you add more value. Absolutely. Because I want you to stay. Yep.

Absolutely. Right. And I think that another thing that would be an overarching theme is that we need to stop being reactive as an agencies. We need, or we need to be proactive and make decisions with strategy innovation with clients, with our team. Yep. Instead of just feeling like we have to react to all of the things that are happening. We need to proactively make decisions for our agency and, and lead our teams in the direction that we see in them painting that picture.

That’s right. And I think, I think it’s so easy to be reactive after a tough year. Yeah, absolutely. You’re sort of, you’re feeling a little bruised, you’ve been bumped around a little bit, but I think you have to believe in your own agency and your own competency as an owner or leader enough to know that your instincts are right most of the time. And when you lean into them proactively and you plan and then you follow that plan, will it work out exactly to the plan? Never. But you get a lot further when you are proactive and you’re, and you’re marching to your plan, you’re always gonna have to react on occasion. Right. Right. But it shouldn’t be your go-to methodology.

That’s exactly right. Yeah. And your team will feel like you are leading them as opposed to what’s gonna happen next. Right. Are we, what are gonna happen if we lose another client? It at least allows them some peace of mind to know that you’re thinking about that and that you’re making plans for all the contingencies and have a direction that you’re, you’re rowing towards. Right.

Alright, so this wraps up this solo cast. Thank you so much for being with us. Thank you. Not only This week, but every week we are super grateful. I I know how busy you all are and so that you keep listening every week and you let us know that you’re listening and that you find value in the podcast is incredibly gratifying. So please do not think we take it for granted and know that we appreciate it very much. Absolutely. We also appreciate our friends at White. Label IQ. They are the presenting sponsor of the podcast. They’ve been with us for years. And, we love those people. They’re, they’re good people. They, they are as invested in agency successes. Yes we are. They work very hard to provide white label services in, in web, in design and in PPC because they know how hard it is for small to mid-size agencies to staff for those highly technical skills.

And they’ve got a whole team of people that can be either your department, your whole department, or if you’ve got folks in house and you just need an extra set of hands ’cause you’re super busy, they’re happy to come alongside and do that as well.

Just like we talk about with the scaling. Yeah. And, we be more, more outside help when we’re addressing client needs. White Label is a great partner and resource to be able to scale for

Sure. So check them out at White Label IQ dot com slash aami for, they’ve got a special offer there for you. Alright. And what we have for you is a promise that we’re gonna come back next week. We’re gonna have a guest who’s gonna help us think differently about our business. In the meantime, we are always glad to hear from you. We’re always glad to see you at our workshops at the summit, but we’re happy to see you in our inbox as well. So if you have any questions or the Facebook group, if you have not joined the Facebook group, you are missing out. That’s, there’s almost 2000 agency owner and leaders in there and they are talking a lot every day about everything from employee challenges to pricing. They’re sharing resources back and forth. So if you’ve not, if you’ve not joined that yet, just go to Facebook search, build a better agency.

You’ll find it. You have to answer I think five really simple questions that the answers to and then we’ll let you in. We are, we’re very guarded about who we let in in terms of, we want it just to be agency folks. We don’t let vendors in or folks like that. So just have to answer a couple questions to prove that you actually are either an agency owner or work in an agency. And then you can jump right into all those conversations show up as both the teacher and the student. And I think you’re gonna, you’re gonna enjoy the conversations and learn a lot.

Right. And one thing we’re very proud of is the a MI community and the resources that our community will give to each other and really support each other. So the Facebook group is a wonderful way for you to engage with that, that community on a bigger scale. For

Sure. Alright, we’ll see you next week. Thanks for listening.

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