The smartest, most successful business owners have surrounded themselves with a strong, powerful leadership team. They don’t go into battle alone and they know that it’s easier to climb the mountain as a cohesive team. If you really want to scale your agency, build it for eventual sale and exceed your goals – you need a strong group of invested professionals around the table.

In this solocast I look at agency leadership teams and how they should function, who should sit on one and why you’d have one in the first place. I explore the best practices around having a functional leadership team that helps the agency owners guide and run the agency day-to-day.

Before you put your leadership team together, be sure to take a listen as I walk you through the steps with:

  • Reasons to build a leadership team
  • Why you should never start a leadership team out of frustration or overwhelm
  • Why your leadership team is a great place to mentor employees ready for the next level
  • How building a leadership team fits into your succession plan
  • What kinds of employees should be on your agency leadership team (and why you shouldn’t just look at employees with certain titles)
  • The huge decisions that you as the agency owner have to make before having your first leadership team meeting
  • What leadership team meetings should accomplish
  • Why every leadership team member needs to leave the meeting with a goal to accomplish before the next meeting
  • How to decide when to include your agency leadership team in the decision-making (and the three levels of decision-making you can use)

Drew McLellan is the Top Dog at Agency Management Institute. For the past 21 years, he has also owned and operated his own agency. Drew’s unique vantage point as being both an active agency owner and working with 250+ small- to mid-size agencies throughout the year, give him a unique perspective on running an agency today.

AMI works with agency owners by:

  • Leading agency owner peer groups
  • Offering workshops for owners and their leadership teams
  • Offering AE bootcamps
  • Conducting individual agency owner coaching
  • Doing on site consulting
  • Offering online courses in agency new business and account service

Because he works with those 250+ agencies every year — he has the unique opportunity to see the patterns and the habits (both good and bad) that happen over and over again. He has also written two books and been featured in The New York Times, Entrepreneur Magazine, and Fortune Small Business. The Wall Street Journal called his blog “One of 10 blogs every entrepreneur should read.”

To listen – you can visit the Build A Better Agency site ( and grab either the iTunes or Stitcher files or just listen to it from the web.

If you’d rather just read the conversation, the transcript is below:

Table of Contents (Jump Straight to It!)

  1. Some of the Reasons an Agency Leadership Team Might Not Work
  2. Why an Agency Owner Might Form a Leadership Team
  3. Who Should Be on Your Leadership Team
  4. What You Should Discuss During Leadership Team Meetings
  5. How Forming a Leadership Team Will Affect Decision Making within the Agency
  6. How to Use Your Leadership Team as an Opportunity for Mentorship

If you’re going to take the risk of running an agency, shouldn’t you get the benefits, too? Welcome to Agency Management Institute’s Build A Better Agency Podcast, presented by HubSpot. We’ll show you how to build an agency that can scale and grow with better clients, invested employees, and best of all, more money to the bottom line.

Bringing his 25 plus years of experience as both an agency owner and agency consultant to you, please welcome your host, Drew McLellan.

Drew McLellan: Hey there everybody, Drew McLellan here with another episode of Build A Better Agency. As you might be suspecting, if you’ve been listening to these in order, today’s episode is a solocast. So, unlike my normal episodes, where I have a guest and we picked their brain about something, the solocasts are really a chance for me to talk to you about a subject that keeps coming up in my conversations with agency owners, or in the agency owner peer network meetings, or in the workshops, something that I know is on a lot of agency owners’ minds, or the leaders’ minds. It’s something I want to sort of just really drill down with you and give you some ideas and some things to think about around a really specific topic.


Some of the Reasons an Agency Leadership Team Might Not Work

So, today’s topic, I want to talk a little bit about agency leadership teams. So many agency owners … For one reason or another, and we’ll get into that in a second, decide that they would like to cherry-pick some of their key employees and create a leadership team. In the abstract, I think this is a dandy idea. I am all for it. Unfortunately, often times what I see is that it doesn’t go well, and it doesn’t go well for a couple reasons.

Number one, I think a lot of times, they are created out of frustration or a sense of “I’m tired of carrying the ball all by myself, so I’m going to put together a leadership team, and I’m going to start delegating more. I’m going to start pushing some of this stuff on my folks.” While that is an end result, and it’s a good end result, it really shouldn’t be why you start a leadership team. So don’t start it out of frustration, don’t start it when you’re feeling really overwhelmed.

It’s actually something that I want you to be really thoughtful about and there are some really great reasons to start an agency leadership team. They are all valid. For some of you, they’re all going to be true. In other cases, one or two of these may be what is compelling you to want to do this. But for most people, for most agencies, it’s a couple things.

Number one, you’ve gotten to a size where the reality is it’s difficult for you as an owner to really have your finger on the pulse of every aspect of the business, and to make every decision in a vacuum. So many of you, you lead into a leadership team by having sort of an informal one. You have a go-to person, or a right-hand person that you go to to discuss agency issues or decisions. For some of you, that might be a head of accounts service, for others it’s often a CFO, or somebody on the operations side, but your agency is getting to the point, either in sophistication level or size, where you know you need more heads around the table when it comes to making big decisions.

It’s also an opportunity for you to set goals and to infuse those goals through your organization by having someone else other than you help carry the load of accomplishing those goals. So it’s a way for you to plant seeds throughout your organization so that everybody is moving in the same direction. It’s also a chance for you to accelerate the growth of your agency. So by having more people who are thinking bigger than their functional job title, and who are being given both the opportunity and the challenge of looking at some of the more agency-wide kinds of decisions you need to make, you can really accelerate your growth by having more folks who are focused on the bigger picture goals.

So again, it’s taking folks out of a functional role of Creative Director, let’s call it, and asking them to think about the agency as a whole, rather than just their department. An agency leadership team is also a great place for you as the agency owner to mentor young, up-and-coming, or seasoned, but ready for the next level employees. So it’s a chance for you to coach, both formally and informally. It’s a chance for you to let them take a peek behind the curtain of how decisions get made and why they get made. And to that end, it gives them a chance and it gives you a chance to observe them getting the opportunity to get a little bit of a taste of what it would be like to run or own an agency.


Why an Agency Owner Might Form a Leadership Team

So one of the motivations for many agency owners of creating an agency leadership team is that they have decided that at some point in time, they want to move to an internal sale. That’s their succession plan. So the leadership team is in essence a try-out of, “I’m going to put some people together, and I’m going to see who rises to the top. I’m going to see who works well together. I’m going to see how they think through challenges and find opportunities and maximize on them. I’m going to observe them without taking the risk of offering them ownership, but I’m going to observe how they approach ownership-like issues and questions.”

All of those, or some of those, are great reasons for starting a leadership team. So why would an employee want to be on a leadership team? First of all, they’re going to be flattered to be asked. We’ll talk about who to ask in a second. Many of them say yes to it, because they don’t feel like they have a choice. Be careful when you are inviting them to be on the leadership team or you’re creating a leadership team, that you only want somebody on that team if they want to do it. So, I wouldn’t make it a mandate, I would make it an invitation.

But if someone says yes, odds are they’re stepping up to that leadership role for a couple of things. So as you might suspect, they think there’ll be additional compensation or an opportunity to advance their career. While there’s no doubt that some of that benefit is there, that should not be the carrot that you dangle. I would not pay them more for being on a leadership team, I wouldn’t promise them a promotion or a new title or anything like that. You want them to be on the leadership team for reasons much bigger than that, and again much bigger than themselves. So you want them to be on the leadership team, and watch for this as you’re talking to them about the idea, because they want to have more of a voice in the agency, that they have leadership attributes or desires that they want to express, and they want to actually help chart the course of the agency.

Also, hopefully, they want to learn. They want to learn how to run an agency better. They want to learn more than their day-to-day task, or job, or department responsibilities. Hopefully, they also want to influence the agency’s culture, and that they have a vision just like you do of where the agency might go, and they want to participate with you in sort of taking the agency in that direction. And hopefully they also just want to help, that they know that you are carrying a heavy load and they want to help relieve some of that burden and use some of their talents and skills.

In many cases, people that you’ve moved up or want to move up to an agency leadership team have been doing their day job for a while. It may not be as challenging or maybe as stimulating as it was when they started. So a leadership team opportunity is also a chance for them to really stretch their wings and to grow. So, not only do they want to help you and take some of the load off of you, but they also want to continue to develop themselves in terms of what’s possible for them inside the agency.


Who Should Be on Your Agency Leadership Team

So let’s talk for a second about who should be on that agency leadership team. I think often times agencies default to department heads. I’m not sure that’s always the right way to think about this. I want you to think about who in your agency brings a “we, not me” attitude. Who thinks bigger picture? Who comes to you with both problems, but solutions to those problems? Who behaves in a way that demonstrates to you that they are in this for the long run and that they are bigger picture thinkers, that they are willing to go beyond what’s right in front of them, that they’re good listeners, that they ask good questions? It might be a department head, and in many cases that probably makes perfect sense, but it also might be someone who is in a department of one. Or it might be somebody who is young and hungry. It doesn’t necessarily mean these are all people you’re going to sell your agency to or give your agency to, or everyone has to have a VP title, or that they all have to be at the same level.

Be thinking about the attributes that you want to surround yourself with when you’re making important agency decisions, and then look for the people who have those attributes. Now, if you’re doing this because this is part of your succession plan … And for many of you, that may be what you’re doing, so you may be doing this because you’ve identified, whether explicitly and you’ve had conversations with them, or implicitly they’re just in your head. You’ve identified some people on your team who could buy the agency from you at some point in time or take an ownership role. This is your way of really mentoring them into ownership. So, in that case, you might want to think about who is all around the table, and how are they going to work together.

So there’s lots of different reasons for putting together the agency leadership team, and there’s different ways to do it, but don’t default to people who’ve only been with you 10 years, or people who have a VP title, or people who are department heads. Be more open-minded than that. Think about what you want the leadership team to do, and who is best suited inside your agency to do it, and don’t worry about them being shoulder-to-shoulder peers or at equal levels. That’ll all work itself out.

One of the things you need to talk to them about is that they now have two roles. They have a role of they are the agency employee, and they have a day job that they have to be good at, whether it’s Art Director or CFO, or whatever it may be. They also have a leadership team role. At the leadership team, titles don’t matter, longevity doesn’t matter, age doesn’t matter. Everybody’s voice around the table is equal on the leadership team. You’re really going to have to teach them how to do that, because they’re going to come in with their own agendas. Especially if they’re younger and they haven’t done a lot of leadership. It’s harder for them to step away from what’s best for them or their department. So you’re going to have to coach them through that, but those are the kinds of people you want on the leadership team.

I want to also argue that you do not want 50% of your staff on an agency leadership team. It doesn’t have to be a big group of people. Maybe it’s you and two other people, or three other people, or maybe it’s up to five or six if you’re a larger agency, but be mindful of the ratio of leadership team members to the entire agency. Make sure that it’s not, like I said, half of your staff. This is a small in-tact team and you’re going to be meeting with them regularly. We’re going to talk about how to set up the leadership team meetings, what should happen in those meetings, and what you can do inside of those meetings to make them effective. But first, let’s take a quick break, and then we will come back to that.


What You Should Discuss During Leadership Team Meetings

Drew McLellan: All right, Drew McLellan here again, with Build A Better Agency, back with you after our break to talk a little bit more about leadership teams. So we’ve covered kind of the reasons why you would want to have a leadership team if you’re an owner. We’ve covered the reasons why you would or should want to be on the leadership team if you are a team leader. And we’ve talked a little bit about the kinds of people that you would want to have around the table with you.

So now let’s talk a little bit about what happens around that table. So, one of the ways that I have seen this go badly is when an owner kicks off a leadership team, and they agree on a cadence of meetings … Monthly, every other week, weekly, doesn’t matter. But then the owner doesn’t honor that schedule. So you have these people all excited, and they’re psyched up about being asked to be on the leadership team and they’re ready to step up, and you’ve made a big deal out of it. You’ve made them feel important and special, and then you start blowing off the meetings, or you start moving the meetings, you start canceling the meetings, or you come to the meetings unprepared. All of those things erode the enthusiasm and excitement and passion that your people had around being asked to be on the leadership team in the first place.

One of the first things I want you to do is I want you to really think through how you want to do this. How often do you want to meet? How long should those meetings last? Is there a set agenda? Do you send out the agenda in advance? Is the agenda always the same? Do you go over certain things on a consistent basis? Are you looking at financial metrics and goals? What kinds of financial metrics and goals are you willing to share with those people around the table? Are you willing to let them see what the AGI is, or other things like that, or are you going to hold your finances super close to the vest? I’ll tell you this, if you are going to not share with them any financial metrics or goals, this is probably not going to work, because odds are that’s going to be one of the ways you would want to keep score.

That’s another thing you need to think about, “How are we going to know if the leadership team is being effective? How are we going to keep score in terms of is this time investment worth it?” So, I would say you need to meet at least once a month. For many leadership teams, it’s typically twice a month. I would say you need to meet for at least an hour to two hours. In the beginning, I would suggest that you follow an agenda so everyone knows what to expect.

You’re going to have to go slow for the first ones. You can’t just all of a sudden expect those folks to know how to help you make good decisions and how to ask great questions that lead to better decisions. So I’m going to suggest you take this slow, that you set some goals … You as the owner, set some goals that you would like to have for the agency for the year, if you haven’t already done that. I would pick one or two of the goals and I would ask the leadership team to help you dissect what it’s going to take to get to that goal and to put together a plan.

Then I think it’s really important that everybody leaves the leadership meeting with a task on assignment, something for them to focus on between now and the next meeting. It might be that you pair them up, they may work on things together, it may be that everybody does it individually. If you have read the book Traction, you might be following that methodology. I’m going to do a podcast on that pretty soon about how agencies are using a traction-like methodology to move some internal projects quickly through their agency in ways that they never thought were possible.

You’re going to want to have everyone have something important to contribute when they come back two weeks later, something to report on. Because if you don’t start that expectation from the very beginning, then it ends up being meaningless where you just sit around and chat about problems. Your goal should be, “Let’s identify the problem or the opportunity, let’s discuss it, and then let’s come to some resolution around it. Let’s decide something and move forward.” You’re going to have to model that for them, but pretty quickly they’ll take to it and they’ll be the one, perhaps, who’s even leading that charge inside the leadership team meetings.


How Forming a Leadership Team Will Affect Decision Making within the Agency

Couple things that I want you to also think about inside the meeting and how that will go well. The truth is that no matter who is on your agency leadership team, and no matter how much you trust them, some decisions are not decisions that should be made by committee. I think one of the most critical tools for you as an agency owner to leverage in the leadership meetings is what I call the three levels of decision-making. It’s your responsibility to be very clear about what level each decision that needs to be made is before you guys dig into it. Let me tell you what the three levels are and then give you an example.

The first level of decision making is, “We’re going to discuss this as a leadership team, and then we are going to, in a very democratic way, vote, and then the majority wins. This is going to be a decision we are going to make together.” In that role, in that level of decision making, my vote is no more or no less important than anyone else’s.

The second level of decision making is, “I have something I would like to discuss with you. I would like all of your feedback, I want to have a lively conversation around it, I want you to help me push and pull in this decision, but ultimately, as the agency owner, I am going to make the decision.”

Then the third level of decision making is, “Hey guys, guess what, I made a decision about something.” No discussion, no weighing in, this is the privilege of taking the risk of owning the agency.

So for example, let’s say that you get your healthcare premium notification and your healthcare insurance is going up 35%. So you have three ways to look at that. You can go to them and say, “Hey, we have some options in terms of how to manage our healthcare costs, and I want to discuss those with all of you and then we’re all going to decide that together.” So you would look at deductibles or whatever the variables are and you would decide it as a group.

Second way of doing it is saying, “Hey, healthcare costs came back and they’re astronomical. I want some thoughts from you. I’ve got some ideas, but I’d like some thoughts from you before I make a decision about how we are going to cover our employees with health insurance without breaking the bank.”

The third one is, “Hey you guys, we got a 35% premium increase from our health insurance, so I have decided to put our company back out to bid and see if we can get lower premiums. If we can’t, I have decided we are raising the deductible to $5,000 to manage the costs.” Or whatever the decision is.

So by doing that in the very beginning … What you don’t want to do is you don’t want to ask someone their opinion, and then make them feel like it didn’t matter. So you want to be really upfront with your team, and you’re going to have to do this very deliberately in the beginning you’re going to have to say, “Remember, there are three levels of decision making.” You might even have to review them, “This is a level two decision, which means I want your input, but then I’m going to decide”, or whichever level it is.

But you want your team to know that when they give you feedback, or when they’ve really thought about something, or when they ask great questions, that it’s been heard and respected and valued. So, when they know that, for example, they get to weigh in, but you get to make the decision, then when you make a decision that’s different than what they would’ve, they don’t feel mad or bad that they didn’t get to make it because you told them right up front. So, that’s a critical element to make a leadership team work. You, as the agency owner, if that’s who you are … You have responsibility to own that, and to not pussyfoot around. Many agency owners are uncomfortable asserting their ownership, and saying, “Look, this is my place. It’s my mortgage that’s on the line, and we are not paying that for health insurance. I know it would be great, but we’re not doing it. So everyone’s going to have to chip in more, or the deductible has to go up.” Or whatever it is.

You have to be ready to make those tough decisions and to own those decisions, and to also have the privilege and responsibility of sometimes being the one that makes the call. So I highly suggest that you use those three levels of decision making.


How to Use Your Leadership Team as an Opportunity for Mentorship

The other thing I want you to think about is inside those meetings, not only should you be using the leadership team to get everyone on the same page, to get everyone moving in the same direction, but also as an opportunity for you to mentor and grow each of those people. So one of the things that I think is easier when someone is sitting on a leadership team is that you can start really helping them develop some of those softer skills. So odds are, if someone’s sitting on your leadership team, they have pretty good jobs in terms of their day job. They’re good at … They’re a great writer, or they’re a great accounts supervisor, or whatever that may be. But like all of us, there’s room for growth. So, inside the leadership team you can help them learn skills like asking better questions, and discernment, and problem solving together, and all kinds of things.

You can coach and mentor in both an informal and formal way. So informally, you can call them out for doing it well during the meeting. You can acknowledge at the end of the meeting that everybody really stayed open-minded, whatever that may be. But then in your one-on-ones with them, which I’m hoping you’re doing, then in the one-on-ones you might say to them, “You know what? One of the things I really want you to be focusing on is I want you to get to the idea that sometimes we need resources outside of the agency to accomplish what we’re trying to do on behalf of a client. So, let’s get to that quicker. I want you to have a better stable of resources for us to be able to rely on in all the departments. I’d really like you to head that up.”

Again, whatever it is, whatever thing you want them to do, you are able inside the agency leadership team to mentor them on bigger, broader, skill development than their core job. At the end of the day, again, what I started off with was, you have to have some goals. You have to have very clear goals of why you have the leadership team, and you have to let them help you keep score. They need to see that their contributions matter. They need to see when they don’t show up with their A game, that it has impact on the goals that you’ve set. They need to see when they put a little oomph in what they’re doing that they really can help you move the needle.

So, whatever the metrics are … And there can be many. They can be financial, they can be employee satisfaction, they can be client retention, lots of different things. Whatever your goals are for your agency, make them smart goals so that you can actually measure them and monitor them. Make sure that they know exactly what they are and that you are, at least once a month, checking back in with those goals and looking at the progress that you’re making as a team.

So that’s it. Agency leadership teams can be a really powerful way for you to expand the agency, for you to stretch your day out in a different way so you have more time to focus on your business and do other things. Because some of the day-to-day operational things around running the agency could be shared with young leaders inside your organization. It’s also a great way for you to test the waters, if you’re thinking that an internal sale might make sense for you down the road.

Lots of good reasons to do it, but a lot of pitfalls that hopefully you can avoid, based on the conversation that we’ve had today. So hopefully, if you have been thinking about this, this was helpful. If you have a leadership team and it’s not going well, maybe you’ve been able to identify some things that you need to tweak or adjust to make that go better. And if you haven’t thought about it at all, hopefully I’ve planted some seeds and as your agency grows and needs it, you’ll be ready to do that.

All right. That wraps up today. Remember, one of the things that we’re trying to do is we are trying to put the spotlight on some of our previous podcasts guests. So I’ve asked a lot of them to send me either their latest book or a free course or something like that. If you go to, fill out the form. You only have to do it once. If you’ve already done it, don’t have to go do it again. Every week, we’re going to be drawing for a podcast listener to win something from one of our guests. Or it might be a free seat at one of the AMI workshops, or it may be free access to one of our online courses. So, it’s worth throwing your name in the hat, and I hope you’ll go do that.

In the meantime, have a great week. I will be back next week with another guest who will help you build your agency to be bigger and better and stronger and everything that you need and want it to be. If you’re looking for me in the meantime, I am at [email protected]. I’ll catch you next week. Thanks for listening.

That’s all for this episode of AMI’s Build A Better Agency, brought to you by HubSpot. Be sure to visit to learn more about our workshops, online courses, and other ways we serve small to mid-size agencies. Don’t miss an episode as we help you build the agency you’ve always dreamed of owning.