When an agency shows a profit, one of the first inclinations of the agency owner is to pay a bonus to the staff. I applaud that instinct. But I don’t think you should do it simply because you have a little extra money. I believe you should have a bonus program that serves your agency every single day, whether you pay out any money or not. I think there are several elements of a successful bonus program: They should not be an end of the year thing. They should influence the employees to behave in ways that serve the agency year-round It needs to be simple and explained over and over (every month/quarter) It should be used to teach employees to think like agency owners (focused on the same metrics you do) It should be based on one or two metrics that accurately measure the financial health of the agency The metrics should be measured/achieved or not every month The metrics should be set in a way that your team hits the goal more often than misses (should be a stretch but a reasonable stretch...ideally they’d hit the metrics at least 7 or 8 months of the year) Bonuses should be paid quarterly (with most of the $ accumulated for an end of the year payout) to keep everyone motivated/focused The owners should hold an all agency meeting every month to report on financials/success on bonus program for the month/YTD At AMI, we have a specific bonus program that we teach in our workshops, owner peer networks etc. It’s based on two metrics. The big number in our opinion in terms of an agency’s health is AGI (Adjusted gross income — Look here for more [...]
One of the biggest threats to your agency’s profitability and long-term existence is giving away the farm by over servicing clients, bad estimates, not issuing change orders and allowing clients to change the rules mid-game without any penalty or cost. Don’t get me wrong - I think it’s okay and smart to over-service certain clients on certain projects. I’m not suggesting you put military order into your agency. But conservatively — I believe most agencies can put another 10% to their bottom line if they rein in scope creep. The good news is — it’s easier to fix than you might think. I explored how scope creep happens and how agencies can contain it in a recent article for Hubspot. Take a look and see if you can find a strategy or two that you can implement in your shop to help you slow down the bleed. The article contains several concepts that I teach in the Advanced AE bootcamp as well. Your account executives should be managing their clients’ budgets and profitability. That means they need two things — the financial data to know how they’re doing AND the tools/knowledge of how to manage both the clients and your internal team so that they aren’t writing time and money off every job. Our next Advanced AE bootcamp is in September (September 9 & 10 in Chicago) and you can register your AEs here.
I know it seems like common sense and your brain may agree — but your mouth often takes a different path. If you’re struggling to work with some of your team members, odds are you have not embraced the idea that employees need clarity. Truth be told — most agency leaders struggle with this, especially if they are offering constructive criticism or even tougher — disciplinary action. One group of employees that really needs you to get good at the whole clarity thing are your millennials. They come into your agency with very different ideas about how employees behave, what success looks like and how they can contribute. They’re eager but raw. But if you really find a way to be straightforward and very directive with your feedback, I think they will surprise you. Be it millennials or any other group of employees, agency owners and department heads can be vague, passive-aggressive, or just absent in their management style (you may well be the exception to the rule) and I think there are a few reasons for that. In a recent blog post, I dug into what gets in the way of us being more clear and then offered up some tools we can use to get better at it. Check it out and let me know what you think.
As we struggle to find and keep great employees, we need to do a quick self- assessment. Are you creating an environment that breeds trust and connection among your team? Especially with you and your leadership team? MediaPost asked me to explore how agencies can create a culture of trust and connection and I’d love your thoughts on my recommendations on the topic. So, how do you find out if your environment is one of trust and connection? You ask. We have built an assessment tool that will help you measure the health of your agency in five key areas - account service, finance, Bizdev, staff management, and agency owner happiness. We're aggregating a large number of agency owner participants so we can come back to you this summer with a comparative analysis of where agencies ranked on these issues. And so you can compare your rankings with other agencies. All you need to do to take the assessment is click here. Just a few minutes of your time and you will get your results as well as a follow-up email with your results. Later this summer I will be letting you know that we're going to do a webinar where we will walk you through the results and you can compare yourself to everybody else and see how you're doing.
Many agencies are struggling with what I have termed “stale employees.” These are seasoned pros who have probably been with your agency for a long time. They were incredibly talented and valuable back in the day, but their skills have not evolved as your agency and the marketplace have. Odds are, they’re someone who has stuck by you through thick and thin as your agency has gone through its ups and downs. Which is why you’re ignoring the issue. But the truth is — this employee is typically one of your more expensive salaries and they are contributing less and less. Not only is this team member costing you money but odds are, they’re going to cost you some of your most valuable employees too. American Express’s Open Forum asked me to dig into the issue and offer some solutions. If you’ve dealt with a stale employee — I’d love to hear how you resolved it.
There is a great dilemma many agency owners face time and time again: Do you hire an internal new business development person for your agency with solid sales experience (and a price tag to match), or an inexperienced individual that’s cheaper, but seems driven/teachable? The former example is certainly a potentially sound investment, although not always feasible, and the latter doesn’t traditionally have a great success rate unless an agency is willing to put real work behind their training and possesses the requisite patience to see the process through. That’s probably why the average new business director at an agency lasts about eighteen months. In my first example, you have likely experienced this in some form or another. That person with experience in one vertical and an abundant network of prospects within that vertical; or the other kind, that person with the fabled “ultimate agency new business Rolodex.” And sometimes, you run across someone with both deep experience in a vertical and an abundant network. These kinds of hires occur often and I don’t blame agencies for it. They can work but, in far too many instances, that new business director with the legendary prospecting network hire ends up flaming out. In fact, I recently spoke with an agency principal on this very topic, and she gave me permission to share her less than desirable experience with you. So, here goes. The Legendary Prospecting Network When my agency owner friend initially hired this new business development guru with the “legendary prospecting network,” the big draw was, of course, that huge network. There were assurances, apparently all in good faith, that success would result from that network. It sounded promising, but unfortunately, it was not in [...]
The aroma of vegetable soup wafted up the stairs to my office. Moments later, my wife called, “Dinner’s ready!” “Mmmmm … I love homemade soup,” I thought. Rushing down the stairs and past the pantry, I spied a tube of crackers, grabbed them, and headed for the dining room. My wife sat at the table, waiting for me, smiling. Her smile vanished as she saw the tube of crackers. “Oh, this isn’t good enough? I really tried to get everything you like. I even brought out the oyster crackers …” Confused, I looked at her. Then, I looked at the table. She had arranged a beautiful spread of crackers, sliced cheese, chips & dips, salsa, veggies and grilled sandwiches to go with our soup. And there I stood, tube of crackers in hand, inflicting help. Acting Without Asking Inflicting help occurs when the helper acts in a way they feel as helpful but the recipient does not. It often stems from the helper not asking if, how or when someone would like to be helped. Instead, the helper jumps in and acts without asking. “But, I was only trying to help!” I was trying to comfort her. “I didn’t know you had all this out. I smelled the soup, saw the crackers, and grabbed them to be helpful.” We quickly sorted things out and went on to have a great meal together. Looking back, it was an interesting interaction, and it holds some lessons for agency managers. Because too often, well-meaning agency owners or managers inflict help on their teams. And when we realize what we’ve done, we might exclaim, “But, I was only trying to help!” Step One — Stop and Look Inflicting help is almost [...]
Planning for growth or adding new services to your agency inevitably leads to “we need more people!” Of course, having a dependable, hard-working staff at your business is key. A talent recruiter can be a great asset in the new hire process, but before you dig out those job advertisements, or call your favorite talent recruiter, ask yourself these 4 critical questions: Do you have a management problem or a hiring problem? Did the last person leave because of their manager? Do you have a turnover problem or a not-enough-turnover problem, or a little of both? Full time? Part time? Or is there a productivity problem that could be addressed by training the current team (or replacing a weak performer)? Do you have an “up-and-comer” who would love to take on new duties, and view this new opportunity as a reason to stay and grow with your company? These are the four most important questions you can ask before you call a talent recruiter, and my bet is that you haven’t asked them about your agency team in a long time. So let's go through each one and how it can impact your need for a talent recruiter. 1. Management problem or hiring problem? The “management problem” is the number one reason people leave their jobs, and it often concerns the trusted employee who’s been with you for a long time (perhaps since the beginning). They “have your back” and “run the place” so you can get out there and grow your business, but is their management style costing you good employees? You may be aware there are issues with the way they handle day-to-day management issues—and you need to re-engage with individual employees to find [...]
If there is one universal problem facing agencies today, it’s talent recruitment and retention. Agencies of all sizes are experiencing more employee churn than they’ve seen in a long time. In fact, agencies report an average 20% turnover per year. Agencies want to retain key employees, and great employees want reasons to stay. So why are so many agencies still seeing their best employees walk? Many agency owners are offering their key employees cars, vacations and hefty bonuses, yet people are still leaving. Unfortunately, many agencies, clients and corporations are offering employees the same perks, so someone can easily leave their current agency and get the same benefits somewhere else. Fortunately, with a little creativity and some honest conversations, agency owners can avoid this inevitable talent drain. How Agencies Keep Stars Unfortunately, money talks and most employees don’t take the time to do their homework. They don’t calculate the value of all of the perks, flexibility and benefits their current employer offers. Instead, in today’s competitive hiring environment, great employees get poached by companies that offer the most money. As a defensive strategy, some agency owners offer equity to retain key employees, hoping it entices them to stay and contribute to long-term growth. Sometimes that works, but when it doesn’t, the backlash hurts. Giving an employee equity doesn’t cost anything at first. However, if that person decides to leave, the equity leaves, too. When that happens, the agency loses control of both a star employee and a chunk of its ownership. The agency could always buy out the departed employee, but no one wants to send a big check to a person who just left the building -- especially if the company gave the equity away for free. Agencies that decide [...]
Happy Anniversary to me. Yep, eight years and two months ago (May 1, 2010) I re-entered the world of entrepreneurship by starting Converse Digital with a mere two weeks notice, no money in the bank, no investors, no credit line, a wife, four kids, a big mortgage payment and lots of private school tuitions. I’ve learned a lot along the way and today I wanted to share some of those lessons for entrepreneurs with you. 1) You Need an Entrepreneurship Runway The common rule of thumb for starting a business is to have at least a few months income in your bank. Unfortunately, I wasn’t able to do that. I didn’t have the luxury so many of my fellow entrepreneurs have, where they don’t take a salary out of the company for months or years, instead reinvesting all profits to quickly grow the business. Nope, Converse Digital had to be cash flow positive from day one. But this lack of runway has been a blessing and a curse. It’s been a curse because I’ve never really had the chance to strategically grow the company. Sure, here and there we launch little initiatives like our Social Reconnaissance Products…or our CIBER product (that I don’t even have a full webpage live for yet – just a quick landing page), usually after they’ve been on the drawing board for months or more. But on the flip side, that lack of runway makes you scared. Every day you wake up expecting the other shoe to drop — for a client to fire you or cut their budget, or for that big project you were counting on to NOT come through, or my "favorite" — a client falls way behind [...]