Lessons in Effective Agency Leadership with Karl Sakas

Drew McLellan [00:00:37]: 

Hey everybody, Drew McLellan here with another episode of Build a Better Agency. Super excited to be back with you and hope that you are having a great start of your summer. If you’re listening to this in real time, if you are listening to this in real time, I want to remind you we have some really great workshops coming up this fall in Denver. So in September we have the Advanced AE bootcamp and we have the brand new workshop that we’ve only taught once before, growing your existing clients, which got rave reviews. Both of those are in September. And in October we have the entry level, a bootcamp for folks who have been in the agency world less than four years. And we have the perennial favorite, Money Matters. So if you’re interested in any of those workshops, head over to Agency Management Institute’s website and under the How We Help tab, you’ll see workshops and you’ll find the specific workshops there. We would love to have you with us. As always, our workshops have a complete money back guarantee. If you didn’t learn anything, if it wasn’t valuable, if you already knew everything we taught, then you absolutely can have every dime of your money back. We’ve never had to actually give the money back, but I want you to know that that offer is always available so you don’t have to worry about taking any risks whatsoever in investing in your own professional development or in your teams. So we’d love to see in Denver this fall. Okay, so today’s guest is Karl Sakas. Karl worked in several agencies, served a leadership role in a couple agencies before he went out on his own as a consultant, does a lot of similar work to what AMI does in terms of coaching and consulting. And we’re going to focus on some topics that are in his new book called From Chaos to Calm. And Karl just wrote that book about some of the work he’s done with agencies. And we’re going to dig into how he sees agency owners kind of getting in their own way and how you can bring some calm to your own chaos. All right, without further ado, let’s welcome him to the show Karl, welcome to the podcast. Thanks for joining us. 

Karl Sakas [00:02:41]: 

Great to be back. 

Drew McLellan [00:02:43]: 

So give everybody, in case they’re not familiar with you, give everybody a little bit of your history and how you came to have sort of this expertise and insight into agencies. 

Karl Sakas [00:02:52]: 

Karl Saikis here. As an agency advisor, I help owners work less and earn more while rewarding their best team members. And I come to that from a background in agency operations. I was a freelance web designer in high school back in the days of Dial up, more recently in various agency operations roles as a pm, Director of Client Services, Director of Operations. And I’ve worked with hundreds of agencies all over the world helping them grow more smoothly. So that’s, that’s the snapshot of things. 

Drew McLellan [00:03:23]: 

Okay, so let’s talk a little bit about where you see agency owners struggling right now. 

Karl Sakas [00:03:31]: 

Yeah, One of the big areas is around lead gen, around sales pipeline. Certainly the geopolitical environment is not helping with that. 

Drew McLellan [00:03:40]: 

Right. 

Karl Sakas [00:03:41]: 

But of course things like agency positioning go in as well, as well as what the agency staffing model is. Is it a flexible model or more fixed things like that. That’s creating a lot of stress around what the pipeline looks like, especially after some really fast moving revenue years and then some slower revenue years. I think people were waiting for 2025 to be. For things to calm down a bit. 

Drew McLellan [00:04:07]: 

That has not happened. 

Karl Sakas [00:04:09]: 

Wishful thinking. You can wish it. It doesn’t mean it’s going to happen. And so with a lot of the agencies I work with, working with what they have. 

Drew McLellan [00:04:18]: 

Right. 

Karl Sakas [00:04:19]: 

So Legion Pipeline is a big challenge. Another one is around succession planning where owners are like something, you know, I’ll hear things like, I don’t want to do this forever. I want to sell whether it’s now or within a few years or sometime in the future. But, you know, saying that they’re not going to do it forever, but what do they need to do now to prepare to make that go smoothly? 

Drew McLellan [00:04:39]: 

Yeah, we spend a lot of our time, you know, in our consulting helping agency owners understand that you can’t decide today to sell the agency and it’s ready to sell. That it’s a, it’s a five year process of really thinking about what your P and L looks like and your profits and how you’re compensating yourself in a million, a million other things. So we’re seeing a lot of the, we’re seeing a lot of the same things. But one of the, where I kind of want to focus our attention is it seems like one of the challenges is agency owners are Sometimes their own worst enemy, they get in their own way all the time. And I know you probably see that all the time. So let’s talk a little bit about, from your perspective, what are agency owners doing to make it harder on themselves and on their shop? 

Karl Sakas [00:05:25]: 

One thing is getting overly involved when they don’t need to. You know, if you don’t have team members who could get things done, if you don’t have people who have. Think of a Venn diagram. Desire, competence and capacity. If you’re missing any one of those things won’t get done. But if your team has desire, competence and capacity, yet you continue interfering, that creates problems. I coached an agent Sooner in Canada several years ago and did a call with his operations director to get some feedback from her about what he could do differently. And one of her comments was, she has a whole bookshelf of great new idea books that he ran after and then abandoned. And now initially she would share feedback and try to help. Now she said that she instead will suffer in silence. It’s a really sad thing to hear. I mean, she was wanting to do her best, but really, the owner continuing to run around after shiny objects had just burned her out. 

Drew McLellan [00:06:24]: 

Yeah, it is the new idea of the month club. We hear that a lot, too. We hear agency employees saying every time he goes to a conference or every time she reads a book or every time, then we do this new thing, we all take the assessment, we all find out that we’re a pigeon or somebody else is a crow or whatever, whatever the shtick is. And then, you know, we dive into that for a month or two until the next conference or the next book, and next thing we know, we’re a color or a flower or we’re doing something else. And it’s exhausting because it’s. Everything gets started, but nothing gets finished or implemented. 

Karl Sakas [00:07:03]: 

Yeah, I think a lot of agency owners forget what it was like to be an employee. 

Drew McLellan [00:07:08]: 

Yeah. 

Karl Sakas [00:07:08]: 

As an employee, depending on where you were in the seniority, you might have been plugged into what’s going on. Maybe you weren’t. You’re sort of along for the ride. And for better or for worse, agencies owners are the dictator of their business. If you wants to do it, everyone has to do it. Of course they bear the consequences of that, but that can be very chaotic for the rest of the team when it comes to conferences. I mean, I’m a huge fan of conferences, both speaking and attending. I recommend that agency owners and leaders apply an idea quarantine after conferences. That’s take A week or so to reflect on what they learned and decide what are they going to share with their team. If you absolutely must tell someone, okay, you can tell your assistant and you can tell your number two, they’ve heard this before. They’re also going to realize that this isn’t a go. Do it immediately. They’re probably going to push back. So do the idea quarantine for yourself and everyone else. 

Drew McLellan [00:08:03]: 

Yeah, I. I also find that agency owners think they want to delegate, and they say they want to delegate, but they’re terrible at it. Terrible at it. Right. They just. Even if they do the initial act of the delegation, when it’s not done exactly how they would do it, or when the person who’s never done something before doesn’t do it perfectly, the first time, that owner just injects themselves back in and kind of pulls it back in. So talk a little bit about your observations around that idea of delegating and actually letting it stay where it’s supposed to be, which is with someone else. 

Karl Sakas [00:08:44]: 

Yeah, you need to delegate rather than abdicate. I talked about that in my previous book, workluster, and more and more recently in my latest book, Calm the Chaos. The idea there is that the team needs to know what success looks like. One framework you could use is what I call values, goals, and resources. People need to know the values to follow the goals you’re trying to achieve and the resources available. That could apply at an agency level, it could apply at a department level, it could apply at a particular client level. You know, these are their values, goals, and resources. My recommendation, if someone has demonstrated that they’re trustworthy, is tell them, if you follow the values, goals and resources that we’ve covered, I will back you up on whatever you decide or recommend. Now, you may say, you know what, I’d like you to do it differently in the future because of this additional information. But I’m not going to make you redo it. Right. I’m not going to make you go back to the client and say, actually, we can’t do that after all. Right. That’s not good for your relationship with them and their relationship with the client. 

Drew McLellan [00:09:50]: 

Or I’m not going to pull it back and take it from you. Right? 

Karl Sakas [00:09:53]: 

Yes, yes. Owners got to where they are because they tend to be good at a lot of different things. But if you’ve handed the baton to your team, don’t grab the baton back. I had a client focused on PR and communications, and their team was working on something, you know, the owner had delegated to the team. And the owner was like, well I don’t know, let me take a look at the deliverable, see if there’s anything I could do to improve it. And they made some edits. The problem was they weren’t plugged into what was going on with the client. It actually made things worse. 

Drew McLellan [00:10:25]: 

Right. 

Karl Sakas [00:10:25]: 

They would have been better off not opening that document at all. Or if it was a case where maybe they were delegating something to someone who is newer or they hadn’t done it before pre scheduled check ins to review it in a structured way rather than doing you know what a lot of clients of agencies will do. The swoop and poop. 

Drew McLellan [00:10:46]: 

Yeah. 

Karl Sakas [00:10:46]: 

Right in like the seagull leave some unwanted feedback and now people have to clean up the mess. 

Drew McLellan [00:10:52]: 

Well it sort of mimics what you were talking about before with the idea of the month club which is I just think you fatigue your team. And so what we hear a lot is employees saying I kind of just go through the motions but I know he or she’s going to pull the rug out from under me. 

Karl Sakas [00:11:11]: 

Yeah. 

Drew McLellan [00:11:11]: 

Pretty soon. And so I don’t really dig in, I don’t really commit myself. I don’t really strive to excel because I know this is temporary. 

Karl Sakas [00:11:25]: 

Yeah. I mean that’s a tough spot. And the challenge is that to your team, your words. If you’re the owner or an executive leader, your words have a much heavier or higher weight than someone else saying the same thing. You could make a casual comment. The team doesn’t realize it’s a casual comment. They’re running around to make it happen. And then they later learn that oh. 

Drew McLellan [00:11:47]: 

That was just the whim of the day. Right. 

Karl Sakas [00:11:50]: 

Yeah. Yeah. I mean one way to deal with this and this impacts how you communicate with your team. And I talk about it in calm the chaos. It’s the three A’s of communication. The A’s are aware, advise and actively involved. So for instance, a team member comes to you, they could say I am making you aware I’m having this problem with a client but I have a plan. Or they might say I need your advice on this client problem here or there. I’m leaning toward this or this. I’m not sure what do you recommend I do? And the final is actively involved. I need you to become actively involved. If you’ve ever repurposed listening. And I mean I will admit I’ve done this too as a leader. Your team comes to you and you want to jump in and solve it. Maybe they just wanted you to Be aware of what was going on or maybe they needed advice, but not to be actively involved. You always have the option to escalate. Right. If they’re sharing an aware and you realize that the situation is totally something they should not have to deal with. For instance, a client mentioned an account manager. Had a client making misogynistic comments to the account manager. I said, that’s you for the. The owner to deal with. Like, that’s right. That’s beyond, you know, something the should handle. 

Drew McLellan [00:13:07]: 

That’s right. 

Karl Sakas [00:13:08]: 

So try the three A’s. Aware, advise, actively involved. That can make your life easier and also empower your team. 

Drew McLellan [00:13:14]: 

I also think it’s one of those things where it’s like every relationship book says, you know, somebody telling you about a problem doesn’t mean they want you to solve the problem. Right. That you should actually ask, like, how can I support you in this? Do you just need to vent? Do you want some ideas? Do you want me to take over and fix it? Like, how can I be helpful? And I don’t know that we bring that to our work the way we should. Particularly when we are trying to empower an employee to take the lead on something. I think, I think we sort of train them that it’s a little bait and switchy. Right. Like I’m going to give you the. I’m going to give you the job, but odds are I’m going to take it back. And I just think we set ourselves up and we set them up for being frustrated. I think every employee, this is my perception. I’m curious if it’s yours. Every employee wants to contribute in bigger and better ways. They’re looking for ways to be valuable to the business. Both because we’re wired as human beings that we want to bring value, but also because we know that there’s a value exchange. And the more valuable I am to the agency, the more I’m going to be compensated over time and I’m going to have more opportunity. Yeah. And when we kind of pull the rug out from under them repeatedly, we sort of train them not to give their all. And that’s when I hear agency owners go, you know what? Nobody in the shop but me can fill in the blank, whatever the blank is. And they’ve kind of set it up to be that way. 

Karl Sakas [00:14:48]: 

Yeah. I had a client who said that the team kept interrupting him and I said, okay, track over a week. The nature of the interruptions, like, who’s interrupting you? When is it coming in? What’s the question? Should you have Gotten the question, but maybe just not at that time, trying to get a sense of the pattern. And I reviewed the results with him, and as we dug into it, and I also talked with some of his team members. It was his own fault. He had trained them to come to him because if they made decisions on their own, he would overrule them. And he had trained them. Don’t decide yourself, because I’m going to want to talk about it. And we could then work on that together. And sometimes that could be more of a therapy topic. Clients sometimes call me their agency therapist. I am not a therapist. We all benefit from that. But, you know, it starts by recognizing, is it about the team or is it about you? Or about the intersection. 

Drew McLellan [00:15:42]: 

Right. I think, too, that for most agency owners, they came up through the business and they are, you know, key phrases. They’re accidental business owners, sooner or later they end up owning the joint or starting an agency. But they’re used to being vital to the everyday interactions of a business. And so often they get so quagmired in the client work or the process and procedures of the agency that they can’t step out and kind of do their own job. Yeah. The other thing I think they’re not awesome at is boundary setting. I think they’re so used to being on call. I think a lot of agency owners have sort of that firefighter mentality. Right. The bell goes off, the alarm goes off, and boop, I got to go down the slide and put on the suit and get on the truck and save the day and save the kitten, whatever it is. I find that agencies, owners who are better at sort of understanding their own lane and staying in their lane, are the ones that can propel their agency further faster. So I’m guessing that you see a little bit of that as well. 

Karl Sakas [00:16:52]: 

Absolutely. And some of that you mentioned, like, you know, doing their own job. Often owners don’t know what their job is. 

Drew McLellan [00:16:59]: 

That’s right. 

Karl Sakas [00:17:00]: 

I’ll ask. When I do my team census for new clients, one of the questions is, does this team member have a current job description? And often it’s, you know, yes, they have one, but it’s outdated or no, it doesn’t exist at all. One case, someone’s about to hire someone new, starting, like in a week or two. No, they did not have a job description. It’s like, oh, that’s going to be a problem. 

Drew McLellan [00:17:25]: 

Right. 

Karl Sakas [00:17:25]: 

You know, as the owner, things change. They tend to become less of a generalist and more specialized over time. You know, they stop doing the Subject matter, expert work. Maybe they stop doing PM and account management. Maybe they’re still doing client strategy for a while and. Or business development. But eventually, depending on your growth goals, you’re probably going to be in more of an executive leadership role. 

Drew McLellan [00:17:47]: 

You hope. Right. 

Karl Sakas [00:17:48]: 

That could be uncomfortable for people because you’re like, all I’m doing is sitting around thinking, and sometimes I’m in meetings. Am I really doing my job? And if you are a leader, meetings are part of your job. Like, you get to define how those work. In chapter 10 of Calm the Chaos, I talk about creating the meetings that you want, but, you know, your work is. Is different. I was speaking with an agency owner in New England where, you know, they had done a good job delegating and their team was handling things, yet they still felt pressure to come in every day, even though there wasn’t necessarily stuff to do and there were other things they wanted to do outside of work and they felt like they couldn’t get away. And I said, it sounds like you don’t have to be in the office five days a week. I said my challenge to them was only come in three days a week and they could choose. Right. Is it Monday, Tuesday, Wednesday? Is it Monday, Wednesday, Friday? Is it? You know, something like that. And they were silent for a bit and they said that they were just overcome with emotions that, that it was okay to step away from the business. 

Drew McLellan [00:18:58]: 

Yeah, I. I find with our clients, a lot of times they struggle. They’re so used to being uber producers. Whatever they were, whether they were a creative director, an account manager, whatever it is, they were so used to doing a lot of producing a lot of things, whatever the things were, that was their skill set. That shifting to owner, where I don’t have, I certainly have a to do list, but it’s different. It’s not. I’m not making stuff anymore and I don’t have homework after every meeting that it almost felt like they felt guilty, like they weren’t carrying their weight the way they used to. And they really struggle emotionally and psychologically with this idea of how they add value. Is different. 

Karl Sakas [00:19:47]: 

Right. 

Drew McLellan [00:19:47]: 

You know, one of the things I say to owners all the time is if you don’t do your job, there is no one else in the agency who can do your job. And so if you don’t free yourself up to do the owner job, it means it just doesn’t get done. And you’re. Now you’re just one of the rank and file making stuff, and no one is doing the leadership role that only you can do. 

Karl Sakas [00:20:09]: 

And that creates, I’m sure you’ve seen this in your work. It creates leadership vacuums. Trying to step in and do their best. It’s not necessarily what you want. Sometimes it makes things worse. You’re frustrated, they’re frustrated. The key is to not create the leadership vacuum. If you notice a problem, talk about it, take action. Even if you’re not sure what to do, you can acknowledge the problem so that people don’t think you’re just asleep at the wheel. Otherwise that’s not good for everyone. And think back to when you were an employee. What was it like when you saw there was clearly a problem at the company or clearly some issue, yet no one was talking about it? It does not feel good. 

Drew McLellan [00:20:49]: 

Yeah, it feels uncertain. And I think in today’s market that uncertainty is exasperated by hybrid work and remote work. And like you were talking about in your introduction to yourself, we have much more flexible work teams than we used to. Not everybody’s working full time, but not everybody’s in the same country or the same time zone. And so that uncertainty and that lack of sort of that physical presence where we got a sense of each other, I think exasperates that discomfort when you don’t have a leader who confidently and consistently steps into the leadership role. 

Karl Sakas [00:21:31]: 

Exactly. And you know, there’s, there are all kinds of things you can do to link people electronically and it’s really important to get people, if you have a remote team together in some way. One option of course is to coordinate that around a conference. Like say people are going to Baba Summit meet up Denver before or after the conference to get people together and things like that. So that is important to do. That also includes when you add new people, sort out how you’re going to get them integrated. I started as an agent, cpm. I didn’t have an working email account for three days. That, yeah, that made it harder to do my job. Although they still put me on a call the, the first day as a. 

Drew McLellan [00:22:18]: 

PM of course, by 10 o’ clock. 

Karl Sakas [00:22:20]: 

With one of our largest clients and the only briefing I had was like five minutes before the call from our salesperson a bit about the client. Like I wasn’t leading the meeting and I was able to, you know, say, listen and say the right things. But that’s not ideal. Like if you know someone is starting in say in the next month, what have you done to prepare? Do you have a new hire ramp up plan, whether that’s a 36, 90 or something else. Have you ordered business Cards like, nothing says, we’re excited to see you and this is real and we’re a real company as sending someone business cards or at least send them the proof of the card, even if they’re never meeting anyone, like, they can share that with their friends and family. Like, this is a real job. 

Drew McLellan [00:23:06]: 

Yeah. It feels official. 

Karl Sakas [00:23:07]: 

Yeah. I mean, I had that with my colleague Kate, who’s been on board for a number of years. I hired her away from the Harvard econ department and she mentioned that, you know, she was joining, say, KUS and Company and her parents were like, well, you know, we know Harvard is. But like, they were retired. They weren’t plugged into agencies. They were like, I don’t know what Seikus & Co. Is, but it helps to have, you know, the card is like, it’s, it’s a real thing, right? 

Drew McLellan [00:23:32]: 

That’s right. It’s so true. I want to talk a little bit more about sort of how agency owners can kind of get out of their own way. Let’s take a quick break and then we will come right back. Hey, everybody, thanks for listening today. Before I get back to the interview, I just want to remind you that we are always offering some really amazing workshops. And you can see the whole [email protected] on the navigation head to how we help. Scroll down and you’ll see workshops and you can see the whole list there with descriptions of each workshop. They are all in Denver and we’ve got them throughout the year for agency owners, account Execs, agency leaders, CFOs. We have a little something for everybody. No matter what it is that you’re struggling with, people, new business, money, all of those things we’ve got covered. So check them out and come join us. All right. Let’s get back to the show. All right, we are back and we are talking about how, first of all, owning an agency is hard work. It’s lonely hard work. It is scary, it’s exciting. It is a wild ride no matter how good you are at it. So it seems to me that one of the kindnesses we can give ourselves as agency owners is to not make it harder than it has to be. Right. And I know you do a lot of work with your clients and sort of helping them get out of their own way to be successful agency owners and to build successful businesses that someday they can sell if they want to. So let’s talk a little bit more about sort of how, how you sort of help your agency owner clients understand what, what their Role is and isn’t. 

Karl Sakas [00:25:18]: 

Part of my intake process is an intake questionnaire which has about 60 questions. They also share about their team, their clients, and their time. And we do a disc behavioral assessment. One of the questions I ask is, what do you love doing every day? What do you hate doing every day? And what do you tolerate doing? Maybe you don’t love it, but you don’t hate it. I’ll take those answers, cross reference with where they’re sharing that here’s how they’re spending their time now, and here’s where they want to spend their time. And I’ll point out if there are gaps in what they’re doing now versus what they want to be doing. A client Belgium, for instance, two owners and their operations head. When I asked, you know, what do you not like doing? The two owners both said they did not like doing sales. And I’m like, that’s fine, but somebody’s got to do sales. They didn’t have a separate salesperson or sales team. But when we dug into it, we identified, you know, it turned out one kind of like the closing stage consultation and closing. But he didn’t like screening people. 

Drew McLellan [00:26:21]: 

I said, you know, right, the lead generation. 

Karl Sakas [00:26:24]: 

Yeah, yeah. I said, you know, you can chunk it out so that someone else does the initial qualification, and then they refer it over to you. When the person is ready to talk further, they’re like, oh, okay, I could do that. So it turned out they didn’t hate sales, they hated the early stages. And we were able to reframe their role. So that was part of it. Some clients conclude that they really just do not like managing people. Some of that becomes, do they not like managing their current team, or do they not like managing people at all if they don’t at all? It’s hard to be an agency owner if you never manage people. In that case, it may make sense to transition to being, rather than running an agency, being a fractional CMO or working in more of a consulting role rather than having a full team. But for everyone else, let’s reframe the role to what you want. Some of that includes getting clear on their ideal future. I’ll say three years from now. What’s different? What’s the same? That gives me an idea on things. A lot of clients are trying to get out of client service work, whether they’re still the account manager or maybe they’re doing client strategy. I had a client who successfully delegated all but one of his clients at the agency and the final client that still wanted to work with him as the founder. The client was paying like $100,000 a month to the agency. So okay, sure you still get the CEO, but I mean at some point, as the sales team keeps bringing in more revenue, maybe at some point even a $100,000 a month client does not merit happy owner. Or if they do, they have to spend 150,000 DOL or $200,000 a month. It’s all within your power, but strengthen your pipeline. It makes everything easier. 

Drew McLellan [00:28:13]: 

One of the things that we find is a lot of times agency owners kind of regress back to the work that they’re so good at. They can do with their eyes closed. Right. And so it’s sort of human nature to gravitate back to something that’s easy. So to your point, running an account or being the creative director or what being the, the one who drives strategy because you can that with your eyes closed. But what we find is that becomes the absolute stop gap to growth because you cannot grow around the agency owner. If they’re stuck in a day to day service role, there’s no way for the agency to grow around them because nobody is managing that growth. 

Karl Sakas [00:29:02]: 

Right. For people who are listening, if you’re like I really want to get back to the old days, I would start by considering nostalgia is often about a time that never existed. 

Drew McLellan [00:29:14]: 

Yeah, that’s right. The rosy retrospection principle that’s called Right, right. We always see it a little better. 

Karl Sakas [00:29:20]: 

Maybe you love the scrappy team working out of a small office, everyone knew each other. But maybe you’re forgetting the part about oh no, are we going to make payroll this month? Things like that. So you know, eventually you can choose to bring in others like part of making yourself optional. As I talk about in the Work Lesser and More book, whether you want to exit or not, you can sell increasingly optional. And that does require bringing in other people, current team members, hiring new people. That’s part of why it’s work lesser and more. While rewarding your best team members, they’re going to be making more money, getting more responsibility and then ultimately you’re reframing your role. So for instance, you know Craig Newmark of Craigslist, he was briefly CEO of the company, realized he was not good at it. He hired a CEO and his new job became customer service representative because that’s what he loved doing, interacting with members and users and things like that in the agency world. Seer Interactive Will Reynolds, for instance, reframed his role from CEO to being the VP of Innovation he hired a CEO to run things for him and he’s able to do fun stuff, exploring AI and everything else. Just because you’re the owner does not mean you have to be the CEO. It’s kind of the default situation, but that doesn’t have to be. But you are going to have to pay someone to do the job. 

Drew McLellan [00:30:46]: 

Yeah, we’ve. We’re finding a lot of our clients are hiring a COO somebody. So a lot of agency owners love the visionary work. They love the exploration. They love, many of them love even the content creation and the sales and being the expert. But what they don’t love is the operational minutiae of the details of running the business. And so we’re seeing a huge increase in hiring of COOs to run the daily operations of the business. To your point of I can’t do it all, I don’t want to do it all. So I want to do the things I’m good at, the things that give me joy, that fuel me, as opposed to the things that drain me every day. And I can’t stand thinking about Monday because I’ve got to be in a project management meeting or an ops meeting. So we’re seeing what you’re, what you’re saying too, which is agency owners. And again, this gets back to our conversation earlier. You have to give yourself permission that you actually own the joint, and therefore you get to decide how you contribute to the whole understanding that the choices you make have consequences for sure. Right. So if you stay an account coordinator and you’re running around collecting assets and you’re not really doing any of the agency owner’s job, there are consequences to that. But if you want to be that visionary who’s exploring AI and speaking at conferences and meeting with the best clients and taking them out to dinner, but you don’t want to worry about if things are being done on time and on budget. You want someone else worrying about that, you could make that choice. Yeah, but I don’t know about you, but I find a lot of owners are sort of surprised that they get to choose that. 

Karl Sakas [00:32:29]: 

Yeah, I mean, EOS talks about the visionary and the integrator. I have a couplet that I’ve termed the starter and the finisher. One person getting things started could be sales, could be internal initiatives, could be recruiting, it could be overall vision. And then the finisher is following along, taking care of the details, turning those ideas into reality. It helps to recognize where you are. Are you more of a starter? Are you more of a finisher? And you could wear both hats in my work. I’m a starter within my business, but often I’m more of the operations kind of finisher type thing, helping clients turn their vision into reality and then delegating to their team. So it starts by recognizing what you’re good at, what you like doing, and then is there someone on your team who has the potential to help? I’ve helped a lot of clients with succession plans, and those tend to work more smoothly when you have the person to become, say, the COO or eventually maybe even CEO if they’re already on your team. Otherwise, no doubt going to add about 18 months to the process. For instance, a client wanted to step back, maybe sell, maybe not one of the option to do so. And we started working together about seven years ago. Two years in, you know, they had decided, yes, they want to step back. So we built a succession plan together. He had a key team member who’s a good match. And ultimately the plan, which was phased, was the team member went from account manager to eventually director of client services, VP president, and finally. And they just got promoted to CEO. That was not an overnight transition. And they flake out. But I had a client who was worried about telling their team member who is their head of client services, like, are they going to flake out if I tell them that I want them to move up and eventually, you know, we might sell? And I said, better that they flake out now rather than three years from now when you’re eager to sell and it’s much harder. 

Drew McLellan [00:34:28]: 

Yeah, we have the same conversation, which is plan A doesn’t always work out, but the quicker you test plan A, and as long as you have a plan B and C, it’s far better to have to shift plans three years out or five years out than it is 18 months before you want to be out the door for sure. 

Karl Sakas [00:34:48]: 

Exactly. I had a client who returned. We’d done some initial work together, and they were working on their own. They came back and they said, we might eventually want to sell, but here’s what we want to focus on now. And I said, let’s take the first call to focus on what you need to do now to lay the groundwork to sell. And I’m glad we did, because a year later they’re like, you know what, let’s accelerate it. They moved things further. They brought in the key team member to run things and grow their EBITDA to grow their valuation, and they are now about to go on the market. So planning ahead. To your comment about, ideally, you’re looking to plan a sale five years beforehand. Absolutely. I mean, the sooner the better. I came across a company here in North Carolina. It was a sad story. It was a staffing firm that had been around for 20 years. It was a profitable business. They recently had a record year. They were getting all these awards as a place to work, and they just shut down. And the article said that the founders husband and wife, the husband who is the CEO, said, yeah, I was hoping our kids would take over. They didn’t want to. And as I was looking to sell, everyone was expecting me to stay for two or three years. And I didn’t want to do that. I’m like, it is normal for the acquirer for you to expect to stay for two to three years. Maybe you can negotiate two instead of three or one instead of two. But like I was thinking, if only he had started the process several years. 

Drew McLellan [00:36:13]: 

Earlier, right when he still had enough gas in the tank to stick around. 

Karl Sakas [00:36:17]: 

Yeah. I mean, my estimate conservatively was that he walked away, he could have gotten an additional $3 million if he had planned ahead. 

Drew McLellan [00:36:27]: 

Yeah. Well. And you know, for some people, it’s not about the money. For, you know, we talk a lot about your agency needs to help you build wealth outside of the business while you still own the business. 

Karl Sakas [00:36:37]: 

Yeah. 

Drew McLellan [00:36:37]: 

So it may not be about money, but it is about legacy. It is about the employees and the longevity and giving them a great Runway to continue their career. It is about clients who’ve been with you a long time and have come to rely on you as a strategic partner. There’s so many reasons why, even if you’re thinking, well, you know what, When I’m done, I just want to close the door and be done with it. Even that, we find, takes a good 12 to 18 months to do respectfully and well. I believe that every agency owner has the right to write their final chapter. You get to decide how the story ends. So you sell it. You sell it internally, you sell it externally, you close the door, you lock the door, and you walk away. However that is for you. You know, your kids take it, your kids don’t take it, whatever. But all of them, if you want to do it with grace and you want to do it respectfully to all of the people that matter in your world, 12 to 18 months goes by in a blink. 

Karl Sakas [00:37:41]: 

Yeah. 

Drew McLellan [00:37:41]: 

And. And I don’t know about you, but we find that if you’ve done no planning, we’re talking two, three years at the soonest, that we can do it well and take Care of everybody the way that you really do want it to end. Right? 

Karl Sakas [00:37:55]: 

Well, yeah. I mean, think about the moving parts. You’ve got your employee and contract relationships, your client relationships. Maybe there’s a lease or other situation around. 

Drew McLellan [00:38:04]: 

Right, right. I was gonna say you’re contractually obligated to things. 

Karl Sakas [00:38:07]: 

Yeah. I mean, also I was at an agency that had had a sizable office, but as people started working remotely, it didn’t make sense to work out of a big, you know, loft style office anymore. And we still had like a year to go on the Spectrum business cable account. 

Drew McLellan [00:38:27]: 

Right. 

Karl Sakas [00:38:28]: 

Even the $500 an hour lawyers could not get us out of that account, which we didn’t need anymore. Right. The agency was moving to a coworking suite, didn’t need the huge office, already had the free Internet and yeah, I think so ultimately they just had to keep paying on that after, I think a few thousand dollars in legal bills too. 

Drew McLellan [00:38:50]: 

Right on top of the cable bill. So, I mean, I think at the end of the day, we find in our coaching work, so much of it is about really understanding the future state that you want. Whether that’s. I want an agency twice the size, I want an agency that’s twice as profitable, I want an agency half the size. I want to be out in three, like whatever the future state is, understanding what it is, and then having a plan, which again, many agency owners, they’re visionary. They, you know, they’re a leap and then look to see if there’s even a pool underneath them, let alone water in the pool. I get it. I totally get it. But you’re running a multimillion dollar business that impact lots of people’s lives. As you say, it’s contractors, it’s team members, it’s clients. You have a responsibility, I think, to have a plan. Right. And then also, also knowing. I don’t know about you, but we’ve yet to build a plan that plays out exactly the way it’s supposed to, the way we planned it. I mean, there’s always zigs and zags, but having a plan that you can follow and then sort of evolve over time, A, it gives you, you know, I go back to the very first thing we talked about, which is the idea of the month. It gives you some boundaries, some bumpers to sort of bounce ideas and go, does this really help me get to where I want to go? Maybe not. Right? So maybe, maybe we don’t need to do bring every book to life inside the agency because we know where we’re headed. We Have a pretty good plan and maybe one of every five ideas is like, oh, this would propel us in the right direction. But without that plan, I just think there’s a lot of splashing around in the water. 

Karl Sakas [00:40:35]: 

Yeah. I created an exit plan template to help clients and others. And, you know, it’s about thinking about what is your ideal future and also what do you want to be doing after you sell. Right to the sale and the wire transfer is in your account. But now what? You know, that can be a strange feeling. That’s why it’s important to get advice from people who’ve been there before, who’ve advised others who’ve been there before to be part of communities like the AMI peer groups. You don’t have to go it alone. The biggest mistake might be trying to do it by yourself when you’re not totally sure, but then just trying to muddle through. There’s an easier way. There are likely several easier ways. By leaving, handling things solo. 

Drew McLellan [00:41:25]: 

Yeah. We find that if an agency owner doesn’t have something they are as excited about as they were about starting the agency, it is really hard for them to walk out the door. They think they want it. They think they want that freedom. But when the freedom is nebulous and in a cloud and they’re like, I’m not sure what I’m going to do. You know, sometimes literally and figuratively, we’re under the desk, kind of peeling their fingers off the desk because it’s like, look, the buyer’s coming in. You got to go. And they’re like, but now what? So I agree with you. We have an exercise that we do too that’s like, what is the next chapter? And how can you get excited about it and how can you start to sample it while you still own the agency to kind of get a taste for it and go, a, this is terrible. I thought I was going to love it, but I hate it. Or be, oh, my gosh, I want to do this. I’m so hungry to do it. Which propels you to make better choices, to exit gracefully on the timeline that that matters to you. So I agree with you. I think, I think it’s critical that you have a next. A game plan and to your point, not to do it by yourself. 

Karl Sakas [00:42:28]: 

Exactly. I think for most people listening, if you’re an agency owner, your agency is likely your number one or maybe number two financial asset. What else is producing six figures in annual income plus, depending on your distributions, and could sell for a multimillion dollar price. But imagine that you were treating your retirement accounts or your brokerage accounts as casually as some agency owners. Do you need this to pay off? 

Drew McLellan [00:42:58]: 

You’ve worked too hard for it not to. Exactly. Yeah, yeah, yeah. This has been a great conversation. Thanks for being with us. I. I know you probably feel the same way I do. I feel it’s a privileged position for us to be able to come alongside agency owners and support them in getting everything that they deserve for all the risk and all the hard work and all the blood, sweat and tears and the sleepless nights. And it breaks my heart when they don’t have help and they don’t get the support that they. They could easily have. 

Karl Sakas [00:43:30]: 

Yeah. You know, the Calm the Chaos title came from a client coaching call where they’d been really stressed at the beginning. I helped triage things, acknowledge what they’re dealing with, work through some solutions. At the end, asked how they’re doing and the client said I had helped them calm the chaos. Made my day week and all that. 

Drew McLellan [00:43:49]: 

Yes. Why we do the work for sure. Hey, Karl, people want to learn more about the work you do. I know you’ve got some resources that you want to share with the audience. What’s the best way for them to track all that down? 

Karl Sakas [00:44:01]: 

I have a bitly link that’ll give you all kinds of resources. In particular a free chapter from the Calm the Chaos book. It’ll also send you to my website if you want to check out other things that’s available. Hundreds of free articles on agency growth and a wide range of other things. Plus if you want one on one or other help. Glad to chat. Here’s the link. Go to Bitly so bit ly all lowercase Karlbaba. That’s K A R L B A B A. That’s bit ly, Bit ly K A R L B A B A. 

Drew McLellan [00:44:39]: 

Beautiful. We will also include that in the show notes. If you guys are on the treadmill or in a place where you cannot write that down, we will make sure it’s in the show notes as well. So, Karl, thank you so much for being here and all the support you offer agencies. I know that we are aligned in many of the ways that we serve agencies and think about the world in which we both exist. So it’s a pleasure to talk to you again. Thanks for being with us. 

Karl Sakas [00:45:01]: 

Thanks, Drew. 

Drew McLellan [00:45:03]: 

All right, guys, some really great takeaways, I think, from this episode. But what I really want you to do after listening to this episode is I want you to look in the mirror and ask yourself in what ways am I making this harder than it needs to be? Because I think you guys work your tail off. I think it’s a hard, scary world sometimes to be an agency owner and there is no reason for you to add to that weight or to that concern or to that sense of loneliness. There’s just. It’s just not necessary. So I want you to ask yourself how, what am I doing to make it harder and what am I going to do to relieve that difficulty? Because it is all well within your control. There’s lots of resources and opportunities. There’s lots of ways for you to lean into the AMI community. Other communities find people who can be great resources for you. So don’t deprive yourself of that. Give yourself that gift of making it. It’s never going to be easy. I would never lie to you and tell you that. But you can make it easier. So there’s no reason to carry extra weight if you don’t have to. All right, before I let you go, of course, you know, I want to say thank you to our friends at White Label iq. They’ve been the presenting sponsor of the podcast and the summit, by the way, for many years. So head over to whitelabeliq.com ami and make sure you thank them for being a sponsor. They help us bring this show to you every week and they are an incredible resource. So they do white label design, dev and PPC for agencies all over the world. They’re born from an AMI agency. I’ve known them for 20 some years. Good, good human beings who understand the world in which you live. They understand how you have to price. They understand how quickly a client can get unhappy or upset and how to calm that fear. They understand all of it because they live it every single day as an agency and as an agency that serves agencies. So check them out, be good to them and thank them for being a sponsor. Okay? All right, with that, I’m going to let you go. I’ll be back next week with another guest like Karl to help you think a little differently about your agency. All right, see you then.