Episode 325

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In response to the changes brought about by the pandemic, many agency owners have turned to fear-based decision-making. Employee turnover and demands coupled with an erratic market and global uncertainty can make things feel out of control. Trying to steer an agency with a vision requires decision-making that might put you at odds with your team so it might feel wise to placate rather than push. But it’s not.

In this solocast, we’re going to take a hard look at the fear-based leadership that has come to plague many of us during the challenges of the last few years. I’m going to explain why the fear won’t change the outcome, a couple of universal truths about what it means to run an agency without this fear, the level of decision-making that needs to return to the forefront, and why it’s so important to embrace once again the joys of being an agency owner.

There’s no doubt that we live in uncertain, confusing, and scary times but we cannot let these challenges define us as leaders. It’s my hope that this conversation will inspire you to march into 2022 with a renewed sense of peace and purpose.

A big thank you to our podcast’s presenting sponsor, White Label IQ. They’re an amazing resource for agencies who want to outsource their design, dev, or PPC work at wholesale prices. Check out their special offer (10 free hours!) for podcast listeners here.

Fear-based Leadership

What You Will Learn in This Episode:

  • Why many agencies are currently run based on fear
  • Why fear-based decision making won’t change the outcome
  • The universal truths of not running an agency based on fear
  • Three levels of decision making
  • The need to embrace again the joy of owning an agency
“We have got to get to the point where we stop running our agencies based on fear.” @DrewMcLellan Click To Tweet “All the things you’re doing out of fear actually isn’t changing the outcome for you.” @DrewMcLellan Click To Tweet “We need to stop responding to the crazy. We need to be calm inside the storm.” @DrewMcLellan Click To Tweet “It’s our job to have a vision for where we’re taking the agency and to get the agency there, whatever that is.” @DrewMcLellan Click To Tweet “When we don’t live our truth, when we don’t speak our heart, when we don’t talk about the things that we actually want or that matters to us, it gets corrosive in a hurry.” @DrewMcLellan Click To Tweet “I want 2022 to be the year that fear isn’t a factor.” @DrewMcLellan Click To Tweet It’s time to stop running your agency based in fear. It’s time to find gratitude and abundance in the world, and maybe a little kindness too. Go forth and build the agency you want to build.” @DrewMcLellan Click To Tweet

Ways to contact Drew McLellan:

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About the Author: Drew McLellan

For 30+ years, Drew McLellan has been in the advertising industry. He started his career at Y&R, worked in boutique-sized agencies, and then started his own (which he still owns and runs) agency in 1995. Additionally, Drew owns and leads the Agency Management Institute, which advises hundreds of small to mid-sized agencies on how to grow their agency and its profitability through agency owner peer groups, consulting, coaching, workshops, and more.

  • Leading agency owner peer groups
  • Offering workshops for agency 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 over 250+ agencies every year, Drew 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 several books, including Sell With Authority (2020) and been featured in The New York Times, Forbes, Entrepreneur Magazine, and Fortune Small Business. The Wall Street Journal called his blog “One of 10 blogs every entrepreneur should read.”

Speaker 1:

It doesn’t matter what kind of an agency you run, traditional, digital, media buying, web dev, PR, whatever your focus, you still need to run a profitable business. The Build a Better Agency Podcast presented by White Label IQ will show you how to make more money and keep more of what you made. Let us help you build an agency that is sustainable, scalable and, if you want down the road, sellable. Bringing his 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McLellan.

Drew McLellan:

Hey, everybody. Drew McLellan here from Agency Management Institute. Welcome back to another episode of Build a Better Agency. Thanks for listening. If you’re listening to this in real time, happy holidays to you. Hopefully, as the year winds down, things went well for you and that you are gearing up for a strong 2022. If you’re listening to this down the road, still welcome. Glad to have you here.

This is one of my solo casts. So if you are new to the show, what that means is, normally, I have a guest on the show every week, but this week, every fifth episode, I am all by myself, just talking to you about something that typically I’ve been talking to a lot of agency owners about or it’s something that’s really on my mind. I was going to talk about an aspect of succession planning, the financial aspect of that, because I think a lot of, as we’re doing more and more succession work with agencies who want to sell, agency owners who want to sell to somebody inside their shop. What we’re finding is that they haven’t managed their finances in a way that that really works out to their advantage as well as it should.

So that was what I was going to talk about, but honestly, this week and last week, I’ve been having so many conversations of a different tenor that I’m going to put a pin in that topic and I’ll get to it in the next solo cast. But I want to talk to you about something different. Before I do that, a couple things. So we need to take care of a couple sort of pieces of housekeeping. Number one, at every solo cast, we give away a free seat in one of our workshops. So you can either have a seat in one of our live workshops, Money Matters, Running Your Agency for Growth and Profit, some of the others.

One that we have coming up in February, which I think is going to be killer, we’ve never done this workshop before, it’s called Rethink Innovation. And the guest instructor for that workshop is a woman named Carla Johnson, who wrote a book by that same title, called Rethink Innovation, and she’s brilliant. And what the book is all about is this idea, this understanding that, when we were kids, all of us were very innovative. We were super creative and we could create, on the fly, big ideas and big visions. But as we go through school and as we get a little older, that ability to innovate gets contained and compressed. And by the time we’re adults, we only tap into a small portion of what we’re capable of doing. And so Carla’s done all this research and she’s figured out a way to reinvigorate our ability to innovate.

So what does that mean for agencies? Well, in a lot of cases, when I talk to you, you’ll talk about the fact that everyone inside your shop can’t come up with big ideas for clients, which is what they pay us to do. And so, when I met Carla and I interviewed her for the podcast, I knew I wanted her to do a workshop and teach us this framework that she has created, based on her research. And so anyway, Carla’s going to be teaching that framework and teaching all of us how to reinvigorate our innovation, our ability to think big on the fly, on demand. And my hope is that you’ll come to the workshop and then you’ll take this framework back to your shop and teach everybody because Carla’s premise is everybody should be able to do this. Everyone can do this. We just have to reawaken it in ourselves and in our team so that you, as the agency owner, aren’t feeling all this pressure to be the only one who innovates.

So that’s the premise of the workshop. It is February 17th and 18th in Orlando, Florida, and you can learn more about it and register on the AMI website. Just go to agencymanagementinstitute.com and, under the how we help tab, you’ll see the workshops listed there and the Rethink Innovation is right there. So I’m super excited about this workshop. And we’re holding it on Disney property because I can’t think of a more innovative place, but we’re going to actually use Disney property and some of the truths about that place to create some fun inside the workshop. So it’s going to be very hands-on, very interactive, and I think you’re going to love it. So anyway, February 17th than 18th, check it out and we would love to have you with us.

The other piece of housekeeping that I want to take care of is that, at every solo cast, we give away the free seat. That’s what I started to talk about and then I got off track with because I’m so excited about this workshop in February. But anyway, so somebody is going to win a free seat at a workshop and here’s how they get in the drawing for that and here’s how you can get in the drawing, as well. All you have to do is go to wherever you get the podcast, so Apple Podcast, Google, iHeart, Spotify, wherever you go to listen to the podcast, anywhere where you can leave a rating and review. All we need to you to do is leave a rating and review.

And then what I want you to do is I want you to take a screenshot of what you said. Even if you gave us one star, it’s okay, you can still go in the drawing. I would love to know why you gave us one star, but what I’m saying is you don’t have to give us a five-star review to be qualified for the drawing. Anyone who leaves a review or rating can do that. So take a screenshot of it and then send it to me by email. So send it to [email protected]. And the reason for that is I read every review, but you all have usernames and your usernames do not give me any idea who you are, what agency you work for, any of that. Typically, it’s your name, or it’s your pet’s name, or it’s your favorite sports team, or something like that. That is not helpful for me in ascertaining who you are. So that’s why I need you to email me the screenshot of it.

Once you do that, you are in the drawing until you win. So sooner or later, lady luck is going to be on your side. And this month, lady luck is on Jason [Mudd’s 00:06:14] side. So Jason left a review in 2019. So he’s been in the drawing for quite awhile and today is his lucky day. So Jason, I’ll reach out to you and communicate with you that you are the winner. Maybe you’ll go to the February workshop because it’s going to be a good one.

Anyway, so that takes care of that. So if you’re not in the drawing, by all means, take the three minutes and leave a rating and review. First of all, I would appreciate if you did that, anyway, even if you don’t want to be in the drawing. It’s how everyone finds us is, the more ratings and reviews we get, the more easy we are to find in search and all the other things inside the podcast format. And obviously, it looks good if we have a good overall rating. So I would be most grateful, if you find the podcast useful, for you to go and leave a rating and review. And if you’re going to do that, you might as well enter the drawing, as well.

All right. Let’s talk a little bit about what I want to talk about. So again, I was going to talk about finances and I will save that for the next solo cast. And the reason I’m saving it is because I can’t tell you … I mean, I just cannot even come up with a number to tell you how many times I’ve had the conversation I want to have with you with an agency owner or leader over the last couple months.

So here’s the deal. The last few years have been brutal. Everybody came out of the gate in 2020 thinking it was going to be the big year. Many of you were geared up. You’d been planting some great seeds in terms of new business, you had a good staff, and then COVID hit and knocked everybody to their knees. And really, through most of 2020 and all of 2021, it feels like every time we turn around or every time we turn a corner and we think we’re sort of past whatever the scary thing of the moment is, there’s a new scary thing.

Right now, so many of you are struggling. You have ample biz dev opportunities, but you’re struggling to staff, struggling to keep the staff that you have that are coming and asking you for outrageous sums of money or they’re being offered crazy … I can’t tell you how many times an agency owner has called me and said, “My top …” fill in the blank, “My director of account service, my creative director, whatever, they got offered double the salary that I’m paying them,” by somebody on the client side or somebody at a university or in some institution that can afford to pay far more than agencies could ever afford to pay.

So right now, you’re struggling with keeping your people and you’re also struggling with finding good people and recruiting them and getting them to come on board. So it just feels like, for the last two years, we’ve been, A, running around like chickens with our heads cut off and, B, we’ve been running scared. And I feel like, if you’ve ever watched a kid’s soccer game, a little kid’s soccer game, the ball gets on the field and then, wherever the ball goes, all the little kids go chasing after the ball. And then wherever the ball gets kicked next, all the little kids go chasing after the ball. And it feels like that’s kind of how agencies and agency owners are feeling these days, is that you’re constantly just running from thing, to thing, to thing. And a lot of times, what we’re running to or what we’re running from is based in fear.

And so that’s the conversation I’ve been having with agency owners lately, is we’ve got to get to the point where we stop running our agencies based on fear. Every day, I’m talking to someone who’s saying, “I’m giving everyone raises because, if I don’t, I’m afraid they’re going to leave,” or, “One of my employees came in and demanded that they be able to work 100% remote. And even though that’s not the way I want the workplace to be, I gave in because I’m afraid. I’m afraid, I’m afraid, I’m afraid.”

Here’s the deal. I get it. I mean, I really do get it. I get that there’s so much uncertainty and things feel heavy and hard. Now, I’ll also tell you, for some of you, it’s not been heavy and hard. And there are agencies inside the AMI ecosystem that are crushing it right now. And yes, they’re struggling to find talent, like everybody is, but other than that, they’re kind of printing money right now. And so their big fear, of course, is, like many of you, “I don’t have the people to service all of this opportunity.”

So I know what you’re going to say to me is, “Drew, tell me why those agencies are being super successful and we’re not.” There’s a couple things. Number one, I hate to sound like the broken record that I’m sure you think I am, but they’re niched in some way. So they’re a media buying and planning agency, or they are a crisis communication PR shop, or they only work with pharma clients of a certain size or with a certain deliverable, or they are PPC and paid search company and that’s all they do every day, all day.

So many agencies are doing very well, financially and from a biz dev perspective, but even they are running their agency from a place of fear, which is, “I’m anticipating these things are going to happen and, therefore, I want to counterbalance them before they do. And so I’m going to make decisions or I’m going to do things, based on that fear.” A couple weeks ago, you heard that episode about vigilance and making sure that we are constantly on alert. So I’m not suggesting that we don’t stay on alert because I completely agree with everything that we talked about in that episode, but I think the decisions we’re making, we’re not making them because we think they’re the right thing for our business, we’re making them because we’re afraid.

I’ll give you a great example. It’s how all of you are dealing with where people work. Do they work in the office five days a week, do we have a hybrid schedule, do we let everybody work remote, or do we let everybody decide and we have 17 people all doing something different or all working in the office different days? That’s not what you want. Now, you may want to have a completely virtual agency, which is fine. You may want to have the hybrid schedule, which is fine. You may want to have everybody in the office five days a week, which is fine, but what you’re doing isn’t in alignment with what you actually want. What you’re doing is from a fear position of, “I’m afraid, if I put my foot down and say,” for example, “everybody’s got to be in the office five days a week, that I’m going to lose some people.”

I got an email the other day from somebody who said, “We’re really struggling with trying to figure out, are we going to be a hybrid agency? Are we going to go completely virtual or remote? Because we’re afraid that people are going to leave. And in fact, we had a creative director that was getting ready to go and it was because he believed that we were all going to mandate coming back to the office and he was unwilling to come back to work in the office anymore.” And so that sort of comment from an employee or that sort of prevailing attitude under the tone of your agency makes you, as an agency owner or leader, freak out.

And I totally get it, but here’s the deal. You’ve given people raises and they’ve left, anyway. You’ve switched to a hybrid schedule and they’ve left, anyway. You have upped the ante in terms of benefits and they have left, anyway. You’ve given out bonuses and they left, anyway. So all the things that you’re doing out of fear actually isn’t changing the outcome for you.

So I’ll have agency owners say to me, “Well, if we do this,” whatever this is, “half my staff will leave.” Well, that means half your staff is going to leave, anyway, because it’s not about the one thing. It’s about a collection of things and they’re already nine tenths of the way to collecting all the things.

And so we have to recognize that we’re making all of these decisions to keep these people happy. And at the end of the day, we still can’t keep them happy and they still leave us because somebody offered them twice their salary. And honestly, how can you blame them? I’m hearing about some of the offers that are happening right now and I’m like, “But who wouldn’t take that job?”

Now, granted, they’re going to take it for six months to a year and the very first time that company has a rough quarter, they’re going to find out how quickly the marketing department gets scuttled or, in a larger agency, how easily they do layoffs because, every time the numbers tell them to, they do that. Why? Because, in many cases, they have shareholders who demand it.

So we know that some of those decisions that our employees are making as they are leaving us are probably not the right decisions or the best decisions. And we know they might come back. We can’t, we can’t, can’t, can’t run our agency based on that fear factor. We have to be willing to step into running the agency the way that we know it should be run, running the agency the way we want to run the agency.

One of the privileges of owning the place is that the business should be structured in a way that serves you, but that also is what you believe in. So if you believe everybody can be equally productive when they’re virtual,, and you want to go virtual or you did go virtual, more power to you. I’m not suggesting that one of the answers is the right answer. What I’m suggesting is that we are like those little kids on the soccer field, running from thing, to thing, to thing, just chasing the ball. And every time there’s a different answer, we chase the ball into another corner of the court and say, or the field rather, and say, “Okay, now I’m over here. I guess we will do hybrid. I guess we won’t do hybrid. I guess we’re going to do virtual all the time,” whatever it is, number one, we’re not running our business, our business is running us.

Number two, the business we’re now running or the business that’s running us is not the business that we’re happy about. Many of you are miserable with the way your agency is being run right now, in terms of where you work and when you work and how you work. But you think that you’re doing it as a sacrifice to get people to stay or to attract new people into the agency. And I’m here to tell you, that’s not it. That’s not why they’re staying or why they’re going. And in fact, even when you give them everything that they want, a subset of them still goes. So if that’s the case, if they’re leaving us anyway, if their loyalty is that tenuous, then why in the world wouldn’t we do what we know is right for the agency and right for us?

Now, right for the agency literally is going to run the gamut. And I’m using the where do people work example because it’s a painful one right now for many of you, but it easily could be the salary, or a raise issue, or it could be a everybody asking for bonuses, or whatever it may be, or the crazy … I had somebody the other day, they had an employee who had no experience whatsoever, no agency experience, no internship, no anything, and walked in and, because they looked at a salary survey online, they expected to start at $75 grand and this was in a smaller market. So there’s crazy all around us right now. The difference is we have to stop responding to the crazy. We need to be the calm inside the storm.

And that doesn’t mean that there’s not stormy weather around us and it doesn’t mean we’re not going to pay the consequence for some of that stormy weather, including people not liking what we decide and leaving, but that just leaves you room to attract someone who actually does like the way you’re running the agency. Again, whether it’s hybrid or work from home or all in the office, doesn’t really matter in this example, but we have to stop letting the agency run us. We have to stop evolving the agency that we loved into something we don’t love.

And most important, remember the whole purpose of the business is to serve you as an individual and your family, if you want a share in that. So this really should be something that makes you happy, that you like, that benefits you, and not just financially. There are a lot of ways to make money. So it’s not really even about the money. It’s really about what … COVID kind of wiped the slate clean and said to all of us, “Okay, you can decide, you can decide.” And instead, we’ve been letting fear decide. We have been allowing what we know is the right decision, whether that’s leaning into Selling With Authority, the book that Steven and I wrote together about how do you niche, and what do you do with that niche, and how do you create content that attracts people to you.

So maybe it’s that. Maybe it’s going from brick and mortar and selling your building and going completely virtual, but it’s your decision and you haven’t been making it. Now, you might be the one person that actually isn’t living in fear, that’s making great decisions, that’s really driving their agency the way they want them to, but you would be in the minority because most agency owners right now are letting fear and worry push them around and drive the decisions that they make, as owners.

And the most alarming thing of all is, no matter what you do, no matter what you acquiesce, no matter what you give as an additional benefit, some of them are going to leave, anyway. So you might as well run the shop that you want to run and own it. And what I mean by own it, I’m talking about not only do you literally own it, but I want you to own why you’re doing what you’re doing. “You know what, you guys? I think this is the right decision. You know what? This matters to me. You know what? This is how I think we work best.” Whatever decision it’s around, it’s okay for you to actually step up and be the leader.

Here’s one of the things … And this is pre-COVID, as well. So many of us grew up in the agency space and we were used to our social circle being born out of our workplace. I know I was, back in the day. I was always the one who was like, “Hey, you guys, let’s create mini golf courses and putt-putt all through the office. Everybody create a hole in the office and we’re going to go get those toddler golf clubs and golf balls, those giant golf balls, and we’re going to play putt-putt for an afternoon.” “Hey, you guys, that’s a great idea. Let’s do that.”

That was me. I was the party planner. I was the connector. I was the, “Hey, let’s go out for a drink.” And I loved that about working in the agency, until I owned my own agency and then, all of a sudden, when I said things like, “Hey, let’s create a putt-putt arena or a putt-putt course in the office,” or, “Hey, let’s go out for a drink afterwards,” people looked at me and said, “Okay,” but they weren’t saying okay because it sounded fun, they were saying okay because I was the boss, so they thought they had to.

So if we’re going to stop running our agency based in fear and we’re going to run it, instead, based on what’s best for the agency, I think there are a couple of universal truths that we have to accept. Number one, we can’t be the fun guy or gal in the office anymore. It’s not that we’re not fun, but it just comes off different when you own the place. And so I don’t care how much fun you are, I don’t care what kind of party you suggest, I don’t care how much liquor you buy, they still remember that you own the place. And so you’re going to lose that position, if that was who you were back when you didn’t own your agency.

So there isn’t them versus us that exists inside every agency. And it has nothing to do with how they feel about us. They may love us to death, but they are also very aware that we’re the boss and that we could fire them. And so there’s just this … I don’t know. It’s almost like a slight film that goes between us and our employees and it just keeps them from getting completely engaged with us on a personal side and maybe it keeps us from engaging at that level, too, but the truth is we can’t be their buddy anymore. We can’t take that role. So that’s number one.

So one of the things that we’re afraid of is that, if we make a decision, everyone’s going to get mad at us and quit. That’s our job. Our job is to actually make decisions for the best of the agency. And sometimes, you’re absolutely right, sometimes somebody’s not going to like your decision and they may not like you. And ultimately, they may start to look for another job. That may be true sometimes. In most cases, I don’t think it is. In most cases, people will accept the shift or the change, especially if they’re participating in actually making the change. They may not have made the decision, but they are participating in getting us there.

And speaking of decisions, here’s the other universal truth that we have to know. Actually, you know what? I’m going to take a break and then I’ll come back and tell you the second universal truth. I never remember to take a break during my solo casts. I’m kind of proud of myself right now. So I’ll be right back.

Hey there. I am really sorry to interrupt, but I want to tell you about a brand new workshop that we’re offering on February 17th and 18th. It is going to be taught by Carla Johnson, international speaker, bestselling author, and it’s all built around her new book, Rethink Innovation. And the whole idea is, how do you build your agency’s idea machine? Let’s face it, the one thing that we have got to be good at is generating big, bold ideas for clients.

And Carla is going to teach us why we struggle with that today, how to reignite it, not only in us because, in many agencies, you, the leader, are the one who has all the big ideas, but not everybody else can do it. That can be changed. She’s going to teach us a scalable framework that we can take back to our agencies and teach everyone how to generate more reliable, effective, big, big ideas. And it’s going to be a great workshop. It’s going to be very hands-on. I’m super excited about it and you are going to love Carla. On the website, head over to how we help. Under workshops, you can see Rethink Innovation. And by all means, sign up quick because I think it’s going to sell out. All right? Let’s get back to the show.

All right. We were talking about the universal truths that allow us to make decisions based in fear rather than the decisions that are right for the agency. The other universal truth is, because many of us came up through the ranks, and because we want to be popular and liked, and because it’s good for our heart and our ego to have our employees like us and stay, the other mistake we make is that we allow too many democratic decisions to be made.

So you’ve probably heard me talk about the three levels of decision making. Level three is, “Hey, you guys, I’m going to ask you a question and everybody’s vote counts.” So we’re actually going to, literally, raise hands and vote around this issue and then we are going to make a decision based on the number of votes. It’s like a democracy; everybody votes and we just count the votes. And that might be something like, when are we going to have the company holiday party or should we get this swag or this kind of swag with the agency stuff on it? There’s clearly decisions that can be made universally in a popularity vote.

But honestly, those decisions are few and far between and we use level three decision making way too often. We allow a gaggle of people to weigh in on every decision we make. And we just can’t run the business that way. You can do that when you’re four or five people for awhile, but as you continue to grow, you can’t do that anymore. You’ve got to, A, be able to talk about and justify your decision, defend your decision if you must and, B, you have to be excited about it. And you have to make those decisions.

So level two decision is, “Hey, you guys, I want to get everybody’s input on something and then I’m going to make a decision and I’ll let you know,” and I decided by Wednesday. So that’s like a, “We got a 27% hike in our health insurance, but obviously, to change carriers, we have to put everyone through the pain of completing the census and all of that again. Is it worth it? Based on the rough estimates of the other companies we’d be considering, we’d save a few hundred dollars a month. Is it worth it to go through the hassle? So again, you’d get everyone’s opinion and then you would make a decision. So that’s a level two decision.

And the level one decision, frankly, is the one that we exercise the least. And I’m not saying I want you to be a dictator, I’m not saying that I want you to be the decision maker about all things, but what I am saying is, if it’s important to you, then it should be a level one decision. And a level one decision is simply, “Hey, you guys, I’ve made a decision. Let me tell you what it is.” So again, those universal truths, we’ve tried it. We’ve run our agency based on fear. We’ve given the raises, we’v