Episode 188:

From staffing challenges to constant client demands, agency life can be bumpy. Our industry is in a state of constant change and that’s not going to let up anytime soon. For some owners, that’s exhilarating and challenging. For others, it just makes them bone tired.

Right now, most agencies are enjoying healthy profits, lots of new business opportunities, and a very difficult hiring season. Our employee base is changing and many owners struggle to find and retain talent that will help them grow and strengthen the agency. Clients are demanding more on tighter timelines and budgets.

How do we thrive in this ever-shifting environment?

In this episode, I talk with someone who has seen it all – Nancy Hill. She is a veteran of big box agencies, former president and CEO of the 4As, and, more recently, has started her own consultancy, Media Sherpas. This broad range of experiences has given her important insights into the current climate – the challenges and opportunities we face every day, especially when it comes to staffing and client relationships.

What You Will Learn in this Episode:

  • How to think differently about your agency’s staffing challenges
  • How to get more creative with your benefits package so that you retain younger employees
  • How to establish mutually beneficial expectations with agency employees
  • Negotiating with clients about scope instead of lowering prices
  • Managing just-in-time staffing
  • Why independently owned agencies need to be nimble in their decision-making
  • How to boost your agency’s ability to say no
  • How to thrive in an environment of constant change
“We can’t compete on pay, and we’re going to lose younger workers if we don’t offer them something else they value.” – @nhhill Click To Tweet “It might sound shocking, but agency owners should consider encouraging their employees’ side hustle.” – @nhhill Click To Tweet “If you allow a client to dictate all the terms, that's how your relationship is going to be forever and ever.” – @nhhill Click To Tweet “This is the first generation of employees that have decided they are simply not going to adapt to us.” – @nhhill Click To Tweet “Having a model based on a fully staffed and loaded agency all the time doesn't work.” – @nhhill Click To Tweet

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Speaker 1:

If you’re going to take the risk of running an agency, shouldn’t you get the benefits too. Welcome to Agency Management Institute’s Build a Better Agency Podcast. Now in our third year of bringing you insights on how small to mid-sized agencies survive and thrive in today’s market. We’ll show you how to grow and scale your business, attract and retain the best talent, make more money and keep more of what you make. With 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McLellan.

Drew McLellan:

Hey everybody. Welcome to another episode of Build a Better Agency. Before I give you a little bit of a hint about what we’re going to be talking about today, want to remind you that every month we are giving away a free either a seat in one of our live workshops or a seat in one of our on demand workshops, and the way we’re doing that is anybody who leaves us a review for the podcast, wherever it is you may connect to the podcast, so iTunes or Stitcher or Google or anywhere else where you’re downloading the podcast and you have an account, if you will leave us a rating and review and then take a screenshot of it and then shoot it to me at [email protected], we are doing a drawing every month among those folks who have left us a review. So as you know, my goal is to get lots of reviews so lots of people can find us.

So that’s how we are incenting you to help us with that goal. So really appreciate it. I do read all of the reviews. I am grateful for your feedback and your comments. So it’s not just about a numbers game for me. I really do want to hear how we’re doing, how we are helping your agency, what topics you would like us to cover that maybe we haven’t, and you can tell me all of that in your review. And I promise that I personally will see it, and I am grateful. So thank you for that.

So let’s talk a little bit about the episode today. One of the truths of agency life is that the only constant in our space is change. And when I think about what agency life was like when I started my career 30 years ago, compared to what it is like today as an agency owner of 24 plus years, the reality is the change that we’re experiencing today absolutely crushes the kind of change we had when I started in my career in the early ’90s. And so you sort of think, “Oh, I’ve done this for a long time. Things will get easier. Things will get more steady. Things will get more static and less unpredictable.”

And the reality is that is just not the case for us in our business. And so I know a lot of you are struggling with trying to figure out what’s coming next. Many of you are wrestling the challenge of recruiting talent and keeping those talent for longer than a couple of years. So lots things that are really facing our agency that add to the challenge of serving our clients well, building a profitable business and really creating a culture and a team that we can count on for a long period of time.

And so my next guest is going to give us a really interesting perspective on agency life from a lens that not very many people have. So, let me tell you a little bit about her. My guest is Nancy Hill. And Nancy Hill from 2008 to 2017 was the president and CEO of AAAA’s. And so, as you all know AAAA’s, here in the states anyway, serves what I call the big box agencies and also some of the larger independent agencies, but really is built for large agencies. So Nancy has seen the agency landscape from that perspective for the last decade. She’s a veteran of agencies from across the country. She began her career at Doner in Baltimore in like 1983 and was there for quite a while. She was at Chiat Day and Hill Holliday, and some other sort of big brand agencies.

And then served as the president of AAAA’s for the 10 years. And now Nancy has stepped down from that position and is working as a consultant, working with independent agencies across the country. And so she’s seeing now the agency business from a whole new landscape. And I wanted to talk to her about what she’s seeing inside the agencies, how smaller agencies can really leverage some of the things that are really unique to them, and actually that can be something that gives you a leg up over if you’re going against bigger agencies, and just also what she sees coming down the pike for us as agency owners. So I’m excited about this conversation. I think it’s going to be really interesting and really it’s a privilege to have Nancy on the show because she has been studying the industry from her seat at the AAAA’s for the last decade. And obviously is a long time veteran of the business. So I’m anxious to get her perspective. All right. So Nancy, welcome to the podcast. I am super excited to talk to you today.

Nancy Hill:

Oh, I’m really excited to be here. Thank you for having me.

Drew McLellan:

So, you have an interesting vantage point because you spent so many years at the AAAA’s and now you’re dealing with more independent agencies, smaller agencies. So I know that the AAAA’s did a huge report on the talent issue. And certainly it’s a topic that we’re talking about in all of our peer groups and things like that. Let’s talk a little bit about the challenge that many agencies are facing today. And I’m curious to see if you’re finding it too, but the agencies that we work with, the number one challenge for them, the number one barrier to growth right now is that they cannot find the bodies to fill their open positions. Are you seeing that as well?

Nancy Hill:

I’m seeing it in every manner and size of agency. If you think that the big agencies are having an easier time, you’re sadly mistaken because they aren’t. RGA for instance will have 160 jobs open in the New York office at any given time. They just can’t fill them fast enough. My clients range from agencies here in Cleveland, where I am now to clients in New York and Los Angeles, and I’m hearing the same thing from them too. And it doesn’t matter what size you are. It doesn’t matter what market you’re in, and it doesn’t matter what title you’re looking for. There’s, I think a big myth that it’s just the data people that you can’t find, or the analysts that you can’t find, or the programmatic buyers, but that’s not true. They’re having trouble finding anybody and everybody.

Drew McLellan:

Yeah. I don’t mean this in a bad way, but even account executives. So where you would think there would be a lot of them out there in some of the positions that have been traditionally part of agencies for eons, even those positions agencies are struggling to fill?

Nancy Hill:

That’s true. But I think that as a result what’s happening is that people are starting to form other organizations that will help with some of this just-in-time hiring on the agency side, and I’ll come back to that in a second, and help with what people perceive as the work life balance issue. And one of the reasons why they don’t want to work at agencies anymore because they don’t want to work more than 40 or 50 hours a week, especially as you start talking about the younger generations coming in because they have side hustles. So, there’s a thing going on in the industry right now where everybody’s trying to correct that for themselves, whether the employee or the employer. And I think it’s going to take a couple of years for that to balance out.

Drew McLellan:

So, it’s interesting. So I have a lot of agency owners in my world that are, let’s call it in their 40s or north of 40 maybe, and they really struggle with this idea of the 40 hour work week because they remember what it was like for them when they broke into the business. Yeah, I think about my own career, it was not uncommon for me to work till eight or nine o’clock at night and be in the office and then go back on the weekends. And I understood that that was just A, sort of the price of admission that, that was how I proved that I really wanted the work and that I was ready to position myself as a leader, but B, because client demands don’t come in Monday through Friday nine to five and a deadline is a deadline and all that sort of stuff, so how do you help agency owners who have that mindset of, “Well, this is how it is. This is how I grew up.

This is the agency business?” How do you help them wrap their head around this, what one agency owner called the yabba dabba doo culture, which is, a nod back to The Flintstones, when the horn would blow and [inaudible 00:09:00] slide down the dinosaur’s nose, how do you help agency owners wrap their head around this?

Nancy Hill:

Well, you have to be willing to wrap their head around it for starters. I’m one of the things that I usually tell anybody who will listen to me is, “Listen, this is the first generation that’s not going to adapt to us. They’ve just decided they’re not going to. They watch their parents work their asses off. They don’t want to live that way. And they’ve come into the workforce with a mentality of you adapt to me, I will give you everything I’ve got when I’m here, this is how I work, this is when I work, and this is where I work. And as long as you can live with that, then you’re going to get the best out of me. But if you don’t give me that in return, I don’t want to work for you.” And they don’t take that same mentality that we did that said, this is what I have to do to get ahead. I know for me the rule of thumb was, you didn’t leave until after your boss left.

Drew McLellan:

Right.

Nancy Hill:

And if your boss left at eight or nine o’clock at night, you stayed until nine or ten o’clock at night. And you were there before your boss came in, in the morning. They don’t think that way, they don’t work that way. “This is how I work. This is the equipment I need to do my job. This is where I’m going to do it from.” Sometimes that’s in the office and sometimes it isn’t. And you either need to learn to adapt to that, or you’re going to continue to have a problem hiring.

Drew McLellan:

So let’s talk a little bit about the where, because I think not only are the hours a challenge, but for many agency owners the, I want to work from home, I want to live in a different city, whatever that may be, again, that’s not how they grew up in the business, and so they wrestle with that.

Nancy Hill:

I just had a conversation last week with an agency owner from Louisville, not a very big agency, and he’s really trying to come to grips with that right now, in terms of people that he thinks are really valuable employees who want to return to their home towns, which are not Louisville. And I think it’s a little easier in that instance when it’s a known entity, somebody who’s already worked for the agency for a year or two, and you know what their productivity is, you know what their intellectual capabilities are. It’s a little harder when you’re hiring somebody off the internet, for lack of a better way of doing it. But I think we have to learn to be more flexible and have lots of different arrangements in order to make this work, because it’s the only way that we’re going to get through this.

The reality is that we don’t pay what other possibilities pay. And it doesn’t matter what market you’re in. Again, I’ll use Cleveland because that’s where I am. I have clients who are losing people to Nestle, to Progressive, to the they’re building in-house capabilities, maybe not full service agencies inside, but they are building some capabilities and they pay more, especially at those levels of two to three years experience. So we have to be more creative as we always have been and be more appealing as an industry when we can’t compete on those salaries, because what will happen, and it happens over and over and over again is these kids will walk in after a year and a half to two years, and that’s really about the right number, 18 to 24 months and say, “I can’t afford to work for you anymore. I have student loans, I have to pay off.” And we’re going to lose them if we don’t give them something else.

Drew McLellan:

So let’s talk about that. So if we know that our work sometimes demands nontraditional hours, if we know that depending on the job they may or may not have to be in our office. So it kind of depends on the kind of work we do that where our clients are, if they’re local, that sort of thing. And we know we can’t pay what the client side can pay, or in some cases for my listeners, maybe what a larger agency would pay, then how do agencies compete today in the talent war? What can we do? What are you seeing out there that is creative in terms of attracting and keeping… Is one thing to find them, it’s another thing to keep them, right? So you invested two years into them and now they really get the client, they’ve built a relationship, they understand the agency ecosystem, and then they walk in the door as you’re saying, “Guess what? I can’t afford to stay here.” How do we prevent that?

Nancy Hill:

Well, I mean, there’s a couple of things, I don’t think that it matters what size agency you are. You’re offering benefits of some sort to your employees, because that’s just… I mean, unless I’m completely missing something, even if you’re a 10 to 25 person agency, you’re offering benefits. Most of these kids that are coming into the business are still on their parents’ insurance. So they’re not going to take your insurance anyway. They can’t afford to go into your 401K program because they can’t contribute. So the match that you’re saying that you’re providing means nothing to them. So what agencies are doing in getting creative for these kids is taking that pool of benefits that they would spend on an employee and looking at it differently and putting together packages, for instance, that help them to either commute or pay back their student loans, rather than saying to them, “We have a benefits package that provides dah, dah, dah, dah.” That they don’t care about.

At that stage of their life they don’t care. So, that’s one way of looking at it. Another way of looking at it is encouraging them to have their side hustle. When we got into this business, moonlighting was forbidden. You didn’t do it. I worked for Doner in Baltimore and in large granted independent agency, it was written into your not employment agreement, but your rules, no moonlighting. Well now, you can’t stop them from moonlighting. So let’s figure out a way to encourage them to have these side hustles. I use the example all the time of, when I started in the business if somebody asked me what I did, I would say, “I’m an account executive at an ad agency.”

Now you ask that same age person what they do and they’d say, “Well, I’m an account executive at an ad agency, and I write a fashion blog and I’m a DJ on the weekends and I’m really into photography, and if I get time, I’m going to go to dance classes.” That’s how they live their lives. We know this about that generation, that parents scheduled them that way. So rather than fight that, let’s encourage that and allow them a certain amount of their day to work on those side projects.

Drew McLellan:

So given all of that, I have my agency owner hat on, and I hear my owners whispering in my ear, “Great, but we’re missing deadlines. We’re not getting the work done in the way that we should. We’re dropping the ball with clients.” How do I marry the needs of the agency, which are a deadline, is a deadline, and if we said it was going to be delivered to a client by Friday morning, we have to get it to them by Friday morning, and this desire to create this new more friendly work environment?

Nancy Hill:

So deadlines are reality. There’s no question. And I think that most of the agencies that I talked to would recognize that you have to… Some of it is how you hire and the expectations that you set forth with the people as you’re bringing them in. All of these things that we’re offering you in terms of that kind of an environment come with a caveat. And the caveat is you have to deliver on our expectations of you. We treat you like an adult, but we have expectations that deadlines will be met and all of those things will happen. And if they don’t, then those things start to go away and it may not be the right fit for you. You still have to have some expectations that things are going to get done.

This is where I also think that we, as an industry have fallen down with middle management, if you will, in terms of training them to be good managers, and it’s their responsibility to make sure that the people who report to them are delivering on their deadlines and really managing that process. And I think as we’ve moved more into project work which I’m sure you’re seeing the same thing with-

Drew McLellan:

Oh, gosh yeah.

Nancy Hill:

… [crosstalk 00:17:05] work with, that we have to get better at managing the timelines, the scope, and really understanding how we’re delivering, but also how we’re getting paid. And that requires a certain amount of transparency with your employees in terms of, “Here’s this contract for client X, this is what their expectations of us are. This is how we get paid. This is how we don’t get paid. And you need to help us manage that process.” If we’re not transparent with them, then how can we ask them to live up to those expectations?

Drew McLellan:

Yeah. And I also think on the flip side, as the work does move to more project work and finite deadlines, we also have to have different conversations with clients.

Nancy Hill:

Yeah, definitely. And I think we have to get better at saying there’s so many things about scope that you can use to your advantage that I think we forget because we put ourselves on our back foot for so many years. So, when you’re negotiating, whether it’s with the CEO, the CMO or the procurement person, regardless of the size of the company, the argument is still the same. And they say, “Well, your price is just too much.” Rather than saying, “Okay, I’ll lower my price.” You go back to them and say, “Okay, then we need to change the scope.” Because in order to deliver what you’re asking for, this is the price. And when you start negotiating that way, instead of, “I’m just going to lower my price,” then the conversation starts to change.

The same holds true with the ongoing relationship in terms of being really good about… They’re professionals too. And going back to them and saying, “Listen, what you just asked us for is really out of scope. And it’s going to cause a lot of extra work. So unless we can renegotiate the scope, we’re going to have to say no.”

Drew McLellan:

Yeah. Well, and you know what? What I’m always talking to agency owners about is because you’re exactly right, we present them with a scope of work and they go, “Oh, $50,000. Yeah, I only have $40,000.” And nine times out of 10, the agency owner, or the account executive goes, “Okay, we’ll do it for $40,000.”

Nancy Hill:

Exactly.

Drew McLellan:

And now what we’ve said to that client, or that prospect is A, I have no integrity in my pricing. You should never accept the first price I give you. And I was trying to screw you-

Nancy Hill:

That’s exactly right.

Drew McLellan:

… and I can get it done for 40 in theory. Now it may be that we actually are getting it done and not making any money, but from their perspective, they’re like, “You were going to take that extra $10,000 from me, and clearly you didn’t need it to get the work done because you just capitulated down to $40,000.”

Nancy Hill:

That’s exactly right. And that’s why I think scope can actually be one of our best tools in negotiating if we use it the right way and think about it as a way of saying, “Well, if this is what you want done, it costs $50,000.” “Oh, I only have 40.” “I’m sorry. Well then we’ll have to knock these three things off that scope.”

Drew McLellan:

Right.

Nancy Hill:

That’s just, it’s a much better way of going back than it is to say, “Okay, I’ll drop my price.”

Drew McLellan:

Yeah. So, in one of our workshops, Money Matters, we teach this negotiating tactic all the time, we talk about it all the time. In terms of A, walking in with multiple options. So immediately you’re saying to the client, “Look, whether you have $75,000, $50,000 or $40,000, we can deliver some subset of what you want.” And B, “No matter how much money you have, we can do something for you, but it’s not the same something.”

Nancy Hill:

That’s exactly right. And guess which one they almost always pick?

Drew McLellan:

Yeah, the middle one [crosstalk 00:20:37].

Nancy Hill:

The middle one.

Drew McLellan:

Well, and that’s what I say to people, I’m like, “This is not an agency thing.” If you go to Starbucks and you stand there, you listen to how often someone says grande before they save the other two sizes which I can’t even remember.

Nancy Hill:

No, it’s true.

Drew McLellan:

Psycology, yeah.

Nancy Hill:

It is. I don’t know why we as agency people have thought that we could be any different with our pricing. The reality is we can price ourselves exactly the same way that everybody else does, and somebody will pick something in the middle. And I got to tell you almost no client will pick the bottom. Almost no client. So chances are, you’re either going to get the middle or the higher price. So at least start there.

But going back to the way that, that impacts the way we hire and talent and all of those things, it also, I think, starts to teach us that having a model that’s based on a fully loaded agency all the time doesn’t work because you can’t have extra bodies sitting around waiting for the new business thing to come in. It just doesn’t work that way.

And I think we have to get better at what I’m seeing as a new development, in full disclosure I’m involved with one of these companies, a new development in what I call just in time staffing, which is hiring on an as needed basis. So what really struck me was I read an article about Brian Grazer and Ron Howard and the way they run their studio many years ago, I think they have 20 full-time staffers or something like that. It’s 20, 25. It’s not big. And they staff up or staff down based on whatever project they’re taking on, because one project is going to look very different from another project. And the skillset required is also very different based on how much of it is script driven versus how much of it is special effects. And if we start to think about our businesses the same way, no two clients are the same, no two assignments are the same.

So while we might have a core staff of people, we also have to have access to people who can come in or come out depending on what project that we’re working on and have a pretty dependable, and this is the way Brian Grazer just described it so please pardon the throwback, but you have to have a really dependable Rolodex to do that. Then access to the right people. And he made it his job as his partnership with Ron Howard to know who to go to, to bring in whenever they needed to. And I think we have to start thinking about ourselves that way, because that’s the nature of the way our work is coming in.

Drew McLellan:

Yeah. I think most agencies today, it was interesting I was talking to an Australian agency on our last night and he was describing his model to many… And he said, “Well, we’re a little different. We’ve got 25 FTEs, and then we have probably another 20 [inaudible 00:23:25] or freelancers.” And I said, “Well, that’s the norm today.” That many agency owners are doing that. But I think the challenge is, and I suspect this is the project that you’re working on, I think the challenge is with the talent pool so depleted A, I’m having a hard time even building my core staff, but B when I need somebody who is to go back to your analogy, a special effects expert, I want to know that they have worked in an agency environment that they’re reliable and I need them today.

I don’t need them tomorrow or a week from now. And I think that’s the challenge that for a lot of agency owners is they may have a stable of freelancers, but the good ones have other clients and they may not be as accessible. So how are you thinking about, it sounds like in this project, how are you thinking about having more ready access to more qualified and vetted people who have the subject matter specialty expertise?

Nancy Hill:

So there are a couple of companies actually more than a couple, but two that I’m going to talk about right now that are really putting this together for not only agencies, but also for marketers, because it’s a talent pool that’s usable for both. One of them is a company based out of Atlanta called We Are Rosie. They already have over 1500 people in their database, 1500, and they’re only a year old, that you can go to them and say, “I have these job specs. I need three people next week to start on this project, it’s going to last six weeks.” And they will find those people for you. Because they’ve already vetted them. They’ve already worked with them most of the time, and they already have a track record with these people. They take care of paying them. They take care of all of it. So you don’t even have to worry about it.

There’s another one that’s based out in New York, that’s called Second Shift and this one has been focused primarily on women. But these are women who, for whatever reason likely dropped out of the workforce and are now coming back in, they have transferable skills. And just because they took some time off to raise their kids or whatever it is, doesn’t mean that they aren’t qualified to come back into your workforce. And they’re doing the same thing with vetting this group of women who can come back in and be full-time employees or part-time, or again, just in time. A lot of people are starting to put this together because this is the way this generation also wants to work. They want to work three months for you and then go take a month off and travel.

That’s just the nature of who they are. It’s funny, I was talking to somebody about this and it didn’t even occur to me, but when I was a young account person, there was a account supervisor or account director I worked for who she did this and she built her whole career on this in the Baltimore Washington area. She would work three to six months at an agency and then she’d take three to six months off and travel. She always got hired back because she was good at what she did. She just wanted to take that time… And I always thought that was so cool that she did that. I couldn’t do it myself because of my work ethic. But I think this is what we’re seeing with this generation, they also don’t necessarily want to go full time for the next 12 years.

Drew McLellan:

Yeah. I’m envisioning the listeners [inaudible 00:26:51] into a paper bag.

Nancy Hill:

I know.

Drew McLellan:

So take a deep breath. We will figure this out and better to be thinking about it now and having a backup plan because our reality and you’re already seeing it in your own agencies, is shifting and the employees that do want to work full time and that do appreciate your 401K and all of those sort of things, they’re aging.

Nancy Hill:

That’s right.

Drew McLellan:

And we’ve got to figure this out because otherwise we’re going to run out of those people and we need the fresh blood. We need the young ideas. We need the energy, we need the lower price point, all of that. So we’re going to have to find ways to work. I think many agency owners have attacked this from a… Every once in a while I find… And I hate to use the word millennial because it’s not always the millennials, but I find a millennial unicorn who actually wants to work hard. And it’s not really that these other people don’t want to work hard, they just want to work differently. And I think that’s where people are really struggling.

Nancy Hill:

That’s exactly right. And they want to work on their own timelines and their own guidelines if you will. But as long as you brought up the aging out thing, let’s go there too, because I also think that’s something that we as an industry are doing a disservice to ourselves. Because we tend to think that the “new young” are the digital natives and that’s who we need to have on staff. The reality is that we’re losing a lot of expertise by letting the older age group out of our doors and what I’ve been hearing from clients, and the conversations that I have is that part of the reason that they will go into a review is that they’re finding that they just don’t have the level of experience on the other side of the table.

So, it’s all well and good to say that we need to have younger, cheaper digital natives on staff, but you have to have a good balance because if you don’t have people who those younger digital natives can go to and say, “Hey, this is what I’m running up against, do you have any advice?” Then you’re really screwed because they’re going to just make a guess and it’s not going to be based on any experience. And I think we have to figure out how to have that balance and pay for it because yes, of course the older workers do cost more money and rightfully so they bring something with them, yeah.

Drew McLellan:

Right. Well, and I think for a lot of agencies, I hear a lot of agency owners say, “I’m tired of being a vendor, we want to be a partner.” You got to bring somebody to the table that can be a thinking partner to your client that understands business and the nuances of that client’s business and can have really strategic conversations if you don’t want to just sell stuff.

Nancy Hill:

That’s exactly right.

Drew McLellan:

[crosstalk 00:29:34] want to sell strategy and be a guide to your client as they’re thinking through what they’re facing in terms of their challenges, literally, or figuratively, you got to have a little gray hair.

Nancy Hill:

No, that’s absolutely right. And it’s also your best bet at getting more business from the clients that you already have.

Drew McLellan:

Absolutely.

Nancy Hill:

Because that person is going to be the one who’s going to have the sense of saying, “Oh, you have a business problem over here, that’s not necessarily part of our scope, but we might be able to help you with that. Let’s talk about that.” A younger person, isn’t going to necessarily identify that right off the bat.

Drew McLellan:

Absolutely right. That’s seasoned hard earned miles that allow you to lean into that kind of a conversation and say, “Let’s talk about your hiring challenges because you know what? We’re helping some other clients recruit and retain good talent, maybe we can help you there.” Or whatever the topic is.

Nancy Hill:

That’s exactly right. But it’s also a pushback that you can use in that conversation about scope because having experienced people who know what they’re doing will allow you to meet the timeline. So if you’re telling me that I have to lower my FTE cost or per head count cost, then it’s going to take us longer. That’s just a matter of the way it is, because experience brings somebody that’s going to be able to not shortcut, but shorthand.

Drew McLellan:

Be more efficient, right.

Nancy Hill:

Exactly.

Drew McLellan:

Yeah. I want to talk a little bit about, I know that you believe that agencies that are independently owned have some leverage points that we’re not really taking advantage of. So I want to talk about that. But first let’s take a quick break and when we come back, well, we’ll dig into that a little bit. Thanks for tuning in to Build a Better Agency. I just want to take a quick second and remind you that throughout the year AMI offers workshops for agency owners, agency leaders, and account executives. So if you head over to the AMI website and you check out under the training tab, you’re going to find a calendar of all of the workshops we offer throughout the year. We cover quite a wide variety of topics, everything from biz dev to creating a content machine for your agency, to making sure that you are running your business based on the best financial metrics and dashboards that you can.

We also have a workshop on agency owner management hacks, all the best practices that agency owners are using to run their businesses well and profitably. And of course, you’re always going to find our account executive bootcamp and our advanced [AE 00:32:03] bootcamp. So go ahead and check it out on the website. And hopefully one of those will meet a need for you and your agency, and we’ll see you soon. Let’s get back to the episode.

All right, we are back with Nancy Hill and we were talking about the evolution of the agency business. So I know you hold the position that agencies that are not a part of what I call a big box agency, but are independently owned and run, have some opportunities that they can really leverage in today’s marketplace. So let’s talk a little bit about what some of those are, because I know you also think that agencies aren’t really playing those to their full advantage.

Nancy Hill:

There are actually quite a few, so I’ll just start with where we were talking about staffing and conversations with clients about scope and how you staff their account. One of the things about independent agencies is that they’re free to make those decisions without having to go up the ladder to say, “I’m bringing in this person or that person.” They’re able to make a decision based on what’s right for the agency and what’s right for the client. And when you’re sitting across from a client, and you’re able to say to that client, “I get to make those decisions. I don’t have to run that up the ladder to anybody else.” That is like manna from heaven for the clients, because they’ve gotten really tired of feeling every decision that has to be made has to be run up to corporate headquarters.

The same thing holds true for the partners that you bring in to help you. When you are sitting across from a client and you as an independent agency can say hand over heart, “I’m bringing in the partners that I think are right to solve this problem, and not because they were part of the holding company that came together that sort of forced me to use what was available.” It’s a much different conversation than, “Wait a minute, who’s benefiting from that, and how does this all play out?” I think that the key criteria is that you, as an agency owner can say to your client that I’m making the best decision for both of us versus what’s going to be happy for the shareholders or what’s going to play well in Madison Avenue or Paris or wherever it is that they’re headquartered. It’s a much different conversation.

I even find that in my own business, I had a friend who runs a holding company agency and one of the offices and asked me if we could work together. And I said to her, “I would love to because I love you, and I think that would be a lot of fun, but here’s the thing, if we go through this whole process and we work out some recommendations, are you going to be able to implement them or are you going to have to get approval to do that?” And she had to think about it. And I said, “Because, listen, don’t waste your money paying me if you’re not going to be able to implement what we talk about.” It’s the same thing. When you’re an independent agency owner, you get to make those decisions and you get to look at your client, look them in the eye and say, “I made this decision because I think it’s what’s right for your business.”

Drew McLellan:

And you’re right. I think we probably don’t position ourselves that way as often as we could.

Nancy Hill:

You don’t have to put down the holding company agencies to do that. All you have to do is have an honest eye to eye conversation and say, “This is what I truly believe is right for you.”

Drew McLellan:

Yeah. So what are some other advantages? Because I think a lot of times the smaller agencies feel like they are constantly at a disadvantage, whether it’s in terms of resources or other things, but what are other things that they have in their toolkit that perhaps they’re not really leveraging the way they should?

Nancy Hill:

Well, I think you can actually, if you’re thinking about business the same way we were talking about Brian Grazer and Ron Howard, again, 20 to 25 people in that company, it’s not a huge company. If you think about your same… If you approach your business as an agency owner the same way and think about who you want to have in your Rolodex or your lifeboat is another way of looking at it, and you can say to a client, “I have those same resources. I can marshal those resources for you just as easily as any holding company can.” And by the way, many times the little, the sad fact is they can do it better. Because in the holding company, they’re forced to do it. In this situation they’re doing it because they enjoy working with each other, they know each other that way.

And it’s not by any dictate that they have to work together. So it’s a much different environment. And it goes also back to the talent thing that we were talking about earlier, that group of individuals that we’re bringing into agency world now, they’re used to collaborating. This is how they grew up. They do their homework that way for God’s sake. So, everybody’s used to working with other groups of people. And I think as independent agencies, you’re able to do that much better, much more successfully with a lot less friction because nobody’s going, “Wait, wait, I have a P&L I have to deal with over here.” It’s a different arrangement and a different mentality and I think clients as long as you can make sure that clients don’t feel like they have to manage that process, they feel like they’re being much better taken care of.

Drew McLellan:

Yeah. And I think the other advantage that makes is that you can acknowledge, “Look while we have a generalist subject matter expertise around this specific deliverable, we have a partner in place that this is what they do all day, every day. We’ve worked with them a million times. So I’m bringing you the best of class, but I’m bringing them to you in a cost-effective way, in a collaborative way, because I’ve had this relationship for a long time and I don’t have to have it all under one roof.”

Nancy Hill:

That’s exactly right. And then that brings up the other subject of when clients have multiple agencies, which is very common these days, it’s rare for a client to have one agency anymore. One of the other pieces of advice that I give ad nauseum probably I’m sure my clients are tired of hearing this, but I don’t care how many agencies a client has. You be the agency that plays nice in the sandbox, because-

Drew McLellan:

Absolutely.

Nancy Hill:

… if you’re the agency that plays nice in the sandbox, the client will appreciate that. They will never feel like they have to reprimand you. They never have to worry or treat you like the problem child, and you will be rewarded for that.

Drew McLellan:

Absolutely. So I give the exact same speech and what I say is, “Look, whoever plays nicest in the sandbox, whoever coordinates all the other kids, whoever makes sure everybody’s included and has all the information, that’s the one that the client likes. They don’t like when you throw another agency under the bus, because you want that piece of business.”

Nancy Hill:

That’s exactly right. And I just had this situation with one of my clients last year, where the lead creative agency, the account person in charge on that agency side of the business kept trying to throw this agency, which was a media agency under the bus over and over and over again, it was so blatant. And finally the client asked that agency to take her off the business because the clients saw it. So if you as an individual think you’re getting away with something you’re not.

Drew McLellan:

Right. And all you’re doing is making the client’s life more miserable.

Nancy Hill:

Exactly right.

Drew McLellan:

Yeah. So I think one of the challenges for agency owners today is that, I think the recession knock them on their rear ends. And I think they got very used to begging for work, just to stay alive. And I think they lost their swagger. They lost their confidence. And I know the agencies that have found a way to get that back to be… Like you were saying, to walk into procurement or look a client in the eye and saying, “Well, that’s out of scope.” Or, “No, we can’t do the $50,000 project for $40,000.” We’ve sort of lost our ability to manage and own the relationship, and I think to say no, when we should say no, so are you seeing that as well?

Nancy Hill:

I am. And I’ve said this for probably 30 years, but I used to tell young account people that the letters N and O form a word and that it’s a really important word. And then the second thing I would tell them is it’s also okay to say to a client, “I don’t know, but I’ll find out.” And don’t guess, but that’s a whole other conversation. The N and O confidence thing, I’ve seen it play itself out over and over and over again. Whether, it’s a client calling up and wanting you to pitch a piece of business with unreasonable spec demands or an unreasonable timeline, and you saying no, and the client’s saying, “Oh, really? You’re saying no.” And then when you start to say, “Why? Well, we can’t finish this pitch in three weeks. We’ve got another project for a current client.”

Every single time I’ve seen the client come back and say, “Well, what can we do to include you?” Because if they called you in the first place, they’re interested in you. So you don’t have to feel like you have to give everything in order to accommodate them, just because it’s a “piece of new business.” There’s ways of having a conversation that are professional that don’t make you sound like you’re being nasty or unreasonable, but allow you to have the confidence to do it on your own terms. And I think that’s the important part of this, because if you right out of the box, especially in a new business situation, allow a client to dictate all the terms, that’s how your relationship’s going to be forever and ever, and I don’t think we want that to happen. So I would say to agencies even at the very beginning you need to make sure that the parameters that the client is setting out with are parameters that you can live with. Because if they’re not, chances are you’re not going to like them as a client either.

Drew McLellan:

Right. Well, and I think you learn a lot about a prospect or even an existing client, when you do say no respectfully with the right sort of backup material, but how they respond to that tells you a lot about what they’re going to be like to deal with on a daily basis.

Nancy Hill:

That’s exactly right. And, again, I’ve seen it in my own life as an agency person, but also with the clients that I work with now, when you say no, it’s so surprises them, because they’ve just talked to five or six other agencies who said, “Yes, of course we’ll be there and we can be there on Tuesday with our full team.” And when you say, no, it’s like, “Wait, why are you saying no?” And I think that we forget that we’re allowed to, because we are business owners and we have a business to manage, and next Tuesday’s not convenient because one of my longtime clients has something that they need from us, and the team that I would like to bring to you is going to be involved with them. It’s not unreasonable.

Drew McLellan:

Yeah. Well, and in fact, I’ve also seen the word no. When an agency finally has had enough and they’ve had a challenging client and they in essence try and break up with that client, the more you say, “No, we can’t work together,” the more the client falls over backwards to try and be like, “Well, we can be better or I’ll move that person.” Or, “How can we fix that?” So that, again, it’s the confidence that makes someone say, “Well, I don’t want to give this up. What do I have to do to make this better?” And we often don’t put our clients in a position where they too have to show up and be good in the relationship.

Nancy Hill:

That’s exactly right. And most reasonable clients understand that they have a really big piece of this relationship and that it’s not just one sided. And the clients that don’t understand that quite honestly, get the work that they deserve because they’ve not put any effort into it themselves, and they’ve looked at it as simply, I’m buying widgets. But I would say to your point that it’s very important that we establish that confidence right from the very first phone call, because it just carries through the whole relationship if you don’t.

Drew McLellan:

Yeah. I think, to be a good agency person you have to understand that sometimes we are the servant leader and sometimes clients need stuff and maybe there’s even unreasonable and we understand why they need it. And we have to jump through that hoop, but that cannot be our everyday stance that we also sometimes have to lead that client.

Nancy Hill:

That’s exactly right.

Drew McLellan:

We’ve got to find the balance between both of those extremes and lean into each one them when the situation calls for it.

Nancy Hill:

When I was still operating as an account person, I always used to tell my clients, “Listen, you have to think of me like you’ve hired a personal trainer. You know what you need to do to get in shape, you know how you have to eat, you know how you have to exercise, you know what it is you need to do. And if you go out and hire a personal trainer, it’s because you need somebody that’s going to hold you accountable and hold a mirror up to your face, and every once in a while, I’ll say to you, no, you need to do five more.” And that’s you have me for representing my agency. We’re here as an outside perspective to help you get in shape the way that you need to get in shape. And otherwise you could do it yourself, but I don’t think you’re going to be happy with the results.

Drew McLellan:

Right, exactly. So I’m curious, where do you think we’re headed? If you had a crystal ball and you look out three to five years, how will agencies look the same and how will they look different?

Nancy Hill:

Well, I think one thing will always hold true for agencies, and it’s why I still love what I do and love being involved in this industry. It is the group of people that I believe to be some of the most creative and wise storytellers ever. And I think that because we can weave a story and we can weave a story in whatever platform it is that we choose to try to tell that story, whether that’s a user experience or a 30 second television spot, agency people are driven by being able to tell a story and move product if you will. And I don’t think that’s ever going to change because those are the people who are attracted to this business. They like to tell stories. But I think that what’s going to happen and it goes back to the way we staff and the way that we make up what an agency looks like, is changing and it’s changing pretty rapidly.

So I think if you come back three to five years, you’re probably going to still have some of the big agencies that are going to have full on staffs, just because I think that’s a very hard model for them to walk away from. But I think for the small and midsize independent agencies, you’re going to see much more of a staffing model that relies on staff up, staff down, depending on what project, and people are going to be okay with that. And by the way, we’ll stop having layoffs, because we won’t have had these people on full time. Having them expect that they’re going to have a job for the next five to six years. Because it’s not the way the world works anymore. And to a certain extent, I don’t think the world wants to work that way anymore.

So I do think that’s going to change. The good news is, as a business model that relies heavily on people, we’re in a much better place to be able to retrofit than somebody that relies heavily on infrastructure and mechanics and buildings and industrial size machines that you have to go out and buy. It’s a human capital that’s a little bit different and in some ways harder but in many ways easier to manage.

Drew McLellan:

And do you think that sort of that size up, size down model will be true for the folks who own the relationship and the account service department, as much as it is the doers, or do you think agencies will tend to have more of those in-house?

Nancy Hill:

I think you will… It’s funny. I think we’re going to have a resurgence in what an account person really is hired to do. And some of this may be just me waxing romantically on the old days. But my job as an account person was to know my client, understand my client’s business and be able to deliver the resources of the agency on behalf of my client. That was my job. That’s how I always saw my job. I made no mistake that I worked for the agency, but I also knew that it was my job to make sure that we were delivering the agency for the client’s business needs.

I don’t think that that has ever changed, but I do think that we devalued that group of individuals and what they were able to do on behalf of the agency, and consequently put ourselves in a bad position with many clients because we didn’t have those people who get it. I do think those people have to be on staff and permanent part of the agency. I don’t think that that’s something that you can… The clients get too crazy about turnover with those people. And I just don’t… And by the way, we’ve been doing that for the last 10 years. The turnover in account management has been horrible.

Drew McLellan:

Yeah. I think so, too. So, last question.

Nancy Hill:

Yes.

Drew McLellan:

If I’m a 55 year old agency owner and I want to do this for another 10 years, what do I have to do to keep up with the evolution of the business? What do I have to do to keep changing my mindset, my business model, the way we chase clients, all of that? How do I… Because I think a lot of times we look at our agency and say, “Well, everybody else has to change.” Or other outside factor has to change, but I’m not sure we always look in the mirror and go, “Oh, okay, I’ve already been doing this for 30 years of my career, but guess what? It’s evolution time for me too.”

Nancy Hill:

So the very first question I ask when I am talking to a new agency that wants to possibly work with me is, what do you want the legacy of this agency to be? Do you want when you decide to leave in 10 years to use your timeline that this agency is going to go on with either your name on the door or the current name on the door, but still thriving and surviving, or do you want to look back and basically say we had a good 30 five-year run? What do you want that legacy to be? And then you, and I need to start planning for how that’s going to move forward. The key is if you’re 55 and you’re going to stick around for the next 10 years, and you’re not learning, and you’re not evolving as a person in terms of modern workforces, modern agency techniques, all of those things… By the way, that doesn’t mean you have to be a user experience expert yourself, but you need to know what you don’t know, because that’s what clients are asking for, then you’re not going to make it those next 10 years.

Because by the time you get to 65, you’re going to have a really lagging agency, and it’s not going to be one that’s going to survive you once you walk out the door. Then I think you have to think about who that next layer of management is in terms of who’s going to help you get through the next 10 years and then take over for you, whether that’s an equity transfer or some other form of moving into that succession. It’s really important that you have that group of individuals and that it’s the right group of individuals who can help forward your thinking, but at the same time, help forward the thinking of the entire agency. So, I mean, there’s a lot of things that I think you can be doing when you’re at that stage, but the last thing you can do is be complacent.

Drew McLellan:

Absolutely. Yeah, it’s interesting. I was talking to a group of agency owners the other day, and I said, “I’m seeing this huge sort of shift in dichotomy and agency owners and either they’re super weary or they’re super energized, and it’s not by age.” Some of my most energized agency owner clients are 70 and some of the top most weary are 35. And it really does boil down to how do you approach the fact that our industry is in constant change and perpetual motion. And if that energizes you and excites you and you do want to keep learning, then that’s how you show up at work. But if you’re like, “Oh my God, I’ve been doing this for 25 years, when does it just stop? When do I get to just tread water for a while?” The reality is that’s not our world.

Nancy Hill:

That’s right. And I think that unfortunately there was a period of time let’s say from the ’90s until the dot com period, where we could be somewhat complacent because the things didn’t change that much. The media was the same. We knew what a media plan was going to look like. My career was built mostly working with tech clients so I never was able to do that because tech just changed too fast. But I do know when I got to an agency in New York and I was talking to one of my peers who ran a packaged goods account, I said, “So what are you working on?” And he said, “We’re working on five-year plans.” And I looked at him and I was like, “I don’t even know what a five day plan is, let alone a five-year plan.”

But I think we got complacent for a long period of time. And so for some people it’s like, “I want to go back to that.” Or for some people, “I always thought I was going to get to this place where I got to do that and now I’m not allowed to do that.” Well, that’s right. Things are moving really fast. So if you’re not energized by this and you want to survive, you better bring in people who are energized by this because it’s not going to change any time soon.

Drew McLellan:

Yeah, I think that’s so true. This has been fascinating. Thank you so much for coming on the show and sharing your expertise. I think lots of really important takeaways, lots of things that people really need to think about and wrap their head around and decide if they can wrap their heart around it. I think we’re at a time where a lot of agency owners have to decide, “Is this still what I want to do because it’s different than what I signed up for?”

Nancy Hill:

That’s very true.

Drew McLellan:

So this has been a great conversation. Thank you so much for being on the show.

Nancy Hill:

Well, thank you for having me anytime.

Drew McLellan:

If folks want to learn more about you and about your business and how you’re working with independent agencies today, where’s the best place for them to go?

Nancy Hill:

The best place to go is LinkedIn, and I’m pretty easy to find there just, Nancy Hill and AAAA’s will get you there or Nancy Hill and Media Sherpas, which is the name of my consultancy.

Drew McLellan:

Okay. Well, we’ll include our links to both of those, your LinkedIn and your business with the show notes. So folks, if you’re looking for Nancy and you can’t find her through the Google, just head over to the show notes, and you’ll be able to find her.

Nancy Hill:

Great.

Drew McLellan:

All right. Awesome.

Nancy Hill:

Thank you.

Drew McLellan:

All right, guys, you bet, thank you. This wraps up another episode of Build a Better Agency. If your brain isn’t a little bit exploding after this hour, I’m not sure what state you’re in because we talked about a lot of things and a lot of change. And honestly a lot of things that are challenging for us today, this idea that the younger employees are not coming into the business with the same mindset that we did. The fact that we’ve got to find a balance of experience and talent and digital natives and strategic talent inside our shops and this whole idea that… For many of you, you’re already wrapping your head around, which is the idea that everybody doesn’t have to be an FTE and you don’t have to have all that talent in house.

And there is value to being able to spin the Rolodex if you will, and find the exact right person for a specific project or a specific client. But what it means for all of us is, we have to have a vision of where we’re going and we have to know what are the next steps that we have to take to move us in that direction. So hopefully you took a lot from this episode that you can bring into your leadership team. These are topics by the way that you should be talking about it with other agency owners, whoever your board of advisors is, this is big heady stuff. And I want you thinking about it and planning for it so that the agency continues to move in the direction that you want it to move.

All right. I will be back next week with another guest, but remember too, we also are offering the AMI assessment. So here’s what I’m hoping you’ll do. Go to agencymanagementinstitute.com/assessment, and it takes you about six or seven minutes to fill out and we will help you diagnose where there are some trouble spots in your agency. You’ll get the results right away. You’ll see it on the screen and then you also get it by email. And then what we’re also going to do is we’re aggregating people’s responses. So we’ll get back to you and show you how you’re showing up compared to other agencies, your size and in the same scores that you have, so would love for you to do that. It’s absolutely free. We just want to help you sort of think about your business more strategically, and this is one of the tools that we’re doing. In the meantime I am around, if you need me [email protected], you can head over to the website and check out what we’ve got going on there, and I’ll be back next week with another guest to get you thinking a little differently about your business. Talk to you soon.

Speaker 4:

That’s all for this episode of AM’s Build a Better Agency Podcast. Be sure to visit agencymanagementinstitute.com to learn more about our workshops, online courses, and other ways we serve small to mid-sized agencies. Don’t forget to subscribe today so you don’t miss an episode.