The Six Leadership Domains Every Agency Needs with Drew McLellan

Danyel McLellan:

It doesn’t matter what kind of agency you run— traditional, digital, media buying, web dev, PR, or brand— whatever your focus, you still need to run a profitable business. The Build a Better Agency podcast presented by White Label IQ will expose you to the best practices that drive growth, client and employee retention, and profitability.

Bringing his 25+ 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. This episode is one of my solo casts, just you and me for the next 45 minutes or so. And I’m coming to you with something that I’ve been working on kind of quietly in the background for a long time. Several months I’ve been kind of working on this. And I’m kind of ready to start to talk to you about it. So I’m excited to dig into this with you today.

But before I do that, a couple quick things. First, of course, I want to thank our friends at White Label IQ. They are the presenting sponsor of this podcast, and this podcast is all about leadership, which I’ll get into in a minute. But one of the things that I really value about what White Label does for their agency partners is they allow you to stay focused on the leadership level of your organization. They are the extra hands for you. They will help you build out AI automations. They’ll help you build out CRMs. They will help you with web design, regular design, and also paid media so that you can stay focused on the strategy and sort of running of your agency. So they’re a great partner for a lot of agencies. If you want to learn more about them and how they help you stay focused on the things that matter and using your skill set to their highest calling, going, go ahead and head over to whitelabeliq.com/ami to learn more about them. And if nothing else, just give them a shout out. Let them know that you appreciate this podcast and that you’re grateful that they make it possible for us to keep bringing it to you.

The other thing I want to do is, of course, every time we do a solo cast, we give away a free ticket to one of our workshops or the Build a Better Agency Summit every May. And here’s what you have to do to get in the drawing. It’s super simple. Go to wherever you download this podcast and leave a rating and review. So whether it’s Apple Podcasts or it’s Spotify or iHeart, wherever it is, just leave the rating and review and then take a screenshot. And the reason I need you to take a screenshot is you’re going to email it to me. So you’re going to send it to [email protected]. And the reason I need you to do that is because even though we read all the reviews, so we scour the internet reading those reviews because it helps us get better. But the reason I need you to send me your review is because a lot of times you have a username that I don’t know. You know, Catlover109 doesn’t tell me who you are, what agency you work for, and it sure doesn’t give me your email address so I can let you know when you’ve won. So take the screenshot, send it to me at my email address, and your name goes in the hat until you get pulled out.

So for some of you, it might take a month. For others, it might take a few years, but sooner or later, odds are for 3 minutes worth of work, you’re gonna win a $2,000 ticket to an AMI event. So this month’s winner is Joseph Newfield from the agency Most Likely To. So congratulations, Joseph. Thank you for the review. So Joseph left his review in January of this year and he’s winning in July, August of this year. So not that long to wait for a $2,000 prize. So Joseph, I’ll reach out to you and give you some details on how you claim that prize. And thank you very much for being a loyal listener.

Hey, just a heads up, when I mapped out this episode, it is data rich and I think it’s going to be a little longer But when I deliver it than my normal solo cast. So a couple things to think about. Number one, I broke it out into like 6 or 7 segments. So there are some really clean places for you to stop if you need to take a break. There’s also, as always, a break kind of in the middle that you could take a break. So don’t freak out if you look at the length of this and think, oh my God, I have to listen to Drew talk for how many ever minutes it is. I think it’s going to be about 90 minutes rather than my normal 60. Pace yourself.

But a lot of data. So also, this may be one where you want to download the transcript to get some of that data if you’re going to talk to your team about it. So either way, I didn’t want to shortchange you. This is really important, and I didn’t want to stay on the surface. I want to dig a little deeper. And to do that, I had a choice of either breaking it up into 2 solo casts, which means you have to wait another 5 weeks for the back half, or going a little longer. And I decided that— Yeah, there was more value in putting it all together in one episode, even if it was a little longer than usual. So just a heads up and a warning about that.

Okay. All right.

Let’s talk about what I wanna talk about today. So most of the leadership problems inside your organization right now are not skill problems. So I literally have been working on this for about 3 months, kind of building a report that in fact is a giant catalog of leadership skills, the skills that your Leaders, the people around that leadership table, and you, if you’re the agency owner, need to have. But stay with me because if there’s one thing I want you to take from this next 45 minutes, I want it to be this. Most of the leaders are not stuck because they lack a technique. They are stuck because of a mindset, a relationship, or a system that no one has really named and articulated out loud for them. That’s the thing that’s been kind of rattling around in my head for months, and that is what I want to talk about today.

So a few of you know that I’ve been building out a leadership readiness assessment and hopefully a companion course for AMI, not for owners, but for the people right underneath you. Although I will tell you that everything we’re going to talk about in this solo cast applies to you, agency owner, as well. But I’m working on some tools that, one of the things that Danielle and I know when we do valuations for agencies is that one of the most critical factors for maximizing the valuation of your agency is that you have an intact, powerful leadership team actually running your business day in and day out. That is huge for a buyer. And so when we come into agencies, a lot of times we see people around a table that you call your leadership team, but they’re not really behaving like leaders. Part of it is skills. They need some more skills and we’re gonna work on that. But part of it is not the skillset. It really is the sort of the framework in which they work and the mindset in which they work. So I wanna build an assessment for you agency owners to help evaluate your leaders and help them grow both in their skillset and in their mindset. So that’s what we’re working for. So the layer underneath you, your department heads, your senior account people, your creative directors, your ops leaders, the people who ultimately are going to be the reason that your agency either scales past you or stalls behind you, and ultimately how that’s going to affect if you decide to go to market with your agency and to build that assessment.

Honestly, we didn’t want to just make stuff up, so we went deep into research. We looked at the best practices from Gallup, from DDI, From Deloitte, from McKinsey. We looked at Amy Edmondson’s psychological safety work out of Harvard. We even looked at competitors’ work—the Four A’s Foundation Talent Report. We looked to Parakito and Iota Finance on the money side, and of course our own work that we have been doing for 20 years of actually watching what works and what actually breaks inside independent agencies that are anywhere between a million and fifteen million dollars in.

What came out on the other side is a framework of six leadership domains we’re calling them, plus a seventh that actually runs through the other six that really describe what your leaders have to actually be good at—not what looks good on a LinkedIn post. What has to be true inside the four walls of your agency on a Tuesday afternoon when a client is angry and one of the team members is crying and your PNL is a little soft. This is real-world stuff we’re talking about.

So today what I want to do in this solo cast is I want to walk you through those 6 domains. Well, actually, I’m going to walk you through all 7, but we’re going to walk through the 6, and then I’m going to talk to you about the one that weaves through all of them. I want to tell you what the research says, what we see in the field, and where we think most agency owners, honestly, including Danielle and I sometimes, have gotten it wrong. And I want to be honest with you about which parts are the hardest, because honestly, this is not all easy. So to do my job, I want to, I want to call this out. I want to be honest with you, and I want to help you start to weave this into the way you think about your agency and your team members.

Okay. So before I hand you the 6 domains, I want to level set why this matters right now. Because I know some of you are listening at 1.5 speed while you’re driving to the office or you’re going to pick up one of the kids. I’m guessing that you’re wondering if this is a someday when I have time episode, or is this a, hey, maybe this is why my last 2 months have been miserable episode. I promise you it is the second one. This is mission critical. I don’t care if you’re 3 people. I don’t care if you’re 300 people. Every agency has a leadership mindset, and every agency calls on their team members to show up as leaders, whether they have the title or not. And if you’re not cultivating an environment where that can happen, and you’re not actually coaching and mentoring to that happening better, then your agency is going to get stuck. There’s no ifs, ands, or buts about it. It’s not a maybe. It is a truth in an independent agency your size. Again, 3 people to 300 people. The leaders sitting one rung below you are the single biggest lever that you have and probably the most underinvested asset in your business.

So Gallup in 2026 did workplace research. What that research said was 70% of your team’s engagement Is attributable to their manager, not the CEO, not the mission statement, not if you have a ping pong table in your office, but their direct manager, the person who runs their one-on-one, the person who decides whether a mistake gets treated as a learning moment or a career-limiting event. 70%. Hear that number. That is a big number.

And then here’s a harder number. Global manager engagement itself has dropped to 22% in 2025 and 2026, which means the very people who account for most of your team’s engagement are themselves the least engaged group in the workforce right now. DDI did a study that found trust in frontline managers fell from 46% to 29% in just 2 years. That is not a slow decline. That’s a collapse.

Now layer on top of that what’s happening in our industry specifically. Average client tenure has been compressing for a decade from historical highs of 7+ years down to 2 or 3 years. AI is changing what execution looks like at every single desk in your agency. Talent’s being poached. And your best senior people, the ones that you were hoping would grow into maybe a partner track or an acquisition track, those are exactly the people that DDI study says are the most likely to leave right now. Departure intent amongst high potential individual contributors jumped from 13% in 2020 to 21% in 2024. And up to 32% in 2026.

So here’s the thing. Your leadership layer is not a nice-to-have development project. It is the ballgame for you. You can’t afford to keep losing those people or have those— or worse, have those people stay and be disengaged, which means the people underneath them are not getting what they need and they’re going to leave. If your account directors can’t have a scope conversation, you’re bleeding profit. If your creative director can’t give hard and candid feedback, you are training your best people in a way that means that they are not going to survive and they’re gonna leave. And if your ops leader can’t build a workflow that survives a crazy busy month, you are burning out the very team you cannot afford to lose.

And most of us, and I put myself squarely in this, most of us promoted the best individual performer and then acted surprised when they weren’t a great leader. Well, you know what? That’s on us. That’s because we didn’t teach them how to be a great leader. Being a great department head, being a great individual contributor is very different than being a great leader. A great leader shows up for the whole. A great leader thinks about the agency, not just themselves and not just their department. Right? They show up different. And if we don’t teach them how to show up different, both through modeling and mentoring, then the odds are not great that they’re going to get there.

I’ve said this before on this podcast, that hiring too fast is one of the biggest mistakes that most agencies make. Promoting into leadership without a plan is the second biggest mistake most agency owners make. And the reason is that the traits that make someone great at their craft are not the traits that make them great at leading. They’re not the same thing in creative services. They’re sometimes inversely correlated. The person most attached to their expertise is often the least prepared to give it up for the coaching, communication, and commercial thinking that the leadership role actually requires.

Okay, so that’s the stage I’m studying. 6 domains. So let me walk you through them and why they’re so important.

Domain 1 is self-leadership and self-awareness, and I put it first for a very specific reason. The research is unbelievably clear that this is the domain that unlocks every other domain. If your leader cannot see themselves clearly, None of the rest of this sticks. And by the way, this applies to you as well. If you have a turnover problem, if you have a performance problem and you’re the agency owner, as we’re talking through these domains, I want you to be thinking about not only who on your team checks these boxes or doesn’t, but also where you could be a better leader, because honestly, all of us can improve in this area.

So let me tell you what self-awareness actually looks like in your agency. It is not a personality assessment on the wall. It is not an Enneagram number in someone’s email signature. Self-awareness is what happens when a client meeting goes sideways and your account director’s first thought is, what could I have done differently? Instead of what is wrong with that client, or what’s wrong with the creative team and the product that they gave me to show that client. That reflex, the reflex to look at yourself first. is the whole game.

Carol Dweck did a, a study. It’s a growth mindset, and her work, which is now decades old, keeps holding up in the research because it names something true about how humans learn. Leaders who default to defensiveness under pressure will not grow. I wanna say that again. Leaders who default to defensiveness under pressure will not grow, not because they’re bad people, but because the door is closed. And when the door is closed, no amount of coaching can get inside.

The mandatory behaviors in this domain, according to the research and our own observations in doing this for over 20 years, is that they demonstrate a growth mindset under pressure. Everybody has a growth mindset when they’re reading a book or they’re watching a webinar, and there’s no pressure to look at yourself critically and see what you could have done better. So this is about a growth mindset under pressure. They manage their emotional reactivity. They don’t take business friction personally, and they don’t make everyone around them manage their moods. I want to say that sentence again because I promise you, you have someone in your agency that, you know, people have to tiptoe around Based on their mood. They do not make everyone around them manage their moods. They actively seek feedback about their leadership and not just their craft. They’ve made the identity shift from, I do the work, to, I lead the people who do the work. And in smaller agencies, they’re wearing both hats. They are leading the work and sometimes they’re doing the work. It still means that the part of them that is the leader— maybe it’s a team leader, maybe it’s part of being an agency leadership— is that they are thinking at a higher level and they treat their own development as a leadership responsibility, not a personal luxury. They know they need to keep getting better and they want to keep getting better, and they are willing to stay open So they keep getting better.

So that last one is one I want you to sit on for a minute because I meet a lot of newly promoted leaders who quietly believe that reading a book on their own time or joining a peer group is somehow selfish, that they shouldn’t invest in themselves to keep becoming a better leader, like they’re stealing hours from the agency to work on themselves. And I want to say this clearly, but as gently as I know how. If you do not invest in you, agency owner, agency leader, agency department head, if you do not invest in you, you cannot invest in them. So agency owner, if you’re not modeling that you’re continuing to learn, that you are coming to peer group meetings, that you are attending workshops, That you are going to conferences, whatever it, however you choose to learn that you’re not reading books, you’re not listening to podcasts. You want to demonstrate that if you want to show them that it is important that they invest in themselves, because if you don’t keep investing in yourself, you cannot invest in others. It’s not selfish. It’s actually the job. It’s a big part of the job.

So here’s the blind spot on this domain, and it’s a big one. Self-assessment on self-awareness is notoriously unreliable. So do I really understand how self-aware I am? Can I assess that accurately? The research is brutal on this point. Leaders who genuinely believe that they are self-aware are frequently the ones when they get 360 feedback, have the biggest gaps, which is why any real assessment on this domain has to include peer input and direct report input. And I know a lot of you avoid that because honestly, you’re afraid of what you’re gonna hear. And that fear should be a signal to you that you know what you’re gonna hear is not all sunshine and roses, and that there are things that you need to learn. You cannot grade yourself on how the room feels when you walk into it.

As I was preparing for this podcast, there are certain sentences that just popped out at me as I was writing this to think about and just kind of stuck with me and have kind of been following me around for a couple weeks. And this is one of those sentences: you cannot grade yourself on how the room feels when you walk into it. Only the room can tell you that. Right?

So if you only take one action from this segment, the first of the 6, It is this: in the next 30 days, ask 2 people who work for you the question, what is the one thing I do that makes your job harder that you don’t think that I know about? What is the one thing that I do that makes your job harder that you think I don’t know about? And then the key to this is don’t be defensive. Don’t close that door. Do not defend. Do not explain. Don’t fix it in the meeting. Just say thank you. Jot it down. Sit with it for some time. This is the entry-level move for Domain 1.

All right, all right. Let’s talk about Domain 2: People, Leadership, and Coaching. Domain 2 is the domain where you are going to win or lose the retention war in your agency, and it’s the domain that most most reflects our AMI core value of leading with love.

So let me start with a hard truth. Most agency owners think that they’re better. Most, not only agency owners, agency owners and agency leaders think they’re better at this than they are. The research says that the highest performing teams are the teams with the highest psychological safety and high standards. So not only is it safe, but I am being held accountable. Accountability. If, if there is one thing that is missing in most agencies, it’s genuine accountability that people are held accountable for the expectations that their role requires of them. So again, highest performing teams are the teams with high psychological safety and high standards of accountability. Not one or the other. Both. Amy Edmondson has been saying this for 20 years, and it— yet it is still the piece that we see agency leaders get wrong most often.

Here’s what we see in the field. We see 2 failure modes, and they tend to sort by background. Failure mode number one, the leaders who came up through client service or creative, Warm, well-liked, great at making the team feel safe, and they have quietly normalized underperformance because hard conversations feel mean. That’s safety without standards. Over time, your high performers leave because they’re tired of carrying the weight of the other people who are not pulling their weight. They resent that they have to work harder Because you’re allowing somebody who is a mid mediocre performer stay without course correction.

Failure mode number two is leaders who came up through ops or finance, great at holding the line on numbers and processes, and they’ve built a team that hits every deadline and hates going to work. That’s standards without safety. Over time, your best talent leaves because no one can bring their whole brain to work when they’re worried about getting their head bitten off. Neither of those is leadership. Both are sort of cosplay. We’re pretending to lead.

The mandatory behaviors in this domain, they create psychological safety, real safety, not the fake kind where the boss says there are no bad ideas, or I’m an— I have an open door, and then kind of rolls their eyes at the next bad idea. They give specific, timely, honest feedback, and they do it within a week of the moment. They don’t wait for the annual review. They coach rather than solve, meaning when a team member walks in with a problem, they don’t immediately grab a marker and draw the solution on the whiteboard. I know you know the answer. It’s not about getting them the answer as quickly as possible. It is about helping them learn how to find the answer without you. Right? That requires coaching. The great leaders ask questions. They hold people accountable with care because accountability without relationship is discipline, and accountability with relationship is development. They develop people beyond their current role.

And, and this is the one that separates the pros from the amateurs, they make hard people decisions. For many of you, this is your Achilles heel. They do not allow a toxic high performer. So they’re great at their job, but everybody has to dance around their moods or tolerate them always showing up late or their ego. They don’t allow a toxic high performer or a chronic underperformer or a wrong person for the seat sit in place for 18 months. Out of discomfort. They are willing to step up and make the hard people decisions.

Every one of us, myself included, every one of us have had times in our career when we let a wrong seat situation or an underperformer situation or a toxic high performer situation drag on for a year or longer than it should have. Every time, and I mean every time, the person that we were protecting, when we finally have the courage to have the conversation we should have had, every time they tell you that they knew. They knew that it wasn’t right. They knew they were underperforming. They knew they were disappointing. Or their ego goes the other way, that closed door, and it’s all your fault. But either way, You and they are relieved when you finally have the conversation. And in the meantime, now you have repair to do because you’ve let their team members work around them, cover up for them. And honestly, that resentment that they have, that by the way, they never articulate, that resentment that they have is why other people are leaving. But they’re mad at us. They’re disappointed in us because we are not doing the right thing.

Yeah, It’s not kind. It’s not leading with love. Avoidance is just cruelty in slow motion, and we have all been guilty of it. I’ve said it on this show before, and I will say it again. If you are avoiding a people conversation and you are, you are really not being nice to them, you’re being nice to yourself because you’re avoiding an uncomfortable conversation, but you’re being nice to yourself at their expense. And most importantly, at your team’s expense.

The blind spot on this domain is the— I coach, meaning I give advice and I call it coaching, right? The truth is, in most cases, you’re giving unsolicited advice and calling it coaching. Real coaching is asking questions. Real coaching is silence long enough that the other person figures out their own answer. Real coaching is uncomfortable at first because for many of you, you kind of have to sit on your hands, right? You can’t just give them the answer. You can’t quickly just sort of shortcut so that they move on and get outta your office or get outta your Zoom.

I want you to test yourself this week in your next one-on-one. Count how many times you offered a solution versus how many times you asked a question. that helped the other person find the solution. If the ratio isn’t at least 2 questions for every 1 piece of advice, you’re not coaching, you’re just being the boss.

All right, let’s talk about domain number 3, commercial and strategic thinking. This is where I’m gonna lose some of you, but I want you to stay with me. Here’s the honest truth about this domain. Your account leaders and creative leaders have almost never been trained on the economics of the business they are leading. Members, this is why we created the Agency Math video series for you so you could teach them agency math. We hire smart, ambitious people. We promote them because they’re good with clients or they’re good with concepts, and we hand them budget responsibility or KPIs that measure things like margin, but we never teach them what any of the numbers actually mean. And more important, we never teach them what they do every single day to influence those numbers. I’ve said this a million times. Every day your employees make a ton of decisions that either make you money or lose you money, but they have no idea what they are and they don’t know which ones do which. Why? Because we have not taught them. And then we get mad because they don’t protect the profit or they make a decision that costs you money.

The research is really clear on this. IOTA Finance’s 2026 benchmarks show that a well-run agency targets 50% or better delivery margin and 15 to 25% net profit. As you know, our gold standard is 55-25-20. So 55% of your AGI is spent on loaded salaries. 25% on overhead, and it leaves you 20% for profit. Out of all of the agencies in the world, very, very few agencies hit that percentage. We know because we get the data that AMI agencies, agencies in our peer groups and inside coaching programs and things like that, are much more likely to hit that 20% profit. And the reason why is because we make them measure it and share it with us. Over and over and over again. And what you measure matters. So not only do you need to be measuring it as an agency owner, as an agency leader, but you need to be teaching your whole team to measure it so that it matters to everyone.

The same study also found, and this one’s going to sting a little, that agencies leak 15 to 30% of potential profit. Through scope creep, poor time tracking, and misaligned pricing. I will say that I, we in the field see that all of the time. All of you would be driving amazing vehicles and going on amazing vacations. Your people would be getting fantastic bonuses if you could solve these problems, and you don’t solve them because you’re not all focused on them and you haven’t taught your team How to measure them, and most importantly, how their behaviors influence that measurement. Every single one of those leaks— scope creep, poor time tracking, and misaligned pricing— is a leadership behavior, not a system failure, a leadership behavior.

So in a $3.5 million agency, the difference between 18% net margin and 25% net margin Is roughly $210,000 a year. That’s a senior hire. That’s a bonus pool. That’s your kid going to a private college and you having the money for it. And that gap is almost always sitting inside 3 or 4 scope conversations that never happened. Because you’re not measuring it. You don’t even know to have the conversation, or worse, you are measuring it. You just don’t have the courage to have the conversation.

The mandatory behaviors in this domain is that your leaders must understand agency economics, not necessarily just in a spreadsheet sense, but in a, they can answer the question, why did that project feel so busy but lose money sense? You need to be able to have those conversations and it can’t just be you, can’t just be your CFO. It has to be all of leadership has to know that you were measuring against it and Know how to answer that question. We can translate— if we’re a good leader, we can translate vague client direction into clear priorities and scope before the team starts working. We protect scope with confidence and skill, meaning that there is practice language for the that’s a change order conversation, and we don’t use the fear of losing a client. As the reason to duck having those hard conversations. Every one of you has opted not to address a money situation with a client because you’re afraid you’re going to lose that client. So instead, you just keep working for free. You keep just doing the work even though you’re not making any profit on it. That makes no sense at all.

You need to prioritize the highest value work. And your entire team needs to know how to manage client relationships through a commercial lens. Your agency is a for-profit business, and anybody in your agency who doesn’t understand that and doesn’t understand what that means in real terms is a liability to your agency. They cannot lead properly. But oftentimes the very people you’re asking to help you lead the agency don’t understand those metrics. And more importantly, they don’t understand what actions, what choices make us unprofitable. They don’t understand how they or their team, people who report to them, are doing things that sink the ship, right? So we’ve gotta be surfacing results and strategic thinking before the renewal conversation. We’ve gotta always be thinking from that commercial lens.

So let’s talk a little bit about the scope thing, because it’s the one that’s been broken in our industry for as long as I’ve been in it, and probably way before I got my first job. The reason your account team says yes to everything is not because they’re weak. It’s because everything in their professional training has told them that saying yes is how you build a great client relationship. They believe that making the client happy is their job. And really their job is helping their client hit their KPIs, hitting their goals, accomplishing what that client is being held accountable to accomplish. They’ve been rewarded. Your team has been for their whole year for being responsive, being flexible, being a great partner. And no one has taught them the difference between being a partner And being a yes man or being a doormat. That is the problem right now in our industry—is that we don’t know how or when to draw the line.

Should we try and create great relationships with clients? Absolutely. Should we be someone who is trying to cultivate a strong relationship, be a trusted partner? Absolutely. Does that mean we have to give away the farm? Absolutely not. So here’s the frame that. We should be talking about with our leaders. A relationship that is built on unlimited yeses is not a partnership. It’s a dependency. And we often feel dependent, especially if you’ve got a gorilla client. We often feel dependent on a client and give them more than what they’re paying for. Should we always give a little more? Absolutely. Should we always give away the farm? Absolutely not. And that dependency erodes your agency’s capacity to do its best work for every client. If you overspend on one, what that means is you don’t have as many resources for everybody else, people who are willing to pay you for it.

When your team is exhausted from doing months of unbilled work, they are not showing up to the strategic conversations with their A-game. They are not showing up for every client ready to go above and beyond. They are just trying to survive the week. And so a lot of times you guys will say to us, I don’t know why we’re not making more money. Everybody’s super busy. In fact, everyone’s freaking out. They’re burning out. They’re taking mental health days. What’s going on? Odds are it is this. This is a lack of leadership in this domain. That we really do not hold ourselves and our clients and our team accountable to agency math, that we run a commercial enterprise. We are here to make a profit so that everyone can keep their job, everyone can get raises and bonuses and all those things. And we cannot do that if we are saying yes to everything without guardrails, if we are not watching The metrics that matter.

The conversation is not an act of aggression against the client. It’s an act of respect for the work that you are trying to do for them. So honestly, you need to provide your leaders with the script. Practice it in role-playing in your leadership meetings. Do it out loud until it stops feeling weird or uncomfortable. Because you know what? We absolutely can do that. but it is out of scope and I need to give you a change order is not something that most people can wing on the fly the very first time they have to say it. You have to build that muscle.

All right, we’re going to get into domains 4 through 6 and then the one that weaves through all of them in a minute. But first, we’re going to take a quick break. All right, I’ll be right back.

Hey everybody, just want to remind you before we get back to the show that we have a very engaged Facebook group. It’s a private group. Just for podcast listeners and agency owners that are in the AMI community. And to find it, if you’re not a member, head over to facebook.com/groups/babapodcast. So again, facebook.com/groups/babapodcast. All you have to do is answer a few questions to make sure that you are an actual agency owner or leader, and we will let you right in. And you can join over 1,700 other agency owners and leaders And I’m telling you, there’s probably 10 or 15 conversations that are started every day that are gonna be of value to you. So come join us.

All right, we are back. Thanks for hanging with me. We are talking about leadership and these domains that as we at AMI are building out some courses and we’re building out some member-only tools like a leadership assessment, these are domains that keep coming up and that we’ve sort of formalized as we think about what does it take to be a great leader in an organization? Both at the agency owner level, but more critical, honestly, for the agency’s health.

And by the way, what I’m about to say is it’s more critical that your next level of leaders, your your leadership team, has these. They will not. They will not have these. They cannot have these if you, the agency owner, don’t have them. So do not hear this episode as a. Go do this to your people. This is a, you need to think about how you are showing up as a leader. So you are modeling these domains and then you are coaching to these domains so that you and your leadership team, and then ultimately all of the leaders in your organization. And I will argue loud and clear that every single employee you have in your organization is a leader at some level. They’re leading clients, they’re leading teams, they’re leading projects, they’re leading themselves. So ultimately this should trickle through your entire organization. But if you don’t recognize that you have room to grow in these domains and be a better leader, then your leadership team, the people who are supposed to help you run that agency day in and day out, they’re not gonna grow in this either. So this is not just about them, it’s about you as well. But it’s ultimately about all of us and how we show up as leaders.

All right. So domain number 4 is operational rigor and systems thinking. I know that the word operational is doing some of you no favors right now. And if you are a creative-first leader, you may be tempted to fast forward to the next domain. Don’t do that. This one is for you particularly.

All right. Here’s the thing. Every agency I know that has plateaued at a certain level, a certain typically AGI level, has plateaued because the founder’s personal heroics have stopped scaling. That is Gino Wickman’s whole point in the book Traction. That is Warlow’s Build to Sell is really— that’s what that book is all about. That’s what the IOTA research keeps proving in a different form. Every year. Charisma got you here. Systems will get you there, whatever there is for you. And the leaders that you’re building have to be as fluent in the systems as they are in the charisma. All of you are incredibly good at what you do, and most of you will say, boy, if I can get in the room with somebody, I can sell, or I can land a project, or I can— I know that is true. But you have a capacity issue. And the way to solve the capacity issue is systems.

The mandatory behaviors in this domain, they work within and reinforce the existing systems, including when systems add friction. So what I’m saying is this is you living in your systems, even when you, the agency owner, know the end run or the runaround to avoid the system. Timesheets come to mind, by the way, my friends. Because you understand that inconsistent process adoption is worse than no process at all. If we come into an agency that has tried to implement timesheet tracking and the agency owner doesn’t do it, odds are it doesn’t work, right? You need to delegate clearly with defined deliverables, timelines, and authority, and build in check-in points at pre-established points rather than just when you feel like something is off. So again, not counting on your intuition anymore, not counting on that sixth sense you have, but really building systems that everyone follows every time. You need to surface operational problems early. So that might be a capacity crunch. It might be a breakdown in a workflow. It might be a conflict around resourcing. You have to surface those early while you still have time to fix them, and that requires systems. That means you’re gonna be tracking metrics that are relevant to everyone’s role and use those metrics to make decisions. And every leader is contributing to process improvement rather than doing workarounds around broken systems.

There’s a specific pattern that we see with creative and strategic leaders that is costing you money and you might not know it. Brilliant craft people Who treat operational systems as a bureaucratic overhead are not people who are actually contributing to the bottom line. They don’t fill out your project management tool cuz they think it slows them down. They don’t track their time because they think it insults their expertise, or they make the argument, look, I had time to either take care of a client or do my timesheet. Which one do you want me to do? You’ve all been faced with that argument, right? They approve scopes without really reading them because reading them feels like it’s kind of beneath them. They don’t have time. So it, it’s this arrogance that keeps them from honoring the systems that your agency has built. And for some of you, I’m talking to you, it is an arrogance that you feel like you no longer have to do what you’re asking everyone else to do, right? The consequence is a brilliant team operating in controlled chaos, which is expensive and burns people out. And the person driving the chaos often has no idea that they are the source of it because from their vantage point, they’re just doing what’s always been done, or they feel like they have earned the right to tap out of a system or a process.

If you were the person, agency owner, if you were the person modeling the, I don’t need to use the system, the system is for everyone else. You are training your entire leadership team and ultimately your entire agency that the system is optional, and then you’re gonna be super frustrated with them when it doesn’t get used. But that is on you. You created that reality. It’s not on ops, it’s not on the PM tool. I’ve seen agencies swapping out PM tools year after year after year. It doesn’t matter what tool you use. It matters how you use the tool, whichever tool it is. If you are really frustrated with that, your team is not following systems, or your leadership team is not following systems, odds are you have to own that responsibility.

So there was a piece of research called the Skill Cycle Research, and it was done by Gallup, and it found that CEOs who delegate who delegate well generate 33% more revenue. I’m going to just say that again for you. CEOs who delegate well generate 33% more revenue. That is a serious number. Delegation is not a personal favor. Delegation is not shirking your duties. It is a growth strategy. And everyone on your leadership team has to understand how to delegate and how to delegate in a system with checks and balances and accountability. So we still know the work gets done at the quality level that we want it to. And by the way, delegation is not in conflict with a value many of you have, which is no job is too small, or no job is— or I’m not so big that I can’t empty the wastebasket, or however you say That many of you have that core value. Delegation does not, is not in misalignment with that value, but it doesn’t mean that you don’t have to delegate and it doesn’t mean you don’t need systems that help you manage that delegation, right? So ops is, that’s why I put ops in this same domain with delegation. You can’t delegate cleanly to a team that’s working inside a broken process. You do have to have a system and a process in place So that when delegation happens, everyone knows what their role is and everyone knows how to be held accountable up and down the food chain so that when someone delegates, they don’t wonder if it’s been done. They don’t have to micromanage to make sure that it gets done.

When you delegate inside a broken system, the outcome you get is going to be pretty consistent. Everyone’s going to try and do their best, It’ll be mostly right, and then you’re going to take it back, fix it, and everyone’s going to feel worse. That is the process of delegating in a broken system. You have to fix the system and then delegate. And then underneath all of that is you have to honor the system yourself. So fix your systems, start doing better delegation, and be the great role model by following and honoring and respecting the systems that you and your team created. That’s the sequence that checks the box on this domain.

Okay? So domain 5 is communications and influence. And this is, this is where we think leadership lives. We think it’s all about communicating and it’s all about influence. And it certainly is a big part of it. There’s, don’t get me wrong, there’s no doubt about it. But we also think about this as on the surface. So this is deceptively simple. Everyone thinks they’re a good communicator, everyone. And the truth is almost no one actually is.

So here’s the pattern we see when we come into an agency. Most leaders are strong in one direction of communication and significantly weaker in the other. They’re excellent with clients and vague with the team. Or they’re inspiring to their team and conflict avoidance with clients, or they can present to a room of 100, but they can’t have a direct one-on-one conversation with a person whose office is next to theirs. The research from the Center for Creative Leadership, which has been running for 4 decades, consistently rates communication as one of the top 3 leadership competencies across every career stage. We cannot be successful if we’re not good communicators. Bottom line, not one of the top 10, not one of only senior leadership, but not junior leadership. At every career stage, it is one of the top 3. And influence, which means the ability to move a decision without pulling positional rank, Sits right next to it. So communication is one thing. Influence, which is helping make a decision that you believe is the right decision, and it may not be the decision you walked into the room with, but by the time we’ve made a decision, we all have a shared belief that it’s the right decision without saying, well, I’m the owner, so that’s the way it’s gonna be. Those 2 sit right next to each other.

The mandatory behaviors in this domain is that people communicate with clarity and specificity, not vague generalities. So we all think we’re great at this, but the truth of the matter is the harder the conversation, the more the vague generalities or the pussyfooting or the passive-aggressive communications that we’d employ. To be good at this, we listen actively before we respond, and we create space for that other person to fully express their thinking Before we jump in. We also calibrate the message to the audience, how we talk to the CEO client or our most junior designer or a peer who is a department head leader just like you are, or how I talk to the agency owner, or if I’m the agency owner, how I talk to my leadership team. In many cases, same substance, but we’re gonna frame that conversation differently because we’re gonna respect The context of who we’re talking to and what they already know and what they need to know. A great communicator can influence without authority. So you probably have some people in your agency who are great communicators that can, that can rally a team to do something, even though they might be a junior woodchuck on your team. They don’t have a position of authority. They’re not a department head. They can either move a client off of a bad direction, or they can move an internal team member to a better decision without saying, because I told you so, or because the agency owner wants it this way. And they communicate proactively rather than reactively. They don’t wait for the client to ask. They are anticipating what the client needs to know, or the team member needs to know, and they are leaning into that conversation. In a proactive way as opposed to waiting to be reactive.

And that last one is the whole ballgame when it comes to client retention. So Forbes Agency Council did a big piece with agency practitioners on this, and the word that kept coming up over and over and over again was proactive. In our own Agency Edge research, year after year after year, one of the things we hear from clients all the time is What makes their agency relationship strong is that their agency is proactively coming to them with ideas, with issues, with problems, with concerns, with updates without the client having to ask for them. It is an expectation of your client that you are proactive. It is the true key. It’s not being brilliant, it’s not being responsive, it is being proactive. Should you be brilliant? Absolutely. Should you be responsive? Absolutely. But we don’t hear that in any of the research, and nor did Forbes Agency Council, what we hear is proactive. And that is as true inside our agency as it is with, with clients.

So let’s talk about what proactive communication actually looks like in an account. Proactive is the account director who sends the client an email on Tuesday morning saying, hey, here’s where the project is and here’s something I’m slightly worried about and here’s how we’re gonna handle it. No action needed from you. So here’s where we’re at. Here’s the potential risk. We’ve already solved the problem. I don’t want you to worry about it. And no, we don’t need anything from you. That email, that email, if you start sending it on a consistent basis, is worth more to client retention than any sizzle reel or QBR deck that you will ever build because it removes the worry.

Yeah, from your clients, and it removes it in real time, not on a monthly basis or a quarterly basis or in an official way, right? Same thing internally, right? When you are having conversations internally about project flow or things like that, and you’re calling out where there might be problems and solving them together, that’s proactive communication.

So here’s what proactive is not. Proactive is not sending a status report. That reads like a legal document. Proactive is not CCing 8 people so no single individual feels responsible. Proactive is not scheduling a meeting to talk about what could have been said in 3 sentences. So it really is about dealing with things quickly while they’re still small and while they are still out in the future so you can do something about it.

So if your account leaders are sending weekly proactive emails to their clients, that name concerns or name opportunities before the client feels them, you are running a very different agency than most of the ones that we see. And your renewals and your upsells are gonna reflect that cuz clients feel that love and that proactivity.

All right, let’s get to domain number 6. Domain number 6 is change, adaptability, and learning agility. There has never been a time in agency life where comfort with change, being ready to adapt, and recognizing that you have to be agile and keep learning has been more critical than it is in 2026. Never before. And by the way, it’s always been important, but it keeps getting more important. And in 2026, this domain is inseparable from AI. So we need to talk about that because honestly, we have, we as an industry, some of us are falling behind and that’s super concerning.

So here’s the McKinsey finding that really caught my attention when I first read it. In their 2025 AI workplace research, they concluded that employees are more ready for AI adoption than their leaders realize. And the biggest barrier to success, and this is McKinsey’s words, not mine, Is leadership. So your employees are ready to learn more and they are ready to bring AI in, in appropriate ways, even more inside your organization, both for internal purposes and with clients than you realize. And the thing that’s keeping them from doing that well is leadership. So not the tools, not the data, not the clients, not the budgets. Us, the leaders.

So I’ve been writing about this for a while now, as, as you all know, and I keep coming back to a phrase that landed for me a few years ago from watching how agencies were responding to disruption. And if you’ve been at the Build a Better Agency Summit, you will know that the theme of my keynote for the last couple of years, last 3 years, has been we have to stop being surprised that we’re in a disruptive industry. It is our responsibility to recognize change, to recognize that we are leading change all of the time. The leaders who win in a disrupted market are the ones who first go into the unknown. And we’re gonna talk about this more in my next solo cast. So next month, they don’t wait for certainty. They don’t wait for someone else to prove that it works. They stand up in front of their team and say, I am figuring this out too. We have to figure this out together. Here’s what we’re going to do to find out together what this means.

Now, that is a really hard thing for most agency leaders to do because for most of our career, we were rewarded for having the answer. That was how we got promoted. We were the one of the smartest people in the room. We had the answers faster and better, right? We were the expert. We, that we get rewarded that way with clients. We get rewarded that way internally. We got rewarded for the person that the client looked to when the room got tense. And AI is a category where the honest answer right now is, I don’t know, and neither does anybody else. But here’s what we’re trying.

In my keynote in 2026, so a couple months ago, I talked about the need to shift from being an expert to being willing to experiment. So being an expert to an experimenter, that’s one of the shifts agency leaders need to make if we are gonna survive and thrive in this moment of agency history and probably for the rest of our careers.

The mandatory behaviors in this domain is that we stay curious under pressure. We don’t retreat to, we’ve always done it that way, when a new idea or approach challenges the old one, and we go first into the unknown. We engage seriously with new ideas, whether it’s AI or something else, meaning that we are personally experimenting. We’re experimenting with teams. We have formed considered views on where AI adds value and where it undermines quality. And we can facilitate a team conversation about it without either dismissing it or capitulating to a client who’s applying pressure on us either to use or not use a certain tool. The leaders of today are making decisions, frankly, with incomplete information. We cannot wait for certainty anymore before we act. We have to be experimenting all the time. And we are creating, if you haven’t already, and many of you have done this, we are creating a learning culture on our team, normalizing conversations about what’s not working, celebrating experiments that are a royal failure, and making development part of how the team operates rather than something that happens when things slow down.

So for many of you, you are splashing around in the water around AI and some of the other technologies that we’re being presented with, but you keep thinking that down the road when things slow down, you’re really going to roll up your sleeves and get into it. You cannot afford to wait. You have to be an experimenter every single day. You have to be a learner every single day. You have to be willing to embrace the discomfort of not knowing.

So The blind spot in this domain is the leader who adopts tools after they’ve been proven by others and mistakes that for adaptability. That’s not learning agility, that’s fast following. And we have to do some fast following too. I mean, one of the AMI values that I love the most is that we all learn faster and better when we learn together. So there’s no reason why you have to do this in a vacuum. You certainly can do it with your agency peers. Inside a safe environment like AMI, but we also have to be leading the experiments. We have to be trying new things. Genuine learning agility means being willing to be in the uncertain space before it’s proven. And I do not believe any agency that does not adopt this in a big, bad way is going to be around in 5 or 10 years.

It means being willing to be wrong in front of your team, which is uncomfortable. It means being willing to say on a Zoom call in front of a bunch of people, I ran this through an AI tool last night and it changed my mind about our recommendation and I wanna walk you through why. Or I ran this through AI and I got a ton of hallucinations and now I’m questioning the decision that we made because we used the AI tool to make it. We have to be willing to be wrong. We have to be willing to be learning. We have to be willing to say to the client, We’re not sure. So here’s why we’re gonna do this experiment and how— here’s how we’re building guardrails around the experiment to make sure we’re protecting you or your data.

So trust, that DDI trust number that I mentioned earlier, that scary 29%, is not built on being right all the time. Trust is built on demonstrating competence, In motion, nobody trusts a leader who pretends to have all the answers that they don’t have, and no one thinks that a leader can have all the answers today. Everyone trusts the leader who says, “Here’s what I know, here’s what I do not know, and here’s what we’re going to try next.” Explorers don’t wait for verdicts; they stay relevant by staying in motion. It’s mission critical to our role as leaders in agencies today, and this is one where you really have to. Model it because your employees are afraid of being wrong in front of you. So if you’re not willing to be wrong in front of them, they are not going to be wrong in front of you, and you are going to get caught flat-footed and you’re going to get behind. So this is a mission-critical one.

All right, so at the top of the hour, I said that there was a 7th domain that kind of runs through all of the 6. It is collaborative and shared leadership. I want to spend just a minute on it because as an independent agency, this is not optional for you. You cannot do this alone. I don’t care if you’re 3 people, you cannot do this alone. You do not have the organizational layers in an agency, 3 people to 300 people, to buffer bad leadership. In a 15-person agency, a bad department head is felt by everyone every single week. In a 50-person agency, a leadership team that is not unified is felt by every account within a month or so. They’re gonna, that’s gonna weave through the work. Your leaders do not have the luxury of operating as silo heads or solo heroes, and nor do you. They have to function as a leadership team, really capital L, capital T. That shares both accountability for the outcomes and the rewards of when we get it right. They have to share accountabilities for the things because everything is cross-functional in our agencies. Everything has impact on departments bigger than my department as a department leader. Everything weaves through the entire agency.

The behaviors for this domain are super simple to name. And man, are they hard to live by. So we’re gonna share information across functions rather than hoarding it. We’re gonna hold peer leaders accountable with respect, treating them like the grownups that they are, with confidence that they’re capable and competent, right? And if not, we’re gonna talk about the how to help them be more competent or how to be more capable. Or again, maybe they’re in the wrong seat and they don’t need, and they can’t stay. So we’re going to hold everybody accountable with respect, capable, and competent. The same way we would give feedback to a direct report, peers have to be able to do that with each other without it becoming a power struggle. We have to assume positive intent. If you are giving me feedback about my performance, I must assume, I have to start that conversation assuming that you’re trying to be a good team member. By giving me that feedback, right? We as a team need to support leadership team decisions publicly. Once we walk out of the room, even if we argued about it for an hour inside the conference room or inside the Zoom meeting, when we go out into the agency as a whole, we support that decision. We have to understand that consensus, meaning I can support that decision, doesn’t mean it was my favorite decision. Or it was the one I think was most right. It was, we as a collective team have made a decision. It is now my job to support that decision and help it be as successful as possible. We need to distribute credit generously, right?

So, and that last one, that is a tell. So if you want to know whether your leadership team is actually functioning as a team, listen to how they talk about the wins. Do they say, my team crushed this, my department crushed this? Or do they say, our agency delivered this, or our agency crushed this? Do they compete for headcount or budgets, or do they trade favors across departments because they trust each other? Do they undermine each other’s decisions to their own teams when they disagreed when you were inside the room? Do they undercut each other or do they build each other up? You know what the answers are. Every owner listening to this knows exactly which of their leaders is a team player and which one is a bit of a lone wolf that looks good, but is actually not performing at the leadership level that you need.

Okay. I know this has been a lot. So 6 domains with that 7th one, that collaborative leadership running all the way through it. That’s a lot of ground. So let’s talk a little bit about how I think you should use this podcast, this data that we’ve talked about, and how I would do it if I were you.

First, and I said this earlier, but I wanna say it again in case you were driving or on the treadmill and you missed it, you cannot self-assess your way to leadership development. The research is really, really clear that self-assessment on these 6 domains is unreliable, And inaccurate, especially on the softer domains. So if you’re gonna run this framework in your agency, if you are going to talk to your leaders about it, you’re gonna have to have some form of peer and direct report input. You’re gonna want to aggregate the direct report scores so that no individual is identifiable, and you’re gonna want to get that outside data, and you’re gonna want to serve it up to your leaders so they can see themselves through other people’s eyes. That is going to be mission critical. And you know what? You know who should start with this, right? It’s you. You have to ask for that. You have to ask for that feedback and be open to learning what your biases are about your own leadership. And if you do it, then they’re going to be more likely to tolerate it. And by the way, they’re going to understand that you’re doing it so they can get better, not so they can get in trouble. It’s about them seeing themselves more clearly, So they can see where they need to spend some time growing and practicing and asking for more feedback. Not that they’re a bad leader, right? The worst leader of all is the leader that had— that thinks they’re great and never gets any feedback and keeps bumbling through your organization doing damage every single day. Otherwise, everyone scores themselves a 5-star or whatever the, the rating is. And nothing changes.

Second, if you’re going to do this kind of work, be thoughtful about when you start doing it. So, you know, if you’ve had a really rough run for a while and everybody’s been working long hours, don’t do it at the year-end crunch. Don’t do it after you’ve lost a big client. No one’s gonna give honest feedback the week after 2 people got laid off. So, You get a distorted picture and it’ll set you back. So be thoughtful about when you start asking for these assessments, if you’re gonna do that.

And third, if you’re gonna do it, so think of it as a growth tool, not a performance rating tool. So this leadership assessment is different than are you doing your day job? So for most organizations, your leaders have a day job. I am the director of account service. I am the creative director, whatever their title is. That’s their job, and you want to give them performance appraisals based on them doing their job. The leadership is on top of that. It is not the whole sum of their job. And in fact, for a lot of them, it’s just a, a sliver of their job. Maybe the— I would argue it’s the most important sliver, but it is a sliver of their job. So this is not— this is a development tool. This is about helping them get better. This is not a, you’re gonna get a bad grade and not get a, a, a raise.

Yeah, where it should be an assessment tool or a performance tool is if you give them the assessment and you don’t see them trying to do anything to get better, that is a performance issue. If I tell you that you are a C- on communication and collaboration and I don’t see you doing anything to get better at that, that is a performance issue. But think of these assessments As, and, and maybe the assessment is just a conversation, but whatever it is, think of it as a development tool, not a performance tool. So the minute your team believes the results are gonna be used to build a case for termination or to decide who gets a bonus, then honest self-assessment dies. Nobody wants to get somebody fired. Nobody wants someone to not get their bonus. So everybody games it and then it becomes worthless. So be really clear with not only the people who are being assessed, but the people you’re asking to do the assessments, that this is about helping someone get better. It’s not about their compensation. For example, the development conversation and the performance conversation are really different conversations and they require different trust levels. So keep them really separate.

Fourth, and this is probably the most important one, is don’t try and fix everything. If a leader scores low, In 4 of the 6 domains, the answer is not like, here’s a giant remediation plan. The answer is, which 1 or 2 of these domains do you want to move on in the next 90 days? You having a conversation about what is most important to the organization and what is most meaningful to that person. Where do you want to get better? We’re going to get better at all these things together eventually, but where do you want to get better first? So human beings can change 1 or 2 behaviors at a time. We cannot do a wholesale change, not 6, not 4, 1 or 2. So pick the ones that have the biggest downstream effect that your team is gonna feel quickest or see quickest. So they’re gonna see, look, I gave an assessment to Drew that he’s a mediocre communicator, and wow, in my one-on-ones and in the team meetings, I’m really seeing him try. And in fact, he stood up in front of us and said, you know what, here’s the score I got on this, and here’s what I’m gonna do to try and get better. I would love feedback. That is a great leader. Somebody who’s willing to be that vulnerable in front of their coworkers, their team, their peers. That is a great, that’s a great sign that you’ve got a good leader who is hungry to be better.

So, and here’s the sequencing insight that all of the research keeps confirming. Some domains unlock others, right? So we’ve talked, I talked about that through this episode. That there are some things you gotta get right first. Psychological safety and self-awareness have to be established before the feedback can even land. That is the first one. I have to be, I have to be open to being self-aware. I have to be willing to be vulnerable to hear where I’m not awesome. And I have to be willing to recognize that the person giving me that feedback or the assessment giving that feedback The group of people have my best interest at heart, and I have to feel safe. I not only have to feel safe as the one being assessed, but I have to feel safe giving the assessment, right? So feedback fluency has to precede delegation excellence, right? I have to know how to give feedback. Commercial thinking becomes learnable once a leader has enough relational safety with their team to have honest conversations. It’s hard for me to talk to somebody about not hitting metrics if I don’t know that we can have that candid conversation. And I have to know how to start the conversation, and I also have to know how to receive the conversation.

Leadership is something that everyone in your organization, A, is responsible for, and B, has the opportunity to get better at. I don’t care how young they are, how new they are, if they supervise people or not. Don’t confuse leadership with Uh, like that they have direct reports. Leadership is how you show up every day. And you could be a 22-year-old who’s just outta college and show up as a leader. And you could be a 45-year-old who’s been in the business for 20 years and need to show up as a leader, right? So you can’t skip the foundational stuff, psychological safety, the ability to be self-aware, the ability to understand what giving good feedback looks like for each other. Those are the, those are the sort of core things before you can tackle some of these more complicated aspects of the business around KPIs and performance and systems and processes. Cannot skip the foundational stuff. Every time that we have watched an agency try to jump straight into our account directors need to be better at strategic thinking without addressing the underlying feedback culture, it’s failed. Every single time. So you kind of got to do this in order. So build the base first.

All right. Here’s where I want to close this out with you today. Given you a lot of numbers today, 70% of engagement, 22% of manager engagement, 29% trust, 15 to 30% profit leakage, $210,000 sitting on the table because you’re, you know, you’re leaking out of your scope. So we’ve had a lot of numbers in this, in this hour together. Numbers are super useful and they pay for the payroll. But if you leave this episode remembering only the numbers, I did not do a good job of communicating to you the critical nature of this topic.

Here’s the thing. The reason all of this matters, the reason we are building the tools that we are inside AMI to give you the workshop and the assessment and things like that, the reason that I’ve spent months Inside this research, really understanding what it takes and how to move the needle. The reason I am sitting in front of this microphone on a Sunday morning talking to you is not because leadership development is a great business line. It’s because the people inside your agency deserve to work for someone who actually knows how to lead them. They deserve it, and you deserve to be a great leader. And most of them right now don’t have as good a leader as they could or should. That might be you, it might be somebody underneath you, but every single person listening to this podcast and every single person who works with the person listening to this podcast can get better at this. None of us are at 100% of our leadership capacity or skill level. None of us. We can all get better. And it starts by wanting to get better. It starts by being self-aware enough to recognize there are some places you could be a better leader. That is true for all of us. That’s where this starts, is recognizing that you don’t have it down pat, right?

Somewhere in your agency this week, there is a mid-level person checking Slack at 10:00 at night because they don’t trust that things are going to be handled without them. There is a producer who’s quietly looking at other jobs online because their department head has never once asked them what they wanted their career to look like. There is an account person who’s emailing your account director less and less because the responses have gotten short and snippy and reactive. There’s a leader on your team who has not been told the truth about their performance In 12 or 18 months, and who’s gonna be blindsided the day that you finally have the courage to talk about it. None of those people are numbers. All of them are somebody’s kid, somebody’s partner, somebody’s parent, and they came to work at your agency because they believed you were gonna be a good place for them. And every single leadership behavior we’ve talked about today is a way of keeping that promise.

One of the things I love about working with agencies and agency owners and agency leaders is your heart. I know you want to be a great place to work. I know you want to be a great leader. I know you want to take great care of your team and create an environment where they can continue to thrive and grow and build their career. I know that about you. And that’s what this episode is about. I know that that is a desire of yours, so let’s start making it happen. Let’s put a plan in place where we help everyone, including you, be a better leader. Keep the promise that you made when they took the job. Keep the promise that you made to yourself when you left wherever you were working to start your agency.

People ask me, Why I started my agency, and I will say it was because I had a horrible boss, terrible agency owner, who I could do a whole episode on all the things that made him a lousy leader and in my opinion a lousy human being. I started my agency because I wanted something different and better for me and for the people that eventually I would hire. And I know that’s true for most of you. You may not have had my version of the leader, but there was a reason you started your agency, and there’s a way you look at. At how you run your agency in terms of the experience you want to create for your employees. And honestly, it all comes from being a better leader, a more honest leader, a more candid leader, a more self-aware leader. And you can do all of that, model it, and then teach your people. And what an amazing gift that is to give your people is to help them be a better leader. That is no small gift.

Okay. So, as you know, at AMI, one of our core values is that we lead with love. So what I’m asking you to do is lead with love and accountability, high standards, high support. That’s the whole thing. That’s what makes an agency worth owning and worth working for. You don’t have to be great at all of these yourself. Nobody is, but you can be continually improving in all 6 of these domains. My job as an agency owner, my job as a business leader is not to be the best leader in every domain. It’s to know where I’m weak and to build a team around me that, A, covers for it, but also that I can demonstrate to them that I’m working on getting better at it very consistently, very intentionally. That’s modeling leadership. And keep working on my own gaps out loud so my team knows that it’s safe to work on theirs. That, I cannot tell you how critical that is, to speak out loud what you’re working on and ask for feedback so that they know it’s safe for them to do that. That’s the work. That’s the work of being a leader. And it never ends. You are never at 100%. And that’s actually the good news, because if it ever ends, then things get a little boring. One of the reasons why we all got into agency life is because we didn’t want to be bored. This is the opportunity for you to dig deeper, to add more value, to be better at what you do, and to grow people underneath you and alongside you who are also getting better all the time.

So 3 pieces of homework for you this week. Number one, pick one of the 6 domains that we’ve talked about today that you believe is your biggest personal gap as a leader. Not your team’s, yours. I want you to write it down and I want you to tell one person. Okay? That’s number one.

Number 2, I want you to pick one leader on your team who has real potential and who you have not invested in enough. Grab coffee with them this week. Have a conversation, not a performance conversation, a, hey, here’s what I see in you and here’s how I want to help you build or grow conversation. That’s what it is. I love this about you. I’m grateful for this about you. Here’s an area where I think you can grow, and I would like to help you get better at that. Now, if you do this consistently for the next 12 months with your top 3 or 4 people, your agency will be a very different agency a year from now. So this is an element of your one-on-one conversations with them.

3, and this is the one that costs you nothing. Go find one person on your team today in the next few hours and tell them specifically what they did last week that really mattered. Not a generic great job, but a really specific, when you did X in the meeting with Y, it changed the outcome for Z. Like, give them really concrete feedback. That’s coaching. That’s domain number 2. That is leading with love, right?

And by the way, number 4, if you’re brave enough, whatever you wrote down, tell one person and then ask them to hold you accountable to actively trying to get better. So for example, I struggle with holding people accountable, and I share that with my COO, and I tell them what I’m gonna do to start holding people more accountable, including myself. Odds are. Then now I have an accountability partner. I have somebody who’s gonna call me on it. I have somebody I feel the need to report to. That is modeling, right? Modeling and coaching are 2 halves of a whole. It’s gonna take you not that long to do any of these 3 things, but the impact is gonna be significant. You don’t need a specific assessment to start doing those things today. Assessments are great. We’re working on one. We’ll get it to you soon if you’re a member, but you know yourself and you know your team well enough to do those 3 things. And if you’re brave, that 4th thing, right? And get those places into action.

So you’re going to hear us talking more and more about this over the coming months. Again, for members, we’ve built an assessment, or we’re testing the assessment now, and we’re going to get it to you. For everybody, we’re going to have a 1-day virtual workshop. So there’s more coming. If you want to talk specifically about running this inside your leadership team, you know how to get ahold of me and we can talk about the ways that we do that work.

But mostly what I want you to walk away from, from this episode is I want you to know that you are absolutely capable of becoming a better leader and grooming other people to be a better leader. I want you to believe, and I do this, I believe this is true, but I want you to believe That you are exactly the person that your team needs. You’re not the perfect version, not the version that has all 6 domains figured out, but the version that is willing to work on it in front of them, to be vulnerable enough to admit that you’re not perfect and you’re trying to get better, which sets the example for how they can do the same. And that is more than what most agency owners are willing to do. If you’re willing to do that, That is more than enough.

All right. Thanks for spending some time with me today. Hopefully, if this was useful, please share it with another agency owner that you love and respect. That’s how this show keeps growing. That’s how we build this community, and that’s how we keep getting stronger. Okay. I’ll see you next week with a guest. Until then, take care of yourself. Take care of your people and go do the work.

All right. You don’t have to be a better leader by Friday. You just have to be a more honest one. About your own skills and everybody else’s skills. Start there. All right. I’ll see you next week.

Danyel McLellan:

Come back next week for another episode designed to help you build a stronger, more stable, and sustainable agency. Check out our workshops, coaching and consulting packages, and other professional development opportunities at agencymanagementinstitute.com.