I’ve been doing some research on the common traits of successful entrepreneurs, trying to understand my clients better so that I can help them build stronger businesses. Here are a few things that you might find interesting–particularly the last item. What’s it like to be in your shoes? How do you understand your world? What would I see following you around for a day? Successful people like you:
Risk-taking is a crazy thing, right? I think you should make a lot of money, but I hate debt. I advocate ruthless positioning, but I don’t think you should grow too fast. I think you should never compromise on culture, but I think you should make some risky hires.
We all have a different tolerance for risk, too. Some of you move from one gorilla client to the next, and others can’t stomach any single client that represents more than ten percent of your business. On the other hand....
I'm struck sometimes by how separate agencies describe the same client so differently. In other words, I'll talk with one agency about their client and they describe them as respectful, appreciative of good work, and fair in their compensation structure. I'll work with another agency who also works for that same client and their experience is very different. From their perspective, the shared client beats them up on pricing, insists on a special process for nearly everything, and is generally difficult to work with.
Let's look at why that might be.
First, the same client sees these two agencies very differently even though they do similar work. Clients believe....
On the face of it, that headline is not a very controversial statement, but if you think about your client base for a minute, chances are good that most of them are using a smaller subset of the services that you provide. Like most of business, things start simple enough and then grow more complex as you position your firm to take advantage of any opportunity that could possibly surface.
I picture some of you with the biggest boat you can afford, patrolling the harbor with the biggest net that’ll fit in the boat, trawling it for anything that wiggles! With that mindset you’re naturally going to allow a client to nibble a little in hopes that you can set the hook later. Agencies that live off that promise, though, keep adding things until eventually it looks like the menu from the Cheescake Factory! It was a one-pager in 1978 and now it has 250+ items on 21 pages. So we might want to avoid....
For the most part, agency principals love the challenge of running an entrepreneurial enterprise. The difficulties are real, but they wouldn’t have it any other way. The only common denominator is their aptitude for risk, and they are very good at leveraging that advantage. Otherwise they are different people who look for different things from their experience.
But their greatest fears–what keeps them up at night–are surprisingly similar. It took me years and hundreds of interviews to see the patterns. I could make a recommendation that was easily supported, only to find an invisible barrier that kept a principal from exercising what otherwise would be good judgment. I’ll list those fears that you’ll bump up against as you manage your own creative firm. Maybe you’ll see yourself in a few of these and then adjust your reactions accordingly. There are five....
Learn how to direct this process at an upcoming event in Nashville on September 23, but let’s look at the timing, first. Things are going well at your firm and for several years a key employee has demonstrated unusual leadership. They’ve taken over some of the roles that you’ve never been able to let go of in the past, and you’d hate to lose them. The team at large already respects their role and they’re functioning as if they owned the place (in a good way) already.
There are keys to help you know when and if you should move forward in making them a partner. You should consider moving forward when these four things are true...
I’m not even sure who is writing this, frankly. It doesn’t sound like me. I’m normally the advocate for understanding your business well and aiming for the right metrics. It almost sounds like opposite day or April 1. I want you to know that it feels that way to me, too. I’m nervous.
I’d like to make a case for less or no business planning in certain circumstances. I want you to forget about the consequences sometimes and just do what your gut is telling you.
You do come close to this sort of recklessness from time to time, after all, but it’s usually when you’re tired or mad. What you’re really thinking or what’s really important comes flying out. Like the inner tube you keep holding under water, what you’re really thinking launches out of the water like a rocket as the frustration finally matches your fear of being honest and you drop the pretense.
Pricing is a great example of this. When you want or need that project, you price it lower than you should because you’re afraid of losing it. When you’re already pretty busy and you don’t feel any panic about getting it, you’ll price it higher. If the prospect says yes, you’re fine. If they say no, you’re fine. It just doesn’t matter quite as much at that point because you don’t care all that much either way. The money would be nice. So would not....
Yeah, this is a campfire discussion for sure! Sitting under the stars dreaming about how a chunk of money would change our lives (though it hardly ever does). But unless you know Warren Buffet’s 84-year old sister and can talk her team into giving you more than the average $4,800, this is just hypothetical.
Answering that question, though, clarifies what’s important to you, how you want the future to be different, and how you identify the performance gaps at your shop.
Try asking your staff to answer this question for the next staff meeting, giving them just these two guidelines to follow, and then compare your answers:
As you try this hypothetical exercise, here’s how you might frame your thinking. What investment, over time, will give our firm the greatest separation from the rest of the crowded competitive field? So what are the investments that will achieve that goal?
Buying new computers for the creative department will pause the whining for a few months, but....
I’ve fielded more inquiries about succession recently than at any time in the last two decades. By succession, I’m including merger, acquisition, closure, transfer to key employee(s), and acqui-hire transactions. It’s worth looking at what might be behind this trend:
Tight positioning is always good: you make more money, you know what you're talking about, you know where to find your clients and what to say to them, and you know who to hire to fulfill the promises that you make. That's the premise, and it usually works.
The problem is that there are many outliers who undermine that claim. Many firms who aren't positioned well are making a lot of money. I love that, though, because usually it means that they are either lucky, confident, or disciplined, or a combination of those qualities. I'll go further and say that there are no successful generalists firms who aren't one or more of those things. But as I said, that doesn't bother me at all. More power to them.
What bothers me is the inverse of that: well-positioned firms who aren't making money. They just aren't killing it, and their performance mimics their poorly-positioned peer firms. That bothers me deeply, in part because it undermines what I've been saying to anyone who will listen. That's what I want to talk about here: why well-positioned firms are yielding poor financial results.
I’ve been thinking about this concept recently, phrasing it like this: things can get a lot better for you, but they need to get a little bit worse, first. And that’s a problem for many of us because we don’t stop and reexamine what we’re doing until our backs are against the wall, and at that point we can’t really imagine holding on a little longer while it gets even just a little bit worse. These difficult moments usually represent less than 20% of your agency experience, but they change your perspective and forge who you are.
But the most critical reason we don’t make as much progress as we could is our own success. It traps us. We scratch and claw our way to a certain lifestyle inside a fairly predictable, arranged world. We know that it’s not what it could be but we’d rather tweak it than blow it up. If we tweak in the wrong direction, we can untweak it. But if we blow it up and nothing else rises in its place, we’re sitting there cross-legged on the ground with dust in our hair wondering what’s next.
I think you should use this same framework when you evaluate prospective clients who want to work your own agency. How badly do they want change? What’s pushing them to consider it? What will an “unchanged” environment look like? Who believes in it and what obstacles will they have to overcome within their own culture? How does the current mess “work” for them, and what are they afraid of when working with you? If they aren’t afraid of something, your work is not that substantial.
The Googleization of the world has created this notion of hyper relevance: I can find the exact thing I want quickly and anywhere in the world and maybe for free. Google algorithms are built on the notion of self-learning. I search for a phrase, Google gives me options, and eventually most of us choose the most relevant link, and then Google serves you that constantly self-healing data. Essentially we’re all unpaid Google volunteers.
In that context, Google is only going to serve queries to you and your firm if you are hyper relevant to the query. All this has fed the specialization craze. Need a marketing firm that understands how best to do social media for credit unions? How to find transactional leads for life insurance products? How to reach young girls as they become women? If so, we have your answer and we know that niche better than anyone in the world. By the way, this deep specialization is also why the average F1000 company has dozens of agencies.
So we end up with all these very specialized firms, which is a good thing, but how do they see the world in a larger context? How do they keep learning from the questions and not just the answers? Enter this notion of a “T-shaped” firm with deep expertise and broad context. You’ll never get discovered and followed unless you’re an expert, but you’ll never be a good expert unless you’re grounded....
