Starting any business is a bold move. Not all survive and few truly thrive. Those that do face the challenges of managing growth and staying true to what made them successful in the first place. This is an interesting tension that I recently discovered in working with four advertising agencies.
These businesses had grown to 100 or more staff. Of course, that metric in, and of itself, is not an indicator of sustained success. The good news is the agency leaders know that. In fact, these leaders were concerned because interesting things happen when the payroll hits 100. Here are some issues that arise:
- Agencies of 15 or 30 or even 75 employees possess a start-up or boutique feel. When you hit 100 this weirdly begins to dissipate.
- You don’t know everyone any more. Small agencies talk of being “family” where everyone has each other’s back. While a strong culture can keep this rolling as staff size grows, it cannot mitigate the realities of being larger. This is compounded when they open up other offices.
- A bigger payroll and presence prompts new business pressures. This can mean chasing the wrong work to keep the machine humming.
- Founders and principals move from client service oversight to functional roles. Marketing, people, service and product development and other areas need full-time leadership. This transition can be bumpy and skill-sets are stretched.
- Specialisms and differentiators begin to lose their luster. You simply cannot make the same claims. Being “nimble”, as an example, gets called in to question.
One agency leader saw his job as keeping “the big-bad stuff out of the agency” as they grew. He was referring to bureaucracy, confining systems, politics, and forsaking creativity for numbers. Many of the people I work with have experienced larger agencies and holding company structures. Their experiences were not always the best and that is why growing bigger is a standing agenda item.
The head of strategy at another agency told me that in her previous (large) agency she would have to fill out two forms to even meet with me. One form was to okay the meeting and the other to account for it on her time sheet and report outcome. Businesses mature as time marches on like any entity but that does not mean they get better with age.
My alma mater, PwC, addressed this in a paper on organizational design, “Organizations that demand procedural compliance suffer from creative constipation. They turn bureaucrats into heroes, reward diligence with delay, sand the sharp edges off of good ideas, and demoralize optimists. Ultimately, they evolve into parasitic organisms that suck shareholder value into a black hole of infrastructure. No light can escape.”
Organizations that demand procedural compliance suffer from creative constipation. They turn bureaucrats into heroes, reward diligence with delay, sand the sharp edges off of good ideas, and demoralize optimists.
That is some powerful prose that represents the fears of agency leaders who treasure speed, flat organizations, and a focus on creativity and innovation. It is if they are protecting the right brain part of the business that made them successful in the first place. Once you hit 100 staff the tension between the past and what lies ahead grows.
It is difficult to enjoy the moment. The expanding size of the agency begins to demand repeatable, trainable, and coachable processes that are sustaining, rational, and logical. Understandably, most creative talent finds such an environment uninviting.
Zak Mroueh is founder and chief creative officer of Zulu Alpha Kilo, which was named Ad Age‘s 2016 Small Agency of the Year. He recently wrote a piece in Advertising Age that said size was immaterial to the success of an agency. That will get no argument from me. He mentions originally dreaming of having an agency of 15 people but has now grown to three digits.
Mroueh writes, “What matters is staying true to your core values whether you’re 50 or 500. You’ll have become “too big” the moment you compromise those values. Good and bad agencies come in all sizes.” That is exactly what my clients experienced. We then worked together to re-defined their values and differentiators and freshly crafted those into a business and brand strategy. That comes to life through a go-to-market plan encompassing recruitment, business development, PR, marketing and more.
That may sound like a bunch of marketing-speak but in essence it is the blueprint for the agency staying true to itself while balancing the realities of being a much different shop. It addresses the tension that growth and size brings. Increasingly this involves dramatically re-orienting organizational design. In fact, most of these efforts had significant org chart implications.
I use the analogy that an agency is like an individual. We are not the same person in our 20’s or 40’s or when we have children or move to another country.
I use the analogy that an agency is like an individual. We are not the same person in our 20’s or 40’s or when we have children or move to another country. This is the same for agencies. They will go through a constant series of different chapters and success means recognizing that fact and by dealing proactively with it.
Tenaciously holding onto the past does not work and neither does avoiding changing for the future. Zulu Alpha Kilo’s mission has “always been to battle against the industry’s absurdities and antiquated models. Our belief that size is immaterial has been one of the keys to success in running our business and in winning pitches against much bigger multi-nationals.”
I agree smaller agencies can best larger ones in many ways but all agencies must ensure that the larger they become and the more mature they grow that they do not sacrifice the good stuff and invite in the bad. Successful agency leaders and agencies recognize and manage this tension daily.