COVID ESSENTIALS EDITION 4
It continues to be a challenging time - but we’re here to help agencies move forward with clarity, confidence and an optimism for the future. In this edition we challenge you to think about your strategy for winning in the future, about raising your game as a leader and about the role of values in uniting your business. We hope these perspectives will guide your own thinking and help shape your plans. But if you’d like to talk more about any of your own specific issues, we’re available and more than happy to talk.
WHY WILL THE WORLD NEED YOU?
The world for agencies will certainly be different in the future. Some of you are holding your breath waiting for things to get back to normal. Others are expecting a ‘new-normal’ that will require a little bit of adjustment. But for most agencies their world will be altered significantly. Think revolution not evolution and fundamental change rather than refinement.
However successful you’ve been in the past; you won’t have an automatic right to thrive in the future. Some agencies will come out very well, most won’t, many won’t survive. This isn’t a false alarm. There is a critical challenge to understand how the environment will change and adapt to find your new place in the world. It won’t be easy to deliver true value for clients, employees and agency owners and this will feel like a real threat for a lot of agencies. But it will be a great opportunity for others. So, whatever battles you’re dealing with today, it’s never too early to be working on how you can become an agency fit for the future.
MUCH MORE THAN THE RECENT CRISIS
History has shown that crises can significantly reshape beliefs and behaviours. New social policies, ways of working, marketplace dynamics and customer needs have all been fuelled by major disruptions. The Second World War, 9/11 and the SARS virus have all played their part in influencing the world as we’ve known it. And Covid-19 will similarly drive change. And all that’s apart from the financial pressures brought about by the deep recession we’re entering now.
But for agencies the pressures are more fundamental than just this crisis. The agency world has been at a tipping point for many years. Originality and creativity have been fading, client connections weakening, employee commitment waning and profitability shrinking. Many agencies have become too elaborate, rigid and predictable. The door has been left open for newer types of competitors and they’ve fared very well.
If you’re an agency that has managed to stay fresh and ahead of these challenges, your preparations for the future are likely to be easier than others – but no less important. If you recognise any of these symptoms, you’ll need to be thinking and changing more radically. But if you do this properly it could be just what your agency has needed for some time – and set you up for years to come.
WINNING AND GROWING CLIENTS
The stagnation in agency sharpness and effectiveness has been felt by many clients for some time. We’ve all seen the increase in pitching, switching, multiple agencies and in-housing as clients have searched for people who can really deliver clever, joined-up solutions across the media landscape. And during this locked down period, they’ll have been exposed to even more agency offerings. They’ll have recognised new requirements, seen new ideas and found quicker, cheaper ways of getting good things done.
Agencies will be under greater pressure to convince clients that their level and type of expertise can genuinely add significant value. This will put more focus on smart thinking and creativity than on just ‘doing’. You’ll need to stack up well against new criteria in terms of offer and impact, taking out the gloss and eliminating unnecessary activities and timings. Relationships and financial rewards can still be mutually beneficial, but your clients will need to be chosen very carefully – and these might not be the ones you’ve had in the past or worked closely with during this crisis.
INSPIRING AND EMPOWERING TALENT
Attitudes and expectations towards work were already changing quickly before the pandemic arrived. The demand for greater meaning and flexibility was already challenging traditional approaches and putting pressure on leaders to be more balanced, transparent and fair. Recent experiences have deepened these desires, added a demand for a greater sense of belonging and prompted more people to feel the same way.
With clients insisting on only working with the very best, attracting and retaining talent will be more difficult than ever before. As leaders you’ll be challenged to define your purpose and to commit to these beliefs in your work every day. And to maintain motivation, productivity and profitability you’ll need to think radically about new approaches to roles, structures, recognition, remuneration, progression and empowerment. These are just some of the many new demands that will fall on leadership teams who must now become more skilful and more consistent than they’ve demonstrated in the past.
CREATING BUSINESS VALUE
With profit margins and dividend streams already under pressure, Covid-19 will only have made things worse for shareholders. And with the list of potential purchasers already much reduced, the current interruption to growth plans will make the chance of a good exit feel even further away. But dreams of easy growth and big sale values have never been realistic. The optimum strategy has always been to build the best business you can and keep your value options open.
Good agencies manage risk well and that will be even more important in the future. Agencies with low profit margins trying to grow their way to better results will have learned the hard way in recent months. So, it will be vital to keep things tight and not add back costs ahead of securing the revenues to support them. Be prepared to fundamentally change your business model - what you provide, to whom, how and for how much. And don’t be daunted by having 2020 as the base year for your new high growth track record, with the right changes the next few years could be significantly better than you would ever have achieved with your ‘old’ business.
To emerge from this period as an agency with a clear, distinctive place for the future will be no ordinary task. Bold, fresh thinking and a rigorous process are vital. It’s not about guess work, nor about waiting to see how things shape up. You’ll need to understand the marketplace in which you’ll be competing, decide how you can play to win, assess your current business and act to transform your game.
We’ve set up a framework to guide this process and we’ve been working it through with a number of proactive clients. It’s been an exciting time for them to gain confidence, set a new direction, see new opportunities and remove the barriers holding them back.
If you aren’t clear why the world will need your agency - you’d better get moving. If you’re already on your way to a good place, keep going. It’s not for the feint hearted, but if you don’t embrace the challenge you might just fade away.
Make sure you’re ready and if we can help just let us know.
BE STRONG AND MOVE ON
The challenges are coming in waves. At first it was getting everyone set up to work from home. Then about detailed financial forecasting and planning staff resources. Now it should be about trying to shape your business for the longer term, while continuing to keep close to what’s happening every day.
Sadly, it’s likely to continue like this for some time to come, with uncertain timings and unpredictable outcomes creating occasional periods of optimism among those of stark reality.
In this situation it’s easy for agency leaders to become passive, particularly when faced with the day to day monotony of working from home and the energy sapping stress of almost continuous video meetings. It’s hard to blame anyone for just focusing on ensuring their staff are safe and well and on making sure the finances aren’t too far away from their predictions.
But this is a time when strong leadership really matters. When the differences between those that can and those that can’t become very obvious. And when the future winners and losers are created.
When the key decisions and pace of activity is driven by client demands good agency leadership can be relatively easy. But when those things need to be initiated – as in the current environment – the challenge is very different. Leaders need to set the agenda, focus efforts and create momentum.
We’re not saying this is an easy task, but here are a few tips that we hope will help you rise to the challenge:
1 LOOK TO THE FUTURE
Many of you will have learned new things about cash forecasting, virtual communications and Government schemes. But once you’ve got these in place you should have your head up looking to the future of your agency and what will make you succeed in the post-Covid era. Good cash management is important and will help you survive, but it won’t make you a winner and shouldn’t be your everyday purpose.
2 SHARE AND DELEGATE
In this locked-down environment it’s easy for leaders to become very insular, working alone or with just a couple of individuals. But the future success of your agency is important to many more people. And a lot of your team have ideas and energy to contribute to making your agency as good as it can be in both the shorter and longer term. You’ll have leaders in many parts of your business, make sure you’re using them.
3 MAKE SMALL STEPS COUNT
In the past you may have set objectives for your team on a 90-day or six-month basis. But faced with the current challenges and with people working at home, the approach needs to be very different. Leaders need to set objectives and tasks for their teams on a daily or weekly basis – with each being a contribution to moving to a much better place. The small steps ensure that people don’t lose their focus when working alone and they create a sense of momentum when achieved. They can also be a basis for celebrating success – rather than focusing on what’s been lost.
4 CHALLENGE YOURSELVES
Many people are claiming that the lockdown has increased their focus and efficiency. And on straightforward everyday tasks this is probably true. But this is not a time when this type of head-down productivity really counts. It’s progress towards being a strong business again that really matters and leaders need to push themselves, and their teams, to get on that track. Ask yourself at the end of each week whether you and your team have done everything possible to ensure your business will be at its best in the future. If the answer is no, you’ll know what next week’s challenge is going to be.
LET’S KEEP VALUES REAL
Covid-19 has proved to be the ultimate stress test for what unites people both personally and professionally. The businesses holding it together have drawn on their values to frame their response and guide their actions. In doing so they’ve proved that even when events feel beyond their control, they can still choose how to respond and where to draw the line.
So, as attention turns to moving business forward, it’s time to regroup and consider if what united you in the past will be enough in the future. To look at what kind of behaviour you want to see more of and use this as a filter for how you recruit, empower and recognise people.
Because whilst it may feel like everything has changed, actions still speak louder than words and, in that way, values are more important than ever.
Some things to think about as you ready your business:
1 GETTING REAL
As a team and culture, ask if you still value the same things you used to. Look at what has held true but also what needs to evolve as the world has changed around you.
2 CLOSING THE GAP
Look at where your values come to life through your culture and make sure you’re making the most of them when it matters. The walk-talk gap is a thing of the past.
3 EMPOWERING YOUR FRONTLINE
Make sure your leaders have the space and support they need to make good decisions. Remove any unnecessary red tape or out of date policies in their way.
4 GETTING TOUGH
As you rebuild, and potentially recall and recruit, be confident that everyone on your team shares the same values. Some things are non-negotiable going forward.
5 SETTING A NEW STANDARD
Encourage and reinforce the behaviour you want to see through the way you feedback and recognise people. With new expectations in play, leading by example is more important than ever.
[29 May 2020]