$76B Revenue for top 50 agency companies
Over the past year I've been inundated with calls from consultants available and eager to help our agency soar to unbelievable heights of success. Many of them are advertising veterans with impressive tales of accounts won, agencies transformed and fortunes made. As seductive as these stories might be, I'm skeptical that most of these consultants can deliver on their promise of transformation. There's much good to be had, but also reason for caution before signing on the dotted line.
I still remember my first engagement with an agency consultant. We had reached one of those agency inflection points at which we were starting to grow and couldn't get out of our own way. Like a miracle, a letter landed on my desk with an offer too good to be true. The consultant, who claimed to have reorganized and "fixed" one of the biggest agencies in town, was striking out on her own and offering to help young agencies like ours improve our performance, and in general, start acting like adults. She got rave reviews and after a couple of inspiring meetings, we agreed to work on an engagement.
What stands out in my mind is the clipboard, which our consultant carried everywhere and on which she took detailed notes about everything we said. Step one was to interview almost everyone in the agency. I knew we had our problems, but she uncovered problems that I didn't know existed. For all this effort, at the end of three months I had a new organizational chart and the outline for a team structure that I still don't understand. None of her recommendations stuck, and we returned to business as usual.
To be fair to her, I was young and naïve and probably did a poor job setting expectations. Since then, I've worked with a dozen consultants on all manner of agency business: human resources, finances, recruitment, new business and operations. A few of these initiatives have been disastrous. For example, one consultant seemed to manufacture one crisis after another and suggested I fire half the staff. Just as many consultants have been immensely rewarding and helped us break through to the next level.
For example, Andrea Edwards from Swift River Associates helped us create a new performance management system that linked our business goals with our employees' individual goals. She supported our management team as we adopted this new program and made sure that we gave people the training resources they needed to succeed in their jobs.
Notice that the operative word here is acted and not advised. She didn't tell us what to do; she led us to get the work done. Before she left, we had a tangible program that is still operating several years later.
Jeff Arnold is another success story. When we were trying to acquire an agency, the word on the street was that Jeff was a skilled dealmaker. His first piece of advice was to scrap the acquisition. He didn't think we were ready. He then proceeded to help us build out a management team, introduce a formal business planning process, and put financial reporting in place that improved our profitability. When we asked Jeff to remain as an advisor, he wanted operational responsibility and continues to act as our consulting CFO.
I favor the consultant who does real work, side by side with the management team. If all you want is someone's advice, you should be able to get that for a nice lunch. However, before spending good money on a consultant, I would make the following recommendations:
Start with a practical, addressable problem, like developing an annual plan, streamlining digital operations or implementing a marketing automation system. Hiring a consultant to tackle something as vague as agency profitability or efficiency is an invitation to pick your pockets.
Don't ask the cook to cut your hair. Most consultants will try to cross-sell their service, but be wary. The person with HR expertise probably can't solve your marketing problems.
Most consultants will want to go through an information-gathering phase. They will want to interview people, review processes and sit in on management meetings. Limit it. Getting up to speed shouldn't consume more than 10% to 20% of your investment.
Buy a deliverable that you can use. A presentation or a report with a series of recommendations may be interesting but probably won't lead to direct action. Before the consultant says goodbye, you should be able to point to a notable change to the agency and the first phase of implementation should be underway.
In case the irony is lost on any of us, these are the same kind of concerns and questions that our clients ask about their advertising agencies. And hopefully we hold ourselves to equally high standards.