How the open talent model saved my agency: Living on the Edge
Living on the Edge is a weekly series exploring how small agencies have overcome adversity and applied creativity, ingenuity and hard work to solve a business problem. This installment is about how one small agency adopted a radical new business model after its largest client left.
In the midst of the Great Recession, when I was still an active owner at Cult, my partner and I woke up one day to find out that our biggest client was gone. Acquired by a larger company, our 23-year relationship vanished overnight, as did two-thirds of our revenue.
Now, I know what you’re probably thinking, we were overexposed. And we were. But it happened slowly over years of great work, which led to incremental growth. The sudden loss and the recession put us in an impossible position–replace the work immediately or close.
Like so many agencies, we had deferred solving a vital structural problem too long, and that mistake forced us into this situation. But in stepping back, we realized there might be another way where we didn’t have to replace that whale client. Doing so, however, required us to make a terrifying decision. We could either push on with the status quo, or completely shift our operational model to open talent.
Open talent is a very simple model to grasp. The core idea is to maintain a core full-time employee team, in our case strategy, creative and account management, while hiring best-in-class freelance talent to solve one-off problems.
I’m in no way suggesting agencies start letting go of staff in favor of this model, and it’s not what we did. If you’re starting an agency, or don’t see a future for your current model, consider open talent. If you’re thinking of doing it to save money, please just stop reading.
Eight years down the road it was the best decision we’ve made. In addition to loving what we do (we’re more selective about work) and working with incredible talent, the model allows us to quickly adapt to market fluctuations like those caused by COVID-19.
We’re just better at what we do. In planning our shift, we adopted the notion that to be most effective going forward meant rigid adherence to agnosticism in how we solved client problems. That hadn't always been the case in the past, when the team we had on staff dictated the work we could do. We wanted the ability to put the right experts on the right jobs, instead of pretending we had every expert a brand could ever need in-house.
Open talent solves this gracefully. If the strategic recommendation to a client requires a microsite, we bring in whoever can execute that need at the highest level. The core team is still intimately involved, but we’re not trying to hire developers overnight.
On the flip side, we never outsource account management and leadership. That group is effectively “the agency," so they need to be fully committed to the mothership, acculturated to our approach, and armed with the skills and expertise to lead.
So, how did we sell this to clients? Simple, we just told them. Honestly, everyone was fine with it.
We learned that the best way to position freelance talent is that you’re getting the right people for the brand, not just whoever happens to be on payroll that given month. For us, it was about presenting the specialist’s combination of category experience and personal interest in the subject that turned freelance help from a weakness into a strength.
As it turns out, that ideology about clients wanting 100 percent FTEs on their business isn’t true.
We had to work hard to find the right talent, of course. You can’t just do a Google search and reach out to the first person you see. Vetted, quality talent is critical. It’s also important to find established freelancers who are good at working remotely.
And for Cult, it’s working. This time around, we haven’t avoided all the pain of shifts in clients’ businesses—that’s just as impossible as replacing two-thirds of your revenue overnight.
But compared to the Great Recession, the experience has been completely different. We have avoided the massive overhaul in day-to-day operations that knocked us down during the last downturn, and without layoffs. We’ve also skirted the requisite cultural decline that is inherent to losing team members.
Positive cashflow and full nights’ sleep followed, and success today is always being able to say yes to new and incremental work knowing with full confidence that we have access to world-class talent to meet those needs.
I wish we would have done it sooner. Those worries from a decade ago are just a memory, and today I am proud to have launched two other businesses; a freelancer platform called Communo and a brand marketing conference called The Gathering, while keeping my stake in Cult.
None of this would be possible if we hadn’t switched to the open talent model. It gave us the flexibility to get much more profitable, which is a total 180 from what we expected would happen as we were suffering through the last downturn when I feared we wouldn’t survive. This time around, my mindset is completely different. I’m wondering how to make sure we thrive on the other side.
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