Agencies are Killing Their Own Productivity

  • by , Op-Ed Contributor, February 28, 2018

Cast a businessperson’s eye toward the new agency productivity report from the Agency Management Institute (AMI), and you’ll be struck by agencies’ toxic attitude. Clients make us over time and budget on half our work, respondents said, because they don’t give us complete briefs, suck up our time, and constantly make last-minute changes. Although we admit our account people are nervous about making the client mad by imposing deadlines or surfacing conflicts. 

In other words, it’s the client’s fault they’re dissatisfied. They have the audacity to ask for what they want, without innately understanding how we need to provide it.  

Here’s how crazy that is. Imagine you sit down and order a hamburger. The waiter brings it to you and it is hopelessly overcooked. You complain. The waiter takes it back to the kitchen and tells the cooks that you can’t make up your mind, even though he never asked you how you wanted it cooked for fear of annoying you. The manager then complains about food costs, because customers are so bad at ordering. 



Imagine the cook recognizes he’s about to lose you, and fires another burger, medium-rare, with some foie gras on top, to win you over. The waiter also gives you a free milkshake. You’re more likely to return, aren’t you? 

Now what if the manager scolds the staff for overserving you? You’d be appalled, right? Yet the AMI report pins overserving on the fact that there are “no repercussions” for doing it. In other words, people who go out of their way to make a client happy are killing the margin. 

And we wonder why clients are looking for alternatives? 

What’s really killing agency productivity is poorly understood scope. Scope is a conversation, not a calculation. Conversation is the only way we reach mutual understanding on anything. Agencies start all their productivity problems when they avoid talking straight with clients about whether a project can be done, what the client can really expect from it, and what each will have to do to make it happen. 

You can’t get to mutual value in a creative endeavor without tradeoffs by both parties. And you can’t operate in scope until the client and agency teams understand the goal and working relationship in the same way. When they do, the client team can set expectations around them. Skip the hard conversation, and you’ll have last-minute changes and approval delays every time. 

Over the last five years, we’ve talked to hundreds of agency leaders who generally agree that this kind of poorly defined scope accounts for more than half of project overages and rework. 

There are good reasons why scope is hard to define. Marketers hire agencies to go places no brand has gone before...basically, moonshots. These give birth to our most inspired moments. But moonshots are tough to scope, and bad habits result, including a willingness to abandon rigorous, realistic conversation with clients.  

In one agency we studied, more than 80% of project overages occurred in projects that were a stretch to the agency’s capabilities – moonshots that ended up as five-alarm fires. 

The moonshot culture embraces and rewards dreamers within creative and business development. Dreamers can wow clients but most don’t do details well, which is why project handoffs typically end in disaster. If someone questions the dream following a big win, they’re dismissed out of hand. “We’ll figure it out,” the dreamers will say. Or a favorite, “What can’t we do for $500k?” 

The looser the scope, the more the client gets to fantasize amazing outcomes. Fantasies become rescues that cost far more than most agencies imagine. They contaminate good work being done with other clients by sucking the best talent into the all-consuming rescue. That turns other good projects into bad projects, and suddenly there’s another rescue. Each one pushes other reliable clients toward the exit. 

Agencies don’t let the moonshot fail for fear of acknowledging the futility of this business model and demoralizing everyone involved. So the business stays stuck in a vicious cycle of renewal. The dissatisfied brand client launches a review, inviting moonshot fantasies from multiple agencies, while the incumbent agency hunts its next client. And so on. 

It doesn’t have to be this way. Agencies that take scope seriously, involve the delivery teams in determining realistic delivery, and educate clients on timing and value, see dramatic improvements in success rates. That’s not an Excel sheet or a software program (as the AMI report authors would have you believe). It’s live human understanding. 

Measure twice, cut once, they say in the rag trades. Take the time to get scope right and clients will, once again, focus on value. This is how you can get them to stay.

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