What is your independence worth? Instinctively, I think most people would say that it’s worth quite a lot… but how much is that really? It’s harder to quantify when it comes to how you operate a creative services business. I’m not saying I have the answer for everyone, but I’m about to tell you what it means to me and our company.
A lot of entrepreneurs will start a business based on a passion in a particular field, industry or area of expertise. They will work. They will toil. If they are lucky, they will crush long hours from the startup phase to funding rounds to growth. Then, if they are really lucky, they may be faced with a choice of whether or not to potentially sell their business to an interested party willing to pay a certain multiple on earnings before interest, taxes, and amortization (EBITA) or revenue, or whatever number makes sense for their industry.
I’ve been an entrepreneur. I’ve been a corporate guy. I’ve done the long hours building businesses. I’ve hunted for funding and flirted with buyouts, but what I just went through with my current agency was one of the most unique situations I had not only encountered, but had even heard about.
A little over 4 years ago, the primary founders of SixSpeed — a Minneapolis-based creative marketing agency — were looking to put their business on the market. They courted. They engaged suitors. They passed on a few opportunities. But eventually, they found a fit with a much larger company that was looking to bring on additional creative services and vertically integrate. It wasn’t a perfect match, but it was good enough for both sides on paper. It allowed a couple of founders to take a much needed break and collect on a well deserved investment in time and energy that had essentially dominated their lives for the ten years prior.
Nothing new here. Classic story. Plenty of creative shops work hard and plenty of owners or founders eventually decide to cash in when the time is right. But if it doesn’t work out the way everyone thinks it should, what happens then? Most creative shops would be consolidated within their new organization, or worse: folded in. People would lose their jobs. Clients would lose their partners. For those of you who have been there, I don’t need to tell you how emotionally devastating that process can be for all parties involved.
But what if that doesn’t have to happen that way? Without divulging all the dirty (mostly boring) details of how we got there, I will summarize nine months of negotiations into a two sentence synopsis.
We wanted to buy the agency back, and we put a plan together with our holding company partners to do just that. In the process we were able to save almost every job in our building while resetting our organization in a way that made sense for us and our people.
It was not easy. It was extremely stressful. But damn was it worth it.
Here is what independence gets you when you get a second chance:
It gets you the autonomy to review and develop your capabilities unencumbered by your partner agencies’ strategic growth plans.
It gives you the opportunity to clearly articulate your voice and brand in a way that truly reflects your company and the people it serves.
It gives you the ability to dole out spot bonuses without filling out a form or waiting for it to run up the corporate ladder.
It allows you to put an employee profit sharing model in place that pays out within the first six months.
It allows you to take some chances, find alternative revenue streams, promote unproven talent (because you already know they are going to be great), and generally operate like a start-up… but with experience.
I’m not going to lie… it’s amazing.
And that is the point of this story. When you are a startup operation, you don’t know exactly how to value that work or your ability to make all the calls until someone puts a number on it for you. When you inherit a company and bring it back to independence, you can literally see the tangible value every day. It’s a stark difference year over year. You know you are lucky. You control the time and energy again. You control your own destiny for better or worse. And now you can take the chances you so desperately wanted to take just a few short months ago. You fear failure, but in a different way. You fear letting down the people that joined the ride with you.
I always like to say that you can never truly gain perspective on anything until you remove yourself from it for a while. Now eight months into our new chapter as a standalone shop, I can say that while being part of a larger organization or holding company wasn’t our destiny. The vision of what we wanted to become was more about how we envisioned ourselves and organizational independence was the only way we were personally ever going to see it clearly. To me that insight is beyond valuable, because we now have the benefit of both hindsight and foresight in a weird and wonderful transition through operating models in a way that few get to see in their careers.
You don’t need to be an independent shop in order to act like an independent shop. It’s a mindset. With that in mind, here are three things that jumped out to us that can foster that “independent mindset” with a creative shop regardless of your organizational structure:
Make sure you have a clear vision for your brand. We push this for our clients all the time, because it’s hard. It’s easy to lose it yourself. Regardless of the size of our team or organizational structure, setting a clear path forward and stamping your brand on it will allow others to feel more comfortable taking broad leaps of creativity and work.
Focus on culture. It’s easy to lose sight of the impact that culture has on teams. You know it when it’s gone, though. In larger organizations or holding companies, the most dynamic thinkers typically come from the teams and groups that have banded together for a unified purpose and built a pseudo gang to not only protect, but foster, their way of thinking. We found, in the re-setting of our company, that we were reminded of how strong our culture had always been. It’s what really drove the work and relationships with our clients. Of course, individuals were and are extremely important, but the collective mindset and camaraderie is what really made – and continues to make – the place special to our clients and our team.
Present opportunities for investment and growth with payoffs. While we were part of a holding company, we were less able to find inventive ways to offer our people the ability to grow from external educational resources, invest in themselves, and incentivize them to do so. When we were able to get the company back, we quickly realized that professional development and employee profit sharing was going to be a key to our success going forward. We needed to re-invest in our people both financially and professionally to substantiate the first two points about brand and culture. Paying out the first profit sharing check to our team and saying yes to continuing education and development courses has been the highlight of our year so far.
Again, this isn’t rocket science. We are just coming at this idea from the unique perspective of newly independent creative shop owners and hope that what we share in this moment might resonate with a few of you out there that are part of a larger organization or maybe in those early stages of developing your own shop. I won’t say I don’t enjoy being independent again. That said, I also realize now that independence is more of an approach or mindset that works in any model or system.