9 things I learned running a digital agency
I’ve just completed a three year tenure launching and running the Sydney office for DT (an ambitious Australian digital agency) so I thought I’d jot down a few notes on things I’ve learned along the way!
I’ve steered clear of advice around culture, process, operations and finance, covered adequately elsewhere. Suffice to say that excellence in these areas is essential for success.
Let’s get started.
I’ve heard this from a few people, that a business goes through a significant period of pain when it breaks through the 15 person threshold, then again at 40 and 100. I inherited a business of 20 people, so I never experienced the 15 person threshold, but the 40 person threshold hit us like a truck.
There are a few factors at play. Not only do these numbers represent the thresholds at which the reporting structures tend to increase from 2 to 3 to 4 levels, but also the people involved change from (mostly) doers, to (mostly) managers, to leaders, under significant pressure. People get stretched to breaking point by the increased volume of work and the change in their role. Tempers fray, people leave, and it can take months to get through.
I’ve heard, anecdotally, that several agencies keep hitting the 40 people threshold without breaking through.
Is it worth the effort? Maybe. We found economies of scale kicking in once we made it through, with people being better able to take holiday and training because of the deeper bench. The peaks and troughs across projects and accounts equaled each other out more often. That said, margins were affected by having a higher percentage of higher paid leaders who weren’t 100% billable rather than highly recoverable doers. Getting the balance right was a challenge, to put it mildly.
I’ve now got a whole lot more respect for independent leaders who refuse to grow their agency above a certain size. The larger the agency, the further removed you are from the work. I didn’t enjoy that.
Incidentally, there’s also a Dunbar number threshold that changes the dynamic of any community, including a digital agency. I’ve seen the effect firsthand — it’s real.
Manage your energy
I’m bad at this! I used to check my email all evening, send replies (setting a bad expectation with others), write proposals at the weekend, even answer calls while on holiday. It’s unsustainable and makes you worse at your job — it’s that simple. What’s worse, it damages your health and your family relationships.
By being more disciplined, and self aware, I should’ve got this under control more quickly. Towards the end I had stopped checking email after 7pm and at weekends. I told others that I was doing this — it sets the tone for the business. I took holidays out of town and resisted the urge to check in. And took up hobbies. And I found myself coming back to work well rested and ready to take on whatever came next.
Give me something to believe in
The team I inherited three years ago had been beaten into submission. They were the passive recipients of decisions made elsewhere, with deadlines, scope and cost imposed upon them without consultation. Failure was systemic. Simply introducing the DT values and brand into the equation made a big difference to some, but I found it useful to also declare my own values, and specifically how these related to individual disciplines. If you have shared beliefs, people will be better aligned when you’re not in the room. My values revolve around quality, a drum I kept on banging.
I kept coming back to Simon Sinek’s excellent TED talk, but when I first watched this I didn’t appreciate that it applies to everything you want to do — not just company strategy, but project work, individual mentoring and direction, even personal relationships. People don’t buy “what”, they buy “why”. And if you can engineer things so all individuals in the business agree (say, through career development plans) how the business core purpose aligns with their job and career goals, then you’re in a great place.
It’s all about relationships
Before leading an agency, I understood how important client relationships were in the completion of work, or running of accounts, but the dynamics change when you’re leading an agency. It’s harder to establish relationships with clients because you’re not involved in the day to day (and nothing builds relationships like working together on a tough project). And inevitably you need to focus part of your time on finding new clients.
This is a problem, because the relationship needs to be solid well in advance of problems occurring. You need trust in place before you can talk candidly about the problem and solve it together. Relationships need to be nurtured, constantly. Make it part of your routine rather than waiting until the shit hits the fan, because by then it’ll be too late.
At one point in my tenure I was informed that some of my direct reports found my style a bit too direct. They were right — I had to work on my emotional connection with them. Take the time to get to know them better. And, importantly, show some vulnerability. An example of good vulnerability is showing how your success is linked with theirs — that you both need to do a good job or you’ll both fail.
I’ve spent a fair amount of time researching emotional intelligence (another area I’m still working on), and have found it very helpful. It applies 360º across your whole reporting line (up, down, across), and worth encouraging in both directions AND through your direct reports to the next level down if you have one. Here’s a good place to start (I can loan you the physical magazine if you know me personally — lots of useful articles).
Shut up and listen
Oh, this is an obvious one — but so true. When you’re running an agency you haven’t got time to listen to people give long winded explanations and descriptions — it’s so tempting to jump in and give them the answer. But this is a false time economy. If people realise that they’ve been listened to, they’re far more likely to listen back. You both learn more in the process. Plus, it’s just good manners. So if you’re struggling to get something done on a tight deadline, tuck yourself away and get it done — but make sure this is an exception to the rule. Your role as a leader is to be available.
Ask the right questions
I was lucky enough to have a great leadership coach, and he shared all sorts of useful knowledge. Perhaps one of the best soundbites was that “90% of leadership is asking the right questions”. This ties into the prior item in some respects — rather than solving people’s problems, your goal is to help them figure out solutions themselves. And if you can do this in a group setting, you’ll come up with exponentially better outcomes than if you figured it out on your own.
As I mentioned before, I believe that shipping a quality product that delivers against strategic goals is the ultimate test of a digital agency. Word will get around if you deliver a poor product, and rightly so. Plus demanding a high quality outcome is a great way to attract and retain the talent that can actually deliver it. The best people want to contribute to something they can be proud of, and this isn’t going to happen unless it’s a shared ambition for the project team and everyone in the agency.
Focus on outcomes, not outputs. The best people will want to know how their work will impact the client and their business. Less effective people will deliver a set of wireframes or some code and consider the job done. Hire the former, change the latter — fast.
Don’t stop believin’
Running a digital agency is easily the hardest, most nuanced job I’ve ever done. At first I thought there were too many problems too far beyond my control, and it took time to understand that the methods I’d learned in previous roles weren’t enough for this one. Giving out orders wasn’t going to cut it. Fixing problems myself was unsustainable. I had no idea how much I didn’t know when I started.
It’s also hard at first to swallow that you can do almost everything right and still fail. You can also do things wrong and still succeed. It feels like a bucking bronco. You’re far more exposed to the whims and fancies of the market than when you’re in a less senior position.
But whenever things weren’t going as planned, I leaned hard on the advice of Chris Savage (former COO for DT’s holding company, STW). He channeled Walt Disney, who said “The only difference between winning and losing is most often not quitting”. Back yourself. You wouldn’t have got the job if you weren’t qualified. And like every business leader on the planet, you’re figuring it out as you go along — and that’s OK. Keep your chin up, and keep going!