Operations Is Marketing

Or: two pieces of advice for less-than-amazing companies 

Nothing kills bad products like good ads.

That’s not a direct quote from Bill Bernbach, but it’s certainly a sentiment he promoted in the late ‘60s. Bernbach was one of the founders of Doyle Dane Bernbach (now DDB) and is certainly one of the godfathers of modern advertising. He was brilliant and made Don Draper look like Mr. Bean. If only Bernbach could have lived to see the current predicament of companies in the Internet age.

These days, bad products don’t need advertising to help them fail. All it takes are a few disgruntled customers with Facebook accounts, Twitter feeds, Foursquare commentary or a Yelp compulsion. It’s easier to complain than ever. And when someone complains, there’s a good chance that hundreds – if not tens of thousands – of people are listening.

Plenty of marketing pundits have focused on what to do when someone calls out your company or brand on a social network. By now, every major national brand has a Social Media Damage Control Plan waiting to get rolled out by their PR professionals. But I haven’t heard anyone suggest the corollary: a preemptive plan to the emergency situation. What’s that option?

Make better stuff. Be better people.

That’s not easy if you’re in a company where management doesn’t see those two things as core values. And that’s why operations is just as important — if not more important — than marketing in today’s world. In fact, operations is the front line of marketing.

Since the beginning of advertising until just fifteen years ago, part of your advertising agency’s job was to overcome your company’s shortcomings by focusing on what you did really well and trusting that the positives outweighed any negatives — not to mention that our messaging for you could counterbalance any negative commentary from your small circle of friends, coworkers and acquaintances.

We hoped your customers would say things like: “I like that company because of <thing they saw in advertising>. Yeah, I’ve heard their <negative thing> kind of sucks. But at least there’s <thing they saw in advertising>.”

These days, most of us in advertising will admit (to each other and usually behind closed doors) that we’re pretty powerless to overcome a bad product. There is — quite literally — a whole world of commentary on every product everywhere. Bad products are burned at the stake by fiery tweets a few thousand times before we ever get your project brief.

As a guy in advertising, it’s hard to admit that I might not be a part of the most important part of your business anymore. But if your product, service and customer service aren’t worth talking about — or worse, they’re only worth talking about because they suck — you have bigger problems than determining the message in your next ad campaign.

Ad people. We’re still here. Every one of us in every department of every agency is looking for the opportunity to work for companies who are focused on creating and designing an amazing product with superior functionality that provides the ultimate user experience. But if you don’t have those, there isn’t much we can do. And there are only two things you can do.

Make better stuff. Be better people.

It’s that easy. It’s that damn hard.

[EDIT: A day after this was posted, I read a post on the HBR blog by Ty Montague (“CEOs Are to Blame for Short CMO Tenures”) that makes a good argument that this marketing predicament lies at the foot of the CEO. It looks like he tackles the subject even more in his new book, giving specific examples of companies and CEOs that are doing it right.]

Next Story — Stop Calling It “Traffic”
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Stop Calling It “Traffic”

Or: your Old World agency viewpoint is killing your New World agency profitability

This is a story that originates from the world of advertising, but reaches deep into a specific problem plagued by many industries these days.


How do you know if this might relate to your job if you’re not in advertising? Here’s a quick test. There’s a guy at your company named Jim. Jim has a very specific skill set and is supergood at what he does. You’d like Jim to work his magic on one of your upcoming projects.

How hard is it for you to secure Jim’s time? How many people do you need to ask? How many of those people will resent you for asking? How many people will wage a passive-aggressive office war with you so that Jim will continue working on their project instead of yours? Are you Jim?

If you’re anxiety level increased just by reading those questions, some of this might be worthwhile regardless of your industry. But let’s start with advertising.

In most advertising agencies, executive management hates the traffic department. For lots of agency bigshots, “traffic” is synonymous with “useless, paper-pushing overhead.”

Not long ago, the traffic department was an integral part of an agency’s success. So how did we get to the point where many current agencies don’t have a single person with the word “traffic” in their title?

There are two-ish culprits: 1) technology, and 2) ignorance and/or ego.

An Exhaustive, Exhausting Metaphor and Retrospective on Agency Traffic

Before we look at the current problem with traffic departments, let’s analyze yesterday’s traffic success. Think of the old traffic system as a hub-and-spoke model — the same model used by major airlines to ferry passengers around America and the world. With airlines, you board an airplane in one city and fly to a hub city.

You’re probably familiar with the concept of hub cities. If not, think of Phoenix, Denver, Chicago, Atlanta or any other city with an enormous airport, where it feels like you need a sherpa and an incessantly beeping golf cart made by Ferrari to make your connecting flight on time. Basically, if you’re not flying direct, the city in between your first and second flights is a hub.

This is the most efficient system possible, because it would be impossible to remain profitable if you flew everyone from their home airport directly to their destination. Airlines simply can’t afford to fly what would amount to a private charter jet for the one guy who needs to get from Des Moines to Little Rock on a Wednesday afternoon.

Before the early 2000s, this wasn’t just the model for air traffic. This was the system in place for the traffic departments of advertising agencies, too.

Instead of passengers, agency traffic people carried two things on a daily basis: information and productivity. Productivity took many forms at many junctures, including creative briefs, marker sketches, copywriting, layouts, bluelines, matchprints and other production documents that no one under the age of 40 will recognize. At some point in a project, each of these was stuffed into a “job jacket” and given to a traffic person, who would then take that piece of productivity to the next person or people in the process.

The traffic person was the hub. Everyone else was a spoke. With every advancement in a project, the traffic person traveled down one of the spokes, picked up the job jacket and then traveled down another spoke in order to deliver the job jacket to another destination.

For a moment, let’s follow just the copywriting for a particular job as an example of what traffic used to do. We’ll say it’s an ad. The traffic person showed up at the copywriter’s office a few days before the copy was due to remind that person of her obligation. On the morning of the deadline, the traffic person returned and ask what time they could expect the copy. The copywriter (who probably hadn’t even started the copy at that time) either gave the traffic person an answer or begged for an extension.

Eventually, the copywriter handed the traffic person a job jacket with a printout of the ad’s copy. The traffic person took the copy to the creative director, who would make revisions. Traffic then took that copy back to the copywriter. Once the copywriter made the revisions, traffic dropped off the copy with the account executive, who either accepted it or asked for more revisions. If there were changes, the traffic director continued to travel up and down the spokes of the copywriter, creative director and account executive until everyone was satisfied.

After that, traffic took the copy to the proofreader, who would suggest even more revisions. After going between the proofreader and the copywriter a few times, the traffic person then walked to the art director’s office, who would eventually put it into layout.

All of that just for copy.

Of course, the traffic person did that for every aspect of the job. And they did it for dozens of jobs for many clients all day, every day. Back and forth, back and forth, back and forth. It’s exhausting to even contemplate. If Fitbits existed during the heyday of traffic, traffic people would have had their 10,000 steps on any given day before most of the agency had even walked to the breakroom for their first cup of coffee.

Traffic Gets Jammed

Eventually, technology came along that negated the necessity of someone physically carrying work around the agency. One of those was the Portable Document Format, now simply called a PDF.

Before universal adoption of the PDF, there was no standard format for file sharing. You could attach your file to an email and send it off, but there was a good chance that the recipient wouldn’t have the necessary program to view and review the document — not to mention that many documents would be too large to attach to an email. Once the PDF came along and anyone could email almost anything, there was no need for a file to be physically delivered by a traffic person.

PDFs were just the beginning of the end for most traffic people. The real demise came with the rise of project management software — think Basecamp or any other program that allows direct communication and file sharing between various team members.

The airline industry instituted the hub-and-spoke model because it was the most efficient way to get passengers to their destination. Project management software made the traffic person’s hub-and-spoke system the least efficient way to move productivity around an agency.

Think of the ad copy example from earlier. The copywriter no longer needed to give the copy to the traffic person for delivery to the creative director. The copy was simply uploaded with a message for the creative director, who replied with revisions for the copywriter via the project management tool. It cut traffic out of the process entirely.

About the same time project management software began to really take off (circa 2008), the nation slid into a recession. Agencies across the country were forced to adjust to a world where their clients demanded more service (because those clients now had fewer resources and were desperate for any kind of success) but had a much smaller budget (because marketing is almost always the first dollar to go when a company starts cutting expenses).

Agencies were no different than any other business at the time. Agency CEOs were forced to make hard decisions in regards to resources. In many agencies, expenses were analyzed with such detail that magazine subscriptions were cancelled. And when a $12/year subscription is on the chopping block, you can bet that salaries are getting scrutinized, as well.

“More with less” had been a small, snickering hallway joke at many agencies for years. It became an unfunny actuality very fast. And that leads us to the demise of the traffic department.

“Alright, folks,” you can almost hear an agency CEO say to a group of executives sequestered in a closed-door meeting, “Projections are down 40% for next quarter. We’ll never survive if we don’t make some hard decisions. It’s unfortunate, but all of your teams are going to be smaller very soon.”

With that, the CEO and a handful of executives would launch into the unenviable process of determining who to lay off. Most of those conversations started with overhead — those unfortunate people who don’t provide a source of revenue to the business. At many agencies, it didn’t take long for the conversation to turn to the traffic department.

“What do Linda and Jamie do these days?” someone would ask.

“That’s a good question,” the CEO would say, “Don’t we have that project management software in place? Isn’t it doing everything they used to do? I still see them walking around with job jackets. I don’t understand why, though. Am I missing something? Anyone want to make an argument for their necessity?”

Some half-hearted cases were probably made for the necessity of the traffic department, but the Lindas and Jamies of the world didn’t stand a chance. They didn’t have client relationships. They didn’t produce anything but job jackets. And job jackets didn’t produce revenue by themselves.

Traffic was toast.

For many agencies that was quite some time ago. Now, here we are. Something is missing. But we can’t seem to put our finger on what it is.

Cutting Off Your Nose to Spite Your Wallet

So what is it that’s missing? The answer lies outside of the job jacket.

Think back to the two things traffic departments carried: productivity and information. Technology replaced the need for shuffling paperwork around the office, but it made information even more important.

This is the thing we forgot about traffic: they had a universal view of the agency. They knew who was working on what. They knew who had capacity and who didn’t. They knew who was a better long-form writer and who was a better headline writer. They knew who could bang out a decent layout in two hours and who needed a whole day for a layout that would blow all others away. They knew who worked well together and who shouldn’t be in the same room without a judge and a couple of sheriffs. They knew everything.

As it turns out, shuffling paperwork wasn’t about shuffling paperwork. Shuffling paperwork was about gathering data points that made the agency run more efficiently, more productively and — ironically — more profitably. Traffic’s biggest asset wasn’t their legs. It was their brains.

When agencies cut their traffic department, they weren’t removing a useless organ like an appendix. They were performing a lobotomy.

This “useless” department may have held the most important people in the agency. And now we’re starting to realize that. So what do we do?

“A Rose Is a Rose Is a Ro-” “Yo. Zip it, Gertrude.”

The first thing we need to do is stop calling it “traffic.” The word has too much baggage. When you say “traffic,” people think of the paper shufflers of yore, not the keepers of the information that are still invaluable.

Call it “resource management” or “supply chain management.” Call it “The Secret Order of Universal Knowledge.” Call it whatever you want. Just don’t call it “traffic.” We’ll go with “resource management” here.

How does resource management work?

Not easily for many. Resource management is akin to going all-in during a game of Texas Hold’em. You can’t halfway manage your resources. You can’t dabble in resource management. There’s no dimmer switch. Resource management needs to remain “on” at all times.

The resource manager needs to be the second most powerful person in the office. Many people in agency leadership find this difficult. It’s too tough of a mental shift for many managers to elevate a position that was considered mere “overhead” not long ago. Here’s the thing, though: if each manager had a universal view of the entire agency workflow at any given time — as opposed to just the projects of their individual clients and teams — resource management would be unnecessary. But they don’t.

Everyone in an agency has tunnel vision. They know what they know. And they only truly know what’s important to their team. Every team has many things that are important. So every team’s manager(s) believes their team and their team’s needs are the most important in the agency.

But only one thing can be the most important thing in the agency at any given time. Not that other things are unimportant. They’re just not the most important.

A good resource manager knows the importance of every client, every job and every employee in the building at any given time. The order of that importance changes daily, if not hourly. That means the strategy for finishing all known agency projects changes every day, if not every hour. If a resource manager isn’t empowered to shift resources from one project or client to another on an as-needed basis, there’s no reason for a resource manager.

Is that a lot of power? Yes. Is there any other system that works? Not efficiently.

Think of our friend, Jim, from way back in the beginning. How many times have you had two or more account managers arguing over Jim’s time?

“I need him.” “No, I need him.” “I need him more.” “My client’s going to fire us if this isn’t done.” “So is mine.” “Fuck you, Jim’s mine.”

How long does that argument last? Most of the time, Jim could have finished both projects by the time any decision is made. This doesn’t even take into consideration the strain on inter-agency relationships that results because of these arguments. Or how Jim feels about being the shitburger in the middle of a Wonderbread sandwich.

An objective, unemotional resource manager would solve the Jim Dilemma before there was a problem in the first place. And that’s not a bad name for this position either. Solutions Manager. Or Department of Solutions. Or for companies who have “ninjas” and “gurus” as titles, I propose what could be my favorite title ever: the Director of Solving Shit.

In any given situation, there might be a number of possibilities in solving the resourcing problem. Shuffle Jim’s projects. Bring in a freelancer. Break the news to Jim that he’s going to be working the weekend (again). Whatever the resource managers need to do, they do it. No questions asked. All decisions are final.

Until they’re not.

That’s why they’re the second most important person in the agency — because not all decisions will be accepted with finality. When a conflict can’t be resolved because one or more parties refuse to accept the decision of the resource manager, there has to be a mediator.

This mediator should be someone at the top of the agency food chain — whoever is involved with the agency, its clients and its staff on a daily basis, but who has no allegiance to one department or another. This could be a CEO, president, COO, general manager. Whoever it is, that person will hear all sides of each situation and either rule with the resource manager or overturn that decision.

These mediated conflicts can’t happen often. If there’s one person who is constantly challenging the decisions of the resource manager, it truly will come down to “this office isn’t big enough for the two of us.” You’ll have High Noon in the breakroom at lunch.

The whole purpose of the resource manager is to make things run as efficiently and profitably as possible with the fewest negative repercussions to the company’s business. If they’re not accomplishing that, it’s time to find another resource manager. If someone else is constantly challenging decisions only to have those decisions upheld, that person is ruining productivity and should find another job.

Is it this easy? Yes. Is implementing a system like this easy? Not at all. Your agency is running on its own system right now. It’s probably unbalanced. It’s probably running at a fraction of its potential productivity. But it’s a known entity. People know the system. They know how to work around the system. The smart one’s know how to manipulate the system. And whoever is currently in power in that system will probably not relinquish that power lightly — especially if the person with power is actually in power.

That’s right. For a resourcing system to work well, senior management can’t put their pet projects into the system and override everything else in the pipeline. Their projects need to be resourced just like the rest of the agency’s work. And that means egos must be abandoned.

Remember: agency management cut the traffic department because it was viewed as useless overhead. It takes a logical, level-headed management team to step back and relinquish a bit of their power and privilege to a department/position that was perceived to hold no value not so long ago.

But there is no other way. Someone has to have control. If executive management needs to retain control of this area, there’s no need to hire a resource manager. In very short time, the Director of Solving Shit will get a pink slip for being the Director of Useless Overhead — because they’ll be rendered useless and ineffective by the very people who hired them.

Hiring a resource manager takes courage. It takes faith. And there’s probably a little bit of magic involved, because someone who has all of the necessary qualities won’t be easy to find.

The resource manager needs a lot of agency experience, because she needs to understand how departments and different positions within those departments work together (or, as is often the case, don’t work together well at all).

Most of all, the resource manager needs the logic of a detective. She needs the demeanor of a concierge. And she needs the patience of a kindergarten teacher with a classroom full of cognitively challenged kids — because that’s the best metaphor for a company in the chaos of a resourcing system that’s overburdened by ego, unaffected by logic and held together with the emotional equivalent of the glue from the back of Post-It notes.

Next Story — Rich People Working on Sundays Should Make You Nervous
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Rich People Working on Sundays Should Make You Nervous

[NOTE: This was originally published online at a long defunct blog just before midnight on Sunday, September 14, 2008 — the day the financial crisis began in earnest. I was reminded of this post as Hank Greenberg’s $40 billion lawsuit against the federal government recently got underway.

If you haven’t yet, take a moment to do a little reading on the case filed by the former chairman and CEO of AIG. It’s embarassing, enlightening and occasionally entertaining. It’s also a valuable lesson. It teaches the government that if you don’t take white-collar hustlers to court for their shenanigans today, they might turn around and put you on the witness stand tomorrow.

Fair warning: this piece ends in a kind of metaphorical ellipses, because there was no end that night. Things were just getting started. For millions of Americans, it hasn’t ended yet. And why should it? Most of the same people are still in charge.]

I know rich people.

Went to school with some. Worked for some. Fished with some. Snorted MDMA with several of them on a particular night back in 1990.

Don’t get me wrong. I’m not saying I’m friends with the rich. Rich people only befriend other rich people, but they let non-rich people occasionally watch them at close range to remind themselves that they’re not non-rich. That was me on numerous occasions.

You’ll have to trust me: I have rich credentials. And not just money-in-the-bank rich, but owning-the-bank rich. These relationships and experiences have led me to several conclusions regarding the more affluent:

  1. Rich people know everything.
  2. Rich people like to own a lot of stuff.
  3. Rich people like time to themselves to enjoy that stuff.

If you believe these three things, it seems that today – September 14, 2008 – we have officially entered into Big Darkness.

We’re fucked.

Right now, as you watch the Steelers/Browns game or a shitty rerun of one shitty show [Note: that’s a broken link to Desperate Housewives] or another [Note: this broken link went to CSI Miami], there are people on another channel in an emergency session that has preempted the regularly scheduled rerun of an even shittier show [Note: I can’t believe America has such horrible taste in television or that NBC has such horrible site maintenance that this link isn’t broken].

You see, Lehman Brothers – one of Wall Street’s five investment banks – is going belly up. Kaput. Nada. Gone. Just like you and me, they’re in debt. Unlike you and me (hopefully), their debt-to-asset ratio is estimated to be as much as 40:1. Imagine owing $4000 to a guy named Vinny and all you had to give him was a hundred bucks. Imagine how pissed Vinny would be. Now imagine you owed Vinny $60 billion and could only come up with a little over a billion. That’s Lehman.

On the same day and at the same time (at the same fucking time), Bank of America has had to bail out Merrill Lynch. In the last year, Merrill’s lost 80% of its value and its downfall was gaining momentum. In fact, it was starting to tank faster than John Goodman at a Boston Marathon. So BofA stepped in again. Again? Yup. For those of you with short memories, Bank of America was also forced to acquire another fantastically shitty company [Note: this was a link to Countrywide Home Loans] a mere 2 ½ months ago.

But wait. There’s more.

Today also saw AIG – one of the world’s 20 largest companies – begin to sell off everything but their Herman Miller Aerons to try and raise a little cash after their stock dropped almost 50% last week. Last fucking week. So how much do they need? Somewhere between $40 and $50 billion. Why? Because if they can’t touch it soon, Vinny’s coming for them after he puts a bullet in the back of Lehman’s skull.

This is all preposterous. And yet it’s all true.

You can go out and do the research on why this is happening if you’d like. You can follow the trail from the subprime market to the prime market to the entire credit market. You can familiarize yourself with CDOs and SIVs. You can read a little about Derivatives Time Bombs. But in order to truly understand how dire the situation is economically in this country today, all you really have to do is look back at those Rich People Rules we started out with:

  1. Rich people know everything.
  2. Rich people like to own a lot of stuff.
  3. Rich people like time to themselves to enjoy that stuff.

First, take Rule Number Two: rich people like to own a lot of stuff. Today, a whole bunch of rich people are selling a lot of stuff they own. Whole companies worth billions of dollars are up for grabs. Hell, AIG was even going to auction off its luxury airline timeshare division. Are you kidding me? Rich people selling off a way to sip Krug in leather at 450 knots while avoiding TSA and armrest wrestlers like me? Desperate times.

Now look at Rule Number Three — rich people like time to themselves to enjoy their stuff — and then remember this: everything I’ve talked about so far has happened on a Sunday. No Hamptons or Cape Cod or Connecticut countryside. In fact, rich people didn’t even get as far as New Jersey today. Think about it: they opened up the stock market. On a Sunday. For trading. I’m assuming they rang the bell and everything.

So what does it all mean? No one seems to know. And that violates Rule Number One: Rich people know everything. I mean, when haven’t you heard some rich douchebag lecture a crowd about the benefits of America’s secret war against Pakistan,* or how he prefers Grindelwald to Banff, or why the National League should be forced to implement the designated hitter?

For the past several hours, CNBC has trotted out or phoned in every rich person that isn’t hunkered down in New York’s Federal Reserve building to give their opinion on what this all means to the economy. By the way, “the economy” is Rich People Code for “all the poor people who have to work.” It’s kind of like a Southern sports announcer calling a basketball team “remarkably athletic,” when what he actually means is “really fucking Black.”

Anyway, none of these pundits know shit. Not a one. Not guys from Goldman Sachs or Morgan Stanley. Not guys who used to work at Treasury. Not low-level Fed lackeys. Not Ivy League economists. None of them will even venture a guess. All they know is that it’s “not good.” In fact, “not good” is usual Rich People Code for “poor people are fucked.” And several of these guys – including the guy** [Note: I really can’t believe this link is still live] who’s at least partially behind our current predicament — are actually using the word “bad.” And when rich people use the word “bad” while talking about their money, that can’t be good.***

* Not calling William Pfaff a douchebag. The brandy-swilling asshole one table over from you who won’t shut the fuck up about foreign policy while you try to enjoy your anniversary dinner? He’s the douchebag.
** This is the most frightening thing I’ve seen in a long time. Start listening to Stephanopolous’ question with about 8:10 left to go. Then listen to Greenspan’s answer. Then tell me whether or not you believe his “best guess.”
*** I didn’t even mention Washington Mutual. Maybe that’s next Sunday.

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