Top 5 Mistakes The Big Businesses Make
We all have a bad habit.
Comparing the worst in ourselves with the best in others.
We all do it. Even in business.
And it's so easy, looking from the outside in, to think everyone else has it sorted.
We always compare the most chaotic, unfinished version of what we do, with the most polished, perfected, imagined version of someone else.
And there's just no way that's ever going to compare well!
But do you know what?
Just as YOU project the best image you can, often camouflaging the mayhem that can go on behind the scenes, so does everyone else.
And the well known, successful businesses are no different.
I spent ten years working with some of London’s top marketing agencies.
You’d think if anyone had it sorted these guys would.
But they don’t.
Sure, they have big name brands, international footprints, hundreds and sometimes thousands of staff, and turn over billions in revenue.
But do they have it all sorted behind closed doors. Not on your life!
Here’s some of the stumbling blocks I’ve encountered from ten years working with the big agencies:
1. Digital Isn’t Difficult
Many large agencies come from a more traditional advertising background. And while they’ve expanded into digital channels as a necessity it often isn’t at the core of who they are.
At the most senior level if you don’t really understand what goes in creating and delivering digital products and services it’s easy to mistakely believe that ‘doing digital’ is fairly straight forward. That someone who does Paid Search should also be able to do SEO. That Programmatic is just an extension of Online Display. That there isn’t much ‘manual labour’ involved because digital is technology based. That the same person who did the campaign strategy should also be an expert at ad creation, campaign setup, optimisation, data analysis and reporting. That the idea that worked so well on TV should also work just as well on banner ads and social media.
This thinking results in underestimating the time, complexity and expense involved in delivering well, as well as not engaging the right expertise at the right time to get the best outcome for the client or yourself.
2. Don't know how much it really costs
Knowing what’s involved and how much it actually costs to deliver your work is vital to ensuring you price yourself correctly and make your margin. However for many large agencies what goes into delivering their digital services is still a bit of a black box.
I remember working with one company and asking how much it cost them to deliver their display ads. The answer was 3% of ad spend. When I clarified that that was how much they charged, not how much it cost, I was met with a perplexed stare and a repeat of “3% of ad spend”.
It turned out that no-one had thought to find out how much it actually cost them to deliver their work. As long as they were making a profit over all they thought it didn’t matter. Until it did. Until they were struggling to hire the right people because they weren’t making enough money. Until the clients were complaining because the work wasn’t happening quick enough or well enough. Until the 10% of revenue that ‘didn’t really matter’ became the 60% that did.
3. Process Isn’t That Important
One of the key items I always ask for when working with an agency is their process diagrams. This tells me a lot not just about the way they deliver or how efficient they are, but about how they think about process and it’s importance.
You would think that the big agencies who are turning out hundreds if not thousands of pieces of work each year would have their delivery down pat. But many don’t. I've worked with a surprising number of agencies to accurately define and document their best-practice process as their previous ways of working were often overly-simplistic or simply outdated.
As a result they were reliant on the specific individuals involved to do the job well. There were few reliable check-points in place meaning the client was often the first person to discover a problem. Not an ideal situation!
It also meant that the quality of their delivery and of the end product was inconsistent. When it went well, it was hard to replicate. When it went wrong it was hard to fix. And the client was often the one that paid the price, just not literally!
Not a situation any agency owner wants to be in.
4. Account Management is the same as Project Management.
When you start out, you and your team often need to be everything to everyone. However as you grow it gives you the opportunity to bring onboard specialists who excel in their area of expertise.
Two skillsets that are key to successfully managing client relationships and delivering projects well when you are operating at scale are Account Management and Project Management. However they are often seen as interchangeable.
I’ve worked with many agencies who, often for cost saving reasons, have decided to combine the two disciplines.
Rarely does it have the end results they were looking for.
And that’s because the two roles often act in opposition to each. Simplistically, Account Management is about managing the client relationship and representing their interests, whereas Project Management is about delivering the project on time and within budget and representing the profit interests of the agency.
Of course in reality it’s not nearly that simple. There’s often overlap. However very few people excel at doing both. And at their heart, the characteristics of the individuals drawn to one role over the other mean they are often placed in conflict when asked to do both.
This results in either poor delivery management or poor client management, or, as I’ve seen in too many occasions, both. The financial cost, as well as the impact to their reputation, can often outweigh any real cost savings they made by combining the roles.
5. Everyone should be 100% Billable
Digital platforms are constantly evolving. Practically every day Facebook pushes another code release and it seems to be the mission statement of Google to change their algorithm on a regular basis.
And that’s just two platforms.
There’s also the consumers. How they are actually using the platforms, what type of content they consume and where they go to find it.
If you don’t keep up with the latest trends and technical advances, you’ll soon be left behind - there’s a reason Google encourages it’s staff to spend 20% of their time on passion projects!
And yet most large agencies create their commercial models assuming all their staff will work on chargeable client work 100% of the time. They leave no time to dedicate to R&D, innovation, or personal development. Which puts them in an incredibly difficult position of having to chose between profit or innovation. And when there are bills to pay and targets to hit, real innovation and personal development rarely end up on top.
Obviously not every agency gets everything wrong. They wouldn't be where they are today if they did! But when you find yourself feeling defeated or that you'll never get everything right and never succeed, just remind yourself that not even the successful ones have it all together.
So take a deep breath.
You got this.