ALP 26: How to avoid becoming an agency of one

Most agencies begin as one-person shows. But to grow and expand -- and keep the owner sane -- it can't stay that way forever. That's the challenge that Chip Griffin and Gini Dietrich tackle in this week's episode of the Agency Leadership Podcast.

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Most agencies begin as one-person shows. But to grow and expand — and keep the owner sane — it can’t stay that way forever. That’s the challenge that Chip Griffin and Gini Dietrich tackle in this week’s episode of the Agency Leadership Podcast.

Clients who originally signed up with an individual naturally want to maintain that access even as the agency takes on more clients and employees.

But that doesn’t scale.

Owners need to focus their time to work on the business, not in it.

That doesn’t mean that there’s not a place for owners to step in and work on client service, but Chip and Gini explain how to position the team for success and set the right expectations with clients.

During this episode, you will hear:

  • Specific examples of cases where agency owners struggled with this challenge.
  • Detailed explanations of why it will hold back growth and make the owner miserable.
  • Strategies for dealing with the inevitable desire of an owner to micromanage projects.
  • Process improvements that will make it easier to escape the “agency of one” trap.
  • Personal stories of how Chip and Gini have addressed this issue in their own agency businesses.

A few notable quotes include:

  • “You do have to put priority on coaching and mentoring a team to be able to do the same level of work that you do.” – Gini
  • “You have to be needed, but not necessary. In other words, you have to bring something to the table, you can’t be in a situation where you’re worthless to your own agency, there needs to be some there there.” – Chip
  • “If I were going to do it, again, I would not put my name on the door.” – Gini
  • “As an agency owner, if you want to help your team grow, if you want to help build the relationship between your subordinates and the client, that means you have to shut up and just be the pretty face.” – Chip

Transcript

CHIP: Hello, and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin.

GINI: And I’m Gini Dietrich.

CHIP: And we’re here today, two of us, to talk about not being an agency of one. I think that makes sense, right? Yes.

And it’s very important because as agency, you know, we’ve talked before about accidental agency owners and starting out on your own, and, you know, you, you, you, all of a sudden have more clients. And so now you’re adding employees and contractors and all that. But, you know, that often means that you haven’t created a strategy to go beyond being you as the agency, and frankly, most agency owners have their name on the door. So…what do you do?

GINI: Right. Also kind of a mistake, as I’ve learned, it’s hard, you know, I was talking to a friend a couple of months ago, and she was like, ah, and she’s, she has a significant business, I think they do, they’ll do four and a half or $5 million this year. So she, you know, she has some employees. And she was like, Oh, I’m so frustrated, because I’ve asked my account executive time and time again, to stop putting our logo on every page of a proposal, it only knows needs to go on the first page. And she’s going on and on on this rant. And I just looked at her and I smiled, and I said, I feel like at this point in your life, of your agency life, you probably don’t need to be worried about that anymore. So they put the logo on every page, don’t you have other things to worry about. But I think that that’s what we tend to do is we don’t we get caught up in maintaining control and not wanting to get delegate, and nobody does it as well as we do. And so we get we get mired in this all this minutia that doesn’t help us grow, and doesn’t allow our team to evolve and grow so that then they can take care of clients. And it doesn’t have to be just the person whose name is on the door.

CHIP: Right. And so, you know, let’s, let’s take a minute and talk about why it’s important not to be an agency of one and, you know, some of its obvious, you know, some of it is that, that stress and anxiety that you have, as an agency owner, gosh, you know, I do I have to do everything around here, you know. And so that’s, that’s a piece of it. But ultimately, it’s, it’s important, not just for your sanity and your quality of life, but also because if you ever want to exit the business, yeah, it’s gonna be very difficult to do that, if it’s all about you.

GINI: Yeah, it’s very difficult. In fact, I just, I was on the board of an organization that sold last year, and not an agency, another business. But one of the things that we implemented five years ago, was a transition team, that would be able to be the team that would then, once the business sold and the founder exited, that would take the business on to the next level. And that was five years before the founder decided to sell. So I mean, obviously, we’ve been talking about it as a board. But that’s one of the things you have to think about is, if it’s just you or the clients all expect you, you’re not going to A, get the same kind of multiple you would if you sell and B, you’re never actually going to exit you’ll just go work for somebody.

CHIP: And in as you’ve just said, there, it takes time, this is not something where you just flip a light switch, it’s very difficult to transition yourself, in part, because that’s not the way that you as an agency owner have been thinking. But it’s also because that’s how the the external world, your clients, your prospects, and others perceive it. So you put yourself in a box, and you need to take time, in order to undo that box, open it up and, and share with others.

GINI: And one of the things that they’ll do when you go to sell is whoever’s buying you if they have, if they have accountants, or lawyers or PE firms, or whoever it happens to be. They’ll go and talk to your clients. And they’ll say, is Chip involved? How involved is he? How often do you see him? What kinds of things do you get from Chip that you don’t get from anybody else? And if the answers aren’t, we rarely see Chip, we don’t need Chip, Chip doesn’t provide any strategic advice. His team is x, y, x, y, and z. And they’re the ones doing it. If the if those if those are not the answers, you’re not going to be able to sell your business.

CHIP: Right Although, hopefully they don’t say Who the hell is Chip that would be the worst. It would be good if they at least knew the name.

GINI: Yeah. But that’s what they want to know that the agency is going to live without you. And if you continue to be the person who’s handling it all. And trust me, I get it. Like I’ve had the phone calls, while I’m traveling, you know, five hours away, and the client’s upset. And you know, because you’re the only person they’ll trust to fix it. And I’ve had the phone calls from clients saying, Yeah, I’m not going to work with so-and-so, you need to figure that out, like I get it. But you do have to put priority on coaching and mentoring a team to be able to do the same level of work that you do.

CHIP: Absolutely. And you have to be, as I think we’ve said before, you have to be needed, but not necessary. In other words, you have to bring something to the table, you can’t be in a situation where you’re worthless to your own agency, there needs to be some there there. Otherwise, you probably didn’t get to where you are anyway. But you you need to be able to just walk away from the business at any given moment, and it will continue forward, it may not grow as fast, it may not be, you know, it may take time to make up for what you were doing working on the business. But ultimately, you need to be able to walk away. And and that’s not only good for if you want to sell it, it’s good for building a business that will keep you sane and keep you profitable in the near term as well.

GINI: And now Yeah, I mean, the the sanity part, I think is really is a really solid one because you don’t want to work 80 to 100 hours a week, every week for the rest of your life. I don’t want to do that, you know, at all. And I think the you know, the more mature you get, and the wiser you get or older you start to realize, you know what’s really important and hopefully you’ve built a business that can sustain you through that versus you being the one that’s answering all the clients, handling all the crises, going on all the trips, going, you know, pitching the media, doing all that stuff, get you past that, so that you have a team that you can depend on, and you can take a week off for vacation or a month of for vacation and not worry about things.

CHIP: And part of it is the team and part of it is the processes around you. You know, when I was running CustomScoop years ago, I put together a hit by a bus document. And it was…

GINI: We like to say “won the lottery”.

CHIP: Sure, okay. We’ll go with that. But But what but but but actually, it’s that’s materially different. And so I think it is actually helpful, even though it is kind of gruesome to think of being hit by a bus, it’s actually helpful because if you win the lottery, you can still be reached to give up a password or something like that. I think that that a lot of of small business owners, agency owners overlook, you know, what, what happens if something happens to me. And you want to think about those things, not because you want to be morbid or depressed or any of those kinds of things. But, you know, let’s, let’s think in a in a practical way, I mean, if you did get hit by a bus, but you live, right, but you’re you’re you know, unconscious, or whatever, you want someone who has access to the appropriate passwords to keep running your agency, and therefore hopefully continue to send checks, right, so so I know. So at a very basic process level, as the business should not have things that are locked up tight with a key that only you can access. Now, you may want to put it, they’re all sorts of services you can use so that people can only access it, if you can’t, you know. LastPass has a great functionality like that, for access to passwords. And such, use them, come up with a process so that if something like that, God forbid, happens, you’re at least in a situation where the business can continue on and hopefully continue to support you as you recover, and then come back and really kick ass as an agency owner your second time around.

GINI: Well, and not only that, but we had a client, probably two years ago who was 50-50 with her business on the agency side. And that’s what happened to her business owner. But they had never put into place anything, any documentation, legal documentation that would allow her to make decisions while the business partner’s incapacitated, so she couldn’t do anything. She couldn’t write checks, she couldn’t invest in the agency, she couldn’t make – she couldn’t do anything. Because she was legally you legally, she was not able to do any of those things, because it needed to be a 50-50 decision. And her business partner was incapacitated. So you have to think about that too. Like, what’s the trigger that gives you 100% decision making, and what kinds of things you know, are included in that, and what kinds of things are off the table. So that you, you know, you can still continue to run your agency, I mean, she her hands were really tied.

CHIP: Right. So let’s let’s move on from the morbid and depressing piece. And, and instead, think about, you know, the, the processes and things that you want to put in place so that you are not solely responsible for client service. And I think it’s a good rule of thumb, if you’re an agency owner, you really shouldn’t be spending more than a quarter of your time on actual client service. In an ideal world, it would be even less than that, you know, you simply come in, to bless the work of your staff, and then and pitch up sales, all even that, you know, most of your account staff should be able to handle themselves. But, you know, so you know, but in order to get down from that level, because most agency owners that I’ve talked to her much closer to, you know, the flip side of that they’re more like 75% of their time as on client service, and begrudgingly they spend some time on other things. You know, you need to find a way to extract yourself. And part of that is making sure that you’re not inadvertently sabotaging your own staff with clients. And so, you know, there is a tendency of agency owners to, it’s probably not quite the right term to puff themselves up, but you know, it to make it seem as if they are so important. And so they’re then fixating in the client’s mind that the only person who can solve it is you as the agency owner. Oh, yes. So part of it is trusting your staff, but part of it is also just making sure that you’re not subtly communicating to your clients and prospects, that you are the person who knows best.

GINI: Well, that’s hard, too. I mean, when, as I was going through this process, exactly what we’re talking about creating the process and hiring and the right team and training and mentoring and coaching, I would sit in meetings, and it was one of those things where I would sit there and I would think, okay, that’s not what I would say, Okay, I wouldn’t have handled it that way. Okay, this is super great. But you have to let them become the expert in the eyes of the client. And then after the meeting, you have the conversation, you know, you handled this extremely well, in this extremely well, I probably would have handled this little bit differently. And here’s why. So, you know, giving them that kind of feedback after the meeting versus in it, because I think what people tend tend to have a tendency to do is sit in that meeting go well, actually, blah, blah, blah, you know, and correct their colleague in front of the client, and that that also demeans the, your colleague in front of in the eyes of the client.

CHIP: Oh, it’s terrible. And, and I, I confess, I have done it.

GINI: As has have I.

CHIP: Sometimes it is, it is just too hard to resist when you just have like, Oh, my answers better, I’m going to give it. Yeah. And it’s it’s incredibly difficult, probably even more difficult than giving up responsibility to your staff. It’s sitting in those meetings and keeping your mouth shut. But as an agency owner, if you want to help your team grow, if you want to help build the relationship between your subordinates and the client, that means you have to shut up and just be the pretty face.

GINI: Yes. And and it’s kind of fun when you get to that point. I remember making that transition. It’s been a few years now. But I remember making that transition of, oh, oh, they don’t, they don’t need me. And it’s kind of a little bit of a blow to your ego. But then you have to go Okay, actually, this is good. This is really good. They don’t need me. I’m going to go ride my bike or drink wine or Scotch or beer or whatever it is that you do, go golf.

CHIP: But don’t mix all three together. That’s just…

GINI: No, please don’t do that.

CHIP: And then playing golf after that is really disastrous, so…Well, but and I this, this all starts at the prospect stage of your client relationship. Because it agency owners want to be the Rainmaker, they want it, it feels good to close business. I mean, who amongst us has not said this is great, you know, I got a big win today. But But you need to allow your team to start getting those wins. Now, you should probably still be part of the process, at least, particularly during the transitional phase. But you have to resist that urge to say, Look, I’m going to negotiate the final deal. Get me on the phone with with the client to close this, you want to get to the point where you can have your team members do the actual close, because the client will associate whoever is doing that close with them as the expert. Yeah. And so you want to be able to be the person who can can come in and help from time to time and offer perspective. But the client needs to believe that that individual has the authority has the expertise, and has the knowledge of the client engagement to get everything done that needs to be done.

GINI: We actually have and I would say it’s the last three years, we charge significantly more money to have me in the room for certain things. And so clients will go, Yeah, no, I don’t need her there. Some clients will say, Yeah, we do need her there, and they’ll pay for it. But some clients say, yeah, I don’t need her there. Then I don’t have to get on a plane, I don’t have to leave my family, I don’t have to, you know, have three days I’m not running my business, it’s fantastic. So you can get to that point to where they pay more just to have you in the room.

CHIP: And that’s and you know, that is an ideal situation. But it only happens if you’re making a conscious effort on and it does, you have to sit there and say, This is a change I want to make this is a change I’m willing to make. And here are the steps that I’m going to take to do it. And of course, it does assume that you’ve done a good job of recruiting because this only works, if you actually have a team that can have these things. Yes. And so that underscores the importance. As an agency owner, basically your role becomes new business, and recruiting. Those are really the two things that that any successful agency owner eventually needs to focus on. And that’s how you become successful. That’s how you build a business where you can, you know, sit on the beach, where you can exit, when and how you want, you know, you don’t you don’t end up in a situation where you, you know, realize that you want to retire in a couple of years, I want to try to sell the business Oh, shoot, I don’t have something that I can actually sell. Well, that sucks. So think about that much earlier on, because it will help you build a better agency, even in the near term.

GINI: Yeah, and it’s definitely something I mean, like I said, At the start, we it’s something you need to start thinking about many years before you do it. Because you have to set the process in the structure in place to be able to either sell to another agency or a software provider, or maybe you even sell to your employees, but it’s something that you have to be thinking about several years in advance.

CHIP: And I think, you know, one of the the toughest is transitioning existing clients, particularly long term clients who are used to dealing with you. And so when you when you reach this point, you know, so you know, we’ve gotten to the point where we’ve, you know, got new prospects, they’re buying into this system, we’ve got the right staff in place, but how do you how do you transition those long term clients? Who are – you know, I talked to Gini all the time, that’s -come on, how are, you know, what am I going to do?

GINI: Well, and, you know, what we did is we spent two years trying making that transition. And so Laura, who has become my right hand person, she for two years, the first six months, she just went to meetings with me or sat on phone calls with me or sat on zoom, you know, video chat with me, and didn’t say anything just absorbed and learned. And then afterwards, we do a, we’d have a conversation about, you know, what she saw what she learned, all that kind of stuff. The second six months of that first year, she then started participating. And we would I would provide the feedback the second year, then she started to take over the meetings. And so I was still there, but and I was still participating. But then the last six months of that second year, then she, I was still there, but I didn’t participate. And I kept my mouth shut and which is very challenging. But it did take us two years before clients were like, okay, yeah, we’re good. Like, we know, we know, we can still get you if if we need you. And there certainly are a couple of clients who still do that, which is fine. But for the most part from an execution standpoint, they are totally cool with Laura and her team. And it’s not an issue for us at all. But it did take two years. It did.

CHIP: And I think that’s I think that’s really important to understand, the the amount of time that it takes to make these adjustments, particularly for existing clients, because you’re not, you’re not going to change behavior overnight, you’re not going to change their mindset overnight, you need to be committed to this process. And you can’t, you can’t give up at the first sign of resistance from the client.

And I’ve seen this, you know, I’ve seen agency owners say, look, this is this is my plan, I, I’m committed to it, I’m going to do it. And then at the first time that there is a problem, and the client says I need to talk to you, you need to fix this, they jump right in and fix it because they’re afraid of losing the client. Yeah. And that’s understandable, right. But at the same time, my experience is that you very rarely lose the client over things like that, in fact, if you let your team solve the problem for them, they can actually strengthen their relationship and sometimes shorten that transition period, because they had a big screw-up that they handled correctly. Some of my best clients over the years have been ones I’ve screwed up for royally because, and I’m not encouraging that by the way. I’m not saying you know, to build a good client relationship go screw up for them first. But the reality is it happens. And it’s the it’s it’s how you handle that that can often strengthen the bond, and can build that relationship to the place where in in something like that, where you’re actually transitioning the mantle of leadership over to a different person within your agency, for the better.

GINI: Mm hmm. We have a client who’s been a client for forever, almost the entire length of our agency. And, you know, I mean, he started with me, I did everything I did the pitching, and I did the events, I did everything. And as we’re making this transition, he would say to me, not working with anybody else not working with anybody else and not working with anybody else. And you know, I kept doing everything that we’ve talked about here. And there was an event, they were doing a ribbon cutting, and it wasn’t part of our retainer. So I said, Look, it’s going to cost more it’s outside of the scope of work. And here’s what it is if I come. And here’s what it is, if somebody from my team comes and it was like $25,000 difference, and he was like, No, I’m good. Send somebody else! And that was what made the transition. So there’s lots of different ways you can, for lack of a better term skin the cat.

CHIP: Wow, I was just hitting buses. I mean, now now you’re brutalizing, poor, poor little cats.

GINI: PETA is gonna come after us!

CHIP: Well, I’m, I’m pretty sure I’m on their hit list already so, you know, unnecessary for me to add to it, I suppose. So, you know, as you as you think about the, you know, the the work that you’ve done to get yourself in a different place. And you know, one of the things that you had mentioned earlier in this discussion was that you had sort of learned your lesson on putting your name in the firm itself. Yeah, I’m curious because this is, this is one of those things that I think there’s less inclination today, or it’s less automatic for people to put their name in the agency today than it was 20-25 years ago. But it still is quite common. And so this is a conversation I’ve had a lot over the years with agency owners. It’s something I thought about a lot when I was first starting my own agency, which did have my name in it, Griffin Strategy Group. And, and so I’m curious, you know, what your views are on that today, and what advice you would give someone who’s just started the naming process to consider?

GINI: If I were going to do it, again, I would not put my name on the door. Because I think it would have been significantly easier as we added, as I added team members, and we were going after new business where they didn’t know me until I walked in the door, and they saw the last name matched the business card. So I think it would have been significantly easier from that perspective that I could have just been participating or not at all the new business meeting. And then that expectation wasn’t there immediately, because the expectation, whether you like it or not, is there because your name is on the door. And as we’ve transitioned over to the Spin Sucks side, that has become very clear that, you know, unless somebody knows me, which I would say is not not not all the time, I’d say half the time, then they don’t know that I own the joint. And so you can have a different kind of relationship from the very beginning. Versus you know, them, them expecting you to be the one that’s at their beck and call.

CHIP: Yeah, and I would I would go so far as to say unless you are insanely well known. And even then I would probably advise that you should not use your name. I think it’s I think it’s a I think it was a mistake when I did it back 20 years ago. I think that it’s a it’s a mistake today, I think it takes away your flexibility. I think the the added value you get is is relatively little. And I think that you’re much better building that flexibility. And, and and I think we we may have talked about this in a previous episode. If you’re not putting your name on it, don’t get too specific with the name either, you know, don’t call it Great Facebook Marketing, LLC.

GINI: And then you have to add in Twitter.

CHIP: Right. Okay, or Great Google Plus Advertising LLC, you know, it’s not a good idea, really advise against it. So, you know, when you’re, when you’re thinking of that name, I guess my point here is, there’s a lot of things that you do as an agency owner that are contributing to you inadvertently becoming an agency of one. And so you need to think about all of these different components, because the only way that you can ensure that you are not getting buried in client work, and that you are the single point of failure for everything in the agency is to make sure that you are making intentional decisions along the way to achieve that goal.

GINI: Yes, it’s hard, like, you certainly get stuck in the day to day and you you have you have to actually stop yourself and think, okay, where does this get me and to what end in? It’s, it’s definitely challenging, but I think it’s something if you even if just at the end of every year, you set out and you sat down with yourself and you say, Okay, I’m, I need to get to this point, by the end of next year. What does that look like? You know, do I go to less new business meetings and send my team, you know, like, think all through all of those things, and it’s not going to happen overnight. I mean, like I said, it took us two years to transition to away from me to my team, my very, very capable team. You know, it took five years for my this other business to transition to their leadership teams so that they could sell five years later. So you know, it definitely takes time. And it’s not an easy thing. But if you’re cognizant of it and try to make decisions based on that your you’ll be better off than the good majority of agency owners are right now.

CHIP: And it’s it’s important to be patient and don’t give up. Yeah, stick with it. Yes, there are going to be bumps along the road, there are some foreseen, some unforeseen. But it’s that you have to have the consistency of taking the steps to achieve the goal and not allowing yourself to get distracted by you know, whatever the crisis does your is whether that’s internal or external, you have an employee leave, you have a client crisis, any of those things, stick with it, because it’s definitely achievable. There are plenty of agencies out there that have successfully extracted the owner from the day to day have have turned it from an agency of one to being a team based agency. And and that’s where you are able to, to make sure that you’ve got a sustainable business that’s going to keep you happy, and maybe one day even be able to sell it.

GINI: Yes, yes, yes. Because you’re building something, this is an asset, don’t let it all go for nothing.

CHIP: Absolutely. And so I guess, with that, that’s going to take the conversation from the two of us about one of us, actually, so I guess this is not a podcast of one. See I managed to torture this completely. But we are not a podcast have one we’re a podcast of two, so we achieved that from day one of this podcast. So other people can achieve that as well with their business just as easily. Maybe not No, not quite as easily. Well, it is what it is. But in any case, that brings to a close this episode. Hopefully we’ve given you a few nuggets that you can take an extract yourself from the day to day so you are not an agency of one and you will have greater success. So do it. I’m Chip Griffin.

GINI: And I’m Gini Dietrich.

CHIP: And it depends.

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