In this episode of the Agency Leadership Podcast, Chip Griffin and Gini Dietrich discuss the pros and cons of running a virtual agency.

Whether an agency is just getting started or looking to switch from an in-office-only culture to one that has some or all team members working remotely, this episode has useful advice.

Chip and Gini both have extensive experience running virtual teams and identify some of the challenges that they have faced — and how they addressed them.

Automated Transcript

The following is an automatically generated transcript. Please listen to the audio to confirm accuracy.

CHIP: Hello and welcome to another episode of the agency leadership podcast. I’m chip Griffin

GINI: and I am Gini Dietrich

CHIP: and this week we are going to dispense with the witty banter, which I know you all enjoy and disappointed with the witty banter. Let’s be real but fair. But the, I should say the irrelevant, witty banter that you enjoy starting the show with mostly because we weren’t creative enough to come up with anything witty banter about. I think we’re both brain dead right now. Indeed we are. Indeed we are, but we’re recording this during the week of Thanksgiving, so that’s fair. I think we can be brain dead this week. Indeed. All right. So, um, what we’ll do is we’ll dive right into the topic. And this week we thought it would be interesting to talk about running virtual teams. This is something that a lot of agencies are doing today. It’s certainly a change from the way that agencies have historically operated and it presents a lot of opportunities, but also some challenges and you and I have both run virtual teams in one fashion or another. I think it’s really at the heart of your current model and sort of was a pivot that you made a number of years ago. So, um, you know, why don’t you jump in and talk about your own experience, how you decided to get there and we can figure out what advice would have for our listeners on how to run their own virtual team.

GINI: Well, it has many things in my life. It was not by strategic design, by any stretch of the imagination, but we had just come off the economy and we were facing the debt ceiling crisis and because we had just come off of the global recession clients, we’re watching all of this happening and put the brakes on. I’m paying bills. So we had like

CHIP: small things like that was just really no impact on an

GINI: no. That doesn’t have an impact on any small business at all. Not at all. Uh, you know, we went from 15 to 30 day receivables to 120 150 180 and we had more than $100,000 out and so it was one of those things where it was like on paper we’re fine, but we have no freaking cash. And I walked into the office one day, um, which was in river north, like the hip spot to be, you know, where all the agencies are and I was paying $12,000 a month for my rent and you know, had this great huge space. It was super cool space exposed brick, the whole kitten caboodle. And I walked in there and the only person who was in the office was my assistant and I was like, why? Why, why are we paying the clients never come to see us and you know, because we were waiting on you no more than six figures to come in the door.

GINI: And we didn’t. We had to figure out more expenses to cut more than we already had. Um, during the recession. And so my accountant, who is a pit bull and amazing helped me negotiate out of the lease, which I think we had another three to five years on it. Um, he helped me negotiate out of it and I had to pay for another year, not, not the full amount we were able to negotiate down, but we ended up leaving with the idea that we would all work from home for a year and then, you know, find smaller space that maybe wasn’t in the heart of the trendy spot to be and, you know, get back together and about 10 months into it I said, okay, is everybody ready to go look at office space? And I was met with complete silence and I was like, do you want to keep working at home?

GINI: And they were like, yeah. So, um, that was seven years ago. And you’re now the only person who’s in Chicago is my assistant and everybody else is actually global, you know, we’ve got people in, in Canada, we have people in Singapore, we have people in Europe, there’s people everywhere. And, and of course across the US. Um, and the thing I love about it is obviously there’s no overhead, there’s no $12,000, $12,000 a month rent, but I can hire the person that’s best for the job and not have to pay to move them here and do all of that expensive stuff. You know, it’s bring your own device, it’s manage your own stuff. It’s, you know, get your work done. I don’t care if it’s from nine to five or eight to three or whatever it happens to be. That’s good for you. We have somebody who works Sunday to Thursday. That’s fine. Just get your stuff done. And it’s working incredibly well. Incredibly well.

CHIP: Well, I think you’ve, you’ve managed to touch on a number of really interesting points there. The first one is that, that Aha moment you had when you walked into the space and realized how underutilized it was, the particularly for how much you were spending on it. And this is, I mean, I think this is something that a lot of agencies these days are experiencing and, and you know, the real question is whether they’re realizing it or not, I was talking with a client not long ago in his office and he was talking about a lot of the, some of the design changes he wanted to make to the space and they were going to be quite expensive changes. And I said, well, you know, over the last 12 months, how many clients have been in here? The answer is none. None. Exactly. Yeah. And I, and I said, you know, given the business that you’re in, your clients are not going to come see you.

CHIP: They’re going to make you go to them. Correct. Right. Because the big clients, they don’t typically go to the agency. The agency goes to them. And so, you know, is it important if you’ve got an office to have it be know nice enough for employees and all that for retention purposes and recruiting purposes? Yeah, absolutely. But it, is it really worth it. You know, are you taking advantage of that space? If you’re, if you’re not, then certainly you should be looking at a virtual team or at least a partial virtual team. You know, there are a lot of agencies now that are going to hot desking and hoteling and things like that to reduce their footprint, but in many cases they may be able to go completely virtual as you have.

GINI: Well, and I will tell you from experience having, we had half and half or half for remote and didn’t live in Chicago in the end, those of us who were in Chicago, we went to the office and from a culture standpoint it was not very good because what I found is that the people who were went to the office everyday have resented the fact that they had to commute. They resented the fact that they had to get dressed. They resented the fact that, you know, they had to be there during normal business hours. They resented the fact that people would show up for video chat, you know, with their hair on top of their head or wearing a ball cap. They resented all of that and so they started leaving them out of important decisions or leaving them out of conversations or, and so from that perspective it was a real challenge to manage, but when we all went, all of us started working from home. That disappeared, like it became a nonissue. Um, so that, that part was interesting, but you’re exactly right. Clients don’t come to you and I will tell you in this, in seven years, I have only had one prospect who’s had a partner problem with that one.

CHIP: Uh, you know, I can’t to be, I’m trying to rack my brain over the years there have been almost no clients that have even had that discussion with me for any of the businesses agency or, or tangential it, it just, it’s typically people don’t care about that sort of thing. Yeah. They don’t care. They just want the work done and done well. They don’t care where you are. Right. And you know, and, and I’ve, I’ve often chalked that up to the fact that I’m in New Hampshire and most of my clients are not so sure that they were going to travel in any case, but I suspect that the answer would have been the same if I was in Washington or New York or any of the places where my clients tend to be.

GINI: Well and I think it’s completely different today than it was, you know, even five years ago because I think by 2020 that number is, they’re supposed to be 65 percent of the working force is supposed to be freelancing in some fashion. It maybe a side hustle, it may not be their whole full time job, but 65 percent, that means 65 percent of the workforce is going to be working from home in some fashion. So the idea that that’s where it’s going versus five years ago where it was Kinda like, well, are you legit because you don’t have an office and that, that perception has dissolved.

CHIP: Right? I mean, I think there still is, particularly amongst, you know, managers of a certain age. A skepticism about working from home and, and certainly it can be problematic, you know, you, you have to be more vigilant I think when you have virtual team because you don’t have sort of the immediate and the indicator of are they actually here, right? Are they, are they sleeping at their desk? The little things that you could note, uh, when folks are in the office, of course, unless they’re screened was facing you, you had no idea what was on their screen and it may well have been solitaire to date myself a little bit. I don’t think anybody plays solitaire anymore on there.

GINI: Probably not, but it didn’t use to come on every pc.

CHIP: It used to be the big thing, right? I mean, you’re kind of lead over someone’s desk quickly and all of a sudden solitary will be minimized, you know? Um, uh, you know, now it’s a, they’re all playing on their phones or something instead. But, um, I think you do have to be a, you know, more aware and, and be more proactive in your communications perhaps then at least you thought you needed to be in the past in order to make sure that, you know, it’s not so much checking up on your employees, but it’s, it’s making sure that you understand what their workload is. Part of that comes down to things like time tracking and such that I’m sure we’ll talk about on a separate episode, but you know, there really has to be that, that understanding between an employee and supervisor when they’re not in the same place about what’s going on when a, so that you can be a well connected.

GINI: And, you know, I mean, technology certainly helps with that because you can see, I mean, if you’re on slack or facebook, you know, whatever it happens to be, you can see if people are on, um, you know, if they’re not actually using their computer, that that light goes dim. So you can see that. Um, but you can wiggle your mouse around, you know, while you’re asleep at your desk and you’re storing in your ruling, then it’s probably going to grow dim, dim. But if you’re really, I mean to your point, exactly. If you’re really good at setting goals and tracking against that and against those things, then you know, it just doesn’t, it just doesn’t matter. And personally I had a really hard time and this was just me, which is crazy, but I used to feel guilty if I worked out at lunchtime because I was brought up in the era that that’s not okay.

GINI: And now I’m like, yeah, I mean I start work at 5:00 in the morning, so screw you if you don’t like it by the time noon hits. I’ve worked a full days, right? Yeah. But I did, I used to feel really guilty about it. So that took me personally a long time to get over just from that perspective. But I don’t care if my team does that stuff or if they help out at school or they go to, you know, what they have kids stuff. I don’t care as long as they are at least meeting their goals if not exceeding them and you know, we have stuff in place to make sure that, that stuff happens.

CHIP: Yeah. And I, I think that’s the, that’s the important part, right? Because I, I’m completely with you that it’s, you know, it’s what’s being produced, um, that, that matters and you know, that’s ultimately how you have to measure people. The is to figure out, you know, are you, are you achieving that maximum of their potential? And that’s challenging in the office, but I think even more so when they’re remote to try and figure out, okay, you know, I’m guessing this task takes you three or four hours. This one takes, you know, the three or four. Okay, that’s probably a good day’s work if you accomplish those two. But you know, maybe it turns out that you’ve completely underestimated your employees capabilities and they get it all done in two hours. So you’re, you know, while they are meeting their goals, you know, they have a lot more capacity that you could be leveraging. And so that becomes something that you just have to know, you have to get a good feel for him in ways that you probably didn’t pay as much attention to all of you probably should have when you were all in the same office.

GINI: Well, and to be honest, if somebody, if you’re thinking it’s going to take somebody six hours to do two projects and they do it in two hours, that type of person is going to be coming to you and saying, I need more new. It’s the person that you think is going to take six hours and it takes them 10 hours. Right? That’s the problem,

CHIP: right? No, that is true. And those tend to be easier to spot obviously because you’re not getting things when, when you’d like to see them. Um, but you’re right. I mean, I, I think the high performers do tend to ask for more stuff. Although I will say that, that I think when folks are virtual, my experience has been that they are, they’re are less likely to come to you with that than they might’ve been in the office. So I think when people are virtually, you have to have more set check in opportunities for sure. Yeah. Because, you know, I mean, I was a big fan when I worked in offices of Mbwa management by walking around, you know, you just kind of poke your head into somebodies office for say hey, what’s up, what’s going on? And they would raise things and you would learn things and, and so we just need to find ways of, of doing that in the virtual world as well. A lot of that comes through scheduled check in. Some of them may come through slack conversations, you know, there’s a lot of different tools that we can use, but I think you still need to have that virtual mbwa attitude, um, in order to really have your finger on the pulse of your team.

GINI: And, you know, I, the way I handle that is I’ll just pop in on zoom on them without scheduling and I’ll just pop in. And when somebody first starts, it freaks them out, right? Because they’re like, am I getting fired? What’s happening? What’s going on? And then they sort of get accustomed to it, so that’s the way I handle it is I’ll just pop in on a video, chat with them real quick and yeah, in the beginning they free.

CHIP: Well, particularly because zoom is a particularly unfriendly app from that standpoint, ended it automatically turns the camera on as opposed to the default for most apps is would you like me to enable the camera? This is definitely true right on. It totally turns it on, which is why I do it. You’re braver than I am Jenny. I’m not sure that I’d always want to be dropping in on like team that way.

GINI: I’ve never had a problem, but I will tell you that there are things that you to manage that you would never in a million years have to manage in an office such as. There might be things that happen on a video chat that wouldn’t have been the office or you might like. There are things that you’re like, Huh, it’s really interesting. I even have to have this conversation. I’ll give you an example. We had somebody who, um, was back from maternity leave and she was still nursing the baby and she would show up to client meetings, nursing the baby, and we were like, can’t see, can’t do that. We don’t care if you’re nursing when you’re not on video chat with the client but not while you’re on video chat with a client. So, you know, those kinds of things that became conversations you had to have that you wouldn’t think you’d have to have, but. And you certainly wouldn’t have to have urine an office. But yeah, stuff like that.

CHIP: Well, yeah, and I think, I think there is, there is the risk always when you work from home becoming too casual and um, you know, I’m going to set, you know, that third rail example aside because there’s no way I’m going anywhere near that one. So all of you who want to send me notes and messages, they go to Jenny, not to me. Anything. Please wear pants. Like seriously. I mean, because a lot of people will focus on, you know, what they’re, what they’re wearing on top. Um, you know, sort of like a, you know, I think we’ve seen some of the TV shows sports night and those sorts of things where, you know, the anchors would wear jeans because you couldn’t see them on camera. You know, when you’re, when you’re on a video conference from home, you know, if you’re wearing gym shorts but address shirt, just remember if you step up to go pick up something and bring it over to, someone’s going to notice that. So gym shorts as being. Again, you know, I’m trying to keep this show peg. No, this is,

GINI: I’m just speaking from my own experience. Conversations. I’ve had real conversations. I’ve had to have

CHIP: unfortunate I’ve had to have those conversations in the office before as well. So I mean probably slightly different, but you know, it is amazing at times how people are not aware of appropriate attire and, and things like that. I think one of the, one of the other things this, this touches on is the, one of the things you lose in a virtual team is the easy access to the social interaction amongst the team. And I think that’s one of the reasons why you saw the tension when you had half the team in house and half the team, not because, you know, when you’re in the office, you tend to socialize with the water cooler, go grab lunch, you know, the, the, the sort of, the soft things that build the relationship. Whereas when you’re a virtual team for the most part, you’re, you’re more likely to interact on a, on business stuff, you know, so you don’t get to know the person as well.

CHIP: Um, and I, you know, I’m not sure what your experience is. I have tried do things virtually with, with my teams to try to get them to interact on more social things, creating separate slack channels for it or general discussion type things or you know, just different opportunities. It, it still is not quite as good as the in person. And so that is, that is the one piece that I think lacks. And so you have to find ways to consciously address it as opposed to just allowing it to blossom on its own as you would in a regular office. Yeah.

GINI: One of the things we do is in our team meetings, we always talk about one great thing that happened personally and professionally during the last week, and so everybody gets to speak to one per personal thing, which is fun because we get to, we get that side of it, but I also have the advantage that we have the spin sucks community, which not everybody would have. Right? And so though our, our business slack channel isn’t as vibrant. My team participates in the spin sucks community and, and we like it’s super engaged and vibrant and all those kinds of things. So we, I have that advantage which I think a lot of agency owners would not have so that, that’s not totally fair, but we do, do we do. That’s what we start our team meetings with. His one personal, one professional.

CHIP: Yeah. And I think, you know, I think having that virtual water cooler, if you will, is, is very valuable. And as you say, I think the spin sucks community because there are more people. It gives it more critical mass so you can get, it gives you the freedom to have those, uh, you know, a more personal convert that person is the wrong term, but you know, more a personality revealing conversations that you might not have in a small team environment on its own. So, you know, I, I think that, um, certainly any listener here who is not a member of the spin sucks community. Well, why not? I’ve got to get community. It is very cool. Even when Christopher Penn is traveling and so therefore not able to be quiet. Yes, it did seem quiet towards the end of last week while he was out on the west coast. He and Greg Brooks were both gone.

CHIP: We’d be scared. It would just go silent. So, but no seriously folks that it is in is highly worthwhile being in there. Um, you know, one, one point I wanted to return to from early on was know when you were talking about the decision to go from the office to the virtual environment, which is what a lot of agencies end up doing, although now more will start virtual and virtual. But when you’re switching from an office, you know, the, one of the tricks is that you have to realize that there are not in substantial costs in getting out of a commercial lease. And for most folks, for most folks who start agencies, you know, their, uh, their knowledge of leases tends to be apartment leases from typically when they were younger and your year to year leases and you know, it is what it is. Um, commercial leases not so much year to year for the most you can get them, but they’re fewer and farther between generally less desirable spots. Um, and when you want to get out of a commercial lease early, it’s not always the easiest thing, particularly when the economy’s in trouble. A, you know, that means that there’s a glut of office space. So, you know, what did, what advice do you have for folks who are considering going virtual or have some other reason why they need to get out of their commercial lease?

GINI: You know, it was a long time ago and it was, I remember how painful it was and I also felt a little like, now remember, I live in Chicago, like the mob was out to get me a little bit, um, which may just have been my own interpretation of it, but it was, it was not an easy thing to do. And we ended up, honestly, if my accountant hadn’t been there, I probably wouldn’t have been able to negotiate it myself because they tried all sorts of fear and scare tactics and they kept saying things like, we’re going to take your business down. And at the time I was writing a weekly column for cranes, which is the business journal here. And they threatened to go public and say that I wasn’t a good business owner, you know, I mean, they did the whole kit and caboodle.

GINI: It was not a fun experience. And I of course started to freak out and take it very personally. And my accountant was like, no, no, no. Like he, he, he was able to stay unemotional about it. Um, so my advice is find somebody like that who can help you through it because you can get through it. And he was great. He just kept going at it and saying, this isn’t, this won’t work. Like you see her financials, this doesn’t work, you know, she’s got six figures outstanding. She just doesn’t have the money. And so we went round and round and finally negotiate, got to a point where, you know, it still wasn’t exactly what I wanted, but it was certainly better than having to stay in a $12,000 a month lease for five years.

CHIP: Yeah. And I, I think, um, I think that’s great advice. I’ve gotten out of a couple of commercial leases on, with my businesses over the years. Um, and in each case I did use a professional advisor. In my case, I use the same real estate agent I use to acquire the space to negotiate my way out somewhere who I’d worked with both on personal and commercial real estate transactions over the years. So he knew me well, but it, it, it did it, it takes the emotion out of it by having a third party involved. And in fact, he did most of his work with the landlord’s broker. So, you know, it kept all of the parties, if you will, out of the conversation except for, you know, approving. So highly recommend, you know, having that, I don’t say disinterested third party, but less interested, um, third party to sort of take some of the heat off and, and work with them.

CHIP: And, and frankly, you know, most landlords at the end of the day we’ll work with you. You know, they want to get as much as they can, but they also, you know, typically recognize that when you’re in that position, there’s a reason you’re in that position. Um, and so what they’re really trying to do in most cases is just try to find a soft landing for themselves. In other words, find some opportunity to release the space. So, um, you know, giving them runway to do that. I’m giving them flexibility to do that. And the more flexible that you can be. Um, you know, the better in those cases as well. So, um, you know, there’s a lot of different things there. The other, the other piece of advice that I have is when you’re signing a commercial lease, you make sure that there is an opportunity in there for you to sublet the space directly.

CHIP: Um, yeah, because that just gives you an additional opportunity really. You can, you can take that space and put it on the market yourself. Now typically I’d have to be approved by the landlord, but you can put it in language in your lease so that they can’t unreasonably withhold permission. Super smart like that. So, you know, you want to think ahead because when you sign that lease you’re all excited and you know, fantastic. But the commercial leases, commercial leases three years, but most of them are going to be five to 10. Um, and you know, so you’re committing to a long period of time. Most agencies have no idea what their business is gonna look like in five or 10 years. So you want to make sure you’re maximizing the flexibility in that initial agreement.

GINI: And the other thing I would recommend negotiating into the lease, and I just had a friend go through this, he was in a lease for 20 years and the, they did a build out in the beginning, which was part of that and the landlord made them, made them payback that build out. So make sure that if the, if they’re doing a build out for you as part of the, getting you into the lease, that, that it’s not that they won’t make you pay for that later when you leave.

CHIP: Yeah. So I assume you left early and that’s why the. No, he didn’t really. Wow. That’s okay. And that’s why you need to have a professional advisor look at this too, because, you know, a normal commercial real estate broker or real estate attorney would look at that and say, hell no, because that is not a normal thing for you to have to pay back a build out if you’ve been in there that length of time. Uh, you know, typically if you break the lease or something like that, they’ll come after you for it. Um, you know, sort of like in the old days when you sign up for a new phone contract and if you left before 24 months, there was no early termination fee, same thing. But if you’re there 20 years, there’s no way you should be paying back the initial build out. And in fact, on a 20 year lease you should be negotiating in some, you know, or some refreshes to the space.

CHIP: Um, some allowances for that, every, you know, five, 10 years, whatever, whatever seems appropriate, you know, there, there are things that you can put into that agreement to make it much more palatable. But Gosh, 20 years, it’s just assuming, I know, I know that that is, that is, that was unusual at the far end of the spectrum, uh, to do, uh, a 20 year lease. But in any case, uh, we’re just about out of time. But the other thing that you had raised, I think is really important on, on virtual is the ability to access talent wherever that talent exists. And, you know, so much of the complaints that agencies have is that, you know, Jesus, we know we can’t find the right people, uh, and if you go virtual in whole or in part, that gives you that opportunity to go find that that Wiz kid who lives in Salt Lake City or you know, the person who’s up on the border of Canada, in northern Maine, in the middle of the woods, you know, there’s a lot of folks out there that you can tap into if you’re running a virtual team that you would not have a chance at if you were doing an in person office.

CHIP: And it’s pretty amazing. I mean, I’ve literally found people around the globe and it’s, it’s pretty amazing. Well, and the around the globe is a good point too because depending on, you know, what your agency model is, what it is that you’re doing. Not only can you access talent elsewhere but, but you can tap into time zones that may be beneficial to your business. A lot of agencies are producing, you know, a daily executive news briefings or things like that. If you’re able to find people who are a few times zones ahead of wherever your clients are, you know, that’s a great way to tap into that and you know, potentially reduce your labor cost because you know, you have to pay a premium for someone to get up at two or 3:00 in the morning to write one of those. But if they can start writing at 9:00 AM their time when it’s, uh, you know, say to am in your client’s time zone, you’re in great shape.

CHIP: So, you know, think about how you can leverage the virtual aspect, not just for the kinds of talent but also the time of the talent that you’re looking for. Pretty incredible. I’ve been really, really happy with it. So I think bottom line is, is we both wholeheartedly endorsed the virtual model. You know, there are challenges with it. There are things that you need to consider and some changes to your behavior that you’ll need to make if you’re used to the in office work environment. But, uh, but certainly worth it for many agencies to be considering. And so I guess that brings us to the end of another episode, Jenny, that was a fast one. It, you know, this time has just flown by it’s way, but for us, yes, I can hear that snoring on the other end of the podcast. But in any case, uh, so that is the end of this episode. We’ll be back with you next week. But in the meantime, I’m chip Griffin and I am Jenny Dietrich and it depends,