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Making the transition to become a virtual agency (featuring Todd Zeigler)

What goes into the decision to give up an office in favor of remote work
Todd Zeigler

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Many new PR and marketing agencies start out as “virtual” agencies where everyone works remotely and there is no physical office. But some agencies with their own office space have made the decision to swap leases for the virtual model.

Todd Zeigler of The Brick Factory in Washington, DC joins Chip on this episode to talk about how his agency reached the decision to go virtual and what steps they have taken to manage the transition with employees and clients.

Todd explains that it wasn’t really an overnight process, but rather an evolutionary one that eventually became the blindingly obvious path forward.

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Transcript

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

CHIP: Hello, and welcome to another episode of Chats with Chip. I am your host, Chip Griffin. And my guest today is Todd Zeigler. He is the CEO and Founder of The Brick Factory. Welcome to the show, Todd.

TODD: Hey,Chip, good to talk to you again.

CHIP: It is great to have you on. It’s been a while since we’ve had a chance to connect. But we did work together back in the day. And I thought, based on some news that you shared about your agency would be great to have you on the show to talk about it. But before we do, why don’t you share a little bit about the brick factory?

TODD: Sure. So the brick factory is a Washington dc based digital agency that is around we’re about 20 people. And basically we specialize in providing web development and digital marketing services to nonprofits, trade associations, advocacy groups and brands. And so being in DC, kind of the DC type of communities. So we work with groups like some of the clients that we work with African parks, American wind energy, Association, etc.

CHIP: Kind of DC based policy type groups, so you do not actually manufacture bricks. You are indeed an agency. So there No,

TODD: no, although many of we’ve gotten a few inquiries on our website, so

CHIP: well, that reminds me I used to have a company called custom scoop. And we had a lot of people who thought it was either an ice cream company or a kitty litter brand. And we were we were neither masala we didn’t take advantage of the ice cream one and we wanted a marketing campaign where we sent out ice cream scoops. And

TODD: we have a there’s a brick factory restaurant in Australia, we also get contacted about So

CHIP: yeah, that’s that’s a little bit of a hike. Yeah, from from your shop. But in any case. So that’s great background, the you know, the reason why I asked you on was because you recently announced that you were going to be going from being a traditional, everybody works in the office or a lot of people work in the office type agency to a remote or virtual agency. And this is something that I know is on the minds of a lot of agency owners out there right now. And so I believe Love to hear more about how you came to that decision?

TODD: Sure. So we I founded the company in 2011. And we kind of we had around, we’ve had kind of a pretty steady headcount between 15 and 20. People the entire time, when I first started the company, we kind of quickly moved into an office, and probably 75% of our employees worked out of the office. You know, we have developers and designers and those people, it’s always been a lot always have wanted to work from home. So even in the beginning, we have partial remote, please, just because we had developers over in other parts of the country, etc.

CHIP: Sort of traditionally tend to like to work stranger hours, right? I mean,

TODD: stranger hours, and also just something that requires great focus. So sometimes being in an office is more distracting for them than it would be for somebody that’s on the phone all the time or, you know, bouncing between client, emergency and client emergency, right. And so basically, in 2015, we moved into our second office, which we built From Scratch this beautiful kind of right by the White House and it would be Pearson square. And by that point we were down to about 60% in house kind of working out of our DC office with the remainder kind of remote. So it it kind of shifted a bit. And basically between 2015. And now what it happened is a couple of things. So first of all, we had some existing employees that had some life changes that caused them to want to work remotely. So we had one woman whose husband moved to Thailand. She wanted to go with him, obviously, another woman had a baby and kind of was wanting to go part time and be, you know, partially stay at home mom, but still work 2030 hours a week. So that kind of scenario happened repeatedly. And so we had people that were in the office that can transition to be remote workers. And we allowed that or encourage that because we wanted to keep them because they were great employees. The other thing that happened is that we had some people just leave organically for other jobs. And we ended up kind of being in dc dc is very expensive from a job market perspective. And a lot of people are were, you know, have to commute a long way. And so we found that if we widened our search to kind of be nationwide and kind of looked for telecommuters that we got, frankly, a wider talent pool, and frankly could afford better people for the salary than if we limited ourselves to kind of competing against DC government agencies, contracting things for developers, designers, etc. So that led us to kind of hiring people that were remote in the beginning. And so by by 2018, or by the end of 2019, we really we had this office that was built for 10 people that we had for four people, four to five people working from kind of want to on a daily basis. And so at that point, it was just this is a lot of money. We’re already basically a remote company 75% remote, and so kind of giving up the the brick and mortar or the physical office. Frankly, it just kind of seemed like at that point to become a no brainer. It was kind of like we waited too long out of kind of ego We’re just kind of me being a little old fashioned and kind of wanting a place to go. So that was kind of the genesis of the thought process.

CHIP: So it’s so you always had remote workers as part of the mix. And it, it just sort of crept up in percentage. And until it became blindingly obvious that this is, this is really the path you should follow.

TODD: Yeah. And I think part of it, frankly, was, you know, as we are, you know, as you’re replacing employees, you’re kind of bringing in younger employees, and I think the younger workforce, the millennials that are on site, they do I mean, it’s, it is kind of true, they value working from home more than, you know, frankly, I would have and kind of enjoy it more and kind of the flexibility to kind of be able to travel and work on their traveling etc. So I think it was Yeah, so I think that was also probably part of that evolution.

CHIP: And it did any of the team that was in the office resisted that. I mean, you know, I know that while there are a lot of people who like to work from home there are also some folks who really value the an office experience that you have to overcome challenge In that regard,

TODD: yeah, we had. That’s definitely the case because we have kind of our, our core people were our client services people. So the people that were working with account on the accounts were the people that are primarily in the office tend to be more social, tend to kind of like to interact with each other. So, so basically, that was a concern. And frankly, the other concern was just having because our kind of front forward facing our client facing people were in DC, we also kind of needed a place to work to meet with clients place to kind of have meetings or kind of retreats when a company when our meetings when other people came in other ways. So basically, what we ended up doing is kind of securing getting a co working space. So we have in DC where I’m actually in it now. We basically signed up for a we work kind of right near our old office, and we have three employees that kind of work out of here. Kind of most days and then we have they have meeting rooms so we can meet with all And, frankly, many more meeting rooms than we had before better options. So we kind of found a kind of, I would say compromise where we had created a space for people if they wanted to come, and also gave us a place to meet with clients without having nearly the overhead of a full office.

CHIP: Right. So it’s sort of virtual agency with an asterisk because you’re taking advantage of sort of the new economies, services that allow you to, to buy services in chunks as opposed to the whole enchilada the job to do in the past.

TODD: Exactly, exactly. So we our previous office, we you know, it’s like you’re signing a seven year lease, you’re right, seven, five years is the minimum five to nine is kind of typical for a commercial real estate lease, here, you know, a month a month, and this is also I’m thinking of it as really a temporary, potentially solution, right? This is kind of like okay, we’re going to do this remote thing, but we kind of still nervous about having a place to do with clients. I’m still nervous about how I will feel about being fully remote. So It’s kind of a way to kind of test it for a bit and see what happens.

CHIP: So and How have your clients received this news? Because I mean, you’ve always been very public about it. There are some agents that sort of do this. And and clients may not know, but you, you went ahead and made an announcement. So what was the reaction on client base?

TODD: And and frankly, I was a little nervous about that, because there is part of you that’s like, that feels having the office is kind of an ego thing. So it’s like I have this pretty office. That’s awesome. And so I was in the back of my mind, I was like, This is definitely a smart decision, but it also felt like a failure for some reason, which doesn’t really make any sense. But that’s just kind of the way the mind works sometimes. So I was a little nervous about talking to clients, but the response has been completely positive. I’ve gotten many notes about people kind of congratulating me, notes from people saying I wish I could work from home and work for remote employee and clients that just there hasn’t been a single negative reaction. And I’m sure every you know you chip in notices but you know, we’re frankly meeting less than person with our clients and more of it is done via zoom and Google Hangouts and kind of be the video conferencing anyway. So not as many we’re kind of coming to the space anyway. So I think it’s not that big of a change, frankly, for our clients from the way we’re working previously.

CHIP: Right, as an agency, you know, more often you’re going to the client’s office anyway. Yeah, but most, most of the time, you know, that they’re the ones with the leverage in the relationship, so they don’t hop in the cab or the car to get going. You go to them very true. Very true. So very, you know, I think, you know, a couple of the things that you talked about as far as how you started going, there gradually are things that other agencies have seen as well. In particular, the, you know, you’ve got someone who’s moving and so you don’t want to have to let them go. So you accommodate them with the right work relationship. You know, have Have you found generally speaking that the folks who started in the office and go remote today Do they have any challenges in In that change, particularly before you gave up the office, you know, that’s that’s a fear that I know a lot of folks have that, you know, once they’re sort of out of sight out of mind, they won’t be still the same part of the team. Yeah, I

TODD: mean, I think that I think that, I mean, I think I was frankly worried about that for myself, because previously I’d worked, I would work from home once a month, or once every two weeks, and frankly, I was less productive, because I would just get, you know, I would just not used to it, I didn’t have a really good setup, etc. So I’d say that the couple of things we’ve done to really try to improve people for being working from home better. First of all, make sure they have a good setup. Make sure they have we’re very much have to monitor company. Make sure people give, you know kind of gave people some stipends to make sure they have the right equipment and they have a good setup at home, pay for internet etc. So I think just making sure they have a comfortable space, have a really good equipment and can replicate what they’re doing in the office. The other thing is, frankly, you know, we have there are I’m very lucky and that our staff is very, I mean Everybody’s going to say this, but our staff is very professional. And frankly, I think if you’re hiring somebody that you literally have to be looking at all the time in order to guarantee that they’re doing the work, then you probably shouldn’t have them working for you anyway. And, and so, kind of trust is kind of always been built into our culture. So you have to deliver within the flexibility that we’re offering. So you get flexibility, but the flexibility is based on trust, and you can tell who’s not delivering, frankly, yeah. So it hasn’t really been a problem. And

CHIP: even when you have workers in the office, all you can really be certain, obviously, that they’re in the office. Exactly. Unless you are literally sitting there looking over their shoulder at every mouse click and keyboard stroke, you’re never going to really know what they’re up to and how productive they’re being, you know, except by deliverables and really, you know, in the agency world, it’s all about deliverables. And so you need to be able to focus on that.

TODD: Yeah, and you can tell from times you know, you have time sheets, you can see billable time you you know and you can See, you can just tell if somebody is lacking or not. And this hasn’t happened for us fortunately,

CHIP: you know, one of the things that I’ve noticed over the years is that agencies are almost infamously bad at internal communications, which is ironic because agencies, by and large exist, to help their clients with external communications. So right. And as agencies go remote communications can be even more challenging because you’re not at a literal water cooler to exchange information. You’re not sitting around a table having a staff meeting. So how have you, as you’ve sort of made this evolution? How have you changed meeting cadences? What styles of meetings do you have? What technology you’re using mentioned zoom, obviously, but, you know, share a little bit about that, if you would. Sure. So we have

TODD: we have kind of frequent to wear personal. We’re using video conference very, very, very, very heavily. So we’re using zoom and hangouts depending on the situation. And we’re basically making sure that Kind of meetings with our, with our core team once every week. So 14 meaning kind of, we have three to three or four divisions depending on how you kind of categorize it. So there’s a meeting with those four teams, once a week, and then we try to have a once a quarter kind of a staff wide meeting where we kind of communicate what’s going on overall with the company, etc. So the meeting cadence, we’ve definitely increased a bit just to make sure we’re in front of people and seeing people more. Whereas in the office, maybe that’s not as necessary. This post, somebody saw it. The other thing, we’re obviously using slack tools like Slack, both for our work and for our internal kind of discussion. So that’s, those are kind of steps we’ve taken. But the big thing that I was worried about, frankly, because we’re used to working with these tools, just given that it was been kind of a slow process. I think that the the big thing that I was worried about that we’re still kind of grappling with is the socialization. So it’s really easy for me there may be a co worker that are not working on on a project That I literally don’t talk to. But in these meetings we have, so maybe I’m talking to somebody once a month. You know, whereas if I saw him every day, we just talked about Game of Thrones or whatever, just organically, it’s more difficult kind of when you’re virtual. So what we’ve really tried to do is, frankly, shift some of the savings from the rents going away to having more in person gatherings and trying to get trying to figure out ways to get people together, have them come to these everybody come to DC at the same time, we’re going to try to do that in April. And then we’re talking about doing like an off site retreat, which we’ve never done before, potentially in September. So we’re trying to have kind of two company wide get togethers a year. And then we also frankly, have kind of cheesy things we do like we have virtual happy hours, everybody logs into like a video conferencing and has a beer at five o’clock on a Friday. And then some things like that, that are a little little goofy, but you know, but kind of try to build some camaraderie and make sure that we don’t lose that social part which is so

CHIP: Yeah, I think you’ve made a really great point there about reinvesting some of the savings and rent into, you know, more activities to interact with each other. And, and I, one of the things I always say to people who are thinking about going from being a traditional in office agency to being a virtual remote agency, is that you shouldn’t be looking at it purely as a cost savings. Right? If you’re, if you’re looking at it as a way to put more money to the bottom line, you’re looking at it the wrong way. It’s really some of the things you’ve talked about as far as the flexibility in hiring talent, retaining talent, you know, a lot of those things that are just as important because depending on how far flung your workforce is, it could actually cost more if you’re doing it well to bring people in then the rent would you know, so, yeah,

TODD: and we’re trying to That’s exactly right. I think, you know, in a lot of ways that shifts the the cost shift, like like a shift to these in person events, you theoretically should offer more, you know, some more benefits in terms of, you know, paying for people’s setups, things like that, that you wouldn’t do in the office. Frankly, like you said, it really isn’t necessarily a cost savings on it may kind of even out or maybe you save a little, the one thing I will say from a financial perspective that I think is useful is that the cost you take a fixed cost and turn it into a variable cost. So I don’t necessarily have to have those in person events, I have to pay my rent if I signed a five year lease, right? So I think or and I don’t necessarily have to do the work that we’re in, I can cut that. So that’s really useful, obviously, right? In running a business if we hit this recession that everyone’s talking about, etc, which, you know, something’s going to happen at some point. So it’s good not to have as many fixed costs. Yeah,

CHIP: absolutely. Having elasticity of expenses can be really helpful in the agency world where, you know, everybody’s on a revenue roller coaster, it’s just a question of, you know, how steep the peaks and valleys are for your particular agency. But, you know, there’s there’s no agency I’ve ever seen that sort of, you know, is on a nice even glide path. Frankly, up or down, there’s always going to be bumps in the road. So having that flexibility, you know, can be very beneficial. Definitely, you know, if I’m sitting in a traditional agency right now, and I’ve got folks in my office, how should I be thinking about the decision as to whether it’s the right decision for me to go remote? You know, what, what are the what are the things that you would suggest? I think about along the way?

TODD: Yeah. I mean, I, for me, it’s like really about kind of, what do you gain by what are you gaining by having everybody in the office? Is there? Is there kind of a collaboration that’s occurring? That’s actually valuable, or people just kind of going into their office and doing their work? etc. So for me, it was kind of, you know, what was the point of the office in the sense of how was that actually furthering what we were doing because it for us, frankly, in a lot of ways, be having people in the office we had an open office plan was actually kind of counterproductive to to, to productivity, because people were getting distracted. They were kind of talking they could hear other people talking, etc. So for us like the, it was actually a negative in some ways, given the work that our people do. So we actually became more productive in some ways by getting rid of the office. So I would say if you’re, and there probably are businesses or agencies were kind of having that kind of need real time communication, being able to talk to the person across from you, is actually super important to delivering what you’re doing. I can see kind of like a political campaign where you’re kind of kind of talking through something in real time and having to respond really quickly or almost like a war room type situation, right? If that’s the type of business you’re running, that maybe is useful to kind of have that real time communication. But if you’re producing longer term deliverables that require focus, I tend to think kind of an office is actually somewhat counterproductive. So I think if the collaboration is really useful, that’s probably the beginning and also frankly, cultural. There are some people that just really want to go to an office. And so that may be, you know, maybe also a driver if your staff is really resistant. to it, that would also be a big factor.

CHIP: One of the issues that and I’ve had remote workers for a long time. And you know most of them have worked well. There have been a few that have been, you know, odd situations. I remember, actually my first experience with it was back in the 90s. And I took over for another manager who had promised the office receptionist that she could telecommute after she had a baby. And I was I was really confused as to how you could be a telecommuting receptionist. Yeah, it turned out that that did not work. Because it’s really, really difficult to greet someone at the door when you’re 20 miles away. But you know, one of the more common things that that I’ve seen, particularly amongst younger folks, is that they often don’t have a space in their, in their home or apartment that’s that’s conducive to doing work, particularly if they have roommates, for example. And so, is that something that you’ve encountered and how have you address that? Because I know that that’s probably been I would think, for me the toughest obstacle to overcome The younger worker who’s got roommates and just doesn’t have a quiet place to be able to work.

TODD: Yeah, and I think and frankly, that’s part of the reason we have the CO working space. That’s this that says that’s two of the people in DC are two of our people in DC are actually working at the CO working because of that they really like, I just have a one bedroom apartment. I live with my boyfriend, you know? Yeah, I don’t want to work on a kitchen table. I don’t have any place to put the monitors, right. Oh, so for us, I think it’s, it’s for those folks. It’s kind of having the CO working space. And then frankly, we’ve been hiring kind of specifically for remote work when it’s outside of DC anyway. So generally, your kind of people that are applying are self selecting, based on they have a good setup, this is what they do, this is what they want to do. So it’s not really a challenge. So and I tend to think, just from my perspective, they’re more they’re not that they’re more people that want to work remotely than there are jobs. So you just buy it. By hiring people that are remote workers, you end up frankly with a better better, frankly, easy, more, it’s more advantageous for us. We’re getting better people for frankly, better salaries or more reasonable salaries and would be if we if we required people to come into,

CHIP: you know, one of the other areas that I think sometimes holds people back from making the decision to, you know, either go completely virtual or to have a lot of remote workers is concern over HR policies and sort of the more bureaucratic and administrative things that come into play. You know, since since you got there gradually, you probably already had to deal with things like dealing with payroll taxes in multiple states and yeah, and the potential impact on other tax filings and registrations, etc. and insurance, you know, but are there are there things, are there lessons from that, that you would suggest that folks thinking about this should be considering?

TODD: Yeah, I think I mean, the payroll tax stuff like

Unknown Speaker
I think if you’re using we’re outsourcing our payroll to SunTrust bank basically SunTrust as a service, so they kind of handle all that. So that’s a pretty minor obstacle at this point. If you’re using x money they will they used to be. Yeah, so that’s fairly simple. I think the in terms of the insurance, it was funny because we we basically just talked to her, like, we were thinking that was a big problem. And for the longest time, I only offered insurance to people that were local, the DMV, DC, Maryland, Virginia. And then we just basically talked to our broker and they’re like, okay, they’re national plans, you can offer a little cover everybody, that pretty much cost the same. So I think as long as you kind of just do your research and kind of look around, most of these kind of more HR type things can be overcome pretty pretty easily. And then obviously, we do have some people that are working out of the country and those people, they have to be contractors. So you kind of just have to set that up a little differently. And we’re typically if somebody is a contractor and they can’t participate in or health insurance or 401k, where you know, adjusting the salary so that they can figure that out on their own kind of in their own country, wherever they are. So

CHIP: yeah, and I think you made a good point there too, which is essentially, you know, none of these things are impossible to overcome. It’s really just that you need to be talking with your professional advisors, your insurance broker, your accountant, your lawyer, all those folks and let them know what you want to do. And they’ll tell you how to do it. Exactly. Without getting into trouble.

TODD: Exactly, exactly.

CHIP: Are there any questions that I haven’t asked you that? Are there other tidbits that you’d like to share with folks thinking about going down this path?

TODD: Um, I mean, I mean, for us, I think, I think kind of just to reiterate, I think for us the biggest problem and the biggest thing that we were still kind of grappling with is just the social part is just how to, you know, keep a tight knit group that really likes each other and knows each other well, because ultimately, the tighter knit your company, the better people know each other and if they like each other, that’s going to that’s going to cause would cause the world to be better and enable you to retain people etc. So just keeping that culture I think is really what I’m kind of curious about how that how that will go as we kind of become even more remote so that’s I think that’s my biggest My biggest concern or the biggest thing that I’m thinking about but otherwise I think he kind of hit on all the all the high spots so the big points

CHIP: break well if someone wants to learn more about the brick factory or connect with you maybe share with you their solution to the social challenge of running a virtual agency How can they find you?

TODD: Sure. So um, so you can reach us at www the brick factory dot com is our is our website and my email is Todd at Todd two D’s at the brick factory dot com, so feel free and you can also find me on Twitter at debaser is the Pixie song. So anyway, hit me up on any of those if you have any questions, and I would love to hear other people’s experiences because we’re kind of at the beginning of the journey. So

CHIP: yeah, absolutely. If someone’s got a good solution to the social side of things hit me up too. And maybe we’ll have you on as a guest to share that story with other agents. See owners but Greg included links to all of those things in the show notes so that if you’re listening here on the treadmill or in your car, you don’t need to stop and pull over. We’ll, we’ll get you covered just visit agency leadership calm for that information. And with that, Todd, I really appreciate your time. My guest today is, again has been Todd Zeigler, the CEO and Founder of The Brick Factory.