Managing your agency in the middle of the Covid-19 crisis

Handling the challenge to emerge stronger
Managing your agency in the middle of the Covid-19 crisis

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It’s an uncertain time for everyone. Business is disrupted. Personal lives are upended. Fear and anxiety are common feelings.

On this episode of the Agency Leadership Podcast, Chip and Gini look at how agencies can and should be handling the situation. There’s no one size fits all answer — it really does depend — but they have both been through tough times in business and the economy before and they share the lessons they have learned along the way.

From staffing to business development, the pair have helpful advice designed to help you get through this challenge and come out stronger on the other side.

Even though it’s a difficult time, Chip and Gini still try to bring some of their trademark humor to lighten the conversation.

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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 the Agency Leadership Podcast. I’m Chip Griffin.

GINI: And I’m Gini Dietrich.

CHIP: And there’s just a bit of news these days. So we thought we thought we would diverge from our usual content calendar, which we actually sort of kind of do have, despite the way it may seem. And we will talk about the corona virus kovat 19 crisis, whatever you want to call it, and how your agency should be responding to it today.

GINI: Yes, it is a very challenging time. I think that, you know, we certainly live through 911 and we lived through the great recession and this this seems to be significantly worse. I don’t think that anybody who is alive on this planet has experienced something like this. No, yeah. It’s It’s It’s a real challenge, and nobody really knows what to do.

CHIP: It’s an incredible challenge. I think the the uncertainty is something that differentiates it from those previous crises? So, you know, if you look back at the great recession of oh eight, you know, in, in part, first of all that, that didn’t affect everybody. I mean, it certainly affected a large swath. But there was a sense that, in some respects, some people were getting their Just Desserts out of it, because, you know, they played fast and loose. So the, you know, the fat cats got screwed. Yes, we’re getting screwed in the process. But it was it was a weird, weird dynamic, I thought at that point in time. And then you look back to 2001. And a lot of people have compared the current situation to 911. And, you know, what, I’ve been telling people, I’ve said, this look it to me, it’s different, because in 911, the original event was the bottom. And, you know, certainly that that first week was was sort of surreal. And everybody was sort of walking around days to sort of like everybody is right.

GINI: Yes,

CHIP: but but but then people sort of got a resolve and said, okay, you know, we’re not going to let them win. We’re going to fight back and And people were asked to do things give blood, you know, continue to fuel the economy go about your daily life, things like that. Whereas now it’s first of all, we don’t know when the bottom is how deep the bottom is. It’s really every day just brings more uncertainty, which is tougher. And then the second piece is the the solution is do nothing. Stay home isolate, don’t

GINI: talk to anyone. Yeah, right. Anyone don’t go anywhere. Yeah,

CHIP: anyone listen to this podcast is is probably fairly fortunate in that they have the ability to continue to do their jobs. Obviously, as we’re sure over the course of this episode, we will acknowledge the fact that you are likely to be seeing a downturn in your business unless you’re in crisis communications or a few other fields that are, you know, frankly, booming right now. But, you know, most people are here are different than restaurant workers or hotel workers or all of these folks who are really really suffering because they can’t do their job. We assume they can’t do it on the phone. They they’re just sitting on the sidelines completely. And for them, it has to be even more frustrating. As as difficult as our jobs are right now at least we have that to go to. Right.

GINI: Yeah, we’re not just sitting at home with nothing to do. That’s a really good point. I also will add your your kids are a little bit older than mine, but having children home during this as well.

CHIP: Well, we are recording this on the first day of the official closure of school in my district, and we’ve already had world war three breakout amongst my teenage sons. Awesome. Yes, yes. Yes, that was that was good. I was sitting in my study on the second floor and they were screaming each other so loud in the basement. I had to pause work and go down to figure out what was going on

GINI: directory. Wow.

CHIP: Yes, yes. And it turned out because there was a miscommunication over what time the older would be taken the younger to school to pick up some materials that the school has for some also going to the local library which was about to close imminently so that they could pick up some books and things like that. So

GINI: I appreciate that they’re going to the library. I went to the ice cream shop. I was like, oh, if everything’s gonna be closed, I’m getting ice cream.

CHIP: Well, I I will confess that on the grocery trip that my wife did at the end of last week, we we may have ended up with a few too many pints of Ben and Jerry’s.

GINI: I feel like you’re gonna need them.

CHIP: Well, I’m not sure how much longer they’re going to last but I when I opened up the freezer, I’m like, do they have any Ben and Jerry’s left in the local grocery store? And she said, Well, they didn’t have a lot of other things.

GINI: Okay, I mean, she’s probably right. I went to get avocados and jalapenos which I almost said you love those because that’s why I call them um, and they were all tomatoes and stuff to make guacamole. Oh God, like she was hurting Calvin yos.

CHIP: Yeah, and I still don’t understand the toilet paper thing and I’ve read Either I’ve read stories about it, you know, that tries to explain why Yeah, I will tell you we were not able to get toilet paper.

GINI: So the paper goods aisles completely gone. Yeah,

CHIP: we mean so you know this goes on more than a few more weeks where where a lot of trouble in the Griffin household

GINI: leaves you can use leaves that

CHIP: that would be nice except I live in New Hampshire and we’re not going to see leaves for another like six weeks. I hope your toilet paper last another six months. My mother did very helpfully say well, it’s okay. You live in the woods. I’m like, Yes, but there are no leaves on the trees. So we still have the toilet piece. So I’m not worried about that.

GINI: I can still use the toilet I just don’t have.

CHIP: All right, well, let’s bring this back on the rails. Right, Jenny. Hopefully this has given you a little bit of lightness before we go into some of the heavier topics that we will talk about today because there are in all reality things that You and your agency should be doing right now to prepare. And, you know, again, you have to assume that in most cases, this is going to be some sort of a hit to your business. Yeah, I ran a survey recently of agencies and already one in five agencies have seen a negative revenue consequence, perhaps more than that. And most people think that there will be a negative impact over the next 12 months. So and

GINI: you ran that was the beginning of last week at the

CHIP: beginning of last week when it seemed like things were really bad. And as we record this on Monday, the 16th and it’ll be out fairly soon thereafter. It’s already gotten worse and

GINI: yeah, I would be curious to run it again this week just to see because when I took the survey a week ago, I did not have negative revenue impact and I do today Yep.

CHIP: And I have negative revenue impact. All I did have it at the start of last week, but you know, I it is I My plan is to run it every other week. I think every week is probably that much but, you know, every other week and until we sort of start to gain some certainty, I’ll probably add a couple of questions that add some clarity to some of the questions from week one, just so that everybody really has a sense of, you know, what the whole boat looks like? The whole ocean, right? I don’t know, whatever. Whatever the sun analogy, Yeah, something like that. But regardless, regardless of all that, you know, there are things that you should be doing as you prepare for what this is doing as you prepare for the likelihood of a recession, economic downturn, whatever you want to call it, you know, I don’t think we need to define labels. It’s really just a question of, you know, what is it that you need to do and I, so I wrote an article about this, mostly because I’ve been asked by almost all of my clients, what should I do? And I knew you were gonna have this episode. So I figured, hey, I’ll just turn my notes into an article. So I won’t go through the whole thing. I will share a link in the show notes. But you know, to me, the the two top things are first of all, don’t panic. And I know that’s difficult. Yes. You know, we’re all in that that’s a, I should shouldn’t say say we’re all in a similar boat of frustration and anxiety. Obviously, it’s modulated by our own personal circumstances, financial and health wise and all that. But the second is be human, be human to your employees, of course, but be human, to your clients, to your vendors, and sort of just just pause because there is going to be that frustration. You don’t want to take it out on them. This is not the time to, you know, be rigid in your policies and contracts. This is a time to try to find solutions with everybody because everybody worldwide, I don’t care who they are. They’re the same boat. We’re all in the same boat. We’re all in this together. And that is that is frankly, different than any of the other crises that we talked about in 2008. didn’t actually hit everybody. even remotely equally. 911 didn’t it depended on which country you were in and even if you were in a city or rural, you know, this is everybody everywhere.

GINI: Yes. And we are all in same boat. Um, I, I have a friend who said to me, I think it’s more important right now to preserve long term revenue than short term, which is really challenging, especially when you’re running an agency and you have payroll, and all those kinds of things. But I think it’s really smart advice. So one of the things that we’ve talked about is how can we help our clients in the short term, and maybe postpone payments or things like that, so that they come back longer term, but that we don’t lose the clients outright? And it’s, it’s a real challenge. I’m not going to pretend it’s not because you know, you are losing the income short term. But if you can think about ways to preserve the long term relationship and the long term revenue, that’s probably one of the smartest things you can do right now.

CHIP: Oh, absolutely. And look, if you, if you go to a client and you try to enforce your contract, first of all right, you’re probably not going to get paid because if they’re, if they are trying to stop work right now, it’s probably because they’re in a bad situation and They’ll just sort of like, you know, go ahead, sue us What? You know what? Yeah, I don’t have them, right. Yeah. So you know, all you’re really doing is engendering a lot of bad will. And that will not help you over time. So it boohoo, you know, I’m not encouraging you to do a ton of free work. I was asked by one client, should we do payment plans and things like that? The answer is maybe you have to assume that any time that you continue to do work for someone who’s not paying you today, that you may never see that money. So you need to weigh that free work against How else you could use that time to build your business to read, you know, reframe your business, whatever. I’m not saying don’t do it, but you just need to weigh it carefully. You know, but at the end of the day, you want to be accommodating. And, and this is doubly so for employees. I mean, I’ve seen some frankly, really horrendous voice out there. From some consultants, you know, that that suggests things like, you know, don’t let your employees work from home because oh my god, that’s a genie that once it’s out of the bottle, you won’t be able to put it back in please. Oh begging Stop with that. You need to accommodate your employees as much as humanly possible a because it’s the right thing to do. But be because you want to they’re they’re going to have a lot of challenges within your business over the next 612 18 months, who knows, maybe longer. You need them to be flexible and work with you. They’re not gonna do that. If when they’re in this mode, you sort of socked them in the face and says, well, the manual says, You can’t do this. I mean, yeah, throw the rules out for any leave policies work from home policy. Yes, yes. Any of this kind of stuff. Just, you know, work it

GINI: out with human beings. Yes. So I just pulled up my phone because I have a friend whose business has not even communicated, what they’re going to do. They don’t know if they’re supposed to go to work, what they’re supposed to do if they can take home their computers and phones that are corporate. They don’t want anything. So she sent an email saying okay to to leadership. I need to know a few things. schools are closed from today through April 3, and will resume April 6, unless there’s another update warranted at that time, due to the lack of Child Services, childcare services, are we allowed to bring our stuff home? Will we all be working remotely regardless of childcare? What does it mean for us if we get sick, they a business that she works for, for has not communicated answers to any of this stuff. And on March 16, she had to send an email asking these questions.

CHIP: That’s that’s not okay. No, that’s not

GINI: that’s not okay.

CHIP: And, and, you know, you really have to as an agency leader, you need to understand that your employees have a lot of fears and concerns. Yeah, they may not be directly expressing them to you. So you need to make sure that you’re giving them forums to do that. And this was something discussed in the spin sucks community on slack. I think earlier today or over the weekend. There you need to be really mindful of this. You need to be having more regular team get together. But you really need to make sure that you’re having one on one with all your direct reports. And if you’re large enough, everyone in your agency who has direct reports needs to have one on ones, right? Yes. Because people need to have that forum to express whatever concerns they have, they may not do it in a group setting, they may not come to proactively give them that, yes, forum today. And frankly, I should be doing this all the time anyway. But extra important right now, because people have anxieties that they need to raise, and that you need to work with them on but you need to give them the ability to do that.

GINI: And not only that, but now that you’ll be working from home or most of you will be working from home, I would imagine, I hope so anyway, you it’s going to become even more important because you’re not going to have the in office interaction or social socialization. So being able to do things on video chat, such as Skype, or Google Hangouts, or zoom B and being able to see one another’s faces is far more important right now than it has been in the past. So you have to you have to To implement some of this stuff,

CHIP: right? And look, I mean, this is an opportunity for you to innovate and I am a huge Absolutely. I’m a huge believer, as, as Rahm Emanuel, the former White House Chief of Staff, mayor of Chicago used to say, never let a good crisis go to waste. Rob, Rob, great at really crass things. But there is a point to that. Yes, in this there, I’m not going to call it a silver lining. But there are opportunities. Absolutely. To look at how you were operating your business. There are opportunities for you to innovate in how you are collaborating with your team, how you are interacting with clients. I know that, you know, in my own business, I’ve already got a long list of ideas of things that I want to try, given the new environment. Yeah, but you know, you should be thinking about things in your own. If you’re working remotely. Now. How do you find a way to support people? You know, one of the things that that I’ve been toying with is for agency owners doing a monthly virtual happy hour on zoom or something like that. I know we just you know, we we sit here with our scotch or a martini or whatever. And you know, we can’t get together in person. Yep, I love that. But you know, so there are things like that. And by the way, if anyone’s interested that send me an email, you know, maybe I’ll set one of those up sooner rather than later. because, frankly, we probably could all use a drink. Yes, or sorry, or coffee or tea or whatever. Yeah, whatever your drink some sort of, we all take beverages or some kind. So whatever, right, whatever is your beverage of choice. But you know, look, so think about those things with your team. Think about them with your clients, how Yeah, how do you innovate the services that you’re providing? I mean, I was doing a lot of on site work with clients of late. That’s not happening. So now I have to find a way to do virtual workshops and things like that. Do the same. If you probably are, if you’re a typical PR communications agency, events are probably at least somehow involved in what you do. They’re not happening anytime soon in person. You need to think about how to adjust your offerings or adjust your partnerships with other agencies that are more event focused. How do you deal with that? There are a lot of good ideas out there. Try them This is the opportunity to try things with relatively low risk.

GINI: So I have one client that does search engine marketing. And he, I mean, I’ve been super impressed, he has taken this opportunity to put together Google adword, one on one webinars, and he’s providing it for free. And, you know, the idea is not that they would hire him to do it, although that would be ideal, but he’s providing the content for free to say, Okay, if you still if you still need to do this stuff, and you do, I mean, you know, business doesn’t stop, here’s how to get the most here’s how to have the biggest effect from the work that you’re doing. If you have to do it yourself. And he’s giving them all the tools they need to be able to do that. Now. We don’t know what the result will be from that because he’s doing them this week. But the idea that he has kind of, he’s looked at his clients and prospects and figured out what what it is that they need the tools that they need to still be successful in their jobs without Being able to outsource it right now. And, you know, I think you and I both believe in good karma, it eventually comes back. So there are those kinds of things that you can be thinking about. Also, I have another client who truthfully needs to prune her business, she needs to prune some staff, she’s a little bit bloated, and I said to her, this is a great opportunity for you to do that. So, you know, some of us may have expenses that we shouldn’t have, some of us may have employees that we shouldn’t have, you know, look at the business. This This gives you a really good opportunity to make some changes that you may have been fearful to make before now.

CHIP: Absolutely. And on the you know, the good karma point, huge believer in that or paying it forward, wherever you want to call it. But you know, now’s the time, particularly if your workload has decreased clients have been pausing work or those sorts of things. Please say yes to pick your brain type meetings or, you know, if someone reaches out for help, you know, again, now is not the time to worry first and foremost about turning that conversation into immediate revenue. Help them out. It will get you referrals. It will get you direct business, it will get you all sorts of things. So, absolutely focus on that. But your second point about, you know, this is an opportunity to to cut costs, perhaps that you should already have been thinking about cutting. Look that that is my experience is that most times when businesses downsize, the first cuts are ones that probably should have been made six or 12 months ago. Yeah. This is just this is just making things take place, that they should have happened and

GINI: let a good crisis go to waste.

CHIP: Yeah. And, and, and success success lets you continue to sort of push things off.

GINI: So absolutely.

CHIP: You know, My only advice on that is first start with the non staff expenses. So, yes, and agencies are always, you know, 50% or more typically a payroll cost. So, you’re not going to be able to make meaningful changes without touching staff, but make sure that you go through the exercise of reviewing your other expenses first, so that when you have those conversations with employees, They can say, Well, okay, great, but why are we spending all this money on this service or that service? Or, you know, why are we still giving out free flaming ons on Friday even though we’re laying off staff? Right? fearfully on Friday, there we go. That sounds

GINI: that is kind of like the alliteration. Yeah.

CHIP: complete accident folks. But you know, sometimes that’s how you invent there’s an idea, right? Chocolate in my peanut butter or whatever, you know. So, but seriously, so. So make sure you do those. Make sure that you understand that as the agency owner in particular, you need to lead by example. So you need to cut your own expenses. Please, please, please do not come in talking about the new vacation home you just closed on and got a steal all because the person who is stressing or just got a new Tesla, right. First of all, my suggestion is don’t do that. But if you are keep it quiet, do not cry. I do not feel the need to I mean, I used I knew leader who wants which he had fairly low paid employees, but he kept posting on social media, these just really luxury cars. I’m like you’re tone deaf. There’s absolutely no reason to do that. Nobody would even know that you had these vehicles if you just stop. But so lead by example, make sure that they understand that you understand the pain that they’re going through, but then rip the band aid off it, you know, if you’ve got payroll to cut, cut it, don’t wait. Yeah, the sooner you do it, the better everybody is. And the other thing is, make sure you do it all at once. We’ve talked about that before on this show. But if you’re going to do layoffs, figure out what you know, what’s the whole picture? What do you need to do based on everything you know, now, and lay off everybody at once because otherwise it turns into death by 1000 cuts and productivity plummets and you’re on the road to nowhere. It’s terrible.

GINI: And I would also say, the sooner you do that, if that’s something you need to do. The more severance you can offer people correct. So if you wait, and you do it at the last minute, you can’t offer people severance, and that’s worse. So correct. Do it sooner rather than later.

CHIP: This is something David C. Baker talks about a lot when he’s talking about, you know, use another agency consultant. How do you do layoffs, and he always says, you know, think about when to do it in terms of how much severance you want to pay. So come up with a number in your head, this is how much severance I want to pay, then, you know, when you have to take action by you know, based on what cash you have available? Yep. And speaking of cash available, what are the other really, really bad pieces of advice that I’m seeing out there is encouraging businesses, agencies otherwise, get lines of credit in order to get through do not do that it’s not do that. Look, if you want to have a line of credit, I support you having a line of credit as long as you know how to use it responsibly. But using debt of any kind of line of credit credit card, you know what? Extra mortgage, I don’t care, whatever debt That you would use in order to get yourself through this, which typically means avoid layoffs. horrendous idea, it only leads to one place and that is bankruptcy of the business and probably bankruptcy of yourself. Do not do that.

GINI: Never, never, never lines

CHIP: of credit are designed to smooth out cash flow. So if you’ve got a payment client that’s slow paying, but you know what’s coming in cool line of credit can be a solution if you use it smartly. Never ever use it to finance a downturn. That’s just a recipe for disaster.

GINI: It is a recipe for disaster because you’re borrowing money. And granted the interest rates are really low right now. But you’re still borrowing money and paying interest on two. I mean, for most of you to make payroll and that is not income generating. So never ever, ever, ever, ever do that.

CHIP: Right. And speaking of payroll, don’t cut salaries. The one possible asterisk is if your team comes to you and suggests it, then you can entertain the conversation but Going to your employees and asking them to voluntarily take pay cuts in lieu of layoffs. It doesn’t work that no, it if you have a large enough agency, you potentially could do that, like, say, at the sea level or something like that. Sure. You’re not going to save a ton of money doing that. But you know, maybe that’s part of your messaging, you know, Hey, everybody at the sea level took a 20% haircut or a 10% haircut for six months. So we could lay off your people, fine. But you don’t go to your staff generally and say, Can we pay you 1015 20%? Less for a few months? They will feel extreme pressure to say yes, most of them are probably not in a position. Really,

GINI: most of them are paycheck to paycheck. Don’t do that.

CHIP: And frankly, when you do that, it’s rare that the salary bounces back in a reasonable period of time. So it just that’s not a good idea. In most cases.

GINI: Yeah. It’s a lot to think about. This advice may change by this time next week. Which,

CHIP: which is why we met, we may publish this episode a day or so early, just so that the advice is not totally worthless by the time, right, then it comes out.

GINI: I mean, we joke that, that just last week felt like a decade. So who knows what this week has in store for us. But for now, don’t panic Be smart plan is as you can and have contingencies in play, right.

CHIP: And the last thing I would add is keep prospecting. Keep looking for business. I know. Yeah, there there is. And I’ve seen a lot of this conversation out there. It’s, you know, it’s not tasteful to do this right. Now. We need to, you know, we need to back off. No, I, you mean, you need to be smart about it. You don’t want to go out there and try to sell it in the same way that you were selling six months ago, but you need to continue to, you know, cultivate new business. There are and, you know, perhaps we should have a separate show on this, but there are a lot of opportunities out there for you to pivot your agency. You know, absolutely. You know, if you’re there are certain industries where if you’re a specialist in, you’re gonna have a really hard time right now. But there are still opportunities, I would wager to say, even if you are a PR agency that specializes in the cruise industry, there are still opportunities for you.

GINI: It might be all crisis work, but yes,

CHIP: it might be all crisis work. I mean, look, the the cruise industry is not going to go away. Right? It’s really going to change. But in that change, there’s a lot of planning that has to go into how do you reposition? How do you make people feel safe ever again, getting on a cruise ship? Right. So if you’re a communicator, you look for that opportunity. So even in the, you know, probably I can’t think of an industry that’s been hit worse than the cruise industry in this whole crisis thus far. Yes, as of March 16,

GINI: as of right now, as of right now,

CHIP: and I should say at about 245 eastern time, because by four o’clock, it could change dramatically. You just never know. But even in the cruise industry, there are still opportunities for you. So you know Don’t don’t hang your head and say there’s no hope there is hope. You need to find it, usually. And it’s going to take creativity, it’s going to take hard work, and it’s going to take continued prospecting. So please, please stay out there and continue to do business development, even in these tough times.

GINI: Yeah, and you know, I’m a big fan of content from that perspective, just stay top of mind, providing really good tips and tools and content and keep them engaged so that you’re on top of mind when they’re ready.

CHIP: And it helps you think, too, I mean, the more content that you’re creating, you know, in the process of creating the show, and writing the article and all that, you know, it’s helping me hone the ice that I’m giving to the agencies that I’m willing to help them through this. Right. So, you know, it’s, you are the same way as a communicator. If you’re coming up with these ideas, it gives you more ammunition to help your existing clients and future clients with.

GINI: Amen. Amen.

CHIP: And that, that concludes this episode of the agency leadership podcast. Good luck to all of you. It’s gonna be a ride. I’m sure

GINI: it is. And I’m Gini Dietrich.

CHIP: It really does depend these days.

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