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The doom and gloom episode

Are there more storm clouds ahead in Q4?

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Chip and Gini started this episode with the idea that they were going to talk about whether you should share ideas with prospects before they sign on the dotted line. They were all set for a vigorous debate since they don’t entirely see eye-to-eye on the question.

But then their usual witty banter at the top turned serious, and Gini prodded Chip to share his fairly gloomy forecast for the end of 2020.

Tune in to this episode to hear why Chip is not optimistic about what November and December holds on a number of fronts. At the same time that they share their concerns, Gini and Chip also balance it with optimism that those who plan and innovate can still make it into 2021 in decent shape — or even better.

Of course, as they always say: it depends.

Transcript

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

Chip Griffin  

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

Gini Dietrich  

and I’m Gini Dietrich,

Chip Griffin  

and we’re here today to give you an idea. But we’re going to charge you for it. We won’t give you an idea until you become a client of ours. No ideas. Not at all.

Gini Dietrich  

I mean, I kind of agree with that. Well, I know we don’t agree on this, but no,

Chip Griffin  

we don’t we don’t agree on this. Well, I think I think like most things where you and I think we don’t agree, and we start a show, because of that, we’re gonna find that there’s more common ground than we think because we go along,

Gini Dietrich  

maybe, or maybe I’ll just argue with you to argue with you. You

Chip Griffin  

know, I mean, why not? It’s 2020. So,

Gini Dietrich  

and you’re you’re tired today, so I could just like,

Chip Griffin  

I am tired. I just,

Gini Dietrich  

yeah, I just I don’t know why. I mean, 2020 has been such a joy. I can’t imagine why anybody would be burned out. Yeah,

Chip Griffin  

I just part of it is I’ve had too many conversations recently where we’ve talked about the rest of 2020 and I am I am Very, very pessimistic on where the rest of the year goes. But we’ll save that topic for another

Gini Dietrich  

week. Now I want to talk about that instead of ideas.

Chip Griffin  

I don’t think anybody really wants to hear my theories about q4 though, I would

Gini Dietrich  

like to hear your theory so that I am better prepared because this is what I learned during the Great Recession. Everybody, all these economists were saying the sky is falling, the sky is falling, the sky is falling and I was like, Oh, please, it can’t be that bad. And then it was so I would like to be prepared. So let’s change our topic.

Chip Griffin  

Well, this is a first and I’m not sure we will see if this episode actually ever airs because maybe you suit simply too depressing for me to have to listen to it over again to do the actual post production on it.

Gini Dietrich  

Have your Oh your summer associates probably started school hasn’t he?

Chip Griffin  

My summer associate start school at the end of the month but okay. He He is mentally checked out already. So I The last week or so I’ve had to pick up some of the slack, shall we say. For those of you who have not been listening, my summer associate is my son who is headed off to college freshman year. I made him work for me this summer. So he was doing something productive because as usual summertime activity is umpiring baseball. But

Gini Dietrich  

he didn’t do that this year. Well, no,

Chip Griffin  

he could. But you know, we decided that we weren’t comfortable with him doing

Gini Dietrich  

any really, I didn’t realize

Chip Griffin  

oh, there’s there’s more baseball. I mean, there’s more baseball in New Hampshire to umpire than any normal summer. I could be out on firing every night if I wanted to. I could do four games every Saturday and every Sunday. It is it is an incredible amount. Unfortunately, it is there. It behaves much as summer baseball in other times, shall we say but I don’t want to get too far off. on that track, okay.

Gini Dietrich  

It’s fascinating to me. The differences. I mean, we’re still certain certainly Chicago is quote unquote, open, but we’re still so not open. not normal, that it’s fat. Like that stuff’s not happening here. The parks aren’t open, the playgrounds aren’t open. You can’t do that stuff here.

Chip Griffin  

What is amazing, it is such a different experience in different places. I mean, and, and it’s just fair, because you’re in New Hampshire, I believe right. Now, if I if I heard the numbers correctly, yesterday, I’m remembering it correctly. And you know, who knows it’s 2020. And my memory is not good in 2019. So you know, but I believe that there are only 12 people in the whole state hospitalized with COVID. What Yeah, so Wow, it’s very, very low. And so it does. I think that breeds a certain degree of complacency. And for someone like me who is more cautious, it makes it hard for me to argue that you know, you need to be more cautious. Because it’s it’s really not just generally spreading around where we are fast. The problem is that at some point, I believe it will. And by the time you realize that it’s too late, right, so it’s one of those great, you know, it becomes very challenging. And but yeah, so I mean, if you want to talk about outlook, I can talk about outlook, I think I think I

Gini Dietrich  

do. I would love to hear what you’re saying, I think

Chip Griffin  

I that q4, so October one on will be the most difficult period that any of us have ever seen. And I think it will be on three fronts. I think that the health situation by also by all estimates is likely to get worse in the fall right now all of the for sure. I agree with typical pandemics have have have gone that way. I think you will likely see that there will be increasing numbers of infections and all that now hopefully, the treatments continue to get better so that you know it’s it’s bad but not as bad but the numbers are just going to be so large that it’s going to be I think Guaranteed. So you’ll have that I think that the economic assistance that been in place has done its job of slowing down the economic damage. But that was all PPP. And all those things in the US and similar programs and other countries were built on the notion that we were going to flatten the curve and then get back to normal in a few months. Right. Right is clearly not happened yet clearly will not happen. There are large swaths of the economy that will remain heavily disrupted, I believe, through at least the end of next year. Even if we succeed, I do not think that that large scale business conferences will return until 2020. No, the earliest i

Gini Dietrich  

don’t think so either.

Chip Griffin  

Yeah. And the reason for that is because even even if you get a vaccine in early 2020, which I think is optimistic, particularly getting it out to people that’s going to take time, but it’s also going to take time for people’s comfort levels to return and then beyond that, people I’m going to start planning these large scale events until you get to that comfort level because they’ve been burned once a lot of people have lost a lot of money on events that they have planned to put on this year, and can’t. So they’re going to be cautious in investing that money, knowing that the return may not be there for a while, so so there’s a lot of issues that we’ll hold off those things wrapped. So So economic damage will continue. I think as the as this money runs out, I think you will see the unemployment numbers start to rise again. Okay. You know, we’ve got we just the as we’re recording this, new numbers came out and they’ve they’ve ticked up for this particular week. So you know, that there’s already some signs that that may be happening. And we know that a lot of the the airlines are planning to do large layoffs in the fall once their government aid runs out. They’ve already pre announced it. So I think we’re going to see more of that. So we’re going to have health problems. We’re going to have economic problems and then here in the US, I think we’re going to pile on serious political problems on top of it. And this is not a political show. But we do have to look at politics, I think in terms of what’s the impact on business? For sure. And I think that the there is an extreme likelihood that there will be a lot of uncertainty around the US election results. I think that I

Gini Dietrich  

don’t know why you say that. Well,

Chip Griffin  

yeah. Well, I mean, obviously, we, you know, we know that that at high levels, the uncertainty is being promoted and encouraged. But the reality is that even if you didn’t have that, the mechanics are such that that it is unlikely that unless it is an extreme blowout in favor of Joe Biden, it is unlikely that we will know what the election results are on election night. Yeah, and I think an extreme blowout win is incredibly unlikely I you know, I just I don’t believe that the the split it that there’s enough Momentum over there. And I still believe that there will be a lot of Trump support out there. So regardless of where you stand on this, whether you’re a Trump or a Biden person, I think that that it’s certain that there will be uncertainty. And I think that the that that is likely to manifest itself in whoever loses, questioning the integrity of the results. And I believe that that will lead to a lot of very energetic arguments, shall we say, that have a high likelihood to deteriorate into violence, like we saw earlier this year? Obviously, different topics, but I think that regardless of the outcome, I think that is a likely scenario. And I think that we’re likely what we’re likely to see is Florida. 2000. on a national scale.

Gini Dietrich  

Yeah, I was wondering,

Chip Griffin  

regardless of which side so that means, you’re going to have a lot of angry people, you’re gonna have a lot A lot of court cases and a lot of different places. And ultimately, there’s a good chance that the Supreme Court or Congress ends up having to weigh in, I think it’s just going to be a giant mess. And that will impact on the economy, because business doesn’t like uncertainty at the big business. And so that then trickles down to all of us who are smaller than that. So I just, I am very pessimistic about what the fourth quarter holds. And I think that it’s going to be very damaging to the economy.

Gini Dietrich  

Well, I mean, they have been saying all along. Exactly that there’s going to be economic fallout around October 1. They’ve been saying all along that there’s going to be a second wave that we don’t know what to expect when it gets cold outside and people can’t be outside and restaurants here open outdoors, but not indoors. So what you know, what does that have what happens there? They’ve been saying this all along. So we have to be prepared for those kinds of things. And from Certainly it’s depressing. And I think, you know, we all have a tendency to be like, ah, we don’t want to I don’t want to think about this. I don’t want to think about this. Let’s just wait and see. But at the same time, we have to be smart as business leaders and figure out what that looks like. And where I mean, one of the things you’ve been saying is plan and plan, plan, plan plan. So what does the plan look like?

Chip Griffin  

It’s very difficult, because there is baked into this. A lot of uncertainty, right? That’s why I said so. Planning amidst uncertainty is challenging. I think what you have to do is you have to plan for the maximum amount of flexibility possible. And so you need to be focused on arranging your agency in such a way that you can be elastic to what the needs of your clients are elastic to what the the economic reality of your own agency may be. run side by side Really, you know, building as much flexibility into your model as you go forward is going to be incredibly important. But I think that the, I’m increasingly convinced that your timeline for building that flexibility in is a lot shorter than I might have thought, or a month or so I think that it’s becoming increasingly clear that you’re going to have the confluence of three events all simultaneously that the health, the economic and the political all coming together at just the wrong time.

Gini Dietrich  

Yeah, I mean, I don’t think you’re wrong. I really don’t. I wish I did. But I completely agree. And one of the things that we’ve been doing that is actually working pretty well, is all of the clients that put us on hold in at the end of March and early April we’ve gone back to, and with the exception of one, everybody’s been like, Oh, I need your help so much, but I can’t do a retainer like they had before. And the funny thing is, is they’re actually ending up paying us more than if they had us on retainer. But they have this feeling of because it’s not a retainer that it’s more project base that if they have more flexibility, and we’re providing them that flexibility. So for instance, we had one client who was paying us $12,000 a month as a retainer, and then he put us on hold, and at the beginning of April, and now he’s paying $15,000 and has for the last two months, and probably will for the next two. So it’s ending up costing him more money from a month to month standpoint, but it’s providing him the flexibility to not freak out and have to say, Okay, we’ve got to put this on pause again. So it’s just a month to month kind of thing. So I think from a flexibility standpoint, doing those kinds of things, and save as much cash as you can, because cash is going to be definitely King right now.

Chip Griffin  

Oh, yeah, absolutely. And, you know, and I don’t, you know, as listeners know, you know, I always believe that there are opportunities in these sorts of situations for sure. So just as, as you identified that, that project work can actually be more lucrative. It at least in the near term, that’s something that agency should be low Looking at and trying to figure out, you know how and we’ve talked about this, how do you de risk things for clients. And that largely means going to shorter, more focused projects. And so that’s likely what you’re, you know, going to be selling in q4. But if you have clients, if you’re in spaces that are likely to be impacted by any of the three factors that I’ve talked about, you need to really start thinking now about how you’re going to address it. So I work with some public affairs firms to help them on their businesses. And so you know, one of the things that we’ve talked about is making sure that they’re not guiding their clients to do quote unquote, normal activity in November, December. Right. So for example, you know, don’t plan on putting virtual events on their public policy related in that timeframe that you’re investing a lot in right now. Because the environment is going to be so bizarre, that it may not work, right. And it’s historically from the world of politics, as some folks know. And you know, it was very Common for us in the public affairs space to put on events in November, December that were public policy focused and sort of looking ahead to the next administration, regardless of which one it was, and you would invest in plan on those in advance. I think it’s very difficult to do right now. Because you could very much end up landing in a spot where a no one cares, right? Because if right, yes, he is Florida 2000 on a national level than all of the political and public policy brainpower is going to be sucked into that, and right focused on that, but even if that’s not there, I think there’s going to be so much uncertainty that you may end up you know, having a topic or panelists or attendees or virtual attendees that are not cool, right? Yeah. Right. So you know, I think that you need to be building that flexibility and and thinking about that, and certainly, if you’re, if you’re in the healthcare space, you’re probably already thinking about this because I think it’s been widely talked about that. There will be a resurgence. So I’m very shocked if you were in in healthcare, PR marketing and didn’t already have that. on your radar, but I think that economic pieces something else to think about, because as as the government assistance runs out, unless there is some new wave of it, and obviously, you know, we know the level of dysfunction in the us right now, when it comes to this, again, no matter which side you’re on, there’s dysfunction. And so the probability of substantial economic aid coming through is low. And if it does, it may be some bizarre kind of thing that’s designed to thread the political needle, which then may not be all that useful. Just just talking reality, folks. So yeah, right. Yeah. So so if you are dealing with industries that need that kind of help going forward, or will be impacted if the economy, you know, takes a right turn into the wrong place, you know, then that’s something that you need to be planning for as well.

Gini Dietrich  

Yeah, and I also think, even if you’re working in industries that are are have and are going to continue to explode like food, you know, I have a really one of my very best friends works for a very large not to be named dog food company. And they he tells me all the time they can’t keep up with was with demand, they just can’t do it because everything’s been interrupted from a supply chain perspective. And it’s just, it’s, it’s nuts. So, all of this stuff, even if, you know, we, even if it’s, I guess what we would call an essential business, that all of that has been interrupted because of everything. And it’s it’s a global pandemic, it’s not a US pandemic, so all of its been interrupted. And that’s going to affect as this trickles down as well, because it there’s just no way that they can keep going the way that they are.

Chip Griffin  

Right. Well, and I think that you know, the other thing is, it’s important that as we’ve talked about before, it’s important to develop your own perspectives. And so just as this is my perspective on things you need to spend the time looking at your ideas. Thinking about what is your perspective? What do you think is going to happen? And I know that a lot of us would rather not think about some of us, right? I mean, I know that it is very, it is very fatiguing to be thinking about these things. Trust me. Yeah. Yeah, but but if you’re not looking at it, then it’s hard for you to figure out what to offer your clients and how you might need to be of assistance to them. If some of this comes to pass, or whatever you think is going to come to pass it comes to pass. So you need to stake that ground out.

Gini Dietrich  

Yeah, I think that’s really smart. And the best, I mean, hope is not a strategy, right? And then like plan, just like we do in crisis communications, you plan for the worst. And you you wait to see what happens is probably not going to be as bad as you have planned in your mind. It’s going to be bad. I agree with you. I don’t think it’s optimistic by any stretch of the imagination. And you know, people keep saying, Well, you know, when the kids go back to school in November, and I’m like, you Yes, not happen. But you know, everybody has this sort of rosy optimistic glow that, I don’t know, we’re going to get through this first quarter of school and do it virtually. And then all of a sudden, we’re going to go back in person like, it’s, it’s just not gonna happen. So plan for the worst. And be pleasantly surprised if it’s not as bad as you think.

Chip Griffin  

Yeah, I would love that. But so, but yes, contingency planning is something you really need to think about. And that’s something that we’re also seeing right now, speaking of schools, you know, there are a lot of schools, which is a colleges and universities that just started going back. And it’s been like, whoops, oh, that’s not working. You know? Yeah. I mean, we think that college kids would would not socially,

Gini Dietrich  

you know, or not have parties or Yeah,

Chip Griffin  

yeah, right. I mean, that’s just that’s not what college kids know. You know, it’s been a while since I was a college kid, but I do remember I was not the best Rule follower at the time, and I was I was one of the better rule followers in my group. So

Gini Dietrich  

as was I still,

Chip Griffin  

but yeah, yeah, fortunately, the statute of limitations is run on all that stuff. So it’s all good. But so so you need to you need to have sort of a plan A, B, and C, I think, yeah. Particularly for that period of time. So, you know, we’ve talked recently about the importance for long term planning. And, and obviously, the longer out you get, the less productive it is to have real contingencies. But you know, the fourth quarter is not that far away. We’re midway through the third quarter right now, right? So you do need to be thinking about, you know, what are your contingency plans for some of these scenarios that may happen or perhaps others that you outline based on your own knowledge and research? Because obviously, you know, we all only know what we know. And so, our our perspectives are based on our own personal experiences, as well as whatever information we’ve been able to collect shares. Oh, sorry. I would encourage you collected much information as you can try to digest it, even though it’s uncomfortable and try to figure out, you know, what are your contingencies if some of the more likely scenarios happen, and maybe even some of the unlikely ones that occur to?

Gini Dietrich  

Right. I mean, it’s it’s crisis communications, planning one on one. That’s it, do it, do it as if you’re helping your clients plan for crisis and have your your different priorities one through five, yeah, if this happens, we do this, if this happens, we do that, like just plan it out and put it on paper. It makes it less emotional that way. And you can say, okay, we’ve hit priority three. So we have to do this, this and this and it sucks. But you’ve you’ve all agreed that that’s what you’re going to do.

Chip Griffin  

Right. And I the only other thing I would add is, you know, plan for the contingency in the near term, but don’t overreact to what it means in the long term. Right. So I’m sure a lot of agencies are talking about, you know, whenever we’re gonna have an office again, I you know, I think it’s premature to start making statements like that. You know, I think that you know, some people are saying the same about each other. Right, we just go online, why? Why even have school buildings? And that kind of stuff doesn’t make any sense. We could just do it online. In reality? No, it’s not. And, and it’s just as we’ve talked about here, you know, remote work isn’t the same for all individuals and all businesses and so that there’s going to be a continued mix. Obviously, there are going to be challenges you need to address in the short term. But, you know, don’t take this. Don’t take the idea of contingency planning to the extreme and just, you know, go radical and say, This is right. This is all I’ve just been, we’re just Yeah, yeah, we’re done. Right. You know, that’s it. And it is tough. You have to, but you have to find that balance amidst all of this and try to figure out how you build that flexibility and for the short term, as well as positioning yourself for the long term.

Gini Dietrich  

Well, I will say that yesterday. cranes, which is the Business Journal here, reported that we work is out of two leases that they were going to do in the Fulton market, the West loop, which is like Hip new trendy place to be. And they’ve backed out of that. So that I mean, those are the kinds of things that you want to be paying attention to, especially in your cities, that that’s huge. That’s going to affect you know whether or not you go back to work in an office. And that’s a big trend setter. So look at those kinds of things, what’s happening in your city? What’s happening to other businesses, to your point earlier? If the airlines are going to be laying off, what does that mean for travel for, you know, increasing clients and all those kinds of things? Those are those are the big triggers that you should be paying attention to, to help you figure out what the next four or five maybe even six months looks like. Yep.

Chip Griffin  

Absolutely not. not pleasant to think about. But

Gini Dietrich  

no, it’s not that I think you have to and it’s not I mean, I know I keep saying this, but it is crisis communications planning and it is looking at every possible scenario. What happens if we do this and what happens if this happens, and you know, you can do everything from natural disasters. And exempt executives passing away unexpectedly to shootings and, you know, social justice movements. I mean, you can plan for all of those things. And then there’s going to be a bucket over here. That is the unknown stuff that you can’t predict you can’t predict that there’s going to be a global pandemic, right. You can’t predict that you couldn’t have before now. So have a bucket of unknowns as well.

Chip Griffin  

Some people did, but yeah.

Gini Dietrich  

Right. We couldn’t have predicted the lack of response, but that’s his political without get.

Chip Griffin  

And I’m gonna behave myself even more so.

Gini Dietrich  

But I do think it is depressing, but I think it’s really important for you to be thinking about those things. Thinking about it from a local perspective or regional perspective and international perspective. And I’m even thinking international because I have two clients who are overseas

and what does that look like? So soli?

Chip Griffin  

Yeah. The International and the International component, even if you’re not directly tied to international, as you mentioned before supply chains and customers? Yeah. Yeah, there are, there are international components that absolutely have an impact. And so that is something to keep an eye on. And I think, you know, generally As Americans, we do a pretty poor job of paying attention to the world. We do. And, you know, so one of the things that I try to do is, you know, once a week, I try to watch the BBC instead of, you know, CNN or something like that, just because I know, for me a different perspective. It’s also because I’ve spent a lot of time over the UK and I just enjoy watching the BBC

Gini Dietrich  

News Network. I

Chip Griffin  

mean, sometimes you sit there and you scratch your head, you say, how is this the third story of the day, like just editorial judgment is just a little bonkers at times over there.

Gini Dietrich  

It’s funny, but

Chip Griffin  

But in any case, it but you know, so you do need to try to find ways to expand your horizon particularly to the International Committee. opponent because that is absolutely going to have an impact potentially even in places where it’s not immediately obvious. So this is a great goes back to the importance of really becoming an expert in the types of ideal clients that you serve and what are the challenges that they are facing now and likely to face based on you know, whatever outlook you want to take on on the fourth quarter and beyond.

Gini Dietrich  

And I would say continue to have conversations with your clients at an executive level like I we have one client that I talked to the CEO probably twice a week and then he texts me non stop. But um, I said to him there there have actually having a really hard time hiring people right now they have 150 jobs open, which is insane. And so I said, Can I talk to your director of HR, and I got a completely different it was the same message but it’s completely different story from her on what things are happening, what’s working, what’s not and you know, being able to under And more fully what they’re really facing with all these jobs open, that they can’t, that they can’t fill. So have conversations with your day to day contact, of course, but also different people on the executive team because you’re going to get different types of information that will help you make these kinds of decisions for your own business.

Chip Griffin  

The Great advice the other people that you need to be having conversations with, or your peers, other agencies. Yes, yes. boggles my mind. How reluctant agency owners are to speak with Yes. They view other agencies as the enemy.

Gini Dietrich  

They do. Listen to me. Yeah.

Chip Griffin  

Other agencies are not the enemy. Okay, well, you can learn a lot. There are a lot of beneficial arrangements that you can have, even if you sit there and this is an agency maybe that you run up against regularly and pitchers still talk to them. Yeah, right. I mean, there are it’s, you know, it’s like those of us who advise agencies, Jenny and I both advise agencies, we do a show together. I have plenty of people on my other shows that also advise agencies, if you’re an agency owner, talk to other agency owners, you’ll learn so much you’ll build your perspective, who knows, maybe it’ll lead to some, you know, potential partnerships down the road. So, so you have to gather as much information as you can at all times, but particularly now, and one of the best places to get it will be other agency owners, and you just can’t be afraid of it. You can’t see them as the enemy that it’s, you know, it’s a zero sum game. It’s not there are plenty of opportunities out there even in this environment. And so, you know, open up Open up your your blinders and expand your knowledge base.

Gini Dietrich  

Well, I I do agree that is, it’s depressing to think about these things, but it’s really, really important. So thank you for changing topics at the last minute. You know,

Chip Griffin  

I’m always happy to talk about just about anything so you know, you just point me in a direction and I’ve got an opinion, it may or may not be a well informed opinion. it’ll certainly be.

Gini Dietrich  

Well, I think this one in particular is very well informed and I agree with you on. I mean, unfortunately, but that’s where we are.

Chip Griffin  

Well, with that, we will we will end the doom and gloom episode of the Agency Leadership Podcast. I’m Chip Griffin,

Gini Dietrich  

and I’m Gini Dietrich,

Chip Griffin  

and it depends

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