Ad agencies face declining performance, as clients cut fees but load on additional work that is not paid for. Hanging in there by meeting client demands is self-destructive, even if it is miscategorized as "good service." There is only so much work that stretched creative and production resources can do without compromising quality. That point has already been reached, but because profit margins are still being earned, many senior agency executives do not appreciate the gravity of their situation. How can the workload-fee problem be brought to center stage so that it can be assessed up close and acted on?
Maybe it's time to dust off an old management concept from the '80s, Management By Walking Around (MBWA), popularized by Tom Peters and Robert Waterman in their bestselling book In Search of Excellence. The concept is an easy one. Top management needs to get out of their offices and stop by to talk with people in their agency face-to-face, with no other agenda than to see how things are going and to listen to whatever may be on the minds of the people doing the work.
One set of questions to ask creative people is "what's happening to workloads? Are they going up (as I've been told)? What about deadlines? What should we (top management) be doing to help you do a better job?"
There are no management reports to show growing workloads and stretched resources, so the only source of data is the people who do the work.
Unquestionably, any senior executive who pursues this line of questioning will get an earful. Workloads are growing. Deadlines are shortening. Resources are tight and getting tighter. There is no plan in place to change the situation. The most likely outcome is further downsizing to maintain Holding Company margins. Creative turnover in the department is rising, above 30% per year and heading to 50%. Maintenance of creative quality has to be an open question.
Once the problem has been articulated, management needs to respond. Reasonable questions are "what are the Client Heads doing with their clients? How did we lose control of this situation? Surely this is not good for our clients, just as it is not good for us. Can't we do a better job of negotiating our Scopes of Work and fees? Who's accountable, anyway?"
Increased Client Head accountability is a required step. This means that Client Heads must be mobilized, as must their Office Head bosses. Enlisting their efforts to halt unpaid SOW growth is a constructive step on the desired path -- it's the way an agency can get better at getting better at the things that are essential for agency health.
Fortune Magazine revisited MWBA in 2012 and suggested that MBWA needed to be an important part of each senior executive's routine, with senior executives getting out on their own, visiting everyone over time, asking for suggestions, following up with answers and strictly avoiding criticism of current practices. It's the right priority for these difficult times, and agency senior executives will find it liberating, getting out to spend unscheduled time with the agency's key people. Management by walking around ought to become a priority for the end of 2014 and the beginning of 2015.
Photo Credit: Frank Modell / The New Yorker Collection / Cartoon Bank. With permission.