That may sound like an odd headline in the context of the news recently, so bear with me and you'll see why I feel good about the future for your agency. Deal?
I usually keep these Monday newsletters short and snappy, with one idea to work on. But this one is so important that I'm going to make it a slightly longer read. Here goes...
First, there's a lot going on
It's fair to say that there's a perfect storm of multiple national and global events that are making the waters very stormy indeed.
As leaders, it's important that we're aware of how these situations could play out, and what else might come up. That's why we publish the Agency Radar, to provide a shortcut to having a strategic view of the future for agency owners.
I talk about these future risks quite a bit, because I've noticed over the years that agency founders are often a bit too caught up in the day-to-day to look ahead much. Also, they tend to default into the keeping-fingers-crossed mode and just reacting when things go wrong, rather than actively designing the business for what's to come.
So in January 2020, I talked about the likelihood of a pandemic. Since June 2021, I've talked about 'talent turbulence', inflation, global conflict, and more. And since March this year I've urged preparation for a recession.
Now I'm talking about supply chain disruptions, expanding global/trade conflicts, energy shortages/disruption, internet connectivity disruption, and civil unrest (strikes, protests etc).
Which are all very important to be aware of and factor into our plans for the next year. But.
The potential threats from these risks are not all there is, and in reviewing risks we shouldn't get locked into focusing only on the downsides.
Spotting the risks is not just about putting out sandbags and hunkering down.
The risks — if seen ahead and addressed — can and will create opportunities.
A golden age
Solving problems in the world is what entrepreneurs do. It's how we provide the value that earns us our rewards.
More than that, you and everyone else reading this newsletter today is an agency entrepreneur. This means you don't just direct the energies of your own business to solving problems — you have an influence on directing the energies of clients too.
When problems are coming down the track is when you can do your best work, and make your biggest impact.
Your skills and energy is needed most now, and will be in demand. Clients are going to depend on agencies to guide them to what's next.
Although it feels hard now, I firmly believe that in a couple of years we'll look back and realise this was the start of a golden age for agencies.
That doesn't mean it will be great for every single agency. But it'll be a boom time for great agencies who can be seen by clients as the wise trusted advisors, the ones who can steer them through the changes, and the ones with the best story about what is coming next.
Don't hunker down, look up
What this turbulence means is that it is going to be much harder to just continue charting the same course we were on before.
Economic headwinds are likely to mean a drop if you try just sticking where you are. Inflation means upwards pressure on costs, recession means clients cutting budgets and pushing back on increases in fees.
That's causing a lot of founders to feel helpless — stuck between opposing forces.
But that's only true if you try to stay where you are.
The real opportunity is on the level above where you are. The level you might have hoped to grow the agency to in a few years.
The economic disruption has brought that growth opportunity forwards.
It's time to look upwards for where this opportunity lies.
Look up the client ladder
As agencies grow and mature they gradually climb the client ladder. The clients you serve when you start out as a team of 3 should probably not still be clients when you're a team of 30. And the clients you serve as a team of 30 would be unlikely to have hired you when you were a team of 3.
So it's natural over time to part with previous clients and win bigger clients.
Now is the time to step up a few rungs.
You need to grow your fees by 20% to stay still in the next year, because of inflation and tax rises — but it'll probably be hard to go to your existing clients and raise their fees by 20%.
So what you do instead is look up a rung or two, targeting bigger clients who are already paying fees 20% higher and keen to avoid increases from their current agencies in the same way your clients are.
Turbulence means change, and these bigger clients are wondering if they can get better advice, fresh creativity and better value out there somewhere.
Just as the last year has seen people changing jobs after the pandemic because the disruption caused them to think about their lives and what else might be out there, the economic crises are going to cause clients to do the same search for greener grass.
So take active advantage of this time of change, rather than just letting it happen to you.
Look up. What clients would you dream of working with on the next level or two up?
How could you begin to make yourself known to them? To show that you are wise and can see what is ahead? To show you can be their trusted advisor?
Look up the value chain
It's also a time to look up the value chain, and seek to move your agency there.
Rather than being an agency that waits for an RFP with specifications about what the client wants to be done, you want to be involved earlier in the process.
Rather than just being the do-ers, you want to be the thinkers that your clients turn to. That is where the higher value is, and where you can have most impact.
It's also where most of the work is in times of turbulence.
But to get there you have to put the work in to build the reputation, trust and relationships that mean clients turn to you earlier with their problems, rather than just telling you to work on whatever solution they've decided on.
What can you do now to build reputation and relationships?
What services can you offer higher up the value chain?
Look up the talent pipeline
Large client organisations, larger agencies, and other agencies who haven't seen ahead enough and prepared for turbulence, are likely to make redundancies in the next year.
Venture capital has dried up for tech startups, leading some to close down and others to make redundancies.
Some freelancers and contractors may seek greater stability in employment.
After a period of talent shortages, you're going to be in a period of finding it easier to recruit great people, and grow your agency to serve the bigger clients and bigger projects you're winning, higher up the value chain.
How can you build a community of talent around your agency now, so that you have access to these people when you want to recruit in the next year?
So things are looking up
Hopefully now you understand why I say that things are looking up for great agencies.
It's vital to look ahead and see clearly what is ahead.
But then, rather than just trying to battle to keep things as they are now in the face of change, we need to look upwards.
Notice, though, that this isn't just optimism 'Oh hopefully it'll all turn out alright' — it is positive action based on a true assessment of the situation. Positive action is the key.
In future editions of this newsletter I'll write more about leading our agencies in this way, turning hope and aspiration into positive action.
Please do share this newsletter with any other agency owners you know. Everyone is feeling quite battered after the last few years, and I know many feel down about more change coming — so I really want to spread this message.
Things are looking up.
P.S. Members on our Advisory Board programmes (Dedicated, Shared and Virtual) will receive their November board pack this week, and one of the briefings is to guide discussion of this idea of 'looking up'
P.P.S. Credit and thanks are due to one of our members, Araminta Robertson at Mint Studios, who inspired me to write today's newsletter with some brilliant questions and wise challenges in a recent Office Hours call. Thanks Araminta! The next Office Hours call for members is at 11am tomorrow.
Don't hire me
Hey, I'm Steve Parks. I've been an agency founder and then board member for years, but now recommend you don't hire me.
That's because, instead of just sitting on two or three boards, I want to help as many agency founders as possible.
To do that, my Convivio colleagues and I have spent the last year working to create the Virtual Advisory Board.
- The Agency Leaders Playbook is the place to turn when you need answers and ideas as an owner and CEO. The missing reference manual on how to run a healthy agency business.
- The Monthly Board Pack give you the agenda, guidance on running the meeting, and two briefings to run productive discussions and workshops on key issues. That way you get a steer on what to be thinking about and discussing at high altitude in the agency.
- Agency Radar helps you see what's ahead that could affect your agency and its clients, so you can prepare for risks and see the opportunities.
- Office Hours gives you a monthly chance to chat with me and other agency founders to discuss, get a steer and get support on what you're currently thinking about.
- Plus there are workshops, book summaries, and more.
It's like having an incredibly supportive non-exec, but at 10% of the cost — because it's spread across more agencies.
It's £225/mo, with no long-term commitment. It'd be daft not to try it eh? :)