Things Principals Should Do More Of

David and Blair each share a list of things that they wish agency principals would do more of to take their firms to the next level of success.



"The Problem of Standards" by David Maister 2001


BLAIR ENNS: Hello David.

DAVID C. BAKER: Hey Blair.

BLAIR: We're going to talk about the things that we wish agency principals would do more of. I've got a list of a few things here and we haven't checked our list. I'll be surprised if there isn't some overlap here, but I know you've got a list too. What's the first thing on the top of your list? What do you wish agency principals would find the time to do more of?

DAVID: As I was thinking about this when you suggest that we talk about this, one of the first things that came to mind was thinking about, okay, what is it that they do that maybe nobody else could effectively step in and do. And so it makes sense to think in those terms and the first thing that came to mind was just promoting their internal culture to attract great talent. Because when they are thinking about selling, they are usually thinking about finding new clients, not so much finding new employees, but I think finding new employees is more critical to a firm's success and maybe more difficult. I guess it depends. It wouldn't be the same for every firm. But doing things like being very intentional about the culture.

DAVID: Like I've got a client that holds a webinar every three months and there are hundreds of prospective employees that listen to this and see the inside of the agency and talk about trends and what they are doing and so on. That kind of thing. Maybe guest speaking at schools that have had good employees to them, participating in social media where appropriate, having open houses. Whatever it takes to sell the culture, which of course means being built on a useful culture as well, but just that whole idea of what it means to run a firm with people and taking it very seriously.

BLAIR: So, practically you listed a couple of examples, but if I am an agency principal and I'm thinking, "Okay, yeah, that makes sense. It is really hard for me to get good people. I do need to do this more." And I recognize that in any creative business, culture's really important because you're trying to attract this highly creative, temperamental, need-to-be cuddled creative people. And I say that with a smile on my face.

DAVID: Yeah, I'm just going to let that pass. No comment.

BLAIR: I mean, the point is these people are generally well paid. But it's not just about money. Culture is so important. Whereas in an infrastructure type of business, it's not really about culture. I've recognized that and I'm thinking, "Okay, what are some of the other ways that I would do this?" First I have to have done a good job of kind of capturing or articulating that culture, right?

DAVID: Right. Yeah, being intentional. Like what kind of a culture do you want to create? Piggy back what you just said, the output of an agency like this does depend a lot on the culture. They're going to spend time complaining and whining about things unless they're happy. They're not going to put their shoulder to the plough unless they are happy, but yeah, absolutely, it's being intentional about it. And one of the things that I didn't realize at all, it didn't occur to me even once in the six years I own an agency, was that growing as in having more people is primarily a commitment to managing people which is from the very beginning of like finding the right ones, and bringing then on well, and managing them and all that stuff.

DAVID: And that's the thing that never changes. If you are going to be a company, you must manage people. And the rest of the stuff can come and go, but that cannot. And so being very intentional about the culture and then promoting that, you and I talk a lot about positioning as a way to attract the right kind of opportunity to you and it feels to me like culture is the flip side of that. It's the internal positioning that attracts the right people. So creating the culture well and then disseminating it, I would like to think more at some point about how do you do that? What does a marketing plan look like for a culture? I don't really have lots of ideas about that, but the culture part is very clear to me how important that is. And I don't think a lot of principals do that.

BLAIR: I know some firms that have thought about this a little bit, but what you said about positioning and culture or maybe mission and values being kind of the two sides of the same coin and I'm kind of envisioning the series of consensual circles that just kind of bifurcated down the middle where the center circle would be your core value proposition, on the right hand side would be one that's expressed outwardly and the left hand side might be one that's expressed inwardly, and you could probably keep going out from that. Once you go from positioning, you go to prospective, what you believe about this? So, you start writing about what you believe about your area of focus of how this should be done and that's for external audiences. And then you start writing about what you believe about this in terms of internal implications that you're writing for your audience et cetera, et cetera. And then you've got your lead generation plan for clients and you've got your lead generation plan for... Yeah, that's a lot to think about.

DAVID: And maybe even have somebody in charge of it. Like you might have somebody who's focusing quite a bit on business development. Maybe there is like a chief cultural officer or when you see an agency with more than one partner, it does seem like one of them tends to be more in charge of that than somebody else, and the other thing I see frequently is that when mom and dad are fighting it really impacts the culture and more so than they recognize. It just goes on to say how difficult it is to do great work unless the culture isn't there. It's on the list of what I wish principals would do more of. Because when they concentrate on it, it's great. I don't see principals out there, and I wish they would just not do it. Like, they're doing it and it's just terrible work and everybody's kind of lowering their eyes and like, "Oh, that's just embarrassing." No, when people are concentrating on the culture, people love it and I just wish I could see more of that out there.

BLAIR: Well, that's a great one to start us off.

DAVID: Have you seen that?

BLAIR: Yeah, I've also seen people pay lip service to culture. Maybe that's my bias. I used to roll my eyes at conversations about culture. I'd go into a firm and they'd talk about culture, culture, culture. And I would say something like, a smart ass comment like I'm prone to making from time to time, but less so as I get older. I would say the only culture is the culture of winning. And now that's just a ridiculous statement. But the reason I said it, I never really fully believed it, but I saw a pattern of people talking about culture at the expense of other things, at the expense of taking a stand in the market place. We're going to be the world's best at X instead it's going to be, "We're going to be a place where everybody loves each other and you can never get fired."

BLAIR: In situations like that, I would say, "The only culture is a culture of winning." Because I don't believe it to be true, I believe it was something that person needed to hear in that moment. I just saw enough of it for a while that I would roll my eyes, I was a solo consultant, and now I'm running a training company, we're scaling up pretty quickly. I just see how absolutely vital culture is. It's one of the few roles, once I'm done getting rid of these other things that I'm trying to delegate to others, it's just going to be one of the few things that will be left on my plate.

DAVID: So, the flip side for me when I see culture done badly I usually make some smart comment about, you know you're not running an orphanage here where they are sort of taking care of people and cuddling them and not expecting much of them, and so I need to, I guess retract my earlier statement, I guess you can do it badly, but generally the problem is not the people who are doing it badly, the problem is that they're just not doing it.

BLAIR: I know we meant to talk about a whole bunch of different topics on this one and we're halfway through the podcast already, but I think one of the smartest pieces of thought leadership I have ever read, and I've cited this many many times, it's by David Maister, it is called "The Problem of Standards." It's actually a transcript of a speech he gave back in 2001 I think, in the Hague, in the Netherlands to a group of lawyers. And in that speech he talks about, you can basically have a culture of togetherness and inclusiveness, we are a big happy family and to get fired you pretty much have to steal or lie to a client. Or the other culture is a culture of essentially expertise of going for the brass ring and we're going to set standards and we're going to hold each other at the standards. So, if you want to look at it, you go to David Master's website. I know he's retired, but that article is still out there somewhere. and type in the Problem of Standards.

DAVID: I haven't read that. I'll have to look that up.

BLAIR: Which is a great segue to the first thing on the top of my list, which is what I wish principals would do more of.

DAVID: I have no idea what you're going to say next, so I'm very interested. I don't think I could predict. I can predict some things that I think you're going to say, but I have no idea what you're going to say. What's the first one?

BLAIR: Mocha Frappuccino Fridays.

DAVID: No we are not less of, it's more of.

BLAIR: Yeah. No, it's "say no." I wrote, "say no more," and then in brackets I wrote "(enforce standards)."

DAVID: Okay.

BLAIR: So, set and enforce the standards in the firm by saying no, by being visible to the other team members and the employee base. We have standards and there are certain things that we won't accept.

DAVID: You're talking about like the type of client or the type of project, those kinds of settings for saying no?

BLAIR: Yeah, those are just two examples, but we could come up with a lot more too, so obviously my focus is new business development so I'm thinking first of all, no, this isn't the right client for us. We're not going to pursue this, or no, there isn't enough revenue or margin in this deal from this perspective new client. No, we're not going to follow this arduous maybe even ridiculous selection process that doesn't set us apart from our competitors, but also treatment of employees. I think there are way too many firms, too many agency principals out there who let clients get away with bad behavior towards their employees. And I think if you want to set culture and if you want to establish standards, and you want to lift morale and you want people to follow you, fire a client or reprimand a client for the way they're treating your people.

DAVID: Yeah, a client hanging in the public square so to speak.

BLAIR: Yeah.

DAVID: And don't wait till it's too late to do it.

BLAIR: Put their head on a pike for everybody to see what happens.

DAVID: Yeah.

BLAIR: How many principals do you know that you've worked with on a consulting basis for us on a training program where they just can't find the time for the engagement? You don't require a lot from your clients I don't think in terms of when they bring you into do a total business review, but there's a little bit of work that needs to be done in advance and I'm sure every once in a while you get somebody who's just so busy, so busy putting things off, and the equivalent in my business would be somebody who signs up for the program or really wants to but says they can't because they can't find the time. Or they sign up and they don't do the work, they don't come the time to come to the classes or to do the homework in between, it's because they're just not saying no, they're kind of tied to the tools and really their assets, their strengths that got them to where they are now and that they've said yes to everything and they've worked really hard.

DAVID: All the same things are pushing them forward from a momentum standpoint.

BLAIR: Yeah, and then they become obstacles to the next level of success. I collect quotes on this on saying no and my favorite one, I've probably mentioned in a previous podcast already, but Warren Buffett who says, "the difference between successful people and really successful people is really successful people saying no to almost everything."


DAVID: Well, how do you decide what to say no to? So to help with that part of the exercise, there has to be something informing how you make yes or no decisions. Is that what you mean by in the parentheses, the standards discussion.

BLAIR: Yeah standards, policies... Policies can be reflections of standards, right? So we won't do this. We will always require that. If I just think some recent examples for myself around speaking engagements. I have a policy, I got it from you actually many years ago. I heard you say this and I thought, oh, "I hate those things too. I never want to do them." So I just adopted a policy. Policy is I don't do panels. I don't sit on panels when it comes to speaking gigs and I've broken that twice and I'm going to break it a third time coming up in a couple of months.

BLAIR: You've been on each of those panels as have other people I know we're not going to get into ridiculous arguments where you're adopting what I would consider to be a ridiculous conventional mainstream perspective and then I have to try it out in five minutes of time. Tell you why your entire world is backwards as I see it. So that's one example. Another example is I spoke at something recently where they wanted me to hang out. I was doing 90 minutes at the end of the day, they wanted to be out all day, A, they weren't paying me enough, but B, I said, I have a policy, I don't listen to people speak before me. If I would've said, "Yeah, I really rather prefer not to do that because I don't like to watch people speak who speak before me." That's completely different from me saying that as a matter of policy, I don't do A.

BLAIR: As soon as I say as a matter of policy, I don't do X and the resistance goes away because nobody, "Oh, okay, it's a policy." Well the policy is really just a predetermined decision. Right. So back to the point here is just decide what your standards are, decide what your policies are. I'm talking primarily about new business development, but also other areas. And then just enjoy the moments when you get to enforce those standards and policies by saying no. And I mean primarily by saying no to clients and prospects.

DAVID: So that's the biggest thing on your list you wish your principal clients would say no, I like that one. It's not on my list. I wish I'd thought of that one because I certainly agree with it. I see it in my clients, but I also see it in myself. That one's so easy to relate to because three or four times a day I'm faced with that same sort of an issue. I spoke one time and that was basically the premise is like you get close to the end of your life and if you weren't as successful as you wanted to be or thought you should be. Will it be because you didn't have enough opportunity or will it be because you had a lot of opportunity and didn't say no to most of them? And so we're just scattered everywhere and the answer is so clear to me. And as we get older, and then I went on to say we have got to simplify our lives and give up on some of those big dreams that we had. I really think we should give up on some dreams in order to reach some other ones.

BLAIR: Who among us is suffering from lack of opportunity?

DAVID: Incompetent people?

BLAIR: Yeah.

DAVID: This is why I'm not a motivational speaker. They are incompetent people that are just new to something. That's about the only two groups in the developed world and other types of civilizations. It's not that way, but in our world, opportunity is falling off the trucks.

BLAIR: Oh my God and it's our birthright to be able to go after opportunity and fail where you can't do that in other cultures. Okay, that's another podcast.

DAVID: Yeah. What's next on your list? Go ahead while you're on a run here.

BLAIR: Next on my list is I wish principals would spend more time innovating their business models.

DAVID: Oh man, that was going to be my next one. I said it better than you did.

BLAIR: Of course, you did.

DAVID: A service and process design. I think we're talking about the same thing, so keep going. That's good. I'm glad we had the same one.

BLAIR: I like mine better.

DAVID: Yeah, of course.

BLAIR: I've seen so many agency principals get a great business idea and then squish that idea as they try to force it into an agency fee for service model. And I think we just think fee for service and there's so much change happening so fast, especially if you're involved in digital and increasingly everything's digital. I just think that principals should free themselves up to focus on a small number of things and this is one of these things. What's left when you delegate everything that can possibly be delegated? Well culture is one of them, we talked about that. The other one is you're ultimately responsible as the CEO for future value and future value means like raising your eyes, looking off in the distance, imagining the future and then innovating the business model today to take advantage of things that are changing tomorrow.

BLAIR: And I just see so many principals get just locked in to that, they can't think beyond an agency. And you think, I'm sure you've got a lot of examples of clients who have started product companies or product type service companies or other businesses and many of their competitors in that same situation wouldn't have thought to capitalize on the opportunity through that model. I wish they would just think bigger, more about how to capture the opportunity that they see and thinking beyond the current model. Play the game, do the constraints exercise of saying, okay, I see the opportunity in the marketplace. How would I capitalize on this if I couldn't send an invoice or something like that. You and I did a whole seminar around that, the first revenue 2.0.

DAVID: Oh yeah. It was really stretching for the participants, 70 some of them and for me and you as well because we struggle enough getting our clients to think about being positioned differently so that they're less interchangeable. But that's just the first step. I mean beyond there what the products and the services look like should be different from firm to firm as well. It's not enough just to say, all right, I've got a diagnostic and it's this much money and this is what it does. I mean 15 years ago a diagnostic was an interesting idea that a lot of firms should have done, but we need completely different ways of thinking and working and we need to be incorporating completely different dreams into things like more research, more analysis, different ways to charge and so on.

DAVID: And I have a lot of confidence in the ability of my clients to do this thing, but they're so stuck doing the things they shouldn't and they're just taking so many things for granted. I find that in this particular area that you've surfaced here, this service and product process design and so on, it's more frequently coming from principals who didn't work at another agency first.

BLAIR: Oh, I was just thinking that.

DAVID: Yeah, there's obviously disadvantages to that too because they struggle with some of the basic things that others who did work at one pick up. But they don't bring the same set of assumptions to the table. And so they're not likely to say to me when I suggest something to them, because I usually give them a half a dozen ideas and every consulting engagement and get all excited about it. And the ones who've worked for a long time in the agency world, they just kind of roll their eyes and it's like, "well that's just not the way it's done." And my point is well, that's true. And that's kind of the point and some of these ideas are not going to work out, but there are some in here that will work really, really well.

BLAIR: I was thinking of the corollary of that is you've got the independent agency owner and you and I both worked primarily with the independent agencies and so if they're looking for a template or a model for their own business, the worst thing that they can do, it happens all the time is they look to like BBDO. They look to a big ad agency and they think that's the model for my business. It's so is not the model, it's so constraining, confining. It's so wrong. You're better off looking outside of the agency space at all. Looking at other different types of innovative businesses for different models. You're just going to be further constrained and restricted if you look to big ad agencies as a model for a kind of an independent marketing communication firm of any kind, even a small ad agency. I wouldn't look to New York ad agencies for your model.

DAVID: No, I mean if you glance at the curriculum at these big business schools, graduate business schools, nobody is studying the innovation coming out of the marketing and advertising field. That's just not happening and when you look at stock market performance and so many other measures, it's not an innovative field, which is so hilarious because if you didn't look very deeply just on the surface you would think this is where the innovation should be happening, but it's not really happening. The service and product and process design is so predictable and I would love for principals to spend more time doing it. I think they're very capable of it. Now, how do you get to the point where you can do that?

DAVID: I think you have to be running a business that isn't always in some emergency mode. There's money around so you're not struggling with meeting payroll next time. You have time to put your feet up and think. You've walked through many, many agencies I know in your career, both working many years ago and then advising many of them for a couple of decades and you get this sense. Even if you wore ear plugs and you're just walking around looking. I like the agencies where you can tell that people are kind of happy, but you also can see that they got their feet up and they're thinking, they're not this freneticness, right. And service and product design doesn't happen in frenetic environments.

BLAIR: Yeah. Too busy doing.

DAVID: Yeah. Did you get everything on your list?

BLAIR: I had one more thing on the list and we'll talk about it in another show.

DAVID: Okay, sounds good. Thank you, Blair.

BLAIR: Thanks David.

David Baker