ORGANIZATIONAL STRUCTURE & TALENT - Step 5 to becoming a Momentum Agency
This is the fifth in a series of nine pieces which share our in-depth thoughts on how your firm can become a Momentum Agency. These are agencies that consistently outpace the industry in terms of revenue growth, profitability and a culture that attracts A-level talent.
Recap to date: Momentum Agencies do an outstanding job in managing the nine variables that drive growth and success over time. In our experience, these growth drivers are:
A compelling mission that attracts talent and clients.
Defined vision with a strategic plan on how to achieve it.
Differentiated and compelling value proposition defined by deep knowledge and expertise.
Strong leadership which extends far beyond the agency owner/CEO. (Note: Mission, Vision, Value Proposition and Leadership have been covered in recent Prosper Group mailings. In-depth pieces on each are available in our website’s Resource Library.)
Organizational structure and talent that effectively and efficiently sell and service the value proposition. (The subject of this document.)
A belief in core methodologies and IP.
Culture (including formal training around those methodologies).
A dedicated new business development function.
Understanding how to manage an agency for fair profit.
Your agency’s organizational structure is more important than you may think.
Optimizing your structure isn’t remotely just an academic exercise. Having the right structure for your specific firm will have a major impact on your future. It will help you achieve these goals:
Enabling you to service and sell your brand proposition more efficiently and effectively.
Moving you as the owner from day-to-day decision-making and fighting fires into a true CEO role of supporting and holding others accountable for the agency’s success.
Transforming your agency from an organization built around your activities to an organization where you’re supporting the activities of others.
4. Creating clear reporting lines for delivering on the agency’s responsibilities to both clients and staff.
5. Establishing a customized, compelling bonus program that will drive winning behaviors.
The development of your organizational structure and its infrastructure should precede increased revenue so the agency can handle more revenue (and activity) without performance or cultural issues.
Importantly, organizational structure and accountability may also help you as the agency’s owner to determine if you have a potential successor on staff.
Having a strong leadership team is the first step in optimizing structure… but your team also needs the right design and internal integration.
A deep and talented senior leadership team is the engine that will keep driving your agency forward. As we’ve discussed in earlier writings, you won’t be able to accomplish this alone.
First, your team should be built around the knowledge and expertise promised by the agency’s value proposition. It’s then vital that all members be aligned with and actively support the agency’s mission, vision, values and strategic plan. They must also clearly understand their individual roles and success metrics.
You need to assign appropriate leaders who will be responsible for:
Revenue streams and/or practices
Specialty areas which support these revenue streams or practices (e.g. – Digital, Research, Content/Creative Development et al.)
Core business functions which also support the revenue stream or practice leaders (such as Finance, Operations, Business Development, Talent)
The most important principle for designing your team is integration. Your agency as a whole must be structured to deliver integrated thinking and services to your clients seamlessly, on time and on budget. This can only occur when a) all leaders completely understand how integration will actually be delivered to clients and b) your lines of reporting have been built accordingly.
As just one example: There should be clear and formalized intersection points for when and how your core account teams interact with the appropriate specialty roles.
Your revenue stream leaders will need adequate support and other resources.
Account teams should be designed so that appropriate work is assigned to each level of account staff:
Revenue stream leaders (Senior VP level) - Lead the strategic thinking for clients and manage the client/agency relationship.
VP level - Provide strategy and relationship management support plus oversight of tactical execution management.
Account Supervisors/Account Directors – Combination of tactical management and execution.
Junior roles - Tactical execution.
Depending upon the size of each revenue stream, there could be multiple team leaders and teams under them. Staff capacity and utilization models can also be used to help leaders determine the best mix of talent required and when additional hires need to be made.
At every level of the team’s composition, it’s very important to have capable people whom you can rely on. If just one person on a team cannot operate at his or her assigned level, the more senior team members are then burdened with taking on lower-level work. In making up for the weak link, the team begins to operate less efficiently and effectively. Morale usually begins to suffer as well.
Establishing specific goals for each person paves the way to success and profitability.
Each level of an account team’s staffing should have a success metric or financial target to achieve. Assigning metrics to each level makes it easier to manage for growth because:
This helps the agency better understand the number of people at each task level who will be needed at a given revenue level.
This also helps the development of hiring triggers for adding new talent within specific teams and at specific staff titles.
For Account Supervisors/Directors and above, we recommend a target based on the revenue under their direct management. For purely tactical roles, the target should be based upon billable hours.
You’ll find that managing profit will become easier as the agency as a whole increasingly understands the targets that each role must hit to ensure a profitable outcome.
Core business functions also need adequate resources to be successful.
Finance, Operations, Business Development and Talent will all require resources under their assigned leaders in order for each function to best serve the agency.
Finance must be able to produce timely reports/analyses and track client billing activity against budgets in order for the account teams to manage for profit. Finance should also be able to ensure that client budgets are accurate and contracts are in place to protect the agency.
Operations must ensure that each account team has adequate tools for success.
The Business Development function must help your revenue stream and practice leaders to build the firm’s reputation while it also generates qualified leads and supports the new business pitch teams.
Finally, a significant and relentless commitment to the Talent function will be needed in order to identify, recruit, train and retain the best people for your firm.
Providing a voice, influence and authority to your leaders.
As a fundamental part of your agency’s corporate governance, you should provide your leaders with frequent and ongoing opportunities to be heard. They (and you) need to know that their opinions on issues and opportunities facing the firm are important, worth listening to and acting upon.
While you want to avoid building a bureaucracy, you should have an Executive Committee to act as the strategic body which guides the direction and growth plan for the agency. You should also have a Leadership Committee responsible for making operating decisions.
Prosper Group is here to help you succeed.
We exist to help the owners of independent marketing communications agencies achieve their goals and maximize the value of their life’s work.
We have the people, experience and proven proprietary methodologies to help you develop highly effective growth drivers for your agency including Mission, Vision, Value Proposition, Leadership and Organizational Structure & Talent.
Please don’t hesitate to contact us at any time.