The evolution of the agency model: What's next?
"It’s not about the money, it’s about the people."
This was said by Steve Jobs, that famously gentle, soft-touch, manager. He was talking about the key to business innovation. About disrupting IBM’s market dominance. And if our creative industry is going to have a hope in hell of collectively innovating its way out of the current predicament, then we need to keep that front of mind. People matter.
Well if you think ‘20 was bad, Q1’21 is going to properly hurt.
Apart from mutant Covid and national lockdown, early Q1 is traditionally when the networks do their 'wet' work, so they can spread the severance costs over the year. It will be happening right now. I’ve sat around that table in years gone by, while the bean counters planned what they call ‘rightsizing’. I’ve argued in vain against life-changing decisions made according to numbers, not needs. Those calling the shots have little understanding as to how the industry is changing and what it really needs to flourish… just a myopic focus on the margin.
Right now, big talents with big salaries will be signing gag orders in exchange for settlement figures.
The lawyers will be busy. That’s why it might seem quiet.
On top of that, there will be another little flourish of pain for us all to contend with at the end of April and the furlough scheme peters out. For sure the revenue will come back, but it will be in a very different shape. And that will reflect the lurch to faster digitisation that all of us have just lived through. That digitisation of course is not just in terms of what we make, but also how we make it. How many of you had heard of Zoom 12 months ago?
Perversely HR will currently be out hunting, but they will be searching for juniors. You can get four of them for the price of one creative director. Maybe five if you’re lucky. This is the only way they can have the coverage to service client business and make their precious margin now. But what you gain in the energy of youth, you lose in skill and craft. Everything comes at a cost. As the clients are learning the hard way.
Clients and agencies alike know the model’s broken.
Yet the raging debate in the trade press right now is around whether to implement 3-2 in/out or 2-3 in/out as we shuffle back to the office.
I can’t believe by how far that misses the point.
We need to look at the other doors that have opened whilst the doors to the office have been shut.
Vaccine or no, there is a growing global community of the very best creative and strategic talent that has already made the decision to leave traditional agency life. Those for whom the kool-aid has curdled. All ages, all genders, all over the world, don’t understand why they need to work all hours god sends and have zero work/life balance when there is an alternative.
There is an exodus to a portfolio career.
Some have private clients, some work with agencies, some work directly with brands, some have personal projects. They flourish. But for them, it’s not about working from home, it’s about working from anywhere. And there’s a massive difference.
On the whole, they haven’t been forced to work from the kitchen table by a global pandemic, they made the explicit choice to jump off the burning platform and find sanctuary. On top of that, the virus has accelerated the move out of town for those who have a choice. You can find them in the north of Scotland, the west coast of France, a beach in Indonesia, Crouch End, Goa, wherever.
Technology allows the creative diaspora to go wherever it damn well wants to. Technology has changed the game.
And now we’ve proved to ourselves that we can live without the soma that is agency ‘culture’, this will only accelerate.
We know that you don’t need the office to actually work. So what do you need it for? Yes, people need people.
But baristas, pitch pizza and the boss's gold Amex behind the bar once a week? Really? For high performing talent, culture is about connection. Life balance. Family. Being the best you can be with mutual support. So what do you need the office for? Just ego?
The marble reception had already begun to lose its sheen with the clients who knew damn well who paid for it.
If you own an agency, work in HR, run a creative department, are hiring or thinking of firing then please consider a couple of points as you rebuild and retool for the post-Corona era.
1. Put people first. Those beautiful crazy amazing people and the ideas they have are the reason we all got into this business in the first place. Build your distributed processes around the portfolio careers of the world’s top independent talent. You can’t afford them full time. You can’t drag them to an office in a big city anymore. But you will need them.
2. Pay them well, pay them fast. Don’t haggle on day rate (if you ‘crush them on cost’ how can you expect their best work?), and don’t make them wait for the money. They are not a bank. That’s your job. If you really can’t afford to pay them properly then you need to look at the way you charge your clients. Input based pricing is always vulnerable to downward pressure. Output-based brings certainty for all. So sell ideas not hours. That’s what the clients want, that’s what the talent has! Clients really are looking for a way to change the old ways of working
3. And because the game has changed, let the talent retain the IP of the work that doesn’t run. It matters. You don’t own them anymore. It makes a difference to the quality of the work you get, and when did you last run the third idea from the second presentation anyway? Exactly.
4. And yes, build to support culture. But theirs, not yours. Great talent wants self-determination now. They’ve stopped believing the hype. Sorry. Agencies don’t hold the glamour they used to have, pretty much anything from a tech giant to a start-up to a walk on the beach is more attractive…..
So, please don’t think about how many days they should come into your building. Think about how you build your business to better come into their lives. Look at it from their end of the telescope.
And don’t forget. The key to growth starts with the people.
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