Professional Documents
Culture Documents
Some Secrets
Eric Mower
these local dealers would spend some of their hard-earned dollars on a media
schedule partially paid for by "co-op" funds from the manufacturer.
After 8 months on the job, I proposed to my boss, the agency founder and
owner, that we purchase a 16-millimeter projector for use in our office. I
suggested that it would make me more productive, our clients feel more
welcome, and our profitability more satisfying. His answer, one of the great
non sequiturs of all time, was, "I never saw a desk make money." Actually,
this was a comment he had used just 2 months earlier when I had asked for a
conference table and chairs, so that our clients and others could visit our office
and meet.
His mixed metaphor aside, I got the point: We were an ad agency, not a
television station. Let the television stations spend their money on such things.
My boss wanted to make money by maximizing revenue and avoiding ex-
pense. This was his view of managing an agency.
Over the next months our business was strong and I was persistent. I got
my conference table with eight chairs, my 16-millimeter projector with
folding screen, and a bonus slide projector. These early investments proved
profitable. Staff time was saved, productivity improved, clients appreciated
the convenience, and we looked more professional by holding meetings in our
offices. It was, at the time, agency management as I knew it.
Now, 30 years later and with much agency management road behind me,
hindsight allows for clarity and charity--clarity in order to recognize and
comprehend the essentials of what it's all about and charity in order to embrace
the human nature and unpredictability of everyday agency life.
For a start, all businesses share certain commonalities. Among these are what
I call the "four oarsmen" of business success: survival, liquidity, profit, and
growth.
Survival speaks for itself. Every living being is faced with issues of survival in
routine threats to existence. -In business, such threats can be as simple as
overextendingobligations or failing to fulfill a contract.Agency managers should
never take survival for granted. Yet they often do. Many agencies risk their
survival by allowing one or two clients to represent a dangerously high percent-
age of their volume. If those clients are lost, the agency may lose its life.
Agency Management 19
Liquidity is the lifeblood of daily operations. It is the ability to meet payroll week
in and week out, to pay the rent and the phone bills, reliably, with no duress or
urgency. It is the ability to handle payables in a timely fashion so that work may
go on. It is the ability to have adequate credit with banks, which expect regular
payments on loans. The ability to spend and invest in those things that will
improve the agency's service to clients, competitive strength, and grasp of
opportunity all depends on liquidity. To be illiquid is to be disabled.
Profit fertilizes business. Profit is to be shared with employees as reward for
accomplishment and contribution. Profit is to be distributed to shareholders in
return for investment, risk, and patience. Profit is to be reinvested in people, plant,
proactivity. Profit is to be retained for additional cash resources. Profit is to
reaffirm that the company's strategy is working and its operations are sound.
Growth allows for self-renewal: new opportunities, new challenges, new skills,
new people, new clients to replace those that are lost. Growth means additional
volume to offset spending declines by existing clients; larger scope of work,
greater scope of. workers; and a way to keep moving forward, to avoid the
staleness of being stationary. Growth reconfirms the good that clients already
think of the agency. Growth revitalizes agency morale, making the conditions of
employment even more promising. Growth provides a means to enlarge the
agency portfolio. Finally, growth enhances the probabilities of success.
Strategy
Strategy is, for ease of discussion, a reflection of what the agency intends
to be all about, as well as how it will get to be that. Every business must have
a strategy. Every strategy must have its strategists.
Strategy follows from a vision of the future. If an agency's management
envisions growth, accomplishment, distinction, recognition, and rewards, all
of these may be objectives. Strategy will be the path taken to meet these
objectives and fulfill that vision. Strategy is the first tangible expression of
what agency management expects to accomplish and how. It is also the earliest
indication of management wisdom and competence.
20 HOW A G E N C I E S O P E R A T E
But managing an ad agency or, for that matter, a public relations or sales
promotion or direct marketing agency requires much more than vision and
strategy. In addition to strategy, there are four other central elements of
management reality: operations, culture, work, and rewards.
Operations
Much of everyday agency management pertains to operations, the business
of revenues and expenses, cash flow and bank relations, management infor-
mation systems, facilities and maintenance, equipment purchase and repair,
payables and receivables, contracts and purchase orders, FICA and medical
insurance, sales tax, employee manuals, payroll and profit-sharing program
administration, tax returns, audits, postage meters, office supplies, and all else
that has to do with the logistics of doing business, of surviving, of staying
liquid, being profitable and growing.
These are the everyday operations in their most essential embodiment.
Components of infrastructure and support common to nearly all businesses
are only slightly different in the agency business. That is why virtually none
of this is of any interest to clients. At best, these aspects of agency operations
are of neutral value to clients, who take for granted smooth, competent
business operations in the agency. Only when the work is overdue, over
budget, or both; or a client audit finds sloppy accounting procedures; or the
phone system is down for the third time in a week; or the computer software
that supports the media department isn't supporting the media department-
only then will a client take notice of how well the agency runs its business.
Just as crucial is the strength or weakness of operations in determining the
load-bearing ability of the agency's foundation. The more an agency wishes to
grow, the more important are its operations. Common sense suggests that funda-
mentally sound business operations and ethical business practices are prereq-
uisites of agency success and therefore of successful agency management.
An agency can establish stable relationships with employees, suppliers,
and clients only when the agency's well-being is not in doubt. When employ-
ees worry about there being adequate funds in the agency's bank account to
cover their payroll checks, when suppliers no longer believe the check is in
the mail, and when clients are reluctant to entrust their monies to the agency,
the business is fundamentally in trouble.
For many agency managers, such basic business capability is not a prob-
lem. They have the knowledge, the skills, and the discipline required. Some
Agency Management 21
other managers lack these resources, and they must be provided by someone
else within the agency organization. It is imperative that senior agency
managers vest the business operations in those who have the operational
competence and ethical behavior necessary to execute the functions well. To
do otherwise is folly that invites failure.
It is not unusual to see agencies being managed by the wrong people-
founders who would be better off delegating, creative people who would be
better off creating, account managers whose time would be better spent with
clients. Truly effective agency managers are comfortable in their role, and
everyone else is comfortable with them. Employees and clients alike validate
management actions through renewed commitment and enthusiasm.
The underlying ethics and judgment of agency management are made
tangible in the very acts of assigning business responsibilities to individuals.
Issues of competence over position, collaboration over authority, fair play and
honesty over fast-buck, quick-fix, whatever-it-takes solutions all signal to
those observing just what kind of company this is and will be. In agency
management, as in most else, character predicts destiny. Employees know fair
from foul, smart from stupid. Those who will tolerate foul will never build a
great agency. And those who find foul intolerable will leave for something
better. As for stupid, the prospects speak for themselves.
If clients are often too forgiving of certain agency operations that fail to
perform as they should, there can be no doubt that clients are the least
forgiving when agency operations adversely affect the work and service
expected and needed. Here clients see much, think more, and judge most. So
much rides on agency performance that clients cannot have a passive attitude
about the way in which the real work of the agency is delivered. Any
disturbance in the development and execution of the work itself is reason for
concern on the part of clients and always is. Missed deadlines. Over budget.
Out of brief. Off-strategy. Not exciting. Not integrated. Not acceptable.
Operations issues? Of course! But caused by mismanagement of the environ-
ment in which diverse agency people devote themselves to serving clients'
interests.
also had some tensions between account and creative people-no physical
confrontations, but plenty of anger and angst. I wondered about all this, and
that wondering led me to a continuing vigilance and stewardship of corporate
culture and all that contributes to it.
Undoubtedly, agency management is about creating effective new business
presentations, negotiating favorable agency compensation, maximizing client
retention, attaining creative excellence, exploiting new trends in technology,
and optimizing billable time, among other things. But these are not the only
concerns of management. There is a separate work dimension that is spiritual,
cultural, environmental: the need to develop an organization's heart and
soul-to foster an environment conducive to professional teamwork and
personal accomplishment that can be measured in effective service to clients
and an enthusiasm for the joys and sorrows of agency life.
If unsuccessful in creating such an environment, an agency manager will
probably have an agency lacking in strong heart and true soul, and thus be facing
a business life of unnecessary difficulty. If successful in this dimension, a
manager could have an agency routinely renewed by everyday actions. In this
dimension exist the real challenges of agency management-managing op-
erations, policies, practices, and people in circumstances where unpredictable
client relationships, uncontrollable business events, and uncertain employ-
ment ramifications create high levels of ambiguity, anxiety, and conflict.
Indeed, the agency business has become increasingly demanding and
stressful as marketplace forces press client companies to expect more from
and pay less to their agencies. Even though this increased level of difficulty
is not only manageable by competent people but often welcomed as stimulat-
ing and beneficial, it still takes an unnecessary toll. Much of the burden borne
each day by those working at every level of the agency organization comes as
the result of management's inability to deal effectively with forces that buffet
people, process, and, ultimately, individual and organizational performance.
What good is it to have some of the very best creative people if their creative
energies are drained by never-ending skirmishes with account people over
"what 'the client' really needs or wants"? What good is it to have higher levels
of business volume each year if the percentage of agency income to volume
continually declines and becomes too thin? What good is it to have some of
the best account people if their strategic sensibilities are focused on how to
keep constantly changing client management from holding another agency
review? What good is it to recruit adroitly and aggressively if the agency is
Agency Management 23
But what of the people, those who are invited to join the agency? Where
does agency management come into play here? The answer is in what I call
natural selection of an agency population and how managers identify the right
people to work within their organizations. Certainly, not everyone is suited to
the advertising agency business. Increasingly, agencies have become less and
less hospitable to the faint of heart. The pace, the pressure, the competition,
the uncertainty-all combine to make for an extremely demanding workplace.
Natural selection, or selection of those who by their very personalities are
naturally suited to agency life, is key to populating an organization with
professionals who haven't lost even before they have begun. In all too many
agencies, much attention is paid to rtsumt and portfolio, with very little
attention given to determining whether or not the prospective employee and
the agency culture will make a good match-or, for that matter, whether the
job candidate is really well suited to the advertising industry.
An agency must be true to its own self, and agency management must make
that self uppermost in the consciousness of those who recruit and select new
agency employees. If an organization prides itself on integrated communica-
tions services, why would it want to hire an award-winning art director who
only wants to do television? No matter how many awards might be won, is it
worth stultifying the culture by allowing for a creative caste system? And if
an organization takes issues of harassment very seriously, why would it want
to hire someone whose initial demeanor during the interviews was eyebrow-
raising? No matter how much new business this prospect may attract, what is
the signal being sent to every other employee? If an organization has prospered
by satisfying client needs even under the most demanding of circumstances,
why would it want to invite in someone who believes that great work is not
done expeditiously? He or she may be right, but not for that cultural reality.
Natural selection is the logical pursuit of particular individuals by an
agency management that has established competent business operations,
ethical standards and practices, and an adaptive workplace environment and
wants to populate that environment with professionals who will thrive in a
common culture.
26 HOW AGENCIES OPERATE
Work
And when those professionals thrive, so will their work. If, from an
environmental perspective, the conditions for excellence of work and individ-
ual productivity are in direct relationship to agency culture and intelligent
recruiting, what needs to be said about the work itself? Actually, many things
could be said about the work: the role of research in determining advertising
strategy and setting creative direction, the decision-making process in appor-
tioning budget dollars for campaign experiditures, executional components
for developing a complete campaign, the team process in uniting account,
creative, production, and media in the overall work process. The list could be
quite long, but there is one essential work-related topic that must be included
in this too-brief chapter on agency management: integrated communications.
Integrated Communications
Rewards
The fifth element in the formula that begins with strategy, operations,
culture, and work relates to compensation: a reward system that captures the
essence of the agency workplace and satisfies the needs and desires of the
agency worker.
There are no easy answers here, but there are simple rules for those who
wish to create an organizational culture in which compensation is a positive
force. They must start with a salary system that is reasonably structured, with
levels, ranges, job specifications, job descriptions, performance reviews,
salary reviews, and honest application for all employees. There must be no
special deals, no secret handshakes, no discrimination, no favoritism, no
unfairness.
28 H O W AGENCIES OPERATE
The same goes for benefits. Management must not create a caste system
within the agency-no favoring television over print, no favoring advertising
over direct marketing, and no giving "special perks" to "special people." Not
today, not in this world. And the profits should be shared generously, but based
on a balance of individual performance and group results. Management should
recognize and reward extraordinary contributions by some while also recog-
nizing and rewarding organizational success by all.
The best way to develop a beneficial compensation format is to make the
process inclusive rather than exclusive. Depending upon the size of an agency,
its management should recognize that the more people who are involved in
establishing a reward system, the more who will be understanding and cornmit-
ted. No matter what, management should avoid unilateral, vest-pocket, authori-
tarian compensation setting. It won't be any more successful than unilateral,
vest-pocket, authoritarian agency management.
Early in this chapter I indicated that there are five central elements of agency
management: strategy, operations, culture, work, and rewards. No one of them
is simple. No one of them is easy. But they are comprehensible, and they are
always identifiable.
Those agencies that excel and succeed are the ones that have attended to
their business through a routine-but highly competent-application of these
basic principles. Factoring in hard work, c o y o n sense, persistence, honesty,
and some good luck, successful agency management can be understood and
described. But understanding and description are one thing-implementation
is something else. Agency managers have to respond-perhaps more than
executives in other organizations-to their day-to-day pressures and many
conflicting priorities. Therefore the successful practice of my five central
principles, with all the focus and disciplined diligence necessary, is not
accomplished as easily as outside observers might think.
The Account Executive
in an Advertising Agency
Jay Quinn
by the well-worn axiom, "A good account person is the client's representative
at the agency and the agency's representative at the client."
Product: The AE should know the entire line as well as the discriminating
benefits and selling niches of each individual product.
Price: The AE should understand the client's pricing strategy and where the
product or service fits in the price continuum of the marketplace.The AE should
also be knowledgeable about the relative elasticity of pricing and sales in the
category.
Promotion: The AE should understand the advertising and promotional history
of the brand as well as its successes and failures, and should be up-to-date on all
competitive product positionings and their relevance to the marketplace.
The Account Executive in an Advertising Agency 31
Place (i.e., distribution): The AE should be familiar with which channels (e.g.,
supermarket, drug, mass merchant, warehouse club, hardware store) are most
successful at selling the product. What new delivery areas make sense? Catalog?
Interactive?1s the geographic reach appropriate?
The Briefing:
The Account Executive in High Profile
1. Product description: What is the product being advertised and what makes it
special? Why do consumers use the product and what causes them to make the
purchase decision in the first place?
2. Target audience analysis: Who buys the product? Do they buy it for themselves
or others? Is it a luxury or a necessity? A complete demographic and psychog-
raphic analysis of who makes up the target audience is important, not only for
the creative team but for the media team as well.
3. Budget: This should include both a production budget and a media budget. The
AE should be able to provide a responsible viewpoint on production budgets and
media budgets and their comparative size.
4. Timeframe: A critical path of key dates for initial internal presentations, client
presentations, and media deadlines for materials should be spelled out at the
outset.
5. Advertising strategy: In plain, unadorned language, the AE describes the distilled
essentials of what must be communicated to a specific target audience. It is here
that the account person can contribute most to a successful end product. (For
more on advertising strategy, see Jones, Chapter 13, this volume.)
Many of us have taken various tests of personality and job aptitude in our
lives, tests that tell us what our personal strengths and weaknesses are. I n m y
experience, successful account executives exhibit the following skills: