Restructuring for efficiency and effectiveness
Starcom’s Liz Nottingham on how restructuring your business can enhance profitability, help client retention and bring overall business success.
How is it that some agencies have experienced a marked increase in client activity throughout the last year and yet their revenues remain the same? The maths do not quite add up. More effort for the same amount of reward does not sound quite right.
Now, we know that the current advertising industry structure, for most of us, was built in the 1950’s. There is a school of thought that says that while this served us well up until now, this is beginning to look a little tired and no longer fit for purpose.
Bold with our clients, the time has come for us to be bold with ourselves, and our structure might be one part of the equation. The trickier part is for agencies to be truly paid for what they do; for the added value they provide to significant client brands. Perhaps we should be set up more like a management consultancy, where our ideas are valued and come with a price. Some bold agencies are paid for results. But how do you really measure all the pieces of a brand journey? And let’s not forget that our clients need more for less. With their own budgets cut, we are all in the tough-times boat together. All busy valuing our client relationships, protecting our fees and delivering great work.
And if this is not enough to keep our smart CEO’s awake all night, just throw in the Generation Y expectations of their employees and the whole thing might just go bang. Oh, and do not be blind-sided by the youngsters doing their start-ups in a garage. They are the competition to fear in the future.
So, where might we begin with all this?
An easy thing to do is to talk to your Generation Y folk. Find out how you shape up and put a plan together where you might be lacking. It need not cost a fortune; role clarity, structure, technology to enable them, and feedback are high on their list of wants. Along with some time flexibility. And this is no longer just the prerogative of maternity returners. Be creative with how and where your people work. Do we have a talent issue, or an issue with how flexible we are prepared to be with the location of our talent. I am not sure I can solve the IP and numbers game; I will leave that for someone cleverer than me!
But we could get practical and creative with the structure part of the conundrum. In the current market conditions, more and more agencies are looking at ways to make their businesses more effective and cost-efficient. This climate demands businesses look at ways which will help them retain key clients, attract and secure new ones and retain their top people. It’s not enough to just continue to do ‘business as usual’. So forward-thinking agencies are considering all the options, and looking at different ways to re-assess their business structure: to streamline operations; reduce costs; and create differentiation in the services they provide. Ultimately, this will provide them with a platform for their business to continue to be successful during times of economic downturn and grow more rapidly in the recovery phase.
We need structures that deliver both efficiency and effectiveness. As we know, clients expect more value and innovation from our people and our systems, since their customers expect more from them. Agencies need to create more productive and mutually beneficial partnerships with them, and look at creative but credible ways to enhance their profitability, but without compromising the quality and effectiveness of the strategic, channel planning and creative content output on which they ultimately depend. Increasingly therefore, agencies are considering restructuring their business and possibly pulling together resources and creating shared services, centres of excellence, outsourcing or off-shoring in all disciplines, be it media buying, digital services, finance or HR.
Focus on what you do well and make it stronger. Look at the areas where you really add value to clients. Really check out that you know what clients value and use that as a start point. No one said any of this would be easy, but to give you some thoughts and inspiration the IPA People Management Group have drawn together some food for thought with their third e-booklet, details of which can be found here: http://www.ipa.co.uk/Content/Make-Your-Business-More-Effective.
Liz Nottingham is chair of the IPA People Management Group, HR Director, Starcom MediaVest Group (SMG) and VivaKi Country Talent & Transformation Officer.