Trust Your People

A number of years ago, there was a very interesting article in the New Yorker. The article reported that when you are a contestant on the game show, “Who Wants to Be a Millionaire,” and you are trying to decide whether Nashville or Knoxville is the capital of Tennessee, you may appeal to one of two outside sources for help. You can call the smartest person you know, or, you can poll the audience. Imagine yourself in the hot seat: Before you call your smart cousin, Melvin, understand that “the smartest person you know” gets it right only two-thirds of the time. But the audience gets it right nine times out of ten.

Here is a related tale from the same article. There is an old B-school stunt where a professor presents his students with a jar full of jelly beans and asks them to guess how many there are. Their answers are always wildly inaccurate, but the average of those guesses—the class’ collective guess—invariably falls within three percent of the correct number.

What does this have to do with running your ad agency? I think plenty.

Don’t Be a Hat Hog

Many agency owners, and for that matter other smaller business owners, are rugged individualists. They come by this honestly for the most part. They started at their kitchen tables where they, as David Ogilvy said in Confessions Of An Advertising Man, “wore all the hats.” They were copywriters in the morning, account executives at lunch and researchers at night. Everything that happened in their budding agencies was their complete responsibility and their instincts carried them through.

Then, by the grace of God, some of their agencies survived; some even prospered. Now they are running agencies far larger than they ever dreamed of. It's these same principals who often find themselves tiptoeing in water over their heads. They find themselves personally servicing their largest agency account, directing the creative department, looking after the bottom line, and making almost all of the decisions themselves, including choosing the new paint color for the office lobby and the agency’s preferred caterer for client lunches.

Here is the point: If it is statistically true that a group of people collectively makes the right decision 9 times out of 10, and that the average of their decision-making is almost always within 3 percent of being dead right, then why doesn’t the aforementioned principal—or, for that matter, why don’t you—allow the collective group to be more involved in the agency decision-making process?

It is high time for most smaller and midsize agency owners to empower the people who work for them. This would certainly help agency principals to “get a life,” and maybe even lead to better agency decisions.

The Art of Delegation

First a brief anecdote... A local dairy owner brags to his friend that he hardly works. “Each day I come into the office early,” he boasts, “and I sit down with the Wall Street Journal and a cup of coffee. At about 8:00, when the rest of the team is arriving, I fold my paper, toss my coffee cup and say to myself, now how much can we get done around here today without me touching a thing?” What a great attitude. This business owner has made it his goal in life to allow his people to make all of the decisions. He feels that, collectively, they can never go wrong, and trusts them to keep the company moving forward.

How should you do this? Following are some suggestions.

First you must personally decide to cease being the despot in your agency and become the leader of a fully functioning team. Remember, everyone already knows you can do it. The secret of life is teaching others to do it. Do you wonder why you are always so personally busy? It’s because you aren’t leveraging the skills of your employees.

For people to take responsibility, they must know what you want them to do. Great job descriptions and directions from you are important. In other words, tell them what you want and move out of the way. Better yet, become a “helicopter pilot”; instead of leaving altogether, invest your time into getting an “aerial view” of your agency’s total situation.

Since planning, creative and account service really are the most important functions in an agency*, create committees to oversee and ensure agency actions are agreed upon by the majority. Too bureaucratic? Designate team leaders for each department to oversee internal “polling.” The key is to follow your mission and brand values.

Make sure all of your people are paid some of their compensation in the form of profit sharing and productivity bonuses. If you can keep your base salaries in line and show people how they can do even better through profit sharing, then you will steer the agency in the right direction. The best system we have ever seen was at a Michigan agency where the agency principal states at the beginning of the year what percentage of net profits will be shared with employees. This makes people think about how they can increase the amount of agency net profit so that there will be more profit sharing.

Hold monthly meetings to review financials. Employees don’t need full disclosure, but you should show them billings, direct costs and AGI in detail. Operating expenses, including payroll figures, can be grouped together as a single figure.

Most important, go back and read the beginning of this article. It has been statistically demonstrated that groups of people tend to make the right decisions. You should trust your very valuable people to make almost all of the agency decisions that affect them and the ongoing viability of your account relationships. This is surely a win/win for everyone involved.

As a postscript to this article, need we say that statistics have demonstrated something else to be correct again and again in recent years: An empowered group of employees is much more likely to stay employed at your agency… and last but not least, to buy the agency from you when you are ready to retire.

And that’s our final answer.

*Everything else is really scorekeeping or facilitation, and I say this with a great deal of respect for traffic managers, production managers, et. al.