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Fix Your Agency Process (Or Perish by the Next Recession)

Quality is all that matters, right? Not every client thinks so.

Once upon a time, there was a brave new business movement known as minimalism. It is best described in Rework, the 2010 bestseller written by Basecamp founders Jason Fried and DHH. Their core idea was to do the work as simply as possible for the benefit of both a business and its clients.

The authors of Rework understood, that under the ever-changing conditions of the internet era the ability to move fast and to burn their own money as a fuel, gave them not only freedom, but also a much needed edge over corporate America, which was holding onto its obsolete procedures and rituals.

The book also sold well because the Great Recession was still at its peak in 2010. Many business owners and managers were struggling to survive and were eager to learn how to cut costs and boost the core of their business.

That’s indeed what most market recessions do. They test and grow our ability to produce high quality results under stressful conditions and with limited resources.

But as the years went by, the heyday of business minimalism passed and the recession turned into a boom again. And as money poured back into the market, the conduct of businesses has been changing profoundly.

Truly great examples of this shift can been seen in professional agencies — in consulting, web design, UX, marketing, copywriting, commercial arts, etc.

Almost every agency has some kind of a standard, fine-tuned procedure to deal with a client. Many call it the agency process, which is right, because it represents a recurring workflow, which is repeated time and again with minor changes or improvements.

What I have witnessed since 2010 as a business consultant is that these core processes of the various agencies I have been dealing with are getting more and more robust and team based, but also more clumsy, poorly managed and ineffective.

In some agencies, a process that was formerly executed by a single senior expert, is now being handled by a team of a half a dozen professionals, both junior and senior ones, and takes at least two to three times as long to complete. Naturally, the costs are skyrocketing as well.

It is not rare to see a whole team of both agency employees and freelancers alike arriving to almost every meeting with their client. They also give workshops, conduct research, develop prototypes, produce lengthy documents and spend days arguing about their subject.

All this is paid for by the client.

Some even prefer not to call their agency’s process “a process”, perhaps in order to disconnect it from the cost-oriented BPM (business process management) and allow for to be billed as a project-oriented approach, which usually requires a larger budget.

When I ask agency owners about this practice, they often give sound explanations:

  1. The teamwork balances out (but cannot always prevent) many cognitive biases that people have and thus employs lessons learned from modern cognitive psychology and evidence-based research.
  2. Sharing the agency process within a team supports the good practices of substitutability and scalability. If you have only individual experts and they leave or get sick, you’re in trouble. And individuals aren’t really scalable either.
  3. The output quality is better. This is usually less valid for creative fields, where a single skilled professional may outperform a team of less gifted creatives and for a lower cost, but let’s call this a draw.
  4. There’s space for a much larger profit to be created. With a skilled salesman, the weeks of teamwork can be sold with a hefty margin, unthinkable while selling a single professional. In other words, it’s good for business.

I believe these are pretty convincing reasons and that is probably why the market has been slowly moving in this direction. But in practice, there are reasonable objections as well.

The key problem is that the higher quality often comes for a much higher price. What’s the point of having an improvement of 10 or even 20 % if you pay 100 or 500 % extra?

The truth is that many agencies keep selling the idea of quality improvement despite the plummeting quality-to-costs ratio. Worse still, they are often unable to measure the second while arguing strongly for the first.

The best agencies I’ve worked with over the years are able to distinguish between these priorities and give each client an appropriate treatment — either an optimized team process with the highest quality results, or a single pro who simply delivers for a great price.

Thus they are not only treating their customers according to their needs, but also keeping their core business fit for the next recession. In these years of abundance, many agencies fail to prepare for those leaner years to come. Even worse off are the less professional agencies that don’t realize they have a process to improve.

The most important takeaway is never to sell your agency process from a “quality only” perspective. Offer the cheaper and more effective options too, if only to measure the price and quality difference between the two.Otherwise you are running a high risk of being diminished by the next downturn that hits your primary market.

Robert Vlach, January 17, 2018

Business consultant, writer and EUpreneur. Proud founder of Procesoid and Na volne noze — one of the largest national freelance communities in Europe

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