Get Out of Your Comfort Zone

It’s rewarding when I hear clients repeating to me some of the suggestions, advice or phrases that I’ve used in my coaching and consulting sessions. At least it shows they are listening to some of the things I say.

The other day I was working with one of my individual clients, a person who has started his own business and I heard him say to me, “You know, I’ve got to start working more on my business rather than in my business.”

It is a phrase I use often with my clients because I see the positive results of this simple piece of advice often.

As the leader you have a choice each and every day, each and every hour. That choice is simple: to work in your business or on your business. In the business means spending most of your time on client business – conference calls, account team meetings, attending client meetings, writing proposals, participating in or leading new business presentations, etc.

Working on your business means thinking about and doing things that move the firm towards its vision and your desired culture.

It’s not one or the other – it’s a combination of both. Too often, however, I find that most owners and CEOs spend the great majority of their time working in their business. I have one client where the CEO and COO are often 90-100% billable. That’s just too high. I have another client where the CEO is proud of the fact that he does no billable work. That’s just wrong – you never want lose touch with the work.

The reason you are more comfortable working in the business is simple: most people who run agencies mounted the promotional ladder in other firms. You like the client work. That’s why you stayed and that’s why you grew as practitioners. It’s your comfort zone. Now that you own or run an agency, it is still your comfort zone.

Working on your business, making tough decisions on investments or new hires, or new services takes you out of your comfort zone. It makes people nervous. Why? Because it often involves taking a risk.

Ultimately, how you spend your time as owner or CEO is totally up to you. It’s your choice. Remember, however, if you want to become a great leader and create a vibrant, sustainable business, getting out of your comfort zone and working on your business is a necessity.

Is Cutting Prices Smart Marketing?

Obviously the competitors for stressed out coffee drinkers think so. In the face of McDonald’s spending $100 million on a new marketing campaign touting the quality of its coffee at a more affordable price than its competitors, Starbucks announced it is cutting prices on some of its drinks and Dunkin' Donuts followed suit.

In an MSN.com article, Jean-Pierre Dube, professor of marketing at the University of Chicago Booth School of Business, said it is “extremely important” for McDonald’s to advertise lower prices during the recession because they are less expensive than others.

This brings up a question for me. Is it smart marketing for agencies to lower their prices and promote that to prospects?

Everyone knows it’s more competitive out there. Large firms are going after prospects they wouldn’t touch if times were good. Yet, large firms have a cost structure that makes it more difficult for them to change or lower billing rates and client fees. Smaller firms don’t necessarily have that problem. They can be more flexible and more nimble. And, they can emphasize lower fees in new business presentations. Despite what we would like to believe, many (good) clients initially buy on price and that’s even more true today.

Some will argue that lowering fees or reducing billing rates, or “giving work away” cheapens the value of that agencies bring to clients. They say once you lower costs you can’t raise them. I don’t buy into that philosophy.

If you can establish a price advantage over a competitor (and still make money) why not use this to win the business, develop a relationship and look to increase the scope of work (and fees) over time. Since many agencies increase their billing rates annually anyway, why can’t you lower them and then increase them in years to come?

I think you can. And it may help you win the business!

Less = More = Opportunity

I hear from numerous agency owners who have reduced their workforce over the last several months that they feel they now have a stronger staff than ever before.

Could fewer staff mean a stronger staff? Absolutely.

I have always believed in the adage that great people create great organizations. Nowhere is that more true than in a “people” business like public relations.

Many smaller firms have reduced staff down to a core group of high performers. Larger firms have eliminated marginal people from account and practice groups. In both cases, the team that’s left primarily represents your “keepers”.

We are slowly emerging from this recession. As we do, firm owners have a great opportunity to add new strength to their agencies by beginning to look for that new “star” who may have gotten caught up in a layoff. They are out there.

Start looking for your next “star”. You don’t have to pull the trigger and hire just yet, but we all know how difficult it is to recruit when times are good. It’s a much better idea to recruit when times are tough.

Now is the time to start capitalizing on the opportunities to get your firm ready for the second half of the year and even 2010.

Make your strong staff even stronger with a smart hire.

Practice What You Preach

There have been countless articles, blogs, and speeches about the importance of companies maintaining an aggressive public relations program during this recession. They all emphasize the need to continue to “invest” in PR as a key element in an overall marketing program. And, they stress the importance of maintaining PR efforts over the long haul.

I have not seen many such proclamations about agencies needing to continue to “invest” in themselves, beyond the obvious need to market the firm to attract new business.

Independently owned firms in particular have a greater ability to “sacrifice” short-term financial goals for longer-term growth and healthier profits by remembering what made their firms grow and continuing to invest in these and other time-tested practices:

• Quarterly business and strategic planning with an eye to identifying and maximizing opportunities;

• Structured, facilitated management meetings to thoroughly discuss and solve key issues affecting the firm and develop new ideas for growth;

• Client surveys by qualified consultants to find out what your clients are really thinking and to identify opportunities that they may not share with your account teams;

• Revisiting your firm’s vision (or creating one) and the strategies to get there to provide a roadmap for the future;

• Rigorous account reviews to dissect relationship issues, brainstorm on opportunities, and review the quality of results;

• Training, skills development, and coaching for key executives to help hone skills, develop new ones and work on leadership and management issues

While stressing the value of maintaining long-term public relations efforts to clients and prospects, don’t forget to practice what you preach and invest for the long-term in your own firm.

A Lesson from Our Last Recession – A Word to the Wise

There’s a new storm forming way out in the distance, and it will shake up firms that don’t prepare for it now. It will wreak havoc on client relationships, upset management structure, break up account teams, increase bottom-line pressure, and give CEOs, owners, and partners a royal pain.

Job switching, the inevitable curse of good times in the agency business, is developing ever so slowly. But don’t be fooled. It is inexorably moving closer, fueled by increasingly tiny (yet positive) signs that our economy is starting to move forward again. PR firms, while by no means out of the doldrums, are beginning to see more new business opportunities with decent, and in many cases, healthy budgets. Granted, these opportunities are more competitive than ever before (if that’s possible), but they are also more frequent.

And, as it continues to improve, those key managers, account directors, practice leaders, specialists, and other valued employees lucky enough to have kept their jobs through the recession will begin to develop a new sense of confidence that maybe now it is time to look for that next, better job.

Retaining employees, always a key need in good times, may be even more important now when times are bad.

In today’s agencies, employees are asked to work longer hours, handle more business per staffer than ever before, develop new business (a task many never dealt with before), supervise juniors without proper training, take on new responsibilities for which they are unprepared, and handle less than “glamorous” clients that 18 months ago the agency would never have even considered.

Tempers flare faster today, job frustration is higher than ever, and the malaise that has affected agencies over the past year — as revenues plummeted and profits remained flat or slid downward — continues unabated in many firms, large and small.

Now is the time for agency management to take a new look at their organizations and figure out how to repair the fragile employee contracts that are certainly cracked in many cases, if not broken altogether. With a little thought, sensitivity, and some solid planning, agency management can begin to identify and start work on changing attitudes and cementing their relationships with their own staffs. But they had better start working fast.

Farsighted managers and owners are communicating more with employees to really understand their feelings and needs. Some are beginning to put into place measures that they hope will, in part, compensate for the dissatisfaction.

Those were excerpts from an article I wrote for PRWeek in July 2002. Are things any different today?

A tough economy only heightens the need to retain your best employees.

Opportunity Knocking ... If You Have the Stomach

The New Yorker ran a great piece on capitalizing on a recession environment. The writer, James Surowiecki, noted that most companies “hunker down, cut spending, and wait for good times to return."

He writes, "They do all this to preserve what they have. But there’s a trade-off: numerous studies have shown that companies that keep spending on acquisition, advertising, and R. & D. during recessions do significantly better than those which make big cuts.”

But, he cautions, you have to be able to withstand and understand the vagaries of risk and uncertainty.

“Risk describes a situation where you have a sense of the range and likelihood of possible outcomes. Uncertainty describes a situation where it’s not even clear what might happen, let alone how likely the possible outcomes are. Uncertainty is always a part of business, but in a recession it dominates everything else. So it’s natural to focus on what you can control: minimizing losses and improving short-term results." For most that means cutting costs.

He cites academics Peter Dickson and Joseph Giglierano, who have argued that companies have to worry about two kinds of failure: “sinking the boat” (wrecking the company by making a bad bet) or “missing the boat” (letting a great opportunity pass).

Many agency owners are far more worried about sinking the boat than about missing it. And, perhaps they should be. But, are they overlooking opportunities to edge out in front of their competition?

Some agencies seem to have the “stomach” for the uncertainty of today. I’ve recently read about agency acquisitions; new hires who bring a new service offering (e.g. word-of-mouth); investing in PR network memberships; starting new divisions and practices; creating new web sites and new digital offerings; and launching new advertising and marketing initiatives. These firms are investing in themselves and their future.

None of these investments (read “risks” because they all cost money) were made by large firms. Indeed most are small to mid-size agencies.

It's smart to be profit driven. But agencies that live and measure success solely by the bottom line will have considerable difficulty investing today as they see their margins shrinking. Yet these firms run the risk of being left behind by some of the more aggressive competitors who recognize the opportunities – and go for it. They will accept break-even or perhaps a small loss or gain today for greater revenue and profit tomorrow.

Food for thought?

It's All About You

For me, the word commitment carries only one definition. It means I will do it. Not I’ll try, but I will do it.

It bears repeating that great leaders create great agencies. Those of us who grew up in an age when small firms became large, great firms observed leaders like Harold Burson, John Hill, Daniel Edelman, John Graham, Bill Ruder and David Finn, and many others. These men understood the importance of leadership and, for the most part, practiced it religiously. They created great firms.

While they were all different individuals, they had at least one trait in common: they were all committed to creating great agencies.

One thing that has hit home to me as I have observed firms and top management is that CEOs (or agency owners) don’t seem to understand their own importance to the growth, development, and health of their agency. Many simply don’t get it and try to deflect the responsibility (or the credit) on to others. In some cases this is admirable – but misguided.

This is not about ego or arrogance. This is about the simple truth that great leaders create great agencies because they commit to doing it and they will not tolerate failure.

Start by affirming your commitment to yourself and your firm: “I am creating a great agency, one that attracts great clients and great people. I am committing to and focusing my efforts on doing everything I need to do to achieve greatness.”

Notice the use of the present tense – a powerful part of the affirmation process and a key element in visioning your success.

As you go about your day observe yourself and your direct reports. How many times do you follow through on your daily “commitments”; how many times do your people follow through? Are you tolerant of those who try but rarely commit? If so, why?

Is personal commitment one of your “Standards of Excellence”? It needs to be if you are going to create a great firm.