Your Leadership Pipeline is Vital to the Performance and Sustainability of Your Agency.

Why your leadership team is so important.

Developing a system to identify and train next-generation leaders is vital to the long-term sustainability and consistent success of every marketing and communications agency.

An effective leadership pipeline will help to:

1.     Perpetuate the organization over many years.

2.     Enable the agency to fulfill its potential.

3.     Avoid the all-too-common cycle of growth spurts followed by revenue contraction.

4.     Move owners/founders from driving agency activity to supporting the efforts of others to grow the firm.

5.     Increase the sales value of the agency.

6.     Provide career growth paths for talent.

7.     Identify and develop a successor.

8.     Make the owner dispensable for agency success in order to best position the agency for the owner’s transition.

Prosper Group has deep experience in helping agencies develop the infrastructure required for identifying, recruiting, developing and retaining senior leadership teams.

What it takes to develop an ongoing talent pipeline.

To develop a strong pipeline, there are four fundamental components which agency owners must understand and actively support:

1.     Agency inflection points and their consequences.

2.     The talent and timing of hires needed for sustained growth.

3.     Recruiting and/or developing the required talent.

4.     Retaining talent.

Today, we will discuss inflection points. The other three components will be the subjects of future mailings.

Defining Inflection Points and how to manage them.

Inflection points come at various stages of agency growth. They require changes in the way the agency operates. Generally, there is impact on the size of the senior team and in the use of their time. All agencies and their owners go through inflection points which requires introspection about the firm’s structure in order to continue momentum.

These changes occur as the owner and senior leaders get further and further away from the everyday details. They become less involved in executing programs for clients and new business development. In short, there is more delegation to and below the leadership team.

With each inflection point, there’s a structural shift within the organization. The existing senior roles change and new leadership roles emerge.

The owner’s challenge is to anticipate and prepare for the next inflection point before it actually occurs. This requires:

1.     Developing a strategic growth plan to identify opportunities and challenges as well as guide both short-term and long-term investment decisions.

2.     Adopting a hiring philosophy of adding senior talent before growth. To add new revenue or be competitive in an emerging revenue stream, you need to add senior talent. To effectively manage added revenue, you also need stronger business leadership.

3.     Anticipating the type of experience and capabilities required of the leadership team to handle your next level of growth. Remember that the agency will need to maintain (or even improve) client service quality while avoiding staff burnout as revenue scales.

The four different stages of inflection points.

Generally, there are four stages of agency inflection points which most owners will experience.

Stage 1 – This is the start-up phase where the owner personally does or manages just about everything.

Stage 2 – The owner is now delegating some aspects of client service and operations. A few tactical client service people have been added and perhaps a manager. There’s also now a bookkeeper.

Stage 3 – All client service and also most new business development have been delegated. Senior VPs and VPs are managing fully-formed client service teams. And the owner now has a function that supports the marketing and new business efforts of the agency.

Stage 4 – Fully evolved agency with all core functions having dedicated leadership and adequate resources for success including:

• President with day-to-day management of the agency reporting to the owner or CEO.

• Core functions of client service, business development, talent and operations with dedicated leadership and resources.

• Within client service, practice leaders or revenue stream leaders and SVPs running the larger books of business and revenue streams.

• Under each revenue stream leader and SVP, client and functional teams with managers and resources.

• Geographic leaders.

• Specialty leaders have emerged (Creative, digital, social, research).

The roles and areas of responsibility of the owner and senior leaders become much broader at each inflection point while their level of day-to-day tactical work actually decreases.

Creating an evolved agency structure.

The agency’s organization chart adjusts as the owner transitions from being the driver to becoming the supporter of the firm’s purpose and activities.

Imagine each inflection point as a click of the dial moving from the top of the org chart towards the bottom, symbolizing the move away from driver to supporter of agency activity. As the owner’s work changes, his/her former duties are delegated to others. To be successful, these people then need more resources under them.

This will be true for operations, client service, business development, talent and specialty services. Eventually, all of these core functions will require dedicated leadership, resources, accountability and owner support.

To sum it all up.

As agencies grow, inflection points are inevitable. Navigating these inflection points requires careful planning and a strategy for identifying, developing and training talent.

At each inflection point, a deeper senior team with adequate assigned resources will be needed. Developing the next generation of senior talent will strengthen your agency, provide appealing exit options to ownership and significantly increase the value of your firm.

We’re here to help you prosper.

Prosper Group exists to help the owners of independent marketing and communications agencies achieve their ambitions and maximize the value of their life’s work.

Our team is comprised of former agency leaders and owners who focus their deep experience on implementing proven proprietary methodologies across our three practices of agency performance, owner exit planning and M&A transactions in order to drive owner and agency success.

To learn more about us, please visit the Services page here on our website