An article in Management Today discusses a unique approach to work that’s been embraced by Best Buy in the U.S. Rather than focusing on the hours employees spend at the office, the company has implemented a program called Results Only Work Environment.
Agencies should take a close look at this, not only in terms of how they manage employees, but in how they structure their client relationships.
Agencies continue to have a higher than average percentage of female employees. Both agencies and their female employees would benefit from greater flexibility and possibly put to rest some sexist stereotypes, and resulting limitations, that still exist in the higher echelons of conglomerates such as WPP.
The call for flexibility is not limited to women. According the article, a Harris Interactive Poll showed that 92% of Gen Y-ers want a flexible work schedule.
With the average length of service at London agencies two years or less, anything that helps retain talent should be given consideration.
Account teams are notorious clock watchers. Many agencies still have an institutionalized culture of working long hours to get ahead, rather than focusing on achieving results to get ahead.
Another reason for the clockwatching is the way agency employees must bill time. They need to account for every minute of their day, usually in 15-minute increments. Often 90-95% of this time must be billable to a client, even if over 40 hours are worked (i.e. it’s not a total number of billable hours per week, it’s the billable to non-billable ratio).
Pay me now or pay me later
A side effect of this is that when there are fewer “open” jobs for people to bill their time to, the clients’ costs per job suddenly go up. If the client is lucky, there will be an eagle-eyed project or account manager managing the budget who won’t let these costs through, but this results in internal battles at the agency… and it’s pay me now, or pay me later, as the agency will have recorded a “write off” which means the next time they quote a similar job, they’ll want to charge more.
Although billing by the project instead of by the hour is a step in the right direction, agencies are still tracking time spent in order to determine profitability. But when staff members are forced to make almost all of their time billable, they can easily “hide” time in fixed-cost projects where the costs are not passed along to the client. However, the next time a similar job is quoted for the client, the project director (or whoever is quoting the job) will look at what they job “cost” last time and inflate the quote.
There is no job number for “adding value”. So agency staff members are focusing on billing to and delivering individual jobs. The more they focus on hours spent, the less they focus on achieving results for the client. I strongly believe that account staff at all levels should seek out ways to add value to their clients on a continuous basis. It will make for a stronger agency client relationship and a more rewarding work experience, and quite possibly it could lead to new business.
Results only partnerships?
I believe that creating more of a partnership agency-client relationship is a step in the right direction, i.e. both parties are responsible for and passionate about a shared goal and both parties feel an ownership and pride in the work produced.
But a “results only work environment” would also need to be translated into the financial relationship. One way this might be achieved is to consider the end product as the result, e.g. a banner ad costs ‘x’, a postcard costs ‘y’, etc. (and in fairness to agencies, extra rounds of revisions cost ‘z’). This only works if the agency staff isn’t required to maintain an unachievable billable percentage, for reasons noted above.
Another approach would be for the clients to pay the agencies based on improvement of direct, measurable results – what DM is all about – for instance an increase in response rate, clickthroughs, page views, etc. Unfortunately in most cases, there would be too many mitigating factors to make this realistic.
Moving business forward
Each client relationship is unique and determining how to measure the results the agency is bringing would vary accordingly. I don’t think there is a one-size fits all solution to shift the focus more towards results. But in most cases where a client has hired a big-name agency, what they really want is an agency that can not only deliver the bread and butter as a matter of course, but one that will also use its collective expertise and passion to add value and move the client’s business ahead. That can’t necessarily be billed to Job 126859.