BUSINESS BUILDING IDEAS
Advertising agency “culture” is always a lively topic. After all, it’s an intangible element that is difficult to pin down. So, almost anyone’s opinion is valid. It’s an opinion.
Nevertheless, the issue comes up whenever two agencies contemplate a business combination. Addressing the integration of operations always includes the consideration of the two cultures.
Or, if owners simply wish to make changes to increase profits, they will be concerned about affecting the working environment of the business. Or, in other words, they don’t wish to adversely affect the “culture”.
In both scenarios, the “culture” must be addressed. But, how is it defined?
One explanation of an agency’s culture is that it is a function of the owner’s profile. This school of thought is that the owner’s values and beliefs tend to lead employees to act and perform in concert with them. When they determine what the owner believes in and emphasizes, employees do it. So, processes evolve from the owners’ profiles.
This is more apparently true in privately-held agencies. But, the principle holds true in large, publicly traded corporations. In the latter, there is a corporate culture that individual gatekeepers at every level of an organization may manipulate and change in their own image. And so, minor fiefdoms emerge throughout the business operations that new employees have to understand in order to succeed.
These factors often affect the failure or success of a business combination. They are crucial elements that must be addressed in order to assure successful integration. However, they are also important to an agency operation when they find that they cannot manage to increase efficiency and profitability.
Processes and procedures guide the activities and shape the behavior of the people who work in the business. When you want to improve the profitability of a business, one of the first places to look is how to improve processes and procedures. In order to do this, you must change the behavior in the workplace.
About 15 years ago, the owner of the agency where I worked directed me to look at their processes, and find ways to improve efficiency. The agency made great ceremony about its’ “10 Steps to Success” mantra. However, the owner informed me that the “10 Steps” required about 125 touch points in their process.
The first person I spoke with was the production manager. He informed me that there weren’t 125 touch points. There were 146.
We managed to whittle the touch points down, but never really made much progress because the owners wanted systems in place to double check a number of elements in the agency’s work product. Not the least of these was compliance with the brand books from several large national clients.
This agency had grown from $3 MM to $15 MM in AGI. But, the owners insisted on maintaining many of the practices they had employed when they were a smaller agency. To my knowledge, they held on to the practices from their storied past right up until the agency closed its doors about 5 years ago.
New technologies have increased the velocity of the world we live in, and the businesses we operate. Technology affects, and in fact shapes most of the workplace. It is important to remember that humans adapt; hardware and software can be adapted. Humans are still in control, and the culture of the workplace is still important in the health of a business.
So, the question is, “What can you do to improve the efficiency and profitability of your business?” If given the opportunity, where would you begin?