Here’s the deal guys, marketing and advertising agencies, by and large, in most cases, and with very few exceptions…suck.

Don’t get me wrong, agencies can be very exciting places to work. I currently run an agency (Dragon Army) and we have a terrific culture, love what we’re doing, and I wouldn’t choose any other industry. But we’re not acting like a typical agency, which I’ll get to later.

At agencies you get a chance to work with great brands, incredibly talented people, and if you’re really fortunate your friends might see what you produced on their TV, their phone, or if you’re really lucky, on Amazon Alexa (yes, we’ve produced work for clients on Alexa, and yes, it’s pretty darn cool.)

But the not-so-hidden truth about agencies is that they’re very often miserable places to work over the long-term. And it’s not (all) the fault of the people running the agencies. There are real reasons that agencies are difficult companies to run.

You’re working for clients

When you’re building your own product, you have a great deal more freedom to make choices on how you run your business. When you have clients, you’re building experiences for them. And “them” = the main client contacts, their bosses, their bosses bosses, their board of directors (everybody has an opinion on marketing and advertising), and ultimately and most importantly of course, their customers. When dozens of people have input and decision-making on your work, it can be hard to product experiences you’re proud of while also managing the expectations of so many.

Additionally, at an agency it’s hard to feel like there is a real purpose to what you’re doing, because in a sense you’re helping other companies fulfill their purpose. A business that inherently exists to help other businesses succeed can be left with an empty feeling inside, which leads to dissatisfaction and high turn-over (because, as it turns out, people want to feel like what they’re doing matters.)

Clients also can start/stop relationships for all sorts of reasons, including good ones like the agency isn’t producing excellent work, but also bad ones such as a new leader comes in and wants to shake things up by cutting all agency partners, or the CEO had dinner with a person and now suddenly, that guy’s agency is forced in. Many times these changes are outside of the agency’s control, and they result in necessary but unfortunate layoffs.

And on top of all that, some clients are…well…meanies. There are mean people everywhere, and some work at brands and hire agencies. And far too often (and for reasons I’ll share below), their behavior is tolerated, resulting in a terrible situation for the agency team members. You can lose a sense of your culture when you work with partners that don’t share your same values.

Seasonality

Many industries are seasonal in nature. More people buy things around the end of year holidays, more food is consumed around Thanksgiving, more people travel during the summer, and more people buy a new car in March (when their tax rebates come in.)

This seasonality results in more advertising and marketing leading up to those times, and deadlines are unmovable, else you’ll miss the season entirely. The clients, understandably so, are stressed trying to make sure they get everything done in anticipation of their big sales period, and (also understandably so) their agency partners take on that pressure in order to deliver great work in a condensed period of time.

Seasonality also results in big spikes in team members in order to do the work, but then after that big push is completed, agencies often have to lay off team members in order to right-size their finances.

Billable time

Ah, the lifeblood of an agency. We talk about things like billable hours, optimal efficiency, and resource utilization. The idea is to optimize the number of hours a person can bill in a week, and what hourly rate can you charge against that.

If a client delays responding to something, a person can sit idle waiting to get back to work. This results in a drop in billable hours, which results in a drop in revenue and profit.

Focusing on billable time can make for stressfully long work weeks as leaders try to hit a certain threshold or “catch up” if hours are behind. It also teaches your team members that the more hours they work, the more valuable they are. But the most detrimental aspect to a billable hours construct is that your team is disconnected from the overall business, in most cases unable to see how what they do is truly important to the goals of the business. You feel like you’re just a cog in the overall machine.

Parent-company structures

Many agencies are owned by what we call holding or parent companies. These are massive, billion dollar companies that have acquired smaller, independent agencies and either merged them together or kept their brand separate.

I sold one of my companies (Engauge) to a holding company, and the result was quite frankly disastrous. We had ~200 employees that went to the new company, and five years later roughly 90% of those employees were no longer with the company. The culture we had built was erased immediately, clients were quickly dissatisfied, and I’m certain the holding company was just as disappointed by the results as we were.

I’m sure there are exceptions…though I’ve never seen one. The main problem here is that when you’re a people-business, the way agencies are, and you’re being managed by a group of people that see you simply as a number that needs to be hit quarter after quarter, year after year, it becomes easy to force optimization over people, results over heart, and financials over purpose.

When all of these elements are working in concert, along with many other agency-related realities (pitching new business with an industry-standard win ratio of 30%, for instance), the result is often over-worked, stressed-out, looking-for-the-next-job employees. This is why agencies have high turnover rates (a staggering 30% rate in 2018, meaning 30% of your employees will leave in a 12-month period) and difficulty achieving growth and profitability at the same time — usually you have to pick one of those metrics to focus on.

When I started Dragon Army, my goal was to push back against the typical ways that an agency is run. Having built and sold two agencies, and therefore been in the industry for 15 years, I have seen it all. The good, the bad, and the very common ugly. How, you ask?

Purpose

I’m a student of business, reading as much as I possibly can on the subject (mostly through books) in order to learn and improve. And every business book says that a company needs to have a purpose, something that is bigger and more meaningful than your actual business. Something that everyone can rally around and dig deep for. Your “why”, if you will.

I struggled for years trying to decide how we could have an authentic purpose at an agency. How could we have something we stand for when we’re really just helping our clients achieve their purpose and goals?

And then two things happened. I read Start With Why, which fundamentally changed the way I thought about purpose, and I met with a friend who is a Purpose Expert. She pushed me to dig deep to understand why I started Dragon Army in the first place, understanding that our “why” could be deeper than what we produced as a company.

From there, our purpose was born: To Inspire Happiness through positive relationships, impactful work, and doing good. You can read more on how we bring that to life, but the important thing is that we have built a culture where our purpose of inspiring happiness is at the center of everything we do. People don’t feel like they’re just a total of billable time, or that they’re simply working to help another company’s dreams come true.

This has created a culture unlike anything I’ve ever seen. Our team is so unified, and believes so deeply in what we’re doing, that I’m certain we’ll accomplish our goals, because when the will of an immensely talented group of people are focused on a singular cause, there’s nothing that can stop it.

Values and transparency

At most agencies, and as far as I’ve seen at most companies in general, there is very little trust. People have different motives, culture and values aren’t at the top of the list when hiring or managing the team, and signals from leadership show that individual results are more important than team wins.

We do two things at Dragon Army to combat this. First, we have values that we actually, truly embody. Every company has values that they’ve written down. Some make it to the walls, some even get reiterated at various company gatherings. But very few companies focus on their values, ensuring that they are real, that they dictate behavior, and that they come before anything else.

It was from Charles Brewer that I truly learned the importance of values within in a business. And so we work hard to make sure that our values guide us on a daily basis, and we call out situations when we’re not acting accordingly.

The second way we run our agency differently is through The Great Game of Business. I’ve broken down how we run this system in a previous blog post, but through The Great Game we expose all of our financials (minus individual salaries) to the entire company on a weekly basis. Everyone weighs in on the decisions we make, on our annual budget and goals, and we’re all rewarded together based on hitting those goals (no individual “winnings”, only entire team wins.)

These two things, focusing on our values and running The Great Game, have allowed us to act entirely different than most agencies, and in fact, unlike any company that I am aware of.

Operating differently

As I mentioned earlier, there are things that are outside of an agency’s control. Regardless of how well we prepare, we cannot predict or plan for a client completely changing direction and deciding we’re not the right fit for them going forward.

To combat that, we’ve adapted our model to allow for local freelancers and contractors to be a major part of our workforce. There are incredibly talented individuals that would prefer to work at home in their pajamas, or want to enjoy the mountains of north Georgia and do not wish to fight the legendary Atlanta traffic every day to be in the office. By working with these contracted team members (meaning, they aren’t full time employees), we have the flexibility to hire them for projects and work that spins up, and then cycle them down (with notice of course) when the work goes away. Most agencies are fearful of this kind of model (for many reasons, including that clients might not appreciate it), but we’ve found that it is the best way to have a stable, motivated workforce that isn’t constantly worried about the consistent round of layoffs that inherently come with the agency business.

Long (like, really long) term thinking

This is perhaps the most important aspect of how we’re doing things differently. We take a very, very long view of where we want our business to go. Yes, we focus on monthly and quarterly metrics to ensure that we’re running our company with operational excellence (that’s one of our Tenets), but we do that because we know that our ability to be the company we want to be requires that we are stable and growing.

When you have a long-term view of where things are headed, you become comfortable making decisions that might “hurt” in the short-term but are better for the overall health of the business. This could be saying no to a big client because your values don’t align, or removing a talented team member because they’re toxic to the culture. If you’re worried about short-term results, you hesitate to make such changes.

I love the agency business. I truly do. I just think it can be done differently. The people working at agencies deserve better. The clients and partners that rely on agencies deserve better. And the world deserves better.

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