A better way to manage the scaling of your agency

There are a number of different types of agencies: advertising agencies, digital agencies, marketing agencies, creative agencies, to name but a few. There is a thread that holds all of them together though, human performance.

Clients on the most part are buying human time and know-how when they appoint an agency. Which is why the management and development of people and their time is at the heart of agency leadership.

Scaling your agency

Creating the right systems and processes

Given the complexity of managing and developing talent, and the necessity to attract and retain this talent, if your agency is going to thrive in the long-term, it is actually surprising how the kind of systems and processes that are set out here are not used by default. In tech companies that equally rely on talent acquisition and retention, they are central to success.
Let’s start at the beginning – why?
If you were asked why your agency exists, what would you say? What’s your Mission, Vision and Purpose? Here’s an example we’ve written. What would yours be?
What do you do and who do you do it for?
We are on a Mission to grow our clients revenue as quickly as possible.
What does achieving this Mission look like?
Clients that choose us are always delighted and want to do more.
Inspire everyone: Describe the cause everyone is signing-up for?
It is competitive out there, to succeed we work hard and act in smarter and more creative ways. Treating our clients investments like they are our own, and their trust like we would a close friend.
The Agency North Star
An agency’s reason for being is to do great work. So much so the client would not hesitate to recommend them. What KPI would connect with your reason for being.Can you think of a North Star Metric?

What about the Quick Ratio? It’s used in tech companies as a health metric, but has a great fit for agencies as well, although does not factor in project work. It could certainly sit alongside a Project Revenue KPI happily.
(New MRR from New Clients + Expansion MRR from Existing Clients)
(Reduced Client Spend MRR + Lost Client MRR)
Another candidate North Star Metric for an agency is Client NPS. If clients wouldn’t recommend you then that’s a pretty big issue.
The Pillars Of A Great Agency

If you were to take this one step further and have to define the ‘Pillars’ or ‘Key Battlegrounds’ you must win in order to achieve your Mission, Vision and Purpose.

What would they be?
What order would you put them in?

Services and Capabilities Enhancement
Existing Client Growth
Net New Business
People Development
Operational & Governance Excellence

Are these the right ones? If these battles were won, would you be thriving? If you would be then these are probably not too far from being right for you.
Time For Agency KPIs / Metrics – Sorry!
We can’t get away from the need for Agency KPIs or Agency Metric, but your agency is going to awash with these numbers. Are they the right metrics though? It’s scary how many KPIs that are tracked are not actually used.
Leading & Lagging Indicators
The need is simple, to ‘measure what matters’, whilst not getting bogged down in measurement, thus causing analysis paralysis.

So we need to define and target the fewest number of leading indicators – KPIs that would align with your Pillars and predict the lagging indicators – KPIs. Some metrics can of course be both.

We also should not worry about whether we have access to that metric right now as well. Worry more about whether it is the right metric to have and focus on. We can always start to measure a metric and get a baseline of where you are now.

Here are some ideas:

Pillar – Operational & Governance Excellence

Metric – Utilization – Actual Billable Hrs / Available Billable Hours

Metric – Billable Hours to Non-Billable Ratio

Metric – Estimated vs Actual Project Time

Metric –  Salaries  as % of  Gross Profit

Metric – Average Profitability Per Client

Pillar – New New Business

Metric – Customer Acquisition Cost (CAC)

Metric – Ideal Client Profile (ICP) Pitches

Metric – ICP Pitch Conversion Rate

Pillar – Existing Client Growth

Metric – Client Churn Rate

Metric – Client Proposal Conversion Rate

Metric – Client Expansion Sales Rate

Metric – Client NPS

Pillar – People Development

Metric – Employee NPS

Metric – Internal Referral Rate

Metric – Employee Retention Rate



Operational & Governance Excellence

Utilization – Actual Billable Hrs / Available Billable Hours

Billable Hours to Non-Billable Ratio

Estimated vs Actual Project Time

Salaries  as % of  Gross Profit

Average Profitability Per Client

New New Business

Customer Acquisition Cost (CAC)

Ideal Client Profile (ICP) Pitches

ICP Pitch Conversion Rate

Existing Client Growth

Client Churn Rate

Client Proposal Conversion Rate

Client Expansion Sales Rate

Client NPS

People Development

Employee NPS

Internal Referral Rate

Employee Retention Rate

Setting Objectives & Key Results
Objectives and Key Results or OKRs is the goal setting framework that’s been used by Google, Intel and hundreds of thousands of other companies around the world for decades. It’s a great fit for all types of agencies as well.

The Objective is a qualitative statement of the objective, and acts a little like the book cover. It makes you want to read on. The Key Results are how you propose to measure success in a period of time like a year of a quarter, and are like the chapters telling the Objectives story in the language of numerical achievement.

Here are some examples that build on the building blocks we’ve been through.
Obj – Good agency economics are good for everyone
KR – The average profitability per client is 15%
KR – We are utilizing 90% of our billable hours
Obj – New clients are choosing us
KR – Our Cost of Acquiring a New Client is under £1000
KR – We are pitching to new Ideal Customers once a week
KR – We are winning 80% of the pitches we attend
Obj – Clients trust us more and more
KR – Increase the Average Client Expansion Sales % to 20%
KR – Retain all of our clients
KR – Improve our Client NPS and achieve a 9
Obj – Above all, we are our people
KR – Our staff are staying for over 2.5 years on average
KR – Our employee NPS equals our clients at 9
KR – 100% of our new employees come from referral
One of the many great things about OKRs, that makes them better than simpler way of setting goals, like SMART, is the ability to group Key Results under Objectives, which you can see above, and cascade goals, creating child OKRs from either an OKR or an individual Key Result.

Let’s take the OKR: Clients trust us more and more.

It would be easy to see how Account Owners would cascade individual Accounts into OKRs. For example:
Obj – Our relationship with [CLIENT NAME] is thriving
KR – We’ve hit the agreed performance target 100% this quarter
KR – Our Client NPS for [CLIENT NAME] is 8 this quarter
KR – We’ve pitched 2 ideas to help them do more with us this quarter
You’re Going To Love The Initiative
If OKRs are what you want to achieve by the end of a year or quarter numerically, how you’re going about achieving is the job of the Initiative. An Initiative is a project (groups of tasks) or task that is being undertaken to achieve a OKR or single Key Result.
The Key to Success
For the OKR – New clients are choosing us, this might include:

• Improvements to Pitch Decks
• Awards Entries
• New Client Announcement PR
• Social Marketing
• White Paper Creation
• Case Study Creation

All of which can have independent owners, collaborators, and due dates.

For the Key Result – We’ve hit the agreed performance target 100% this quarter, the Initiatives could be:

• Deliver [PROJECT BOARD] managed in Trello for Example
• New ideas brainstorm for achieving client goals

What are the Projects / Tasks aka Initiatives that you’re planning to do and doing to improve your OKRs?
Control & Agility In Less Than 30 Minutes A Week
Lightweight but effective management systems and processes are needed that stop you ‘setting and forgetting’ the OKRs that are improving your KPIs and will deliver your Mission, Vision and Purpose puts them at risk.

What is needed is regular check-in and team meetings. The inputs and weekly agendas look like this:
Individual Check-ins
Owners of Key Results and Initiatives update Status, Progress, Confidence and comment on the blockers (What’s holding them back) – this should take less that 5 minutes a week
Collaborator / Team Reviews
Collaborators and Team members of the owners of Key Results and Initiatives review the updates and comment on the issues holding their colleague back – this should take less that 5 minutes a week
Team meeting
In a group, the team meets and discusses the ‘at risk’ Key Results and Initiatives and their blockers, any new Initiative Ideas, and any next steps – this should take about 20 minutes a week
The Best Way Of Embedding This In Your Culture

ZOKRI has been designed from the ground up to help you work through the steps outlined, measure and track Goals and Initiatives, and embed the systems and processes into culture. Where they are not thought about, they are just how you plan and work.

We also have the people that can guide and facilitate the meetings that help your teams learn skills like goal setting. Whatever you need to embed a Performance Management Blueprint like this, we have it.

What About Culture, Wellbeing & Personal Development?

You’re right. When you’re a small agency the culture is defined and lived by founders and everyone gets to see it and live it as well. As you scale then it is harder to learn and monitor. Don’t worry, we’ve a solution for that.

Wellbeing is also critical. If you’re going to be a talent fuelled people business then looking after the wellbeing of employees is critical. We have a unique wellbeing monitor solution inside ZOKRI to help here as well.

And finally, Personal Development. Talent needs to be developed, and if you’re not you might lose it. So Quarterly PDPs are much better than annual appraisals. Which again are covered in a better way than what’s out there right now.

Want to know more about how ZOKRI can work for you? Book a meeting now.