In the dynamic world of creative agencies, achieving operational excellence can often feel like navigating through the copious obstacles of a Takeshi’s Castle challenge. Most agency leaders know that there is more profit potential to be found in the cracks and crevices of daily operations but in such a dynamic environment, staying on top of operations is a full-time job in itself.
As we emerge from the challenges of the past year, there is a groundswell of desire to redefine success through, amongst other strategic objectives, a commitment to operational excellence in 2024.
What is operational excellence?
Essentially it is the smooth-running of all systems, process, workflow and people actions & behaviour. It is achieved by knowing what you’re doing, where you’re going and how you’re delivering work goals and promises. Sounds easy!
It is a rare agency that experiences full operational efficiency 100% of the time. Creativity is not a 9-5pm business; work comes as peaks and troughs. They say that when you are at your busiest, you should still be pitching and looking for new business, but how can capacity stretch that far?
It’s also important to acknowledge that agencies are people-led businesses, filled with passionate, energetic, creative-minded, opinionated people and people can be random even in the most straight-jacketed of systems. People have ideas, there’s always “a better of doing it”, or “well let’s just try it” so project plans, timings and budgets are always going to run away from the original plan. And ask any agency founder or leader and they wouldn’t have it any other way. It is this passionate behaviour that creates amazing ideas and incredible culture. However, in the most creative of agencies, process is still required.
Indicators of operational inefficiencies
Significant indicators of issues include half-attended resourcing meetings, incorrect briefs or designers sitting around waiting to be briefed, sign-off processes that delay proposals or work getting delivered on time, people not knowing the financial status of their projects, the same question / challenge / problem being passed from person-to-person without resolution, version control issues resulting in the wrong file was developed or artworked, people not knowing where something is filed or not being able to retrieve a file quickly enough.
More importantly, listen to the conversation. What are people expressing frustration over? If it’s a point of process, lack of a system or procedure, then you know there is a screw that can be tightened so the work can flow past that blockage or leak.
How to tackle operational inefficiencies
As a specialist in operational excellence, I have evolved the McKinsey 7S model to tailor it for creative agencies specifically.
The 7 Core Components for Operational Excellence
- Vision & Strategy: are people aligned with the brand story and business vision? Do their annual objectives deliver the overarching business goals?
- Organisational Structure: How does the structure deliver profit ie. the Cost-to-Fee earnings ratio and role utilisation targets? Does your structure inform effective People Planning?
- Price & Profitability: what are your pricing strategies? How do client service balance time, rate and quality to win projects at viable budgets? Do they build in expectations caveats?
- ROI on Business Development & Marketing: How much does lead generation, pitching and ongoing proposal/estimate creation cost?
- Systems, Tracking & Reporting: Are the project management workflows, systems and tools fit for purpose? Do they enable working efficiency? What data reports are issued and how are they assessed to inform future decisions?
- Creative process & Service Levels: What are the roadblocks in the creative process that cause internal friction and affect quality of creative delivery? What hinders the quality of client relationship management? How do clients feel about the quality of service and creative output?
- Culture & Wellbeing: an audit, insights gathering and gap analysis to identify areas for improvement in organizational culture; covers skills, behaviours, PDP planning, learning & development opportunities; and potential for regular culture measurement.
These can be audited independently if you are seeking to resolve a specific challenge area, but obviously all parts of the business are inter-connected so don’t be surprised if you need to open up another area of inquiry to sort out the first area of inquiry.
Auditing for operational opportunities
A root & branch audit is an investment into your successful future so if you are trying to transform an agency, or any business for that matter, using an external supplier, like myself, who can bring experience, fresh thinking and objectivity to inform smarter ways of working.
If you would like to use this model to self-assess the operational health of your agency, download a Self-assessment question guide, click on the link below.
Find out the operational health of your agency with this quick self-assessment. Ideally, share it with other people in the business to see where discrepancies lie and uncover some of the hidden strengths and weaknesses in the business.
If you would like to talk to me, please fill out the contact form or PM me on LinkedIn