Agency Fatigue: Two Simple Changes That Will Deliver Better Business Results
Feeling overloaded and not seeing results? Discover the two things that will help you get around this.
The coronavirus pandemic disrupted businesses across the globe. And agencies weren’t an exception.
Back in April, we started working with an agency that had lost 70% of its revenue in just two weeks in March. Their clients put their projects and spend on hold, which resulted in this massive revenue drop. Fortunately, we were able to help the agency make significant pivots pretty quickly. And over the course of our work with them, the agency managed to recoup the majority of that lost revenue.
We found ourselves discussing utilization ratios with that client recently. It’s because we found this to be a serious issue, as the staff was feeling quite overwhelmed. They couldn’t complete projects without additional resources, and the amount of time and effort that went into each project was too high.
Luckily, there was a perfect solution to this agency fatigue. And it involved making two critical changes that are now transforming the agency’s performance.
So let’s take a look at what we did toward this end.
The Big Cultural Switch That Needs to Happen
Have you heard of Parkinson’s law? It states that work always expands to fill the available resources. You can also think of this in terms of how people spend their money. The more you make, the more you’ll spend.
This is precisely what was happening to our client. The work would keep stretching out to meet the resources that they had.
But why was this the case?
It’s a natural consequence of the hourly billing model. Team members look at their time and then fill it with the available work.
You can anticipate how dangerous this is to performance.
In our client’s case, it resulted in a reduction of revenue and an increase in the administrative time listed for each employee.
This is why we had to make a massive pivot to a superior model – the value-based fixed-fee model. The plan to do so is already in motion and it will result in a significant cultural shift.
It’s because the staff won’t be looking at their time the same way anymore. The KPIs will change to meet the new model, and so will the team’s goals. They’ll want to shift their focus to completing projects under budget and on time and as efficiently as possible.
Of course, there’s a clear benefit to this from the team’s perspective. The more efficient they are and the quicker they can get things done, the sooner their workday will end. So the entire mindset around how they perform will change completely.
Naturally, the agency’s performance will skyrocket.
But it’s not the only thing we have planned. Once the collective mindset changes, we’ll do something that will take the overall performance to a whole new level.
Our Plan After the Switch – Conducting a Time Study
Let’s assume your team member has three tasks to complete in eight hours. According to Parkinson’s law, they’ll find a way to stretch those three tasks out to fill all of that time. In fact, they’re likely to request 10 hours to get them done.
That’s even if they could handle all those tasks in 30 minutes.
Something like this used to happen to our client. But after we switch to the fixed-fee model, we’ll make sure it never happens again. And the way we’ll do it is through a time study.
In essence, a time study looks at everything that an employee does throughout the day. It tracks each task and the time necessary to complete it. In this way, we can know exactly how all the team members spend their time.
When we did a time study for another client in Los Angeles, we found lots of inefficiencies. And after creating systems to minimize them, we took the client from insolvency to positive cash flow and high profitability. And we’re looking at a similar result for this client in the future.
The reason for this is clear enough. A time study will uncover any and all wastes that the agency is suffering from. When this happens, we can eliminate wastes and introduce clear systems and processes.
There are a number of benefits to having such systems in place.
First, the client’s delivered results will become more predictable. Once everyone’s clear on what they need to do, it all comes down to performing, rinsing, and repeating. This also frees up more room for agencies to add new services and offer them more efficiently.
This is exactly what happened for our client whose story you read earlier. After eliminating waste, they pivoted and started offering new services to their clients. Those services will get in process as soon as the budget for them reopens. And the result will be some evergreen retainer income that the agency didn’t have before.
All in all, the client is already seeing huge improvements in their agency. And by the time we’ve fully executed the plan, they’ll more than make up for all that lost revenue.
Tighten Up Your Systems!
Our client’s story is all the proof you need that agencies can recover from losses without struggling. Once we took a closer look at the processes, we identified a wealth of room for improvement.
If you feel overwhelmed, know that now’s the perfect time to pivot.
See if inefficiencies have found their way into your processes. Conduct a time study to see whether your staff is really using their time productively. There’s a good chance that you’ll find more empty time than you assume. But don't get me wrong, over-working yourself and your team can also affect your agency, so in order to avoid agency burnout, you need to find the right balance.
If this happens, don’t worry as there’s a way to turn this around. Better yet, you don’t have to handle it on your own.
If you need help turning your agency into a well-oiled machine, contact us today.