Lesley Donnelly is a highly experienced change consultant who will be delivering the opening talk at our next event, Change Stories on 29th September 2016. Lesley has led change programmes at many leading clients such as Capgemini as well as being Head of Consulting at BAE Systems Applied Intelligence, and prior to becoming a Management Consultant, she worked on both client and agency side on such businesses as American Express, Air France and Vauxhall Motors. Lesley holds a CIPD Masters level qualification in Organisation Design and Development and so brings an outside perspective of how other sectors have adapted to the forces of change.
In this special guest post, Lesley looks at how agencies can change to disrupt the market.
Back in 2008, a Forrester report could not have been clearer. Marketing services agencies needed a fundamental change to their business model to match the changing consumer.“The organization of agencies around specific skill sets is the root of their problems.
Since then the volume of industry reports and press coverage supporting change has been overwhelming:
So why is the pace of change so sluggish?
The agency business model of the future is not clear. Agencies are looking for the safe answer, to protect shareholders and personal reputations. The model that has worked well is high quality ideas and execution, but gold plated solutions don’t always have a place in the new faster consumer environment. ‘Done is better than perfect’ will cross the finish line first, learn, and iterate for better next time.
Winners act like they have nothing to lose
Competitors who are smaller are not faster because of their size, it is because they believe have nothing to lose. Amazon, Microsoft, and Google are not small, but they are fearless. Failure is part of their culture. No individual worries that an idea might fail – it’s a collective responsibility. Agencies don’t work like that. There is a hero culture, there are departmental budgets to protect and there is a lack of transparency.
The sunk cost fallacy
Essentially, legacy agencies have strategies, business plans, costs and reputations painstakingly plotted for the year ahead. And so the theory of ‘sunk cost fallacy’ raises its head. SO much is invested in how agencies are structured that they continue to adjust the existing model rather than throw it out and start again. Agencies were built in a complicated world, carefully structured to deliver at scale in a mechanised way. The world is now complex and those processes cannot be made any faster or cheaper. Instead of improving, organisations need to do things differently.
How to spot your Kodak moment
In complexity, competitor progress is not linear. Competitors do not have to build reputations – they can leap frog straight into your client’s heart with ideas that produce a great outcome. Some agencies are steeped in ways of working that have them carefully ticking off the KPI’s on a client’s contract to ensure they get paid for their output. They are hoping the client will stick to the rules, but why should they when someone else has a new idea to solve their problem?
Your most important value should be change itself
Unruly have been the agency success story of the last five years. It is a start-up recently acquired by News Corp. Yes, their success was dependent on many things including new technology. But when asked what holds that together, the founder Sarah Wood says it is down to their values. Their top value is ‘embracing change’.
Solve problems, don’t sell what you make
The tools and techniques to successfully change are available – to move from a closed business model to the open collaborative one the client needs. New ways of working will make more money because you will add more value to your client – by solving their problems, not selling them what you make. But new ways of working can only be applied once the mindset has shifted.
If you’d like to hear Lesley and others speak in more detail on the subject of change, you can buy tickets to our next event here.
Sign up now!