1. When to Say No
by Mike Carlton
No
(no) adv. 1. negative 2. not ever 3. opposite of yes 4. to deny, refuse or disagree
Recent Struggles
The "Great Recession" has been terrible for many agencies. Clients slashed
budgets. Search consultants and client procurement people squeezed agency
compensation. Just getting by was a real struggle. A frightening number of
agency brands simply disappeared.
And agency people fared even worse. No one was safe. Layoffs came in waves.
Tens of thousands of jobs within the industry were eliminated. Those who
remained became risk averse. Keep your head down. Don't make any mistakes.
Don't get caught in the next round of layoffs.
Survival
In this environment, survival demanded accommodation. Many agencies did
whatever was necessary to adapt to the harsh realities of the marketplace. And
protect as much as possible their most valuable asset, their talent base. They did
what they needed to do.
Many accepted whatever work they could stir up. Often without thinking what that
work would do to their business model. Or much less, what it might do to their
brand reputation. It was work. It generated cash. The agency and its people
needed that work.
The operative word was yes. Or maybe even yes, sir! The word "NO" faded from
the agency lexicon.
What agencies had to do was not always easy or pleasant. And maybe not even
right for the client. But, it was right for the time. It assured survival.
The Law of Supply and Demand
They were indeed extraordinary times. The industry had not seen anything like it
in 70 years. There was a gross oversupply of agency capabilities to meet the
diminished demands of marketers.
The law of supply and demand governs every free market. This market became
unbalanced. The traditional market forces tipped in the marketer's favor.
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2. Marketers were clearly in the driver's seat. They could, if so inclined, almost
dictate to their agencies. They demanded the rights to agency intellectual
property. And if an agency was not responsive enough, or accommodating
enough, or low priced enough, there were plenty more agencies willing to take its
place.
This market picture was not pretty.
Keeping clients happy became more important than making them successful.
And ultimately, agencies are responsible for ideas that make clients successful,
not just keeping their people happy.
Bad Habits
During this period of imbalance, it was easy for bad habits to flourish.
In their quest for revenue many agencies retreated from the high ground. Rather
than fighting to maintain intellectual leadership - providing big, effective ideas - it
was easy to slide into the trap of doing mundane stuff just to keep the shop busy.
It was not uncommon for expediency to overwhelm judgment.
On the client side, protecting one's job also was paramount. So it became easy
for client people to play it safe by focusing on the quantity and price of stuff rather
than big break-through ideas. Price became more important than value.
Innovation equated with risk. And risk could put one's job at stake. Conservatism
reigned.
Agencies didn't create this environment. But they had to deal with it. Often by
acquiescing.
But, the subservient advertising agency is not good. It is not good for its clients. It
is not good for its people. It is not good for the industry. And it is not good for
itself.
It Is Time
The economy is now beginning to recover. While it may be hard to believe, we
are likely to move from a period of too many advertising professionals to a period
of too few. The supply and demand equation should start tipping back the other
way. An overabundance of talent may become a talent shortage. And it could
remain that way for some time.
Marketers are shifting from defense to offense. Many are ready again to fight for
increased market share. They need a lot more than stuff to do that. They need
big ideas. They need architected, holistic solutions. They need innovative
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3. agencies. Ones that are more interested in their client's business success than in
the happiness of client people.
It is time to turn this market around.
It is time for a reassertion of the leadership values that made agencies invaluable
to clients in the first place. It is time for agencies to re-occupy the intellectual
high-ground. To minimize their economic reliance on the production of stuff. To
resist mediocre ideas.
It is time for agencies to hold true to their beliefs.
It is time for agencies to say no.
Softly, Constructively, Resolutely
Now let's be clear here. There is a big difference between a constructive no and
a blow-off. There is no suggestion here to use no as a put-down. Or to just be
contrary. Or in any way that does not ultimately benefit the client.
Nobody wins when no is used negatively.
But the word no, properly used, can be a major tool in reasserting the traditional
values agencies can bring to clients.
It's a strange truth but saying no can lead to dramatically increased respect.
Clients don't expect to hear it. When they do, the smart ones understand that you
are acting out of principle, not expediency. Also, declining work that is not right
for you can play an important role in improving staff esprit and defining your
brand.
This is not a place for the faint-hearted. Improved respect for advertising
agencies and their people is badly needed.
Shakespeare Said It Best
The line in Hamlet, "This above all, to thine own self be true" should be the
mantra for each of us.
Agency people are professionals. Each should have knowledge, experience and
judgment in her area of specialization that is valuable. Properly expressing that
intellectual power requires a healthy respect for the truth. Truth in core beliefs.
Truth in the potential effectiveness of unusual ideas. Truth in self-esteem.
The word no, when supported by a belief in the truth, is not negative. It is
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4. constructive. And it is not only powerful, it is right.
No used in this manner is ultimately an expression of self-worth for the individual
and the agency. It articulates the intellectual honesty that wise clients are
seeking.
And, it will help rebuild the professional regard that good agencies deserve.
The Road Back
"OK," you say. "If we have been too accommodating to client tactical demands,
how do we reclaim the strategic high-ground?"
The first step is to look at your business model. And determine what is right for
you. And as a note, what is right for each agency is most likely different.
Asking yourself the following may be a starting guide:
1. What Business Are You In?
The first question to address is what business are you in. Are you primarily an
idea firm? Much like a consultancy. Focusing on holistic strategies that will move
the client's brand forward.
Or is your business more focused on producing individual ads, spots, brochures,
etc.? Stuff that is crucial to advancing the client's brand, but more tactical in
nature.
Agencies are known by their work and their clients. How do people outside your
agency describe your agency? Remember, their description reflects the market
and thus is much more important than your view.
2. What's the Money Trail?
Another way to get an honest answer to the question above is to look at where
your agency's gross income comes from. Check what percentage comes from
tactical work vs. what comes from strategic engagements.
How have these percentages been trending over the past few years? And does
that trend match internal and external perceptions?
3. What Business Do You Want To Be In?
Now it gets fun. With a clear picture of where you are now, envision what kind of
business you would like to have in five years. If it is the same as the business
you are in now, wonderful. You can quit reading here.
But if it is not, create a vision of the kind of agency you would like to be.
Determine the kind of work you'd like to be doing. And the percentage mix
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5. between strategic and tactical. And the kinds of clients you would like.
And how and from where the income would come.
4. What About Client Worthiness?
In the depths of the recession, questioning client worthiness was almost
blasphemous. But it is an important question to now ask.
Do the clients you now have reflect the kind of agency you would like to become?
Do they present the right kind of challenges you want in the future? Do they need
and value the kinds of solutions you expect to be offering?
Are they worthy of your time and efforts? And if they aren't, what clients might be
available to you that would meet this worthiness test?
5. Are You Lean Enough?
Saying no to things that are not right for you takes courage. It also takes an
organizational leanness. And flexibility. You must be profitable enough to take
turning down an income opportunity in stride. For saying no should never have to
cost someone's job. Or work a hardship on the organization.
This means making and keeping the agency as trim as possible. And not letting
any one client become bigger than your profit. Big and good are not related.
Staying lean will help you sleep better at night too.
6. Should You Be Trading Up?
When struggling for survival, trading up clients is furthest from any agency
leader's mind. But in the emerging marketplace agencies should be thinking with
the same degree of selectivity as clients do. Mutuality in the relationship is vital.
There is nothing wrong with this notion. It just means that the agency is playing a
more decisive role in making sure the fit between agency and client is right. Not
just for the client. Not just for the agency. But for both.
7. What's Your Staffing Strategy?
Different people have different strengths. Conceptual, consultative work requires
different talents than managing multiple production jobs.
Do your people match the agency's aspirations? If not, a plan needs to be
developed to transition from the people strengths you have now to those you will
need in the future.
Allow enough time so you can make this transition carefully and
compassionately. Good and loyal people deserve extra effort and care so that
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6. any change not only benefits the agency but benefits their lives too.
8. How About Your Branding Plan?
If your agency will be changing its focus, a comprehensive, long-term branding
plan is in order. Moving marketplace perceptions from those held currently to
where you want them to be is no quick or simple task.
But, the good news is that you internally have the skills needed to create and
implement such a plan. But, it will require commitment and consistency.
9. Can You Make the Numbers Work?
Finally, there must be a financial plan that supports your agency of the future. If
you are transitioning from tactical to more strategic the key elements will be
crafting new compensation methods. These new compensation programs must
reward you more generously for strategic work and big ideas.
These compensation programs should be value based, most likely fees for
defined deliverables rather than hourly based. And possibly embracing the
concept of residual rewards. This is not an easy change to make. But, the
models frequently used by other categories of talent driven professional service
providers can serve as a helpful guide.
A Question of Courage
Ultimately, the effective use of the word no comes down to courage.
It takes guts to say no. To turn down business opportunities. To risk offending a
client. To go against the flow. To stand up for what you believe is right.
At its core, the use of the word no is a test of personal courage and conviction.
At Peace
During the bad times, most agencies were on the defensive. It is hard to feel
good about your work when you are constantly being buffeted by forces outside
your control. That is a frustrating and stressful way to live.
That can change.
It is said that we are all defined more by what we choose not to be than by what
we are. Restoring the ability to say no is all about taking charge of your destiny.
Even though the road ahead may be bumpy, there is great comfort in assuming
control again. And ironically, great value to the clients when agencies do so.
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7. The Question and the Answer
So, when asked to do something outside your defined business model or
contrary to your beliefs the answer is simple.
No, thank you.
Copyright 2010 Carlton Associates Incorporated
About Mike Carlton
Mike has spent most of his life in and around advertising agencies. For over a
quarter of a century he served in various agency functions, including general
management and ownership in a 150-person shop. Along the way he held
offices in the American Association of Advertising Agencies, agency networks,
and became a frequent writer and speaker on agency issues.
In the 1980s he founded Carlton Associates Incorporated, a consulting firm that
focuses on agency business and leadership challenges. He was also a founder
of World Systems, a first generation accounting system supplier for agencies,
and 600 Monkeys (now a part of Computer Associates), a provider of new
technologies for agencies and other professional service firms. In addition, he
founded Centre for International Business, which has assisted advertisers and
agencies globally.
His consulting, systems and international work has taken him to agencies all over
the world. The client roster numbers more than 100, including strong, mid-size
independent agencies, offices of global agency organizations, as well as
successful smaller shops. He currently serves on the advisory or corporate
boards of a number of agencies and related firms.
Mike is a former Army officer and holds a business degree from The University of
Delaware. He regularly lectures to marketing, communications and MBA
students around the world. He and his wife Ruth have a large family and live in
Chagrin Falls, Ohio, USA.
Carlton 100 N. Main St. #115 Tel: 440-247-6672
Associates Chagrin Falls, OH www.carltonassociatesinc.com
Incorporated 44022 USA mwcarlton@carltonassociatesinc.com
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