Who needed "hands-on management" when revenues were
high and automatic, workloads modest, TV dominant, creativity celebrated,
brands growing, agencies respected, employees well-paid, parties outrageousand
clients long-lasting? Creativity was the foundation of agency success,
and to nourish creativity, management got out of the way, lest its intervention
destroy the magic.
"A creative
agency needs to operate like an ant colony," declared Kevin Roberts,
former CEO of Saatchi & Saatchi, "where every ant knows its job and
has the freedom to do it. As long as we hire and inspire the right people, to
do the right thing … our agency should grow and our creativity should
flourish."
Activist CEOs are not needed. Belief in
creativity is all-important. "Anything is possible," goes the
Saatchi & Saatchi slogan. Slogans are an important part of ant-colony
management.
The assumption is that loose management is
good for creativity and tight management will kill it. "Bain
& McKinsey stuff would kill our creative capability," said Roberts.
"I believe in hiring Mad Men rather than Math Men."
Agencies did not manage Scopes of Work during
the Golden Era, and they do not manage them today. If they managed or
influenced anything in the past, it was their clients' spend on media, from
which agencies derived a 15% commission. Remuneration was exceptionally
high relative to agency workloads. Why worry if a client asked for
additional work? They'll need more media spend, and we'll make more money!
Out-of-Scope work is a good thing! Encourage it!
Today, of course, the world is upside down.
Fee revenues are low and declining; workloads are high and rising; brands
are stagnating, agencies are treated dubiously as commodity suppliers;
employees are paid badly, and client relationships are short and uncertain.
As for agency senior executives, they yearn
for the good old days, and they continue their loose management practices.
Does this make sense? Should they start to worry about those pesky Scopes
of Work? Should they spend time reviewing Account Lead performance,
acting like executives who know something about Peter Drucker's leadership
principles? Should they ask: What work are we doing for our clients?
Will the work have a positive effect on brand performance? How much
work are we doing? Are the fees adequate? Can we staff the work
appropriately? If not, do we have an action plan to fix our problems?
What would Bill
Bernbach think? Here's a famous Bernbach quote, voted in 2011 by DDB as
the No. 1 quote of the century: "Nobody counts the number of ads you
run; they just remember the impression you make." This
was certainly appropriate for the Golden Era, when money gushed from media
commissions.
Well, agencies still do not count the number
of ads they do, and money ceased gushing more than a decade ago. Is Scope
of Work management the kind of "Bain & McKinsey stuff" that kills
creative capability? Does that explain why agency CEOs are allergic to
counting the number and type of ads and negotiating growing (rather than
declining) fees for their growing workloads? There must be a reason for
this SOW allergy, since the failure to be paid for growing workloads is
illogical.
Bernbach said some
less famous things that may be more relevant than his observation that no one
counts ads: "I fear all the sins we may commit
in the name of 'creativity.' I fear that we may be entering an age of phonies."
Agencies are committing sins in the name of
creativity. They are prisoners of a creative past, when money took care
of itself. Hands off management is wrong and suicidal.
The good old days are gone, permanently.
The challenge for agency leaders is to find an exit strategy from the
prison they are in. New management strategies are required for today's
permanently changed circumstances.
Time is running out.
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