Trading through a downturn, part two: Getting your leadership team on the same page
Navigating choppy waters is easier when you get your team on the same page. Here's how to do that.
This is the second part of a series of interviews with Stephen Waddington on trading through a downturn. The first part, on agency finances, can be found here.
If you’d like to book a 30-minute meeting with Stephen to discuss any issues covered in this newsletter, you can contact him via email at stephen.waddington@wadds.co.uk.
If you’re the type to search for silver linings, the good news is we got through 2023 without a recession. The bad news, much like the devil, lurks in the details.
"We're not in a recession,” says Stephen Waddington, who advises agencies on management, finances, propositions, and growth. “But GDP growth last year was 0.6 percent , and is forecasted by the Office for Budget Responsibility at 0.7 percent this year.”
Waddington says we’re experiencing a sort of post-Covid whiplash. There was a tightening, and then a glut of cheap money, which meant the recovery was always on shaky legs. This is part of the reason we haven’t technically been in a recession, but it certainly felt like one for a lot of industries.
“Inflation is running way ahead of growth, and that creates a recession-like climate.”
Whiplash, shaky legs, choppy waters. Whatever metaphor you use, we’re in a downturn. And when you’re up against it, having your senior team pulling in different directions makes a tough job even tougher.
“There are two important things to do with your team [in a downturn]: get everyone together and get them facing in the right direction. You want to shift from the founders making every decision and embrace collective responsibility.”
What can agencies learn from corporates when it comes to senior decision-making?
Management frameworks can be extremely helpful tools in helping founders run their business.
But when you start looking into them – EOS (Entrepreneurial Operating System), OKRs (Objectives and Key Results), 4DX (The 4 Disciplines) – you start to wonder, are these really going to help me run my 30 person agency, or are they just corporate gobbledygook?
But if you put the cynicism to one side you’ll find out that, at their core, they’re simply methods that help your team decide what they need to do to reach a certain goal.
Stephen recently facilitated a two-day workshop for Hard Numbers. “There are any number of planning mechanisms you can use,” says Waddington, but the key is to pick one, understand how - and why - it works, and then take the time to go through a structured and intentional process to align your key team members.
“Going through a planning process is essential, and we chose to use the EOS framework. It's almost like following a recipe, and there are various planning mechanisms you could use.”
What is the EOS Model and how can I use it for my agency?
We settled on the EOS model as a tool to align our management team.
As Waddington describes it, “EOS is like an operating system for a business. It provides a structured framework for organising and managing different aspects of the business. It breaks down the work into various categories, such as seats, pebbles, and rocks, to help prioritise tasks.”
In very practical terms, it gave us an agenda for an offsite, a new structure for our meetings, and a way of assigning ownership of the common headaches we faced in running our agency.
The offsite agenda was incredibly tight. It allowed us to bridge the gap between blue sky thinking – where do we want to be in ten years? – and the nuts and bolts of management – what are we doing today?
“A discipline comes from following a structured approach to business planning,” Waddington continues. “It helps you think through all aspects of the business and follows a logical progression from vision to your priorities for the next five years, 12 months, quarter, and day.
“Ultimately, it drives strategic proactive decisions about objectives, tactical next steps, metrics, and adjustments ahead of time.”
Part of this process also involves discussing business challenges, and then assigning ownership – or ‘seats’ – for your team to own going forward.
“The traction process and the notion of seats are a really good way of framing management responsibility within an organisation. It gives individuals roles and responsibilities, freeing up founders to focus on building the business.”
The importance of management discipline in agencies
The EOS process hasn’t been perfect, and we’ve already found a few gaps in the thinking. However, it’s undoubtedly helped us link our long-term goals with what we’re doing tomorrow. It’s helped us share the responsibility for those actions, too.
Stephen says that the instinct to micromanage is common in PR agency founders, but that makes scaling their business harder than it needs to be. “It's the natural practitioner mindset. When you start an agency, you think you have some special X factor, and clients buy into that.
“You, as a practitioner, have this healthy paranoia that you need to be involved in every piece of work and client to deliver. There are agencies where a strong founder, also a practitioner, holds the agency back due to these factors.
“They don't scale the management or the culture.”