The agency triangle

Most conven­tional busi­nesses – and service busi­nesses in partic­u­lar – are subject to the laws of the project management triangle.

It’s very hard to deliver high-​quality work, at a high speed, at a low cost. Optimising for one comes at the cost of the others.

Most compet­it­ive differ­en­ti­ation in busi­ness comes from those who find unfair advant­ages in how well they balance these comprom­ises. (E.g., an organ­iz­a­tion’s propri­et­ary tech­no­logy may reduce produc­tion costs, or increase produc­tion speeds).

But agen­cies and consult­ants – who typic­ally charge (at least in part) based on time – have another triangle of comprom­ises, which relates to how they spend that time.

They also have to balance commu­nic­a­tion, strategy and execu­tion.

Communication is time spent in meet­ings, discus­sions, phone calls, emails. A high focus on commu­nic­a­tion ensures that all parties have a clear under­stand­ing of what’s happen­ing at any given moment. A low focus on commu­nic­a­tion results in mismatched expect­a­tions, under­stand­ings, and frus­tra­tion; in the extremes, it de-​humanises the client-​agency rela­tion­ship.

Strategy is time spent in research, plan­ning, eval­u­ation. A high focus on strategy ensures that the brief is correct, and gives the highest possible chance for work to be success­ful and impact­ful (and/​or that mistakes deliver learn­ings). A low focus on strategy risks ‘busy work’, failed campaigns, and unim­pact­ful consultancy.

Execution is time spent doing the work. A high focus on execu­tion ensures that deliv­er­ables are completed. A low focus means things don’t get done.

As with our first triangle, the compet­it­ive differ­en­ti­ation between many agen­cies often lies in where they have unfair advant­ages in these comprom­ises.

Getting the balance wrong in either of these triangles often results in upset clients, and even­tu­ally, termin­ated contracts.

For many agen­cies, these are impossible comprom­ises. The resourcing, billing and commer­cial models of almost all but the largest or most expens­ive vendors prevent them from reach­ing ‘perfect’ in each of these areas.

That said, to a degree, you can ‘solve’ this second triangle by alloc­at­ing addi­tional resources (more people, tools, and paral­lel processes), but this expo­nen­tially increases cost. Or, you can commod­it­ise your services and reduce the surface area for ambi­gu­ity; but then you’re in a race to the bottom on costs-​per-​deliverable.

Inevitably, these comprom­ises mean that, over time, fric­tion builds up in rela­tion­ships. Cracks start to appear as expect­a­tions aren’t consist­ently or suffi­ciently met.

Clients begin to complain about slow deliv­er­ables, a lack of insight from report­ing, or that they’re not happy that they’re getting value for money.

These complaints – which emerge almost as predict­ably as clock­work in client-​agency rela­tion­ships – are the inev­it­able result of mismatched expect­a­tions between how the comprom­ises in both triangles should be handled.

Sometimes these mismatched expect­a­tions can be re-​aligned. An agree­ment to a shift of focus, or e.g., a reduc­tion in costs (at the expense of either speed or qual­ity!), can reduce or even reset that build-​up of fric­tion.

But the most success­ful client-​agency rela­tion­ships are those where both parties are trans­par­ent and up-​front about how they determ­ine where, and when, to comprom­ise on both triangles.

For agen­cies, consciously and openly eval­u­at­ing, managing and improv­ing where they plot on these triangles is crit­ical to success­ful client rela­tion­ships.

Failing to do so risks rely­ing on senior staff being lost to perpetual ‘fire­fight­ing’ (at the further cost of other areas of comprom­ise), setting low ceil­ings on client reten­tion levels, and on the prom­ises of compet­ing agen­cies always look­ing increas­ingly attract­ive over time.

If you work for an agency, where would you plot your comprom­ises?

And if you don’t, what would your perfect agency look like?

Maybe you should talk, and align those expect­a­tions.

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James
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James

This is some­thing I needed to read and be reminded of in my agency build­ing jour­ney, thanks for shar­ing.

Evan Waters
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Hey Jono. I can empath­ize with the piece having worked as an inde­pend­ent growth consult­ant. I don’t think, however that the triangle is unique to an agency. Perhaps for front­line campaign managers it is differ­ent, but I feel that as one moves up the chain of command strategy, but partic­u­larly commu­nic­a­tion also play an outsized role.

Danie
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“Clients begin to complain about slow deliv­er­ables, a lack of insight from report­ing, or that they’re not happy that they’re getting value for money.” Too true. From my exper­i­ence, this gener­ally is a result of the inab­il­ity to execute quickly do to A) unstable/​cumbersome plat­forms or B) there is some sort of bottle­neck with market­ing and an internal developer/​IT team; mean­ing, a deliv­er­able is turned over by market­ing and gets placed in some sort of queue with internal developers/​IT that is often put on the back burner. Client then gets frus­trated at the agency; mean­while, the prob­lem is often internal. The fault of… Read more »