The agency triangle
29th February, 2020
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.