The Chats with Chip Podcast

In this episode, Chip discusses agency business development with regular guest and seasoned expert Lee McKnight Jr., of RSW/US. The conversation covers the challenges agencies have been facing in 2024, such as prolonged sales cycles and client budget constraints.

They discuss survey findings indicating optimism among agencies. The dialogue also explores the role of AI in business development, emphasizing its current limitations but potential in the future.

They advocate for a consistent, omnichannel approach, stressing the importance of referrals and content creation like podcasts and videos to foster expertise and client relationships. The episode concludes by highlighting the need for persistence in business development efforts and the benefits of continuously providing valuable resources to prospects.

Lee is the VP of Sales for RSW/US, and earned his undergraduate degree at the University of Kentucky and JD from Cumberland School of Law in Birmingham, AL.

After graduating law school, he worked for an internet healthcare start-up in Nashville, a grocery wholesaler brokerage in Cincinnati, and then to RSW/US in 2007, where he’s worked with marketing agencies of all types to help drive their new business efforts.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of Chats with Chip. I’m your host, Chip Griffin, the founder of SAGA, the Small Agency Growth Alliance. And I am delighted to have with me one of my most regular guests and a very interesting one at that, Lee McKnight Jr. Otherwise known as Lima Nightmare.

Lee McKnight, Jr.: Correct. How are you, sir?

It’s been too long.

Chip Griffin: It has been way too long.

Lee McKnight, Jr.: If people are watching. Oh, oh, oh.

Chip Griffin: Yes, if you are watching this on video,

Lee McKnight, Jr.: The best.

Chip Griffin: My condolences, first of all, for having to look at us for, at least at me, for the next 20 minutes or so. But Lee was holding up his Lima Nightmare t shirt because I guess there’s a number of years ago, the automated transcription for one of the shows that he was on with me, came out with his name being Lima Nightmare.

And so my wife and I call him Lima Nightmare from there on out.

Lee McKnight, Jr.: And were kind enough to send me the shirt.

Chip Griffin: Well, I mean, you have to, I mean, when it’s, when it’s a cool name like that, you just, you can’t help, but.

Lee McKnight, Jr.: I will tell you, and this is not why I’m here, but quickly, I, play in a cover band here in town and I wore this shirt.

I should send you pictures. Someone asked me at one of the breaks, like, like in Lima, Ohio, you’re like a nightmare. And I’m like, well, that’s not actually what it is, but I see where you’re okay. It’s fair. I should have gone with it. Yes, I’m a professional wrestler. I’m from Lima and that’s what they call me.

Chip Griffin: I mean, or, or, I mean, just wait if I told you the story of what happened in Lima that one night, you know, in any case, so that we can bring this a little bit back onto the rails, I suppose we should, because as much entertainment as it would be for us to go down this path for the next 20 minutes, it’s probably not what you’ve tuned in for, but we’re going to talk about a number of things from an agency business development front, because obviously that is Lee’s particular area of expertise.

And so, I mean, I, I thought I’d kick it off by just, you know, talking about what are you seeing and what are you hearing as far as the outlook for agencies in the next year?

Lee McKnight, Jr.: Yeah. Yeah It’ll be interesting because I know we both had survey reports that we’ve released and this one we had last month was a little bit new for us because we put our new year outlook survey out in January agency new business survey, which we actually just I’m finishing as we speak, which will be out here in about two weeks, but we decided to drop one in the middle and follow up from where agencies were beginning of the year to now.

And generally speaking, there was a certain level of optimism around this back half of ’24, which are obviously already in, you know, but one of the things that we saw last, or I should say the beginning of ’24 coming out of ’23. Certain levels of frustration, I think, from a business development standpoint, the two things for sure, and it’s, it’s, They’ve not gone away, but it is sales cycles.

And I feel like we talked about this the last time, but you have no sales cycles that just were taking longer even signing contracts and well, we got to kick this can down the road. Sorry. And then budgets not being as robust as they have been. What we’re seeing is those two things still in play, unfortunately, but have gotten better.

 You know, in terms of percentage, something for us, I think it was around in terms of just overall optimism for this back half, it’s interesting because we were just talking about these stats. I think ours was close to like 52, 48 percent of agencies in terms of what they’re, what they think is going to be happening in that back half, which feels like we’re leading there, but, pretty higher level than I would have expected.

Chip Griffin: Yeah. And in our case, we looked at the next 12 months and this is research that, that concluded in early August. So, so that may account for some of the differences because you’re looking at the back half of the year, but our, our group was extremely optimistic that their revenue would grow over the following 12 months.

About 68 percent of the respondents anticipated that they were predicted that their revenue would grow. A similar number suggested that profits would grow. Unfortunately, only about a third thought that their head count would grow. So, that suggests one of two, either they are way overstaffed today, which I know a lot of agencies are because, agencies are typically very slow to downsize when their revenue goes down and they, they convince themselves that, that there’s hope around the corner.

And so, you know, it often puts them in a difficult situation, but the other possibility is that they’re like, well, I’ve had a tough couple of years. I’m going to make up for this by jacking my profits up by not hiring, which then means you’re probably going to have a morale problem in the next year or two.

Lee McKnight, Jr.: Yeah, I would. Yes, I would tend to agree with that. And when you gave me that stat, I was, I was surprised. And I think, you know, agencies, the cyclical world we live in, you got to have that optimism to be, to be sure, because otherwise you’re just going to be kicking yourself. But I think that, you know, as far as what we have seen, that’s working.

You know, or just from business development standpoint, is that omnichannel approach. And it just so happens to be self serving. I mean, that’s what we do at RSW, but that’s not why I bring it up. And it is sincerely because, you know, what we’ve seen, especially post COVID, I don’t know how much longer we can say that until we’re, we can just stop talking about it, but I feel like it’s still warranted to talk about a bit because that those impacts are still what we’re dealing with in many ways.

I believe, to, it’s interesting, especially digital agencies, God bless them. But, and it’s understandable, but that will kind of fall prey to a lot of these tropes of, you know, in terms of what’s working. On the business development side. We’re like, no one’s picking up the phone anymore. No one’s going to answer emails.

It’s so cluttered and blah, blah, blah. I’m like, yeah, well, you’re just, now we’re having self serving prophecies where, you know, there was self fulfilling I should say, where, yeah, if you’re not trying these things, but I think ultimately. Things like AI, which are nowhere near, you know, and I’m throwing out a bunch of topics we can go back to here, but I think that’s one that everyone was super excited about what we’re seeing now is now, how is it literally helping our business?

So one thing it’s not doing yet. I’m sure you can attest to it. I get the same 30 emails a day that we all do. And so many of those now are AI driven and it is blatantly obvious that they are.

Chip Griffin: It’s awful.

Lee McKnight, Jr.: Yeah. And they’ve either scraped from LinkedIn and they’re like, hello, Lee, who went to university of Kentucky and is in Cincinnati.

And it’s so that’s not, you know, who knows? And it obviously is moving quickly, and I’m certainly not confessed to be an expert where we’re seeing that just to stick on AI guess for a second because I put us there on the list building side of things. You still cannot pull. You’re not gonna be able to pull a list using AI and have it be ready, set, go, in terms of prospecting lists.

We are seeing, and I’m not getting sponsored, but you know, things like Ocean AI and Seamless AI are two of the ones we’ve been experimenting with and using. And again, not, there’s, there’s a lot of them out there. It seems like every day they’re dropping a new one. It can help in finding companies, you know, that’s definitely where we’re seeing it being a helpful tool, but building a list out, not really. It’s not going to help you do that.

So I think that’s, I feel like it’s a ways away, but maybe it’s not. So that’ll be helpful for agencies. If you can get that piece nailed down, that’ll be huge. But I think for us, otherwise, it’s certainly helped me in forming content thoughts. And organizing, but when I tried to do any writing beyond that, it’s, again, so blatant, you know, and it’s just, it’s not there yet. But I think it’s something that as we’re writing the report, we asked that stuff that’s about to come out here in a couple of weeks.

A sneak peek, but last, last year was 38 % of agencies were using AI, for business development. And then we asked the second question, like, okay, well, how are you using it? Well, then there weren’t a lot of good answers because it was still fairly new. And today. Just from the last month of taking the survey, now it’s up to 57%.

And the answers were basically what I threw out to you. It’s yes, shaping and forming content. It’s even doing some competitive analysis. So I think agencies are finding ways on that end to, to help the effort. If nothing else, save some time and be able to get it out there a lot quicker.

Chip Griffin: Yeah. I mean, I think part of the challenge is that agencies, particularly small agencies, are always looking for the silver bullet.

And so when, and it’s, you know, just as you’ll find, there are lots of YouTube videos and articles and books out there that says, here’s your secret formula to build a seven figure agency overnight. You know, no, no sweat. Anybody can do it. And, and I think a lot of agencies look at AI in the same way or have looked at it in the same way, which is, Oh, this is going to make it so that, you know, I don’t have to pay writers or I don’t have to, I don’t have to do any, you know, real manual research for lists.

It’ll just all be served up on a silver platter to me. And the reality is that AI, like many things can be very helpful. But it is still just helpful. It is not a replacement for anything. And I, I still like to compare it to a good intern. Right. And, and you can, a good intern does a lot of stuff for you, but you still got to check it over.

You still have to do more work on it to take it across the goal line. It’s not immediately client ready, prospect, ready mail ready, whatever. And if you think about it that way, then there’s a lot of things that it can do for you and can help you to be much more effective, both in growing your business, but also serving your clients.

Lee McKnight, Jr.: Yeah, no, no. Agreed. Agreed. And so I think why that’s, wow, that is interesting. I go back, if I may, to that kind of omnichannel approach. And I think agencies, of course, they’re going to default to referrals as they always have. And that’s not a bad thing. In fact, it’s a fantastic thing.

Chip Griffin: Yeah. People who dump on referrals. I don’t get it. Like, you know, I have people because they watch these again, these videos that tell them, you know, you shouldn’t be relying on referrals. Well, why not? If you can actually figure out how to generate more and more of them, that’s the best way to grow. Oh yeah. The problem is eventually you, you probably have to do other things beyond that in order to keep growing, but maybe not, it depends on your business model.

Lee McKnight, Jr.: That’s it. That’s exactly it. And yeah, anyone that says that you shouldn’t do that is well, foolish is what I was going to say. It really is because it’s, it’s quite frankly, it’s not easy. None of this is easy, but it is versus building out a, you know, outsourced or excuse me, a business development strategy that is outbound.

 But I agree with the second part of what you said, and that is, and we’ll say the same thing when we get new clients on board, it’s like, if you have referrals, you have a strategy in place and that’s working, do not stop that because that’s fantastic. And why would you? Same with organic growth. I mean, you’ve got to have a plan for that, but, but again, to your point, it’s those referrals typically aren’t sustainable, or I guess a better word is dependable in terms of when they’re coming in. And so to have some kind of outbound and inbound components, and it doesn’t have to be us, where the small to midsize firms, which is who we work with predominantly and obviously you as well, feel like we can’t sustain this something like RSW does. Like, well, you might not need to, quite frankly, because if you have these referrals in place and that’s making up a certain percentage of what you’re doing, it’s working to have a manageable process and outbound where you not going after a thousand companies because you’re not going to be able to sustain that and you’re going to give up and it’s going to get frustrating.

I’m going to pick my initial 20 or 30. I’m going to go after those of the course of the next X amount of weeks. And know that one hour a day or whatever it is, it might sound very simple, but that’s the way to do it. And that way you’ve got some of that backup where you’re not solely relying on any one of those channels, if you will.

And we’ve seen agencies that can do it and it pays dividends. I think where it gets problematic. Self serving on my part, but it’s that new business director when they try to get in and hire one of those in the small midsize firm side, it is hard because if they’re really good, they’re going to be expensive. And they’re really good they tend to jump around a lot. I mean, it’s seeing some resumes lately. It’s been crazy. Some of these people jump around as often as they do, especially when they’re getting into the big, as you well know, up into the larger agencies. It’s about 18 months, right? It’s what it’s that still hasn’t changed.

18 months is the average tenure of a new business director in an agency. It’s not ha ha ha funny, but it’s just like, it just hasn’t changed in years. That’s that.

Chip Griffin: Right. And I mean, that’s why the vast majority of small agencies need to think about how they can leverage some of these resources, but you can’t be dependent upon them.

It, again, it’s not the silver bullet. You know, I talked to plenty of owners who are like, well, you know, I just, I’ll just hire a new business person then I, I won’t have to worry about it anymore. That is. No, because to your point, even, well, one of two things will happen. They’ll either do a good job and they’ll move on because they did a good job or they’ll suck and they’ll move on because they sucked. So either way,what is the outcome? They move on. And so then you back to square one, you get to start over again. So, you know, the reality is a small agency owner’s got to be involved in business development, no matter whether you have a business development person on board, whether you’re working with someone like RSW/US, whether you’re, you know, just playing lottery, whatever, the owner’s got to have some involvement.

Lee McKnight, Jr.: Yeah, for sure.

Chip Griffin: And I think the other thing, to me, and one of the things that I saw in some of the research that we did recently as well is some of the tactics that are more, serving of the prospect base tend to work better. So for example, two of the top five tactics were hosting a podcast and creating videos.

Okay. And, and both of those, and, and they’re not used by a significant number of agencies. No. But for those, those who are, they are ranked among the top five most effective things. Only slightly behind referrals. And those are because they are of a service mindset in my view. And so instead of coming in and saying, me, me, me.

You’re, you’ve got something that you can provide as a resource for your prospects. And even things like podcasts, I love podcasts as an outreach tool, which is not how most people think of it. But if you have a podcast and you do it interview style, you can reach out to prospective clients and invite them on the show.

That’s a much better way to start the relationship with them than say. Hey, I looked at your website. It sucks. Let me tell you how to fix it, which is the vast majority of the, the direct email that I see. It says, it says something to the effect of your video sucks. Your website sucks. Your PR sucks. We’ll solve it.

Yeah. Who starts a relationship that way? I mean, that’s like going to the bar and saying, you know, you’re ugly, but I could tell you how to dress better. And then maybe you’d be a worthy date. Like what?

Lee McKnight, Jr.: That’s interesting. I mean, that’s, yeah, I agree. That’s at least better than this rash of I’ll give you a hundred dollar Amazon gift card that I get every other email.

At least they’re trying to show that they have some level of expertise, but I 100 percent agree if that’s the initial outreach, it’s like, Oh yeah, you offended someone now. That’s awesome.

Chip Griffin: Right.

Lee McKnight, Jr.: But yeah, instead I, you know, it’s so funny. It, it, not many are doing, but the ones who are doing it, especially, and you’re right.

The interview, avenue is the way to go on the podcast. And I, I have, I can name five or six agencies. Right now that and I’ve had two of them in my interview series where they’ve kept it up and that expertise man. It is It’s to your point. It’s such a value and it you know, they’ve got it mastered now to where they’ll do something like the software using right now this platform that we’re on we use the same one You can nail that down and it’s not, it’s work, but it’s manageable and the dividends that can pay off.

I can’t stress it enough how right you are. And, and some folks, I do understand some of them don’t feel comfortable. They feel like they’re not good interviewers. You know, we have two series. I feel like my interview series is maybe not as good as when it’s just me. Giving my three takeaways, , but I’ve had folks say no, the interviews are good.

You’re pulling good information out. So, it’s not to make that about me, but it’s just, I think a lot of these folks in these agency principals who don’t probably think that they’re very good, give it a shot or bring someone in. There’s might be another partner or someone there who can drive that train. And it is such a valuable tool because you know, having and establishing that expertise, whether it’s one vertical or whatever it might be, you know, agencies are still getting frustrated today when they hear like from from me or from others, like you have to niche down, you have to specialize.

We’ve talked about this before, but I can’t say it enough, you know, that it doesn’t mean you only have to play in one vertical at all. Can mean that. But they, they, prospects want to see that there is some authority, expertise, leadership to do a podcast like that. And it could be other forms of content, but man, that’s one great way to do it.

And, and you get it down to, to a science.

Chip Griffin: Yeah, I mean, I certainly agree that guests on podcasts are a real drag, but you know,

Lee McKnight, Jr.: geez, I walked into that one.

Chip Griffin: You did, you did. But look, and it doesn’t have to be a podcast, right? I mean, I understand that it is not a fit for everybody. I happen to be passionate about them because I’ve been creating podcasts since the 1990s before an iPod even came out before you even thought to call it this.

So it is a format that I really like and I think is really valuable. I think to me, the key takeaway was that, it’s providing things that benefit your audience and allow you to share your expertise as well. So you’re, it’s a, it’s a multi pronged win because you are building relationships and you are helping people to know more about you and what you know about.

I mean, I know for myself and in the work that I do today, almost every client that I get is someone who has listened to my podcast, watch my videos, and so they feel like they already know me. And they certainly understand what my perspective is. So they’re, they’re not coming in and then surprised when I rant and rave about something in their business because they’ve heard me do it before.

And, and so they know what to, and if you don’t like those things, if you don’t like me saying that you need to have a focus and you need to focus on project profitability and all the things that I go on about, you’re just not going to call me up. And so that’s great. I’m getting better fit clients.

Agencies can do the same thing. Good point. Again, it doesn’t have to be a podcast, but it’s got to be something that allows your expertise to shine. It could be webinars, it could be articles, it could be e books, it could be videos. I mean, there’s all sorts of different things that you can do, and you just need to find the one that you’re most comfortable with, and to your point, you need to stick with it.

Yeah, because too often I see agencies try these new business development tactics and they, they do it for a month or two and then, you know, they’re on to something else. I mean, I’ve worked with plenty of, of agency owners over the years who are like, well, you know, I did this great webinar on this topic, you know, what, what industry should I focus on next?

The same one, right? Right. Yeah. I mean, until you’re tired of it, you haven’t even begun to make an impression. Same thing with direct mail back when direct mail was a thing. And I think actually direct mail is something people should still consider today because there’s, there’s a lot less mail being received.

I’m not saying it’s a fit for everybody, but think about it, right? Sometimes, sometimes You know, going against the, the tide can be an interesting place to be.

Lee McKnight, Jr.: It’s another tool, right?

Chip Griffin: Yeah. Another tool, but, but it’s not the kind of thing where you, you do one email or even email or direct mail or whatever, and you’re done and you say, okay, well, I didn’t get any results.

So I’m done. No, you’ve got to keep doing it. You got to keep at it. Yeah. And so you need to find whatever it is that you can do well, that you will keep with, and that will help you to build your business much more quickly.

Lee McKnight, Jr.: And they’re gonna see part of the passion, if you will. But two other pieces that add to what you just said, which I 100 percent agree with, but one is build it and they will not come, you know, just because you’ve done it.

Now you got to get it into your prospect’s lap or get it out there or both. And the other thing is, cause too many agencies don’t do that. Like, okay, we did it. Okay. Well then I, okay, that’s good. But now how, now how are you getting that in front of people? And to follow up on that, you know, I would get when we first did our video series, 3 Takeaways, and now we’re about to today film episode 107, which to some podcasters would be like, wow, it’s a lot.

Others it’s like, yeah, I passed that years ago, right? I’m sure you did. But, it was a thing where we’re seeing the views and still today, if you go and look on our YouTube channel. Anywhere from like two to 300 for the first like six months and that grew over time and I would be like, I got, as my daughter would point out that that’s not good dad.

But it’s like, well actually those are all, I mean, for the most part, agencies. Individuals that care and good amount. So if you have, you know, don’t get discouraged if you have numbers like that or even in the beginning like, not much at all because it takes time to build. I can point to literally at least 8 different clients, specifically that told me I am talking to you because I watched that episode that came on board.

And so what, what that translates to in terms of profit is, is fantastic in terms of like what we’re spending on those videos. Yeah. The equipment up front, which you can get nuts with it, of course.

Chip Griffin: I don’t know what you’re talking about.

Lee McKnight, Jr.: But, beyond that, I was going to say Craig, who does our stuff still wants to talk to you about your entire setup.

Chip Griffin: I’ve only spent like 10 bucks on the whole thing.

Lee McKnight, Jr.: Exactly, 10 dollars people. That’s it. But, and that’s something that, you know, that pays off as well. But you can, you know, it’s something that, again, just don’t get discouraged. It’s certainly that takeaway to your point, keep it going because it will pay off. But again, you have to get it in front of folks.

Chip Griffin: I’d say in most cases, just don’t look at the numbers. They, the vast majority of time. It really, honestly, it doesn’t matter because what you really are looking for is are people talking to you about what you’re providing. And, and so to me, if, you know, I, back when I did digital consulting and digital marketing for folks, you know, one of the questions I was asked in the early days of blogging was, you know, how many people need to read my blog in order for it to matter?

And I’m like, you know, I mean, it could be 3000. It could be three. I mean, if those three are, you know, Barack Obama, Warren Buffett and Bill Gates, and they all love what you have to say. Who the heck cares about anything else? This was, of course, you know, back in 2009. Yeah, and you know, it’s all about are you reaching the right people?

Are you having the impact? And the vast majority of agencies who are listening to us today don’t need more than 10 to 15 good clients at any one time.

Lee McKnight, Jr.: Yeah, true.

Chip Griffin: The vast majority of agencies do not need tens or hundreds of clients.

Lee McKnight, Jr.: Couldn’t do it.

Chip Griffin: Well, I mean, most couldn’t, right? I mean, it’s, you know, so

Lee McKnight, Jr.: wouldn’t want to do it.

Yeah.

Chip Griffin: So that means realistically, unless you have a huge retention problem, in which case solve that before you worry about bringing on new clients. You only need a handful of new clients every year. Yeah. So if you’ve got 25 people who are loyal listeners and they’re they’re part of your ICP there’s a good chance that that’s enough and you don’t need more than 25 people listening or reading or talking to you or whatever.

Lee McKnight, Jr.: Yeah agreed. Agreed I think that brings us full circle to in the beginning talking about just business development general and kind of some trends. I will say another one as i’m writing our new report and seeing, you know, the average time it takes to close a piece of business, has, once again, you know, it’s, it’s one to six months has always kind of been the, the yard stick, if you will.

But, that percentage is increasing even more, to really, it’s turning into like 6, 7, 8 months. And man, I’ve seen too many agencies who just, I don’t refuse to accept it as too strong a word, but just like, you know, build it and they won’t come, you, you, you have to keep doing it. You have to have that consistency.

It’s the same with business development. And that’s something that we, anyone would know that’s ever been a part of business development is that you have to keep at it, but we can say that all we want and any agency can say they get it. But when the rubber hits the road and they’re in like month three or month four, and you haven’t closed something yet, that’s most agencies. Like for us, we have 30 percent of clients that close in the first six months.

Can and does happen, but it’s especially now, hopefully that will change with these sales cycles. But it’s something that you got to dig your heels in and you got to keep it up. Whether it’s content, whether it’s your business development program, it’s one of the biggest things I see. And I get it. I’m an impatient person myself.

You want to see these results, and you will, but you’ve got to keep it consistent.

Chip Griffin: Yeah, and I’m sure you get asked as I do all the time, you know, how can I hurry those people along? How can I get them to close faster? And look, the reality is that once they’re in your pipeline, there’s not a whole lot that you can do to speed it up.

Because, because the problem is even if you are successful in, in, in hastening their decision, it may not be a good decision. And so, so you do need to give them the room to make the decision that, that actually works for them. Cause there’s, it’s no good to get them to close in two months versus six months.

And then they disappear after three because they, they rushed into a decision that they weren’t really ready for or that they didn’t really embrace. But to me, the way that you shorten those sales cycles is some of those things we talked about. Provide the resources in advance. Yes. So, so they’re coming to you primed.

I mean, I, I can tell you that in all the businesses where I’ve had podcasts, articles, eBooks, et cetera, the sales cycle for people who consume that is always shorter, always a hundred percent of the time shorter. It may not be as short as I’d like it to be shorter because they already know a lot about you and they’ve already crossed that threshold of accepting you as an expert and now they just need to figure out how it fits into their own plans and internal processes and all that kind of stuff. So once they’re in there, don’t worry about speeding them up. Instead, prime the pump and get them ready to buy before they even come in.

Lee McKnight, Jr.: Yeah, I think that’s very well put. The only thing I’d add to that though is that while speeding up is not something that maybe is going to happen. The beauty of priming the pump is when you, they are in that pipeline and let’s say it is X amount of weeks out or, or whatever that timeline might be. You can take all that content, whatever it is, They haven’t seen it all.

Most likely, even if they have, you can drop that into their world again. And I’ll, I just did it today. I just did around with some of my hotter prospects. I was not selling. I said, you know what? I haven’t, you know, I could see, you know, when we send out our newsletter and everything else, what they’d opened and what they hadn’t, they did, they never opened this.

So I dropped that into their world and say, Hey, really enjoyed talking with you. Look forward to catching up here in the next couple of weeks. Thought this might help you right now, though. This is something we created, whether it’s our report, whether it’s a video I did. What we’re doing right now, I will send out to people, right?

And say, Hey, this thing with Chip that, you know, I think you might find value in. And again, it kind of shows them this is the way that we think. And most agencies never do that, right? So you’re going to set yourself apart just by doing that. So you’re both priming the pump, then at the same time, able to use that content ongoing.

You’re not going to hit it too hard, to your point, because that won’t speed it up. It’ll just get annoying. But just dropping that in. can be a difference maker.

Chip Griffin: Right. Yeah. I mean, all those follow up emails you get from someone you talk to it like, you know, Oh, you know, are you ready to make this decision yet?

You know, how can we move this along faster? Who do I need to talk to? No, I mean, you do want to stay top of mind. You don’t want to just ignore them, right? Provide them with valuable resources that you’ve already accumulated. And that gives you the, the reason to stay in front of them. And so they see your name and they’re like, right, that’s right.

I owe Chip an answer on this. Yes. Or, you know, let me give them an update or whatever. And people are so much more comfortable with that than with that constant prodding of, well, you know, when, when are you going to, what do we need to do next? Can we schedule our next meeting or phone call or whatever?

That’s just, it’s so damn annoying. And agencies need to get past that and figure out that. Look, if a client isn’t saying yes, it’s because they’re not ready.

Lee McKnight, Jr.: Yep. Yeah. Yeah.

Chip Griffin: It’s an answer in itself.

Lee McKnight, Jr.: It is. Right. I mean, I literally just had a prospect today and this is not just me making this up. I mean, I really did where he said, look, I’ve been following you for years and, and, and the content and you know what timing is now right.

And I want you to talk to our two partners. And that’s, that’s how it went down. So, you know, they have a proposal, but it’s not there yet, but I’ve had that happen many times. And it’s just part of that is the patience, but, but you’re exactly right. I mean, they, and a lot of them are reviewing where you don’t even know to your point.

It’s like, it’s hard not to worry about the numbers sometimes. Like I want to see those views. It’s like the human nature or what it’s become. But, but you are right, you can’t get hung up on it.

Chip Griffin: As long as you can contain your urge to change something dramatic because of what you see, right? Either saying, hey, I’m going to change the format entirely because I’m not getting listeners or I’m just going to stop.

You know, so if you want to, if you want to accumulate the data, that’s fine. But don’t overreact to it. That’s the problem I see looking at a lot of this data that’s so readily available to us today. It more often than not causes people to either give up too quickly or dramatically shift strategy too early.

And neither one of those is particularly helpful. But I agree. Unfortunately, we are at the end of our available time here today. So.

Lee McKnight, Jr.: I thought this is a six hour thing we were doing.

Chip Griffin: I mean, we could certainly, I know that we could go on for six hours. I think, I think we would have a precipitous drop in listenership.

Probably starting about now. So that’s if we haven’t lost you already. Thank you for continuing to listen. If you are still listening and you would like to learn more about Lee or RSW/US Lee, where should they go to find out more information?

Lee McKnight, Jr.: Sure. Rswus.com is where everything is and that resources tab is where all our content is.

Chip Griffin: Excellent. And you do have lots of excellent resources. You are a video maven yourself. And so there’s lots of good content to be consumed there. So I would encourage you to do that. And I would encourage you to come back here because I’m sure Lee will be a guest again. Absolutely. I love having Lee on. So with that, that will draw this episode of Chats with Chip.

I appreciate you listening and I will have you all back here on a future show.

In this episode, Chip talks with David C. Baker, who has been dubbed “the expert’s expert.” He leads the advisory firm Punctuation, and has worked with more than 1,000 agencies to help them get better positioned for success.

The discussion focuses on improving agency management and scalability by emphasizing the importance of understanding business fundamentals and integrating them alongside the creative and strategic solutions.

Key topics include the benefits of proper positioning, effective client communication, strategic pricing, and the importance of sharing expertise.

David C. Baker is an author, speaker, and advisor to entrepreneurial creatives worldwide. He has written 6 books, advised 1,000+ firms, and keynoted conferences in 30+ countries. His work has been discussed in dozens of international publications. Recently, the NY Times referred to him as” the expert’s expert”. He co-hosts the most listened to podcast in the creative services field (2Bobs).

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of Chats with Chip. I’m your host, Chip Griffin, the founder of SAGA, the Small Agency Growth Alliance. And I am delighted to have with me David C. Baker of Punctuation. He is perhaps the longest serving agency advisor out there and a guy who’s got lots of great content that he puts out on a regular basis, newsletter, podcast.

He’s got books to his name. He is going to provide some great information and insight for you today. I know that for sure. Welcome to the show, David.

David C. Baker: Thank you. Longest serving. That’s like code for old.

Chip Griffin: Hey, you know, as I always tell people, you know, the reason why I can give advice now is because I’m bald, right?

David C. Baker: Yeah, right. Yeah, no, thank you for having me. I’ve been looking forward to this. I’ve known of you for many, many years. I don’t think we’ve ever spoken on the phone, but we’ve exchanged emails, multiple times. So I appreciate the chance to be on your podcast.

Chip Griffin: I am glad to have you here. And all of that wisdom that you’ve accumulated over the years is not just from actually advising, but you also, are like I am a data nerd.

You’ve done a lot of research. You’ve accumulated a lot of data. And so I, I really like that. And I think that will be something that’s useful to the audience here. But is there anything that you’d like to add about yourself that might be useful to listeners before we jump in?

David C. Baker: Oh, I think, no, I think that covers it.

I write, I’m sort of an author who also does other things. People know me more probably by the podcast I do with Blair – 2Bobs or the writing the weekly emails. But I think of myself as sort of an author who also tries to step into other roles like consulting. But most people have heard of me. So.

Yeah, that’s all boring. I’m good.

Chip Griffin: Perfect. I mean, one of the things that I enjoy particularly about the newsletter is you’re sort of a provocateur. And so I’m going to ask you to be a provocateur today and suggest, you know, what is it that agencies in particular could be doing better today that would, that would make them a better positioned for 2025 and beyond?

What is the, what is the key thing that you’re seeing today that they just need to be thinking about?

David C. Baker: Yeah, I suspect that people listening to that question are thinking that I’m going to say AI and that AI to me is way down the list. I, and I actually think that their, the quality of their work is plenty good enough.

I, if there’s one thing I could change by waving a magic wand over the industry, it’s to run their businesses better. And that’s sort of how I’ve committed my business life. What I’ve committed to helping them with. It’s running their business better. You know, I, the focus seems to be on raising the quality of the work and so on, which I think is important.

It obviously we have to keep up with all of that stuff. But just the basic nuts and bolts of understanding people and processes and structure and pricing and financial performance. And because so many of these folks never received any training on that in school. They were trained on the craft, which they’re more than good enough at.

And then the rest of it, they either picked up because they grew up in an entrepreneurial family. May not have had anything to do with this industry, but an entrepreneurial family, or they work for somebody else and they absorb the good and the bad things that they saw and then emulated in the principle.

So just running businesses well. Now, having said that, I think we’re probably, I don’t know for sure if this is the case, but I’d say we’re better at running our businesses than we ever have been, but it also feels to me like it’s sort of the exception rather than the rule. And I’d like that to be better because we live in a, when I look at not just 2025, but 2024, we live in a very chaotic world with all kinds of pressures.

And it’s so easy just to be frozen. In fact, I was, I was programming an event we’re going to be doing. And I stepped back from it. I looked over at the topics that I’d chosen and asked people to speak on. And I was just kind of amazed at how many of them were about leadership and coaching and mentoring.

And then I realized, oh, like, yeah, we need a lot of that right now. We live in a world that’s pretty uncertain and it’s difficult to lead in that sort of a world. So I would focus not on the craft. I would focus on running their businesses well.

Chip Griffin: I think that’s great insight. I mean, I’m sure as I do, you often go into an agency and they don’t have even regularly reliable financial reporting that they’re doing. oftentimes I, I’ll ask for a P& L and either get none or get something that is not even close to accurate.

David C. Baker: Yeah. Or what is a P& L? The question.

Chip Griffin: What is a P& L? Right. Right. So, you know, if you’re an agency owner, apart from hiring someone like you or me to help them along, you know, what, what would you advise them to do in order to start to run their businesses better?

David C. Baker: Probably the best thing they could do would be to network with other principals. And be transparent with each other. And I think that’s something that we’re also pretty good at. We just don’t take enough advantage of that. So yeah, you could hire somebody like you or me, but you could get free stuff by just being very transparent, finding other people running firms and sharing with them.

And the more tightly positioned every agency is, the less they see those peers as competitors. And so they are freer, more free to be transparent with each other. That joining a group of peers, there are lots of those, you know, there’s two dozen of those and so on, just to learn from each other. Maybe even stepping outside of the industry and joining a group like an EO or, or something like Strategic Coach or something like that, where you’re just learning from other people.

And the first thing that, that strikes you, this struck me too, because that was my same path. The first thing that struck me is how different our expectations are for the performance of a business. And so you talk with say somebody in the consulting field or somebody in the accounting field, and you’re comparing notes about how much money you make, what your expected profit is and so on.

And you, and they just say to you like without batting an eye, this is what I make. This is my expected profit. You’re like, Whoa. Oh, okay. Maybe I need to change my expectations there. So I think there’s free ways to do that too. There’s also a lot of great books out there that… there’s a lot of bad books out there too, but there’s a lot of great books out there that you can get that are basically free, right?

Just to pick up stuff. Things on pricing, on financial management of your firm. Some are specific to this field and some aren’t. And most of it applies. I mean, we are a professional service at heart. And so I don’t think we ought to view the performance of this industry all that differently than other professional service firms.

So there’s lots to learn out there.

Chip Griffin: Yeah, that, I mean, that is a great point. And, you know, we, we think of ourselves as different from you know, lawyers, accountants and all that kind of stuff. But there are, there’s a lot of similarities in the fundamentals of the business. One of the things that you just mentioned, and I know is a particular area of passion for you, as it is for me, which is positioning. Because so many agencies, today are, you know, that they want to be full service.

They want, they feel, they tell me, and I’m sure they tell you they’re afraid of leaving, you know, opportunities on the table if they focus too narrowly. So, you know, how do you convince a firm that they really need to have clear positioning and what even is clear positioning in your mind?

David C. Baker: Well, so if we use you for an example, you’re, I mean, we could call you a broadcaster or an author or a consultant.

Let’s just stick with consultant. So if you were just Chip Griffin, a consultant in New Hampshire, It’s like, it’d be hard for the world to notice you, but you’ve decided that you’re going to focus on small agencies. It’s right in your name. So now all of a sudden, you know, exactly who your target is, how to reach them, what they care about, and so on.

And all of a sudden if you wanted to have a really robust marketing plan, it wouldn’t be all that difficult to do. So back to the question, how do I convince them? I usually am not very good at convincing them. I, they have to realize that on their own. They have to recognize the need for it and the door to that realization for them is almost always new business, that same thing.

So they say, okay, We’re five or six years into this thing. And that’s kind of, I picked that number because that’s usually when the early sort of noise dies down and the referrals and the word of mouth sort of isn’t there as much anymore and they have to earn their way and they say, okay, the business isn’t quite where we want, or we had this growth spurt.

Now we have a lot of people sitting around because some of that work died. It was usually on the back of a single large client that was occupying a lot of our attention. So how do we grow? And then they say, okay, we need a marketing plan. Duh. You know, that’s kind of what they do with their clients. Right.

But it hasn’t occurred to them yet. And they, that’s where they just stop dead in their tracks. How in the world do I create an efficient marketing plan for an unpositioned firm? It’s very, the only way to do that is to be really famous. And absent that since very few of us really are, then I got to have a tighter positioning and that’s where it comes from.

It’s usually a pressure from the marketplace. And then they come to me or you or somebody else and they say, Hey, can you help us think through this? But the, the desire that demand for that usually doesn’t come from the outside. Usually it comes from an internal frustration because they just can’t figure out how to get new business.

Chip Griffin: Yeah. And a lot of agencies, frankly, have some sort of positioning, even when they don’t think they do, right? When I, they tell me that they are full service, they’ll service anybody. Then you start looking at their client list and you realize, well, they kind of have an inferred positioning anyway, that typically comes from their own expertise or perhaps who their early clients were or something like that.

So it shouldn’t be as big of a jump for them mentally as it usually ends up being to get them there. But can you also talk about the, you know, it obviously helps on the business development side. But good positioning also helps on running the business better, right?

David C. Baker: Yeah, it helps run the business better.

Obviously, you know, the new business thing is important because if you can’t solve that, then nothing else matters. But you also know what, how to, how to design your service offerings, because now all of a sudden there’s a little bit more commonality in what your clients need. And then that leads to, okay, now I know who to hire.

I know what sorts of skills to bring aboard. I know how to fashion the processes and so on. And then something that we haven’t even talked about yet. It’s like, and now I’m doing better work for my clients. Like that ought to be, that ought to be front and center.

Chip Griffin: Right.

David C. Baker: It’s just so, it’s so odd to me. Like you don’t, you don’t see doctors, like a brain surgeon saying at the Monday morning staff meeting like hey team.

I’ve got an announcement I know we pretty much only work on brains, but I, I have really been interested in experimenting in heart stuff. So next time somebody walks in here, don’t send them away down the hall. Just say, no, we’ll take care of it. It’s like, no, that stuff doesn’t happen in professional services, but it does in our side because we’re so driven. Two things.

We’re so driven by the interest in variety and because we’re so desperate for new work that we’re terrified that a positioning decision will close off some opportunity and we’re so desperate for opportunity. So it’s just a slow, long process of maturing. And like you said, just a minute ago, we’re not inventing expertise.

Like you’re, it’s going to emerge from something that you have already developed a particular favor in, some sort of focus. And so we’re, it’s just, It’s an exercise in exclusion, not inclusion. It’s like, what are we not going to be looking for moving forward? But whatever we are going to be looking for is something we’ve already been doing.

We’re, we’re not making up expertise. We’re just saying, let’s start focusing more on what one of the things that we’re really good at.

Chip Griffin: Yeah. And I love that you used a medical analogy because I often do as well, although that particular one I haven’t used, and I’m going to now borrow that one from you because I think it is very apt, but you know, the other, I think comparison to the medical field is that we have people come into us for new business and we let them tell us we want a website, we want a press campaign, we want whatever, and we just give it to them.

Because we think that’s the easiest way to generate revenue, to give them what they’re asking for. But that’s, that’s sort of like the patient who goes in and says to the doctor, you know, I need Ozempic or I need this surgery or that surgery. You know, they’re going to ask you questions to try to, to figure out if that’s what you really need or not. And that’s something I think a lot of agencies are reluctant to do because they think it might impede the sale.

David C. Baker: Yeah, right. And it’s not going to fly if you say to that doctor, well, like, I know you went to seven years of school, but I mean, I’ve just spent an hour on a WebMD. I’m pretty sure, I’m pretty sure this is what’s wrong. Yeah. And once you start, this doesn’t happen overnight, but once you start to taste expertise, you start to taste what it means.

When somebody looks to you with hunger in their eyes and they really want a solution that’s very important to them, it feels so great to be able to confidently say. I think this is what you need, right? You’re never 100 percent right and you have to be humble about it. But this stuff is important to people and they’re spending money that matters to them.

It’s like, we ought to be delivering really as much value as we can. I just, that’s sort of the unspoken problem around focus really, because we talk about, In fact, I’m guilty of this. I talk so much about how it’s easier to craft a marketing plan. It’s easier to make more money, but what about the client?

Like what does the client deserve? Yeah.

Chip Griffin: Well, and that’s it. That is something that we lose sight of at our own peril, right? Because you might win the business, but then you’ll churn them because you’re not producing the results that they were expecting, which I think that’s another area to look at is expectations.

How do you set expectations correctly with your prospects so that it can be a winning arrangement and one that that causes them to want to stay with you as opposed to being bitterly disappointed, you know, six months later?

David C. Baker: Hey, let me, let me turn that question around and ask you, what, what do you think, what do you think agencies ought to be considering around what the changes they need to make to be really relevant in the next few years?

What would you say to that?

Chip Griffin: So, I mean, I think that, that agencies in general need to, listen more and talk less. Particularly when they’re with prospects. Because you can learn so much from them. And I, you know, one of the things that, that I guess frustrates me is, is when I talk to an agency owner who says, you know, I, these people want to pick my brain, I, I just, I don’t have time for that.

They need to pay me for that. And I, I understand the time pressures that agency owners have, but I think that because things are changing even faster today than they were 20 or 30 years ago when I first got into the agency business. You have to be listening and understanding where things are going and where your clients and your prospects are headed.

What, what’s, what’s worrying them? And I, while I don’t love the, what keeps you up at night question, I do like with a prospect saying, you know, right off the bat, what brings us here today? And, and, and not the first answer will be because I need a website because I need, you know, a media campaign or whatever, but, but dig deeper. Find out what actually triggered it.

Because if you figure out what the triggering thing is, we had a meeting, the CEO is pounding his fist on the table. We’re not getting the financial results we need, or I saw a competitor in the Wall Street Journal and I’m ticked off about that, that I’m not there, whatever it is. It helps you to better understand.

And I, so to me, if you want to know where to go in the next two or three years, you need to be listening more and asking those probing questions.

David C. Baker: And train yourself to love finding the right solution for the client, even if it isn’t you. Like get used to that great feeling of, of saying, Oh, I really appreciate this conversation we’ve had, but I don’t think I’m the right person for you.

I think you should talk with such and such. And then graciously refer somebody to somebody else without expecting anything in return. That’s training yourself to love that too, is really fun.

Chip Griffin: Yeah, and one of the easiest ways that I get to convince clients of that is have them look at what their worst client experience has been, client experiences have been in the past few years and, and trace that back to the prospect conversation. Typically, typically there was a red flag in the prospect conversation, but they drove right through it because they wanted the business.

David C. Baker: Yeah. Okay. So that I see how you’re tying that to listening very carefully, not just to what is going on in the client’s world, but also to whatever extent they might be a qualified client. Like it’s about money or expectations or how much an expert they think you are or so on. Yeah, great point.

Chip Griffin: Yeah, because, you know, if you’ve got someone who’s coming in and saying, you know, well, the reason why we’re hiring you is because we want to be in the Wall Street Journal.

And you know, that’s not going to happen, right? You know, based on your expertise, you understand that the stories that they have, that’s just not likely to happen. If you just tell them that and, and you pass them on to someone who maybe could do it or could give them something different, fine. But if you take that business on, it’s gonna be a miserable client.

That’s right. And, and it’s gonna be the one that you call me up about and say, God, this client’s such a pain. I don’t understand. Yeah. That’s not what you want.

So, one of the other things you talk about a lot, is the, that agencies should be planting a flag to share their expertise and taking a stand on things, right?

Something that obviously you and I don’t have any real difficulty doing. In fact, if anything, we probably need to be restrained from time to time. But it, it does amaze me often that so many agencies are not out there and saying things, right? Other than this is what we do. And, so talk a little bit about the, the value of that, both from a growth perspective, as well as the overall impact on the agency business.

David C. Baker: Yeah. So it probably wouldn’t be fair to not at least for 15 seconds, tie us back to the positioning, conversation because it’s hard to know what to say that hasn’t been said already unless you are tightly positioned. So that’s sort of a given, but there’s just so many reasons to develop a point of view.

I constantly think that the primary one is to figure out what you think. And there are different ways for us to do this like the way my mind works I have to write something to figure out not because i’ve already figured out what I want to say but the clarity comes in the articulation not before it. Other people need to talk through something before they kind of figure out exactly concisely what they think.

So that’s the primary purpose is just to figure out what you think about something. And for me, this really struck me many years ago, because I would be in a conversation with a client and it was clear that they had a certain expectation that I would have a point of view on whatever it was, and I would hesitate.

It’s like, Oh, I’m not sure, you know, excellent question, but not sure. And so I started writing those things down. And then decided to articulate each of those points into a particular point of view, which some of them have changed over the years for sure. So that’s the first reason is just to figure out what you think.

The second reason is just to give clients some perspective of what it’s going to be like to work with you. There should be very, very few surprises ideally. So even before they pull the trigger and work with you, they should have sampled how you think, how you approach problems, and so on. And what all they’re left to decide is not to decide what you think, to decide whether or not they want you to apply those thinking skills to their very specific situation.

Another reason is just from a an indexable question, right? I mean, we got to give Google, I guess we keep saying that for a few years until they’re surpassed, but we need to give Google something to work with. We need to give them some indexable content that will drive organic traffic to our sites I, I don’t think that will ever be the primary way you get business to me.

I think of that as sort of like a 20, 25 percent solution, but it’s still pretty significant. So those are the big reasons in my mind where you need to do it. And. I you know, I, this is coupled, I think, with the fact that we have, we’ve begun to tie together our thinking with our doing. And if we want to move upstream, we have to be known as thinkers with particular perspectives and So it just kind of boggles my mind.

In fact, if I, like if, if I was reaching back decades and my kids couldn’t go to school for some reason, then all I would really ask them to do is write a lot and read a lot, because that’s what sort of develops a mind. And I’m not sure we ever lose that sort of ability to do that over time. So it’s very important to me.

And I wish it was more important to other people too.

Chip Griffin: Absolutely. And I mean, to your point of, you know, helping clients to understand your perspective, I mean, it helps your prospects so that you can shorten the sales cycle, which I think every agency would like to do. I’m sure, as I do, you have people who are coming to you in your current role and they know how you think, they know how you speak, they can hear you.

And so, therefore, it is a much shorter sales cycle than it might have been in the past where there wasn’t any content for people to consume.

David C. Baker: Yeah, right.

Chip Griffin: And so, if you can do that, you’ll find those better clients faster and spend less time going through all the mundane stuff with your prospects. But I think, I think one other value of whether it’s written content, video, audio, whatever kind of content you want to put out and stake a position on is that it helps your team.

And because if your team is consuming your content, and that’s not a given, by the way, I’ve, I’ve had in the past plenty of times where I’ve had people working for me who didn’t listen to my podcast or read my posts and articles. but to the extent that they are, it helps them to understand your vision for things in a way that’s better than sitting in a team meeting, banging the table and saying, well, this is what we’re doing today.

They can see it and they can internalize it in a much easier fashion.

David C. Baker: Yeah, and decide if they want to hitch their wagon to this train, so to speak. And I would guess that’s probably true for prospects too, right? I like how these people think. I’d like to work for them. Yeah, it is a zero sum game isn’t it.

Like the better we do at marketing, the less we have to do in sales. And if we do very little in marketing, we have to be really good at sales. It’s very inefficient. We tend to get, attached to the prospect and we sunk, we sink all these costs in there. And then it’s hard to abandon a prospect because it’s so, this particular one is so important to us.

Our marketing needs to be really, really effective so that we can comfortably waste prospects. By waste I mean not feel like we have to land everyone.

Chip Griffin: Well, I think I, you know, one of my positions is that, you know, sales is a dirty word for agencies and it’s not really sales anyway. You’re trying to find the best fit clients and that’s very different than selling a car or a widget where your goal is you get the prospect in and your single minded focus is to close the deal.

That’s not what you should be doing. As you suggested earlier, you should be comfortable telling people that you’re not the right option and sending them along to someone else. Right. And, and that’s fundamentally different from sales. So I see agency owners pick up sales books and they read through them and they’re like, Oh, this is how I need to do it.

Well, no, because that is, it is a linear process, which is not the same process, I don’t think that agencies should be following.

David C. Baker: Good point.

Chip Griffin: So, you know, we we’ve talked about a lot of different things. Let’s talk about pricing right now, because this is always a popular topic. And I know something that your, your co host on 2Bobs, writes and speaks about a lot.

But I, I, I think that agencies have great difficulty in pricing in part from going back to the very start of this conversation today, because they are not particularly good at business management, so they don’t really understand their costs. But I think, I think honestly, some of us who. and I confess to this, I, I tell clients who ask me, you know, how is their pricing?

I, without even looking at it, I tell them they need to increase it.

David C. Baker: Before you’ve even seen it, right? Yeah. Right. It should be higher.

Chip Griffin: Right. And, and, and I think that that is, that is risky because there are some agencies that are not underpriced, but I think fundamentally agencies don’t even understand their pricing at all.

And so how do you advise agencies today to be thinking about their pricing in a in a rational way that doesn’t leave money on the table, which I know they’re all worried about, but still gets them the business?

David C. Baker: Yeah. I think it’s a little bit dangerous to talk about pricing in isolation because I think it needs to be as one of multiple things that they talk about, like salary load and profit and how much the principal pays himself or herself and so on. But I also don’t like, pricing discussions that just don’t take into account where somebody happens to be on that maturity ladder. So in some cases, I think, well, in all cases, I think you ought to look at what’s the next step in pricing for you.

And so if somebody is earlier or lower on that ladder, The next step for them is to get paid for all their time. It’s like, that’s pretty basic. And in those cases, I have no objection to timekeeping at all. I think timekeeping is a fantastic temporary tool to figure out how to get paid for all your inventory.

Now, once you’ve done that, then. The next step is really to get paid for all your time at possibly a higher hourly rate. And then the next step is to just disconnect what you make from time entirely by productizing your services, maybe value pricing, whatever that is. But I don’t think most firms are ever going to get to that place.

And so I’d be very satisfied with those first two steps. Instead, what I see are people who feel abused or underappreciated, underpaid by their clients, and they just jump to value pricing, but they haven’t even climbed the basic ladder to get paid for their time. Like, let’s not talk about value pricing until you get paid for all your time.

And then they also don’t have some of the other components in place, like a tight positioning. The idea that you need to reinvent your, your agency one client at a time, you, it’s, it’s very difficult to reinvent your firm with your existing clients. You kind of have to swap them out one at a time. It’s a, it’s a long, slow, patient, arduous process.

And then, you know, the flip side of that is I just throw all that technique out. I just say, listen, kind of like you said, well, whatever it is needs to be higher. But also I think the best time to set your pricing is when you’re pissed off or tired. It’s like, I ain’t doing this again for that. my, I always adjust my pricing on the way back.

On the flight home. It’s like, I ain’t doing this again for that. You know, I just, Blair’s the pricing guy and he’s got lots of science behind it and so on. And he and I are in slightly different places about that stuff. Theoretically, and just from a pure advice standpoint, I think it’s brilliant, but I, I don’t, I think people listen to pricing at the wrong point in their development and, they’re just kind of getting it wrong.

So anyway, I’m, I’m a little mixed up on the whole pricing thing, honestly.

Chip Griffin: Well, I, I really like how you described it as a progression because so many agencies fail to get to that first rung on the ladder, which is making sure that they’re being paid fairly for their time. And, and so, you know, the, the, the risk of some of the things that are out there on value pricing and such as that, it sounds so enticing that, as you say, they jump right to that step without having done the intermediary work to, to be able to figure out what does it actually cost them to deliver.

And, and it doesn’t, at some point it doesn’t matter what the value is to the client if that’s still not enough to cover your actual costs. And so, you know, to go back to where we started, if you understand your numbers, if you know what it costs to deliver, then you can at least have your, your safety price, right?

You know, or as I call it, my price floor, that the number I’m not going to go below because I know below that I’m not going to make money. And so if you don’t understand that number, then any, any theory around pricing is worthless.

David C. Baker: I, I was struck by this yesterday. I was working with a new client and you know, where, where agencies seem to get stuck is in this fee billings per full time equivalent employee, they get stuck around 155, 160, something like that.

And, my target for them is, is 220. That’s, that’s where it kind of starts. And so if they’re at 155, 160, we try to get them to 220. The, the woman I was working with yesterday, she was at 460. And wasn’t satisfied with that. And I thought, well, that’s great. Let’s get you up to 900. It’s like, you know, my clients range anywhere from 150.

There’s a few little bit lower than that, up to a little over a million. And it doesn’t matter where you are. It was like, let’s just take it further while still delivering exceptional value to your clients. And if you’re still doing that the sky’s the limit. And so just understand where you are and, and be happy just doing a little bit better.

What, what are the levers you need to pull to do a little bit better and not beat yourself up about that. But there is room for growth every year that you stay in business if you’re doing the right things and it’s, it’s a great adventure really.

Chip Griffin: Absolutely. Well, I think that’s a that’s a good note to to conclude our conversation.

We could probably go on for hours here and cover lots more room. So we’ll have to have you back again for a future conversation. But in the meantime, if someone is interested in getting your newsletter, subscribing to the podcast, learning more about you, where should they go?

David C. Baker: So, the business address would be punctuation.com and, you’ll learn there about, books, events, and so on. We’re doing an event in Atlanta, October 21 to 23, which you refused to speak at, by the way. And

Chip Griffin: That’s, that’s a slight mischaracterization. I had a schedule conflict.

David C. Baker: Yeah. so anyway, punctuation.com and, you can sign up for a weekly emails there too.

I appreciate the invitation to chat with you, Chip. I enjoyed it.

Chip Griffin: It’s been great having you. Again, my guest today has been David C. Baker. I encourage you all to sign up for his newsletter, buy his books, watch his, or I guess listen to his podcast, all those kinds of things. It is great, useful information and will help you to level up your agency.

So with that, thank you all for listening. I appreciate it. And I will have you all back here on another show.

Patrick Rogan of Ignition HR joins Chip to discuss the FTC’s new ruling on non-compete agreements and expected adjustments to overtime pay regulations.

They discuss strategies for managing overtime and compensation issues in small agencies, highlighting the importance of compliance, proactive planning, and seeking HR assistance when necessary.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of Chats with Chip. I’m your host, Chip Griffin, the founder of SAGA, the Small Agency Growth Alliance. And I’m, I guess I would say I’m delighted to have with me Patrick Rogan of Ignition HR, a great mind when it comes to all things talent related to agencies. And it is a pleasure to have you here, Patrick.

I’m not sure it’s a pleasure to talk about regulatory issues, but that’s what we’re going to be doing today.

Patrick Rogan: Well, it’s kind of like going to the dentist. No one wants to go, but if you don’t, it’s just going to hurt a lot more later. So that’s, that’s why I’m here.

Chip Griffin: Yes, absolutely. So we’re going to try to make it hurt less and we’re going to talk about new federal regulations around non compete agreements with your employees as well as around overtime pay. And we’re going to start with non competes because I think that should be a little bit easier and Patrick and I have both been of like minds for many many years which is giving advice: don’t do non competes. Don’t, don’t have it as part of your arsenal, but we’ll elaborate on that and share what you need to do in light of this new, regulation for, or I guess ruling from the Federal Trade Commission.

Patrick Rogan: Yep. I’m looking forward to it.

Chip Griffin: So, so what has the Federal Trade Commission done to American businesses?

Patrick Rogan: Well, regarding non competes, they’ve outlined a process, 120 days after it’s filed, where it will effectively be illegal to have non competes with employees you’re going to hire, employees you have, contractors, independent consultants they basically are saying that, this will be wiped out.

No more non competes. and when we say non competes, let’s be really clear. What we’re saying is that we’re not allowing employees with a non compete to typically work for a competitor of ours – depends on how it’s working, but it’s more about going to one of our competitors. Which is different than other things that we’re going to be talking about in a little bit more that kind of get more to the meat of what’s important. But that that piece in particular assuming the courts don’t overrule this which You know, who knows what’s going to happen.

that’s the piece, that’s changed.

Chip Griffin: And I think that’s an important caveat. Both of these decisions and regulations are facing strong opposition, shall we say. Yes. And the courts and or Congress may step in. Public pressure may cause decisions to be changed. Who knows. But this is what appears to be taking effect and I think it’s important to plan in both cases as if these regulations will take effect because it’s a lot easier to back off on whatever plans you might have than it is to scramble at the last second to figure out what your solution might be.

Patrick Rogan: Yeah, and also it’s a great time to take a look at what do you have in place right now. On the day this came out, I was talking to one of my agency clients who are like, Oh my gosh, we can’t do non competes anymore. And this is going to be a huge change for us. And, and my response to that was, well, you actually, you don’t do non competes. You do non solicitations. And they’re like, no, no, we, we, we do. And I’m like, no, you don’t. Let’s look at it. Right. And they’re like, I thought that was a non compete. No, you’re good. You have a non solicitation. That’s fine. Right now. Stick with that.

Chip Griffin: We’ll come back to that in a minute, but I think that I do want to underscore one of the things that you said, that I think has been glossed over in a lot of the media coverage, but it’s really relevant to agencies, which is that this applies to independent contractors as well as employees.

Yes. And so, so you need to look at those agreements as well, not just your employee handbook or employee agreements. It is absolutely applicable to independent contractors, which is a place where even agencies that have gotten it out of their employment agreements, I have typically seen often still keep it in their independent contractor arrangements.

No go. Can’t do that. The other thing is you need to understand that these are retroactive to previous employees. So it’s not just, it’s not just people who will work for you today or in the future. If you have this with someone who has already left your agency, unless it’s already the subject of, of court action,

 then it’s gone, too, assuming these rules hold up.

Patrick Rogan: Yeah. The only exception, is there is a carve out for some highly paid senior level employees.

That’s a, that’s a small piece of it.

Chip Griffin: Yes. I mean, there are exceptions, you know, we always encourage you to talk with someone about your specific circumstances, whether that’s an HR advisor like Patrick or a lawyer, or somebody who can help you evaluate the specifics of your circumstances. But the vast majority of agencies don’t have individuals who are going to be exempt.

It also applies to partners within your agency in most cases. So just, just because someone’s a co owner doesn’t exempt them, from being able to be submitted to a non compete. The one place where non competes do appear to still be permitted will be in the case of you selling your agency, there can still be non compete covenants in the purchase and sale agreement, that takes, that takes effect there.

So that is, that is what, but the vast majority of you aren’t going to be selling your businesses anytime soon. So that’s, that’s not really a major consideration for you today. But so, so, so explain the difference between a non compete and a non solicitation agreement, because this is, you and I have advised going the non solicitation route, which appears that this new decision is silent on non solicitation, but the current legal analysis that I’ve seen, and I don’t know if you’ve seen anything different, seems to suggest that non solicitation probably will survive at least for the moment.

Patrick Rogan: That’s what I’m reading as well too, and I’m hearing as well. I think we should keep an eye on non solicitation. But when we say non solicitation, we’re primarily talking about something that comes in two flavors. The first flavor of non solicitation is if you leave our company, you’re not allowed to take any of our clients with you

for a period of time. And typically I recommend that be limited to clients that the employee worked on. that’s probably the norm. In some cases, it’ll be a little bit broader than that, any client that the company did business with a little bit harder to, enforce. But you know, but I’ve, but I’ve seen it both ways and usually it’s for a time period prior to the termination.

So probably 12 months is probably the typical one I would see. So if you leave our organization, if you leave our company, you can’t solicit work from any of our clients or any clients you worked on that were for a period of time, usually 12 months, that’s flavor A. Flavor B is, if you leave our company, you can’t hire any of our employees out.

And I think they’re both important, to have in place because it does kind of protect the company. I’ve seen it happen many times. And they need to be written in a, in a way, you know, I’m not a legal person. I’m an HR person, but, typically you want the document sort of buttoned up that they cannot hire anyone or calls anyone to be hired.

So they can’t call their headhunter friend and have their headhunter friend call their person and then, you know, and do a triangle thing. That doesn’t work either. So it’s important that it be worded correctly. But those, those are the two flavors that I tend to see with non solicitations.

Chip Griffin: Yeah. And I think both are important and valuable.

I think that they need to be carefully tailored, you know, narrowly tailored, you know, not, not any agency, any client the agency has ever had, whether you know about them or not, not, you know, for perpetuity. I mean, you do want to put some frameworks around it because that A, makes it more enforceable and B, frankly, it makes it more understandable, from the, the employee’s perspective.

I do believe that in both cases, Even though you have these provisions, I would generally try to avoid enforcing them directly and instead use them as leverage to negotiate some kind of an arrangement. So if you have an employee who leaves and a client wants to go with them, then fine, work out a deal where you get a referral fee or something like that.

Same thing. I mean, a little bit less so if they want to poach employees, I mean, that’s a little bit more challenging, particularly if they’re, if they’re just trying to strip you know, a lot of your talent away, but still, if you’re forcing someone to stay because of a legal document that you have, that’s going to backfire you in backfire on you in the end. Even if one employee leaves and they want to take three other folks with them to go start their own business.

You might be able to enforce that, but now you’ve got three disgruntled employees working for you who would rather not. You’ve got a past employee who has already left. They’re even unhappier about you and will badmouth you all around town. So, is it really what you want to do? But having those documents allows you to have an adult conversation that says, Hey, I could block this if I want.

I don’t want to. I want to try to come to an arrangement. And usually that will work out.

Patrick Rogan: The strength of a good non solicitation is it sets an expectation for future behaviors. And in essence, when you make it clear that this is against the rules, you can’t take our clients, you can’t hire employees when you leave. We make that clear before you even start working for us.

It just prevents it from happening. Like, you know, the, the strength of it isn’t what happens after it does happen. It’s still going to be messy. And to your point, you need to figure out a way to kind of gracefully get through that. But what I, what I’ve observed is it just tends to prevent that bad behavior from happening in the first place, which is kind of what you want, which is why you want it fair, which is why you want it concise.

You want it clear and set expectations and make sure people understand.

Chip Griffin: Yeah, and look, ultimately, agencies need to treat their employees well, they need to treat them fairly, so that they’re not inclined to go out and try to screw them over by stealing clients or employees, right? So, so part of this comes down to, if this is something you’re really worried about, ask yourself, why?

Are you hiring untrustworthy people?

Patrick Rogan: Mm hmm.

Chip Griffin: Are you, are you not treating them well? So you think they’re going to want to run away at the first chance they get? I mean, think about why you really feel like you need something that strong in there and solve that problem rather than putting together a legal document that puts, you know, unfair handcuffs on people.

Patrick Rogan: Yeah. I would say if your employees are regularly leaving, whether it’s to go to your clients or to steal your clients or to hire your employees, maybe the first place to look is what are things you can do to give your employees incentive to stay in the first place? That way we, we don’t have to deal with so much of that.

Chip Griffin: Well, and your clients.

Patrick Rogan: Yeah, for sure.

Chip Griffin: I mean, if you haven’t built a strong enough relationship with your clients that they want to go anytime an employee leaves, that’s a problem too. So in any case, I, you know, I think, I think the bottom line is stay away from non competes regardless of what happens with this FTC decision.

For sure.

Focus on non solicitation, focus on confidentiality and reminding departing employees of their obligations regarding trade secrets and returning information. Those things haven’t been gotten rid of. Those are all still there. So, rely on those kinds of protections rather than non competes anyway.

And then you won’t even have to worry about whether this gets struck down in the courts or not because you’re already on the side of the angels.

Patrick Rogan: The other thing I see is when I hear the complaint from clients in terms of the need for these types of agreements is well, you know i’ve invested in these employees if they leave and take that to one of my competitors then I lose that investment. And if that’s something that really bothers you, you can create clawback agreements so that if you provide specific training for employees and they leave with the next months of the training They would have to pay you back a percentage of that.

I mean, if that’s something that really bothers you, that’s one way you can address that, but a non compete isn’t really going to fix that.

Chip Griffin: No. And I would still advise against those kinds of provisions. You certainly can have them, but I mean, they’re just, again, it, it sends the message to your team that you don’t trust them, that you think they’re basically stealing from you and they’re going to leave as soon, I mean.

I shoud, you want to go into it assuming the best of your team. And if you can’t assume the best of your team, your hiring practices need some help. Right. For sure. You can talk with Patrick about that too. I’m sure you can help with that. But, but now let’s, let’s move on to the, the, the rule that I think is, has the potential to impact a lot more agencies in a lot more meaningful ways and something that you really need to give some thought to how you prepare.

And frankly, as you’re looking at both of these issues, I would say it’s a great time for you to be looking at all of your HR policies and procedures. I mean, I’m not trying to, you know, turn this into the full employment for HR consultants role show, but, but that really is something. The fact that these both came out in the same week is It’s a wake up call to a lot of agencies that probably haven’t looked at handbooks and policies and agreements in many, many years and they probably didn’t give it a lot of thought even when they first put it together.

So now is a good time, as you’re looking at non competes and overtime rules, just take a fresh look at everything. See if there’s anything else that needs to be tweaked because there are a lot more rules and regulations that have taken effect in recent years that are more employee friendly and they’re not just at the federal level, they’re at the state level and I expect we’ll be seeing even more of these In the months ahead.

Patrick Rogan: So I totally agree.

Yep.

Chip Griffin: So, over time.

Patrick Rogan: Yeah.

Chip Griffin: What is First of all, I think a lot of people are confused when you talk about exempt employees. They don’t understand like an exempt employee What does that mean? And that’s most of these regulations are written around fancy terms that that are, I don’t know if they’re intentionally confusing, but they’re more friendly to lawyers than they are to lay people, which is why instead of talking about exempt employees, I just talk about overtime rules because that’s the practical impact.

But explain how overtime works and what the change is.

Patrick Rogan: Sure. So the Department of Labor enforces a law called the Fair Labor Standards Act. And what that law does is it requires All employees to be paid overtime for hours over 40 per week unless they fit within several defined categories, at which case it’s okay to pay them a salary for all hours worked in a week.

By the way, if you’re paying someone a salary, And they work 20 hours a week. You still owe them their full salary. So you, there’s two sides to that, but, but it’s so that the, in the agency world, well, there’s a, there’s an executive exemption, there’s the administrative exemption, there’s a professional exemption, which cover, you know, more than 90 percent of employees who

are eligible for exemption, and it’s the professional exemption is the one that applies most to agencies. And, you know, currently, there’s a, you know, there’s a, minimum amount of salary that has to be paid. It’s very low. It hasn’t changed in a long time. Right now, it’s just a little over 35, 000 a year.

And what we’re, what will be changing, unless this goes back to the courts again, is, that’s going to bump up effective July 1st to 43, 000 and change, but most importantly, in January 1st, that’s going to bump up to, over 58, 000. So that’s something we’re going to probably need to talk about.

Chip Griffin: So there are, there are essentially three questions then that need to be asked, right? Did an employee work more than 40 hours a week, right? Correct. And it is, it is 40 hours. It’s not whatever, if you set a 37 and a half hour work week for your agency, you don’t have to pay for hour 38, you have to pay for hour 40, right?

So, so, That’s the first thing. If nobody works under 40 hours, yeah, you’re not going to have to pay overtime.

Patrick Rogan: Right.

Chip Griffin: If they work over 40 hours, that first test that you suggest is what kind of work are they doing? And the vast majority of particularly small agencies in 2024, the professional exemption is going to apply.

Still work. You know, working with your HR advisor just to make sure you don’t have anybody on your team, or you don’t have some kind of a business model where you have somebody who wouldn’t qualify. I don’t know very many small PR marketing agencies that have anyone on, on staff these days that wouldn’t qualify.

I mean, 20 years ago, you had secretarial support or things like that. You know, that would have qualified for overtime in most cases, but today that’s not the case. Everybody does all of their own clerical work. So we’re all professionals.

So then the real thing is this salary number. And as you say, the 35, 000 number hasn’t changed in a long time.

The vast majority of even small agencies are paying full time employees more than 35, 000 these days. So frankly, you know, It’s been a while since anybody has even given any thought to overtime. Probably the last time was eight years ago. If your agency was around eight years ago, hopefully you were thinking about how to deal with it then because this same attempt was made or a similar one was made in 2016.

And I remember working with you, Patrick, on this, for some agency clients trying to figure out how we can solve this problem.

Patrick Rogan: Right.

Chip Griffin: And at the last second, it went away. We cannot assume that this one is going to just go away at the last second. So we need to prepare So that’s my question. What do we do to prepare for the fact that it’s going up to assuming these hold 44 000 or so on July 1 which is less than two months or two months exactly Right very very close. But I think that’s an almost irrelevant number because that’s, to me that’s just for political purposes so the Department of Labor could say well, we’re doing it in you know in gradual steps. But the next step is January 1 which is seven months away.

And that’s a very substantial bump to 58, 656 a year as the minimum salary in order to not think about overtime for somebody, right? There are a lot of small agency employees for sure less than that. So what do we do today? What if you’re, if you’re sitting in the owner’s chair or an owner calls you up, what do you tell them they should be doing, here today in May of 2024?

Patrick Rogan: Well, there are multiple steps to this. and it’s a little bit tricky. So, I’m not aware of any agencies that are, that are paying employees, a salary of 35, 568, which is the official minimum salary right now, most are in the neighborhood, of the July 1st for entry level, let’s say for entry level employees.

43 888 is the number, getting that up to date by July 1st. I’m not really worried about that. That’s kind of, you know, for 99 percent of agencies out there, I think they’re probably pretty close to that anyway. That’s a rounding error. to your point though, January 1st, that’s significant. If this goes through, this is, you know, upwards of 59, 58,656.

That could be a significant increase, for exempt employees. And I think it’s going to be important for employers to be very careful about how they approach this. So, so there could be some employees that maybe they’re going to change them to non exempt status. So they are overtime eligible and maybe they will just work 40 hours a week.

in other cases, they’re going to need to, to increase to that salary level. And it’s not just the employee who’s getting, you know, eight or 10, 000 or more increase, there’s the downstream impact of that. So like, if you’re normally bringing in today. Let’s say you’re bringing employees in at 44, 000 and the July 1st means nothing to you.

So typically after a year, you would bump that up to what, maybe 48 or 50, 000. So you’ve got people who’ve got, you know, a year’s experience. Or even two years experience. They might still not be at the January 1 level of, of almost 59, 000. So, all right, so we, we’ve got our, our, all our entry level hires.

We’re going to bump them up to 58,656, January 1st. We can meet that, but wait a minute. What about all the, all the employees you have a year or two experience? Are you going to, are you going to pay all your employees the same, the same salary? Obviously. So that’s, that’s where it gets a little bit tricky and that’s where it’s going to take a significant amount of planning to make sure that we begin right now, figuring out how we’re going to approach this.

What do we need to do? Easy, I think, relative to your most for July 1. But for January 1, if that goes through, we need to be careful that we’re prepared that has approached that really impacts not just those employees who are below, but all the, even the ones who are above, is there going to be a differentiation in how you’re paying your employees?

And we also have to be careful. We’ve been down this road before, where we almost got to the 11th hour. And then they said, no, we’re not going to do that. In which case I did have clients who had actually already made changes. And they were like, okay, well, I guess we’re prepared for when it does come through.

So that’s we’re going to keep that in the background too. So this is tricky.

Chip Griffin: Because it was eight years later. So all those employees are being paid either a lot more or they’re not even there anymore. Right. Yeah. But, but yeah, so the, the absolute easiest is just to get somebody up above that number. Right. Because then you don’t have, you know, you can keep them as exempt and you don’t have to worry about it.

And so, as you say, for July 1, I think the vast majority of entry level employees, even at small agencies, are over 40 now. So if you’re within a couple of thousand, just move them up. Just go to 44 and call it a day and buy yourself the breathing room to look ahead to what to do on January 1st. So that way you don’t have to rush into anything in the next few weeks.

And in general, I think for, for either of the deadlines, if you’re, if to get someone clear of, non exempt status and, and, and avoid paying overtime, if it’s less than a 10 percent bump in their pay, that’s, that’s, that would, I would use that as the rule of thumb. It’s probably best if it’s, if it’s a single digit percentage increase, just give them that.

And it makes it easier for everybody involved. Because overtime is, you know, it, it takes some calculation to do. It takes paperwork to actually make it work regardless of whether or not you’re going to pay it right. Even if you say we’re not going to let you work over the 40 hours a week, it still requires a lot more process.

And we’ll talk about that in a minute, but, but I love that you pointed out that you need to think about what the downstream effects are, because you and I have talked a lot in previous forums. about the importance of having proper salary bands within your agency to make sure that you’re paying people equitably, that you have a path forward for them from a career progression standpoint, that you avoid, you know, any, any issues around equity problems because you are paying one class more than another.

And if you, if you have salary bands that define roles and appropriate salaries for that. You’re much more likely to be in the right place and paying everybody fairly and giving people those paths forward. So you need to think about that, particularly if you’re doing more than a 10 percent bump, right?

Cause anytime you’re giving a group of people more than 10%, now you probably do have a meaningful downstream effect. 5 percent you probably can wiggle it within your existing system. 10, 20, 30 percent now you’ve got a huge problem. And you don’t want to be taking someone from 42, 000 today to 60, 000 on January 1, just to avoid having to deal with overtime compliance.

That doesn’t make a whole lot of sense, either from a business perspective or from what it does to the rest of your organization.

Patrick Rogan: Yep, I totally agree. And salary bands, we’ve talked about this before, they’re coming whether we want it or not. You know, a number of states already require putting salary ranges for postings.

Maryland and D. C. will have passed effective this year, D. C. I think it’s July 1st, and Maryland I think is October 1st. Colorado was sort of the first one to jump in on the bandwagon, so it’s coming. We might as well get the salary bands done whether we want to or not because we’re gonna have to.

Chip Griffin: Well all of these things are coming and you know whether it’s non competes or new overtime thresholds because it’s not just the federal government that can get involved with these. State governments can and are. I mean California for a long time has had more stringent regulations around a lot of things including prohibiting non competes.

I mean that’s been in place for a long time Right. And we’re seeing more at the state legislative level where they are, they are following California’s example. And I think because both of these issues are getting attention, even if they are stopped at the federal level, you’re likely to see more state action.

And because many listeners have employees in multiple states now, because post 2020 hybrid remote agencies have become the norm. So you hire the best talent, wherever it is. You might as well comply with the most stringent standard you’re going to have to deal with rather than trying to figure out, well, Sally gets this set of rules and Joey gets that set of rules, because that’s confusing for you.

It’s bad for team morale. So just figure out what the toughest is you have to comply with and comply.

Patrick Rogan: That’s my total recommendation. I think Oregon jumped on the bandwagon too. But yeah, just, just make it fit the, the hardest one, and that way you’re done. You don’t have to go back and redo it again.

Otherwise you’re, you’re all over the board. And then, you know, you wanna make sure from an internal equity perspective, you have some rhyme and reason, you know, that isn’t, tied up to state litigation or federal litigation. You, you want to, you have a business you gotta run. So make sure you have consistency and and if you make it consistent with the hardest one out there, that usually works out to be easier for everyone in the long run.

Chip Griffin: Yeah. And if you are making these bumps to avoid overtime, you also need to look at what, what’s the impact on your agency’s pricing. A lot of times we give employees raises and we don’t think, I mean, whether it’s for this or anything else, we don’t think about what does it mean for prices to existing clients or new business.

And so as you pay your team more, which everybody’s having to do regardless of these rules, right? I mean, everybody complains to me, Oh, gee, some entry level employees cost so much more today than they did 20 years ago. Well, yeah, there’s inflation and all that kind of stuff. So it happens whether we like it or not, but you need to be updating your pricing at the same time and making sure you understand that impact. But let’s, so let’s say, let’s say we come to January 1, Patrick, and, and we’ve got some employees.

We’re just not going to pay them 60, 000 just to, to avoid the headache. We have to have them at a more reasonable salary. That’s more appropriate to the work that they’re doing and how we can price it and all that. So what do I need to be thinking about if I, because I haven’t been thinking about overtime.

I haven’t been thinking about the record keeping around it or the policies for approvals and pay and all. So what do I have to be thinking? What are the key things that I need to be thinking about in preparation for that?

Patrick Rogan: So if we’re going to have employees. that on January 1st are going to be non exempt.

So we’re going to, they’re going to be overtime eligible. One of the things I see is, well, we’re just going to say there’ll be no overtime. And so, so there, and there are two flavors of that. So there’s, there will be no overtime and we don’t want you to work over 40 hours a week. So that’s one. The other one I see is.

There’s going to be no overtime pay and, and you’re not expected to work any hours over 40 wink, wink, nod, nod. That’s not good. That’s not good because the onus is on the employer. So if you say there’s going to be no overtime and you know, your employees are working overtime or if you say there’s no overtime and you’re not aware your employees are working overtime, you still owe them for overtime. And probably interest in penalties and all that kind of stuff on top of that there.

So it’s not like, we can say, you know, well, I wasn’t aware. We have to be aware and we need to have the systems, tools, and processes to make sure, we are aware. And it’s probably a pretty good idea to know how many hours your employees are working anyway. Like it might be you know, like if you want to determine profitability or things like that I mean probably would be a best more your area than mine, but You know, that probably is something that, that would be good to know.

Chip Griffin: I’m a staunch advocate of timesheets regardless of overtime, but with overtime, they start to take on a different level of significance, right? So it’s, it’s not just, you know, kind of, do your best to figure out some timesheets and give me something that I can kind of work with. And, and I I’ve shared the story previously that, that when I was a junior account executive, I lied on my timesheets all the time to give the employer what they wanted, not from an overtime avoidance perspective, but from the perspective of, you know, We’re only supposed to work so many hours on certain clients.

People will report what whoever is seeing that report wants to see. Right. I didn’t want to get yelled at by the client for not doing the work. And I didn’t want to get yelled at by my boss for, for working too many hours. So I just made the timesheets work so that they made everybody happy. You can’t have that.

And I think that you’ve done a good job of explaining that the burden of proof is on you, the employer, right? To make sure that there is compliance. Wink and a nod does not hold up in court. Never has, never will. And, and you can’t just stick your head in the sand and claim ignorance that you didn’t know, right?

You need to be taking proactive steps to be able to demonstrate that to the best of your knowledge and you put in your due diligence, nobody was working over 40 hours.

Patrick Rogan: And when push comes to shove and you get asked the question, how did you clarify that your employees, you made a change effective January 1st or right before then, how did you clarify that your employees were eligible for overtime pay?

How did you make that clear? Give us examples of that. And I want to see that documentation. It was like, well, we just had a conversation and you know, everyone pretty much… no, no, no, no, no. So that’s not going to work.

Chip Griffin: Right. So the first thing you can do is you can say, look, overtime is not authorized in any case, and we’ve got to document it.

So for that documentation, timesheets that you collect on a weekly basis and hold on to, as long as you believe that they are accurate and you’re not playing any games, that presumably is sufficient documentation. How long do you need to keep that documentation for? What’s the best practice there?

Patrick Rogan: In general five years, but ten if there’s going to be some type of litigation. So ten’s a good rule of thumb.

Chip Griffin: So basically it’s electronic. Just keep it.

Patrick Rogan: Yeah, just keep it. Yeah, just keep it

Chip Griffin: Just keep it, there’s no downside. Make sure that if you switch time tracking platforms, you download a copy of it so you’ve got it so that if someone comes to some disgruntled employee, ’cause all of these come about usually by disgruntled employees, right?

That’s how it normally works.

You have an employee who is unhappy with you, whether it’s current or former employee, they file a complaint and that’s how these things come to light. So, you know, it behooves you again, to treat your employees well so that they don’t want to do that to you. But okay, so we’re, so we’re, we’re documenting it.

We’re saying you can’t do it. So that’s, that’s policy A, policy B is. You can only work overtime, but you need prior authorization for it. And I would encourage you never allow employees just to work overtime on their own. Right? So to me, it’s either ban it and document it or it’s allow it, document it, but require pre approval so that at least you’re not just being surprised by someone saying, I worked 80 hours last week.

You got to pay me for it now, right? There needs to be a level of authorization that takes place in advance.

Patrick Rogan: And if you do the option your option, I guess we’ll call it B there with with prior approval for overtime You can manage that right? You can you are in charge of managing how much overtime there’s going to be and there may be enough profitability that that it it totally makes sense. And it does kind of fit a little bit more of the real world test. Like even if your employees just work a little bit of overtime and this goes to litigation and you’re keeping good records and you do some overtime in certain cases and other cases there’s no overtime versus you just made this blanket policy that said no one ever does overtime.

How realistic is that? Maybe it is, but you know, did it meet your business needs? Did it meet your employees’ needs? And is it going to pass a litmus test if this goes sideways?

Chip Griffin: So, so require that prior authorization, and, and it does, as you say, it allows you to manage it. The other thing that you need to think about then is how you calculate it, right?

Because I, and for most agencies, it’s, it’s relatively straightforward, but there are some potential gotchas, particularly if you have employees who, you know, who are doing some form of sales as part of their role, and they’re getting some commissions, because that needs to be factored into overtime pay calculations, correct?

Patrick Rogan: Right. It’s the total compensation divided by. You know, 2, 080 hours a year. That’s your, however you calculate that out. But it’s total comp at time and a half.

Chip Griffin: Yeah. So most agencies don’t run into that, but I, but I know there’s a not insignificant number of you out there who do have employees who get commission as a meaningful piece of what they’re doing.

And so you need to make sure that you’re factoring that in to frankly, not just overtime. There are other things, you know, retirement contributions and things like that, where it also comes into play. And so you need to be looking at it there as well. If you’re not already.

Patrick Rogan: And you could typically true that up at the end of the year too, they’ll usually allow that, like, if it gets kind of complicated in terms of how those payouts are usually truing it up at the year is how that’s handled.

Chip Griffin: Yeah, and my general experience with, you know, government auditors and such on things is they’re willing to work with you as long as you’re showing good faith, right? They are not – the vast majority of them, despite all public reputation. They’re not there to get you. Right. If you are trying your best as a small business owner to comply and, and working things through, they’re not going to come in there and pop you in the face if they find out that you, you know, messed up and you, you missed by, you know, 1 percent the number that you were supposed to give somebody, you know, because of an honest mistake.

Right. You know, it doesn’t mean you’re not gonna have to pay for it and pay a fine probably for it, but they’re not, they’re not looking to, to jam you up unnecessarily.

Patrick Rogan: And the more you can prove that you’ve done your due diligence, to your point, it means a lot, you know, it’ll help you there. Maybe it’s a slap on the wrist or just do this differently going forward versus, Oh boy, you better lawyer up.

Chip Griffin: Right. And ultimately, you know, assuming that you go through this process, the actual paying of overtime these days is relatively straightforward. Whatever payroll processor you’re using likely has the ability to pretty easily add this to the next pay period. You do need to make sure that you are doing it in a timely fashion.

You don’t just, you know, Randomly pay overtime whenever you feel like it. There are standards as far as you know when those overtime payments need to be made.

Patrick Rogan: It should be in that check that covers that time period for sure.

Chip Griffin: So that means you also need to be collecting accurate time sheets in a timely fashion, right?

You can’t let someone just do a time sheet at the end of the month if you’re paying twice a month. You need to make sure that the time tracking is matching up with your pay period so that you can pay people properly. And I think this is as good a time as any to mention that the practice that that many owners think they can do where they just give comp time for overtime. That doesn’t fly.

You know, you can’t just say well you worked an extra half day this week I’ll give you a half day off next week and we’ll call it good. No, I mean, honestly, I don’t love that. I think that comp time should be permissible As long as it’s mutually agreed, but that’s not how the law works.

Patrick Rogan: It is not unfortunately Comp time should only be used … in general, I’m not in favor of it anyway, just because it gets, but only with exempt employees, salaried employees would, was the only time I would ever. But for non exempt, you just can’t do it.

Chip Griffin: And I would prefer not to, just don’t call it comp time. Yeah. It’s just, yeah. If you want to let someone take a little bit of extra time off because they’ve been working hard, fine.

Patrick Rogan: Yeah.

Chip Griffin: You know, let’s not call it an exchange of this for that.

Patrick Rogan: Right. Right. Yeah.

Chip Griffin: Any time you’re connecting two pieces together, even if they are exempt, it just gets messier than it needs to be.

Because then, then you create an expectation. Well, every time I work an extra half day, I get an extra half day somewhere. You know, maybe that’s right. Maybe it’s not. I don’t know. But, you know, keep it a little bit more informal when it comes to those kinds of things. if you can. But I think that the most important message that we’re sending here, particularly as it relates to overtime, is you need to sit down and you need to figure out what is your, first of all, what’s your strategy for this?

What, what kind of problem do you have if these numbers do indeed take effect? Can we solve it just by increasing salary? Do we need to put in a proper process and a full overtime payment scheme? And if you do make sure that you’re setting it up in a way that both works for your business as well as complies with the relevant laws and regulations.

Patrick Rogan: And how does it impact your entire team, not just the few that are in, you know, if all of a sudden, you know, half your agency is making the same exact amount of money and, you know, some have eight years of experience and some just started, you know, that, that might be a problem.

Chip Griffin: Yeah. I mean, look, if you’re giving 30 percent raises to a bunch of people on your team, it’s going to cause you problems.

Right. I mean, I guarantee it. If you’ve got only one employee who needs to get a substantial bump, maybe you can find a way to work around that, you know, because if you’re willing to do that, to keep them and avoid overtime, you must feel pretty strongly about them, right? In that case, you know, you can probably find a way to promote them so that they are still being paid within an appropriate salary band.

And it becomes a more effective story to tell that employee as well as others. So, but bottom line, put your plan together, give it some thought. Don’t just go into this willy nilly. Don’t sit back and hope that the courts or Congress will save you because that is a fool’s errand, and, and ultimately will cause you problems down the road, even if it’s not in the next six months.

Patrick Rogan: Yes. Eyes wide open.

Chip Griffin: So Patrick, if someone has more questions, they’d like to talk to you. They’d like to call up in a panic and say, Patrick, I need you to take a look at things. You need to help bail me out. How can they get in touch with you?

Patrick Rogan: Real easy. You can find me at ignitionhr.com. On the lower right hand corner there’s a little box, click it and schedule a Zoom meeting for us.

Chip Griffin: Excellent. And, Patrick is, he’a great HR guy to work with. He can help solve your problems without feeling like he’s an HR guy, if, if you know what I mean. So, in any event, thanks for, for taking the time to help simplify these things, explain them in terms that I think most owners will understand.

It’s a very valuable service and, and obviously we’ll continue to keep an eye on this issue. And if there are major developments, we may do a fresh episode to take a look at whatever changes or adjustments might be in place or whatever that next regulation is, that’s going to be part of your full employment plan.

Patrick Rogan: Or the next two that happen at the same time.

Chip Griffin: Oh, there we go. There we go. I mean, it’s always nice when it happens twice at once. So we can, we can condense it into one episode instead of two red tape episodes. So anyway, thank you for your time, Patrick. Thank you everybody for listening. Again, I’m Chip Griffin of SAGA, and I look forward to having Patrick back on a future show and I look forward to having you as listeners come back for my next episode as well.

Thanks for joining me.

Meetings have evolved over the last few decades, so shouldn’t the agency owner’s role have changed?

In this episode, Chip and Brad Farris of Anchor Advisors discuss the importance of effective leadership and meetings in agencies, emphasizing the owner’s unique role in providing vision and direction.

They explore the need for well-structured meetings with agendas, purpose, and active participation from all members.

The conversation touches on techniques for better meetings, the role of leaders in encouraging participation, and the value of appreciating contributions and creating positive meeting experiences.

Brad Farris has helped hundreds of agency owners sharpen their focus, raise their prices, and hire better people so that their firms can scale and thrive. Brad has learned that success is driven less by what you do than by who you decide to be, and the biggest hurdle to your agency’s growth is between your ears.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of Chats with Chip. I’m your host, Chip Griffin, the founder of SAGA, the Small Agency Growth Alliance. And I am delighted to have with me a regular collaborator on all of my podcasts and other things, because he’s a smart guy. He’s a fun guy, Brad Farris of Anchor Advisors.

Welcome to the show again, Brad.

Brad Farris: Thanks, Chip. I’m glad to be here.

Chip Griffin: Always great to have you here today. And I think that we’ve got a good topic to get started with because I know you’ve been thinking a lot about leadership. And in particularly, in particular, leadership in meetings. And, you know, meetings.

There have been books literally written about meetings. In fact, I have one over here on my bookshelf. Lencioni, I can’t remember how to Yeah, Death by Meeting, a famous, famous, book on meetings. And I, I think that it’s a worthy topic because most agency owners spend a lot of time in meetings and a lot of time leading them.

Yeah. Pretending to at least.

Brad Farris: And I want to set this up by thinking about what is the only job in an agency that you, the owner that are uniquely able to do. Like no one else can do this job. And that is obviously the leadership role, the role of seeing the future. And saying, this is how we’re going to approach the future.

And this is how we’re going to be successful in the future. Come on everybody. This is how we’re doing this. Right. And so alignment and vision, that’s the job that only the owner can do. Right?

Chip Griffin: Absolutely. I mean, the, the owner, it’s their business. That’s right. So now, I mean, what I will say is that many owners abdicate that responsibility and allow inertia to carry them forward, but the, the business ought to be serving your needs as the owner, otherwise why take on all the risk and stress.

Brad Farris: I have also seen owners who try to have some sort of consensus or majority rule situation. And that tends to go horribly wrong in my experience because the, the person who is rewarded most for the longevity of the business is clearly you. And so the rest of the team, they have more of the immediate needs of the business in mind.

You have the longterm health of the business in mind. And so that’s the job that is yours and yours alone. Right.

Chip Griffin: You should be a benevolent dictator. That’s right. That’s I mean, it is fundamentally what it should be. I think trying to build consensus and get people to come along is okay up to a point, but at some point, you simply have to take responsibility and make that decision.

I remember when I was first hired to be CEO of a company back in the mid nineties and one of the early staff meetings, someone, we were discussing something and there was two different opinions. And so someone said, well, let’s have a vote on it. And I said, I said, you can have a vote, but mine’s the only one that counts.

And it was a little bit of a flip answer. I, you know, I, in, in the fullness of time, I’ve learned that there are better ways to handle that than being quite that direct that early on in the relationship. But. That’s how it is. That’s how it needs to be.

Brad Farris: That’s right. And the place where our team most often experiences that leadership from us is in meetings. You know, now one to one surely they’re experiencing our leadership one to one and there are a lot of leadership skills that we want to apply when we’re one to one with people. But by and large, the time that The rank and file of the majority of our organization experiences, our leadership is in meetings.

And my observation is that we’re running meetings, basically the way we ran them in the eighties, when I started work. And I have to believe that we’ve learned a few things about how to run a meeting since then, that would help us to project our leadership in a more positive and effective way than the way that we’re doing.

Is it, do you have that same observation?

Chip Griffin: I do, and I think even more so now, the nature of these meetings is very different than it was, because when you and I got started, these meetings all took place around a table. Yes. And, and so part of the whole meeting experience was, you know, coming in and the chit chat before and after, and it was just, it was a whole different dynamic from what you have today.

Brad Farris: Who sat where was important.

Chip Griffin: Exactly, exactly. You know, and, and now we’re, we’re all doing it like you and I are doing this right now where we’re doing it electronically. It is a very different environment. And so you need to adapt your style for the times and also for the technology.

Brad Farris: Yes. And I think that’s an important point because we’re running so many more meetings virtually.

I think one of the things that that requires of us is to think about how to do them in a way that we get things done as quickly as we can and that we stay on point. Like that we actually accomplished the things that we came there for. And so the first thing that that is my personal rule is if a meeting doesn’t have an agenda, I’m not coming.

And what does an agenda mean? An agenda means these are the things we’re here to discuss, and here’s how we’ll know whether we’ve done a good job or not. In other words, this is the outcome that we’re looking for from this meeting. And so, it, it’s, it’s my rule, and I, I am not afraid to cancel a meeting. If there’s not an agenda, I’m not there.

You guys can have a meeting about a meeting or whatever, but I’m not going to a meeting that doesn’t have an agenda.

Chip Griffin: Well, I would step back even one more step, which is it has to have a purpose. So before you have an agenda, there has to be, and too many meetings take place without a purpose. It takes place because, well, we always do this or it’s been a couple of weeks.

We should check in, but why? What are we actually trying to accomplish? And, and so I think that big picture purpose needs to come even before the agenda.

Brad Farris: And so the, the, the running joke there is this meeting could have been an email, right? And so that is an important thing that I’ve also started to think about is that one of the tests about whether this email, this meeting could be an email is once we have the agenda, I want someone to write down a point of view about each of the things that are on the agenda. So if there’s an appointment on the agenda that says, you know, we need to improve our lead generation. Great. I want you to show up with a one page description of what have we tried and what proposals do you have about things that we can do to improve our lead generation and what is your recommendation based on that, you know, analysis. And so that people come in advance, having thought about the thing before we show up so that we’re not doing, we’re not thinking in the meeting. We’re thinking before we came to the meeting. And this is something that, that, Quite honestly, I’m experimenting with, but doing it, I think helps a bunch of things.

Number one is it means that we know that there was a purpose for this meeting before we came. Because a lot of times, and this is honest to God, when I’ve asked people to do this, they’ll write that document up and they’ll say, Oh, actually, it’s very clear what we need to do. We need to do this thing. So we don’t have to have a meeting.

We can just send out the email, right? Great. Meeting eliminated. Fantastic. Second, if there is a reason for the meeting, we can allow the introverts to think about this thing before they show up. So we can send this document out, everyone can think about it and have some thoughts. And then we’re coming and moving from the place that the document started toward a destination that hopefully is getting us further along.

Is this something that you’ve…

Chip Griffin: I think that the introvert thing is so important. And I think even a lot of more junior employees today, and I think part of it is because of the medium and doing it not in person, you know, my experience has been that a lot of more junior employees are very reluctant to share their views off the top of their head, and they want that time to digest and think about it. And so giving them both the introverts as well as the juniors that opportunity to build their confidence in their own point of view, so that they can bring their own experience and expertise and all that to the table. Incredibly valuable. So I think there’s a balance to how much you share in advance, right?

Of course. You don’t want to overwhelm somebody, but you do need to provide them enough information that they can start thinking carefully about it. And you’re not wasting the first 30 minutes of the meeting, just describing the challenge.

Brad Farris: The other end of this spectrum is the Amazon six pager that they have this six page memo that they use before a meeting.

And then everyone comes to the meeting and spends the first 20 minutes reading it. Like that might be on the, on the far end of what I’m proposing here, but some amount of writing that is distributed ahead of time that describes why we’re talking and what the background is and what we already know and what we need to know that can really help bring the conversation a little bit.

Chip Griffin: Yeah, I’ve talked to Amazon employees about the amount of work that goes into those and it is astonishing.

Yes, it’s no joke.

And I, to me, that is not a good use of time in my view.

Brad Farris: I mean, I think of the executive levels, it could be, but none of us are working with billion dollar companies. So let’s just cut that off at the pass.

Chip Griffin: Yeah. And I, I, I don’t believe that the billion dollar companies are really all that different, but we can have that argument another day, I suppose. In any case, so yes, I mean, I, I think that by sharing this kind of information, you really are evoking a better discussion and conversation, because that’s why you should be having a meeting.

Meetings should not be briefings. That’s right. That is the one that could be an email. A meeting ought to be to try to involve people in discussion, and it should be involving everybody on the call, because there’s no point in being on the call if you’re not participating.

Brad Farris: So that was gonna be my next point, Chip.

Is that…

Chip Griffin: There you go. You’re welcome.

Brad Farris: Your transition is amazing. my next two rules are, okay, so we, we know what we’re there to meet about. We’ve done some thinking ahead of time. Now. The first part of the meeting is I want each person in the meeting to get some period of time to talk about what their perspective is on this thing.

And so start a timer. Go around the horn, get input from everybody. Because to your point, if they’re on the call, we need to hear from them. If we don’t need to hear from them, they don’t need to be on the call. Right? And so, if they’re on the call, we need to hear from them. So we, we want to give each person a chance to talk.

And in that time that they have to talk, you can’t interrupt them. People have uninterrupted time to tell you what they think. This has been a game changer in the meetings that I’ve done this, where people know that they have time to say what needs to be said and that they won’t be interrupted. Then they’re willing to wait their turn and we don’t have people getting cut off in the middle of their thoughts.

And this is really more for the extroverts in the group because for the extroverts, They can’t think about it unless they’re talking. And a lot of times their best ideas come at the end of their three minutes or whatever. And if you interrupt them, they never get to those good ideas that come at the end.

And so we need to give them the chance to work through the 10 crappy ideas to get to the three or four good ideas. They’re going to show up after they get a chance to talk.

Chip Griffin: Sorry. I just wanted to make sure I didn’t interrupt you there.

Brad Farris: Good job. I appreciate it.

Chip Griffin: Which I’ll admit I am terrible about particularly on these shows because I get so eager to, you know, and I think a lot of agency owners are similar, right?

You know, we’re all full of ideas and that kind of stuff. And we want to blurt them out for the most part ourselves. So, so having that patience to give people the time and space to have their opportunity to communicate is important. And I think part of this is a mindset shift for owners in that they need to realize that leadership is not always about talking.

Leadership is about creating the conditions to make the good decisions. And so what that fundamentally means in most meetings, you ought to be more of a moderator than a speaker, spread it around, make sure everybody has a chance to talk. The problem is in my experience, most times, whoever’s most senior in the meeting, as soon as they speak, it shuts down conversation.

Yes. Because nobody wants to contradict the leader, whether that’s the owner or a senior manager or whomever. So if you really, really want to get participation, you need to reserve your comments until the end, unless it’s really gone off the rails and you just need to say, well, look, that’s already been decided.

We’re not debating that, you know, and I think you should jump in on those. That is where you should interrupt. Don’t allow it to go off the rails because that’s not productive.

Brad Farris: Yeah. And and to your point, if we don’t want to hear everyone’s input, why are we doing this in a meeting? Why are they here?

Right? So the ground rules to me are the people in the meeting are the people we want to hear from. And so let’s give us a chance to hear from them. And then as the leader, I want to ask questions. I want to probe a little bit more deeply. I want to say as, you know, does anyone have anything to follow up on what Cheryl said?

I thought that was an interesting point, like highlighting things, but giving everybody a chance to, to have, some time on the floor.

Chip Griffin: And these things that you’re describing, we focus mostly on internal meetings, but these are just as effective in using these techniques with clients. And that’s another place where, again, we often feel we need to demonstrate how smart we are.

This particularly rears its ugly head during pitches where we just can’t shut up, but even once you’re working with the client, Shut up more, elicit feedback and ideas from the client. You’ll have a more successful relationship.

Brad Farris: So can I tell a story that might be a little bit of a diversion here, but I think it applies?

Chip Griffin: As long as you don’t go off the rails. If you go off the rails, I’m going to have to interrupt you.

Brad Farris: So the first time that I changed jobs, so I found a job right out of college and I was there for three or four years. And then a recruiter called me and was bringing me to a new job. And he said, okay, here’s the interview.

I’m setting you up on the interview. Here’s what I want you to do, Brad. When you walk into the guy’s office, you know, shake his hand. Before he’s even sat down, I want you to say, Tell me a little bit about yourself and how you got into this role. And then the recruiter said, and then don’t say another word for the whole interview.

The guy will probably talk about that for 30 or 40 minutes. I did that. Exactly what he said happened. The guy talked for 30 or 40 minutes. He says, Oh my gosh, you’re the smartest guy I’ve ever talked to. This is fantastic. We’re offering you the job. I went back to the recruiter. I’m like, I can’t take this job.

I don’t even know what the job is. Right. But the point is, The person that talks the most thinks more highly of the person who talks the least. And so if you’re in a new business situation, the less you talk, the more that they’re going to think highly of you. And that’s a crazy idea, but once you get used to it and try it out, if you’re just asking questions and letting the client do the talking.

It works out better, like 99. 9 percent of the time.

Chip Griffin: When I think that that you’ve touched on the right thing there, which is asking the questions, right? It shouldn’t be total silence. No, you know, your example was the extreme one. If you sit through a meeting internal or external and you say nothing, that’s not great either.

But by learning to ask good, intelligent questions that actually invite the right kind of conversation. You will be in a much better position, right?

Brad Farris: And so if we’re in that leadership situation where we’re trying to gain consensus around an initiative, having everyone have a voice in that and you asking questions to guide the conversation in a certain direction, that’s a way that you can demonstrate leadership in a way that they will feel like this was their idea. This is something that came from them. They’re more bought into it. They’re more connected to it. And you got out of it what you needed to get out of it without being without talking a whole lot.

Chip Griffin: And by the way, you might find a new idea that you didn’t have before or a solution, right?

I mean, it, it, it might not be just that it actually makes people feel included. It might actually produce a better result.

Usually does. That’s right.

And one of the things I like too, is, you know, and I, this is one of the things that I’ve seen you do a lot over the years on the shows that we do. You really like to say, “say more” to people and, and, and, and really draw them out and I think that’s particularly effective as we’re thinking about the introverts on our teams, those people who may not be like you and I, where you kind of have to shut us up a little bit and say, okay, that’s time out, we’re say less.

I don’t need to hear more from you.

Where’s the mute button. But a lot of members of your team or clients. They’re going to say something and you know, you may even already have a sense as to what’s behind it, but eliciting more, following up, asking them to say more, or asking a follow up question, those kinds of things Incredibly valuable, particularly for those introverts or people more reluctant to speak.

Brad Farris: Then the last practice that I want to highlight here is in some ways the most difficult. and that is I want to end every meeting with appreciation. What went really well in this meeting? What was great about this meeting? What did I appreciate about you, Chip? Like, like, I really like the way you, called me out for, for saying that, you know, I asked people to tell me more, like to have specific things in specific ways in which we’re highlighting the things that went well in the meeting, doing that creates a sense of bonding and connection and Sometimes it’s the most worthwhile part of the meeting.

Chip Griffin: I think that’s particularly true if you’ve had a tough conversation. True. Because you don’t want to leave, even if you’ve sort of built a consensus and you’ve reached the decisions that you need to make, I think it’s important that people leave meetings on high notes. And so that can be appreciation. It can be recognition of things, even as you’re saying, okay, well, we need to, you know, we need to make these budget cuts or we need to, you know, to do these changes or whatever, mixing that in with what is working, what has gone well, whether it’s in the meeting or even outside of it, I think, I think finding some way to touch on those, frankly, throughout the meeting, but, but I would agree with you that particularly at the end, you want people who walking away on as high a note as possible, even in the toughest meetings that we may have.

Brad Farris: EOS has a has a habit of rating meetings on a scale of 1 to 10 at the end of every meeting. They give it a number grade and there’s no It’s not a discussion. They just say, you know, this was a six, this was a seven, this was an eight, whatever, and tracking that over time and seeing are the ratings we’re giving our meetings improving, which I thought was an interesting idea too.

Chip Griffin: Yeah. I mean, that, that presumes that everybody’s rating it quote unquote, the right way. I mean, my experience is a lot of employees would probably rate pretty highly if nothing was accomplished, but that’s true, but they managed to escape without getting yelled at. Or assigned more work or whatever. So I, I guess I would, I put me down as skeptical for that particular approach.

You need some kind of rubric, right?

Yeah. Cause people will naturally judge those through their own lens. And was, was this a good meeting for me? That may not mean it was actually a good meeting. I mean, I think we’ve all had those meetings where we’re just, we’re just happy to have escaped it without anything bad happening.

I know I’ve had many of those over the course of my career.

Brad Farris: So. Before we step away from this topic, I want to ask, like, what makes doing these things hard? Why don’t we, as leaders automatically do these things? What is it that keeps us stuck in those old meeting patterns or ways of talking?

Chip Griffin: I mean, I, you know, I think so much of what fails in small agencies comes down to inertia.

And it’s, it’s just, this is how we’ve always done it. We’ve seen, you know, we’ve observed at our past employers that this is sort of I mean, how meetings occur, right? And we feel like, well, this is how meetings happen. This is how we should do them. I think that’s a piece of it. I think another piece of it is that we’re not comfortable letting go.

And that’s particularly true again, in small, I mean, I know that the work that we were talking about this pre show, a lot of the work we do with owners is trying to get them to let go. Yes. And, and that exhibits itself in meetings because you can’t really invite everybody in because you want to control every little aspect of the business.

And if you’re a micromanager, meetings are going to be really rough for everybody.

Brad Farris: You mean I need to listen to what everybody has to say? I get bored. I’m tired of listening to what that person has to say.

Chip Griffin: And you need to accept that you don’t have all the answers. That’s right. And that’s a good thing.

Mm hmm. Because, because then you don’t become so integral to the business that you can’t take a day off, or a week off, or sell the business someday, or whatever. Mm hmm. You, you need to be able to do that. And I, I, so I, I think those are all, and the third I would just say is fear. I think fear holds back a lot of leaders because they’re afraid of what might happen if they don’t do all the talking, if they do let go, if this meeting doesn’t achieve exactly what I think it needs to achieve, and fear is an incredible detriment to success.

Brad Farris: But Chip, I’m an entrepreneur. I eat fear for breakfast. Like, I’m not afraid of anything. Bull. Bull. Say more. Say more.

Chip Griffin: Most entrepreneurs are lying.

I mean, you know, entrepreneurs love to claim to be risk takers and all that. I mean, I’ve done my share of that claim over the years as well. And look, I mean, I certainly think that most entrepreneurs do have higher risk tolerance than most people, but it’s not unlimited. And we all have fears of different things.

It may not be a fear of true failure, but it may be a fear of looking stupid to our subordinates or a fear of looking weak to our clients. Or, I mean, there’s all sorts of things we can be afraid of. And that doesn’t make us, you know, scaredy cats. It just means we have, I mean, if you have no fear about anything, that’s a problem too.

Brad Farris: My, when I was in high school, my speech and debate coach, she would say, if you’re not scared, I don’t want you up there. Fear means we’re doing something important. It’s something that is important to us. And so that fear is actually sharpening your senses, helping you to focus, helping you to be present.

And so fear isn’t a bad thing in every case, but when it keeps us from being genuine and being, and showing up and listening and being curious, When we’re afraid of looking bad or we’re afraid of a decision going a different way. If, if our program for happiness is that everyone is responding to situations the way we want them to.

Well, that’s, that’s going to be a problem. You’re not going to get your best outcomes. If that’s the mindset you’re going in.

Chip Griffin: Absolutely. I think part of it too, is that, that everybody, including owners hate meetings, which is just completely backwards and wrong. That I, you know, I always have owners come to me and say, well, you know, we’ve got too many meetings.

We’ve got to cut back on the meetings. Maybe, maybe not. You need to have better meetings, but no meetings is not the solution either. Well run meetings can be an incredibly valuable thing. I, I went through a period of time where I was working for a larger employer and I basically just did meetings from sunrise to sunset, but they were by and large productive meetings.

And so, you know, people say, I can’t believe you spent, you know, 12 hours in meetings every day. I’m like, yeah, but that, that was the best way to get my job, the role that I had at that time done. And if I’d been sitting in an office on my own sending emails, that would not have been the best way to achieve them.

So just get better meetings. Don’t, don’t try to randomly eliminate them. And if you go into every meeting saying, I hate meetings, I just want to get out of this meeting. Of course, it’s not going to be run well.

Brad Farris: That’s it. I mean, if you’re, if you’re successful at growing your agency, you’re going to get to a point where your job is to go to meetings.

That is your job. Yes. You need some time to think away from meetings, but, but your job is to coordinate the group of others and to build the clockworks that then delivers the work to the clients. And that is largely done through meetings. And to your point, Chip, if, if you’re, if you have a negative view of meetings, Then you’re probably not going to put the work in to get that meeting to be as productive as it needs to be.

And to make it more productive means everyone’s more engaged in the meeting, we’re getting more out of it, and then we’re going to have fewer of them, because we’re making more progress when we are in a meeting.

Chip Griffin: And to bring this back full circle to the whole concept of leadership, you do not lead by email.

I, I cannot think of a single example where I, I saw an email and said, well, that’s a real example of leadership. I mean, seriously, it’s not, I mean, it’s, it’s, you can be a keyboard warrior and that’s great, but that’s not leadership. Leadership is fundamentally interacting with people. If not in person, at least by video.

And by the way, that’s the other thing I would say about meetings, put people on camera. I know the people zoom fatigue, blah, blah, blah, forget it. Yeah. I mean, I spent decades as I’m sure you did on conference calls. And I can tell you that when you are not on camera, you are not paying attention. It was a fine art form.

Cause you’d be on, I was on conference calls with 20, 30 people at a time. And, you know, inevitably at some point, you know, someone would say, well, Chip, what do you think? And then you, you pause cause you pretend you’re on mute and you know, you, so someone says something, so it jogs your memory about what was being discussed.

And then you come on, you know, You come off of, sorry, I was on mute and you come up with all these wacky excuses for, to get back in. You kind of broke up there. Can you clarify that question? You know, I mean, there are all sorts of techniques, but it was because we were sitting there and we were on email or doing other things or watching the birds out the window or something.

Brad Farris: There’s a reason why there’s a reason why every operating system has solitaire on it.

Chip Griffin: I was just talking about that with someone the other day. Does it still, I mean, I’m sure…

Brad Farris: I don’t know. I haven’t had a windows machine in a long time.

Chip Griffin: I have a windows machine, but I have not, I brought up solitaire, I guess while we’re talking,

Brad Farris: I bet minesweeper is still there too.

Chip Griffin: Oh, solitaire is still, Oh no, I have to download them apparently. So that’s what my computer is telling me. Of course, I’m probably blowing up my connection now. So the rest of the show doesn’t air it’s because I tried to load solitaire. So for you, for you younguns, that was a big problem. We didn’t have Facebook.

We had solitaire.

Brad Farris: When, when I’m talking to a leader about improving their leadership skills. What I want them to be thinking about is how am I representing the company’s values in every exchange that I’m having with, within my organization? And if the way that people are primarily experiencing me is through meetings, then I need to be really thoughtful about how am I representing the company’s values in this meeting?

How can I be more curious? How can I be more helpful? How can we get further in the meeting? If we’re already here, like let’s go as far as we can before we go on to do something else. I absolutely do that. We need to be more thoughtful about the structures we’re using.

Chip Griffin: I think that is a perfect note to end on Brad.

It’s almost like we’ve done these before and you know how to bring it in for a gentle landing for us. So, so hopefully we’ve given you some, some good food for thought on both leadership and meetings and how they interact and you know, with any luck, you’ll go and implement some of those in your own agency today.

Don’t wait till tomorrow, do it today, because all of these changes will make a big difference into the outcomes that you’re seeing both internally and with your clients. So again, my guest today has been Brad Farris, Brad, why don’t you tell folks where they can find you if they are interested in learning more about you and sharing in all the wisdom that you share regularly by email and elsewhere.

Brad Farris: anchoradvisors.com is my, is my home base. If you go to anchoradvisors.com/conversations, you can join an email list that I have there. I just send out one email a week, but several people have told me it’s the one email a week that they look forward to. And then if you go to, on the homepage, there’s a button there for a growth phase assessment, and that helps you to see what stage of growth you’re in and what are the specific actions you need to take to get to the next phase.

Chip Griffin: And I will say I it is not the only email that I look forward to each week and I hope that You know, most of my clients enjoy my emails as well. So, but, but it is a very valuable email and, and you are very good at asking thought provoking questions in those emails, as well, which I think is useful because it’s not just you pontificating, it’s you, it’s you forcing people to think, and I think we have a lot of the answers ourselves.

We just need to take a minute to reflect and it’s true. So go ahead, reflect everybody, go check out, sign up for, for Brad’s list and be sure to come back for the next episode of Chats with Chip with whomever I have on. Cause I don’t know. So with that, I’m Chip Griffin, my guest has been Brad Farris and we are done.

See you next week.

Author of Start with the Story: Brand-Building in a Narrative Economy, Kristian Alomá knows the value of brand storytelling for agencies and businesses.

In this episode, Kristian shares insights about his agency, Threadline, and the art of crafting a narrative that is relevant, meaningful, and inspiring to the audience. He and Chip cover the evolution of brand stories over time and the need for agencies to live their own brand stories. 

Chip and Kristian also discuss the value of a helpfulness mindset for growing a thriving agency. The importance of building trust and evolving with customers is highlighted throughout the conversation.

Kristian A Alomá, PhD, is a seasoned storyteller and strategist who believes in harnessing the power of narrative psychology and social sciences to forge meaningful connections with audiences. Kristian has spent over 20 years enhancing major brands like Harley-Davidson and Coca-Cola and boosting nonprofit outreach with his marketing acumen.His brand strategy firm leverages his PhD in narrative psychology to develop impactful stories that engage stakeholders. A lecturer at the Kellogg SchoolCenter for Nonprofit Management at Northwestern University and author of “Start with the Story,” Kristian champions storytelling’s role in brand building, especially for nonprofits. Committed to ethical communication, he contributes to the American Psychology Association and B Lab’s Marketer’s Network. Based in Chicago with his family, Kristian’s passion for global cultures informs his narrative branding expertise.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of Chats with Chip. I’m your host, Chip Griffin, the founder of SAGA, the Small Agency Growth Alliance, and I am delighted to have with me today someone who, like me, likes to be helpful, and we’ll actually be talking about helpfulness as one of the things on this episode, and that is Kristian Alomá, the founder and CEO of Threadline.

Welcome to the show, Kristian.

Kristian Alomá: Thank you for having me, Chip. It’s a pleasure to be here.

Chip Griffin: It is great to, to have you here. I think you’re going to offer some, interesting insights, but before we start getting into those insights, why don’t you just share a little bit about yourself with the listeners?

Kristian Alomá: Would be happy to. So, I have been, working in the marketing industry for about 20 plus years or so. And, about halfway into that career, I decided to pursue a degree in psychology. So I have a PhD in psychology. with a focus on consumer identity and narrative. And so, those areas have really sort of informed, essentially, sort of, everything I do and think about in regards to marketing, to branding, to brand strategy, customer service, customer engagement.

and on those foundations, I’ve built an agency called Threadline, and also recently wrote a book called Start with the Story that focuses on how we can build, not just brands, but better relationships with our customers. through story, through narrative.

Chip Griffin: So that’s a good jumping off point. And, and, you know, the fact that you are bringing some proper education to this conversation is probably a good thing because my degree is in political science, or as I like to tell people, I have a BA in BS.

and so, you know, we’re, we’re going to hopefully learn something a little bit more than what I have to offer.

Kristian Alomá: I’ll try. They say the PhD stands for piled high and deep. So, well,

Chip Griffin: there you go. So. One way or the other, it’ll be an interesting conversation. so, so, so why don’t we just, you know, talk about your journey a little bit, and then, then we’ll talk, about a couple of other topics.

But so, you know, how did you decide I’m going to start my own agency? I’m going to, I’m going to take this leap and this is the right thing to do.

Kristian Alomá: Yeah. You know, it had always been, I guess, a desire of mine, even at the last company I had my, my hope, my focus, my development was in basically moving into leadership positions, and leading that organization.

but I come from a family of entrepreneurs, small business owners, medium sized agency owners, that sort of thing. And so this sort of idea of, of running an organization and building a company that is really sort of, you know, again, those were all family run businesses and your customers felt like friends of the family.

And you sort of served folks in these really kind of genuine and authentic ways. I knew I wanted to do something like that. And, and, you know, my just educational path took me to, obviously sort of beyond, the sort of home nest, if you will. And I got into areas that my family’s never worked in.

And so I had to figure out how to make that work in a marketing space, right? In an advertising space. And so, at about, seven years ago or so, you know, I’ve, I’ve had this really sort of deep conversation with my wife about these dreams and these ambitions and these aspirations. And, you know, we had the hard conversation of, can we afford to do something like this, right?

To take that leap and not have that guarantee of a paycheck every two weeks. And, and, you know, we felt really good about it. And we felt like, you know, I had built a personal brand in the industry. I had relationships with some really great clients that I knew I could perhaps rely on. and, and that brought me here.

And from there, it’s all been about, you know, how do I build an organization that is not just another agency, right? That’s not just, you know, the thing that I see as a cash cow or an ATM machine that I can just sort of turn on and off or bring in the right staff to sort of generate enough profit for me, but something that like, I see as a legacy for myself.

I see as part of my identity. I see as something that I want my kids to look at and think that’s, that’s the right way to run a business. I want the world to look at and think that’s the right way to run a business. And that’s sort of is where we are. And it’s a, it’s a learning process for sure. I doubt I’m getting it right every day, but I’m figuring it out as I go along.

Chip Griffin: You know, I, I think that’s a great way of describing entrepreneurship generally, right? Any true entrepreneur is constantly trying to figure things out and, and, and hopefully learning, mostly from our mistakes, right? I always say you learn more from failure than from success. success can be just some dumb luck, but failure, there’s probably a reason for it.

And, and if you understand that, then at least you can try to avoid making the exact same mistake again.

Kristian Alomá: Right, right. And you know, I’ve, I’ve, I’ve, really sort of relied on when I became an entrepreneur in, in sort of right in full, how much the sort of entrepreneurial community reached out and, and wanted to share their experiences with me, right?

I think we do learn from our mistakes. We learn from everyone else’s mistakes as well, if they share them with us. And, and that’s what happened. And, and that was actually probably sort of more rewarding than even starting the business because, you know, starting the business is actually pretty kind of uneventful, right? Like all of a sudden you get an email from the government that says you’ve you’ve filed your articles of organization and all of a sudden you have a business. It was harder to buy a house than it was to start a business to be honest. And so, but when, when all these different folks sort of reaching out and having meetings and saying, Hey, this is what I struggled with.

Or if you’ve got questions, reach out that, sort of really kind of made me feel like I was in the right place. and, and inspired me to say, Hey, if there’s anyone else that’s doing the same thing. Cool. I’m here to pay that back as much as I can.

Chip Griffin: Yeah. I mean, that, that’s one thing I’ve always loved about the community of entrepreneurs is that almost without exception, entrepreneurs are happy to help other entrepreneurs because they have a passion for what they do.

And I’ve been fortunate to basically, that’s my business now. I just run around telling people all the things I failed at so that, so that they don’t, so that hopefully they don’t have to. you know, if you think back to the conversations that you had with your wife, when you were saying, okay, you know, we can take this leap and this risk.

How has owning an agency lived up to or fell short of the expectations that you have had, that you had at that time? In other words, is it what you thought it was going to be?

Kristian Alomá: I think it was, although I should say what I have discovered is what I want it to be constantly changes. You know, when, when we first had the conversation, I had that picture in my head of like, Oh, we’re going to be this 25 person agency with a cool office and pool tables and all this sort of stuff.

Right. And, you know, you start sort of going through it and you start living it and you start to realize. Maybe 25 isn’t what I want. Maybe I want 12. Maybe I want 10. Maybe I want 5. Right? And, and so I’m sort of constantly using the sort of experience that I’m having as feedback to say, yeah, that maybe wasn’t what I wanted, but it’s still everything I could ask for.

Right? Like it’s, it’s a weird sort of, dynamic that I experienced where I’ve, I’ve never, though at probably at no point has it ever actually lived up to what I thought it would be, at no point has it ever disappointed me. in, in sort of a core way, right? There are challenges, there are struggles, you know, we’ve, we’ve hired and we’ve had to let folks go and things like that, right?

Like all of that sort of comes with it and all of it’s difficult. And, and, you know, you learn a lot about what your skills are and what your weaknesses are. You know, I’ve, I very quickly learned, I don’t know like business finance very well. I’m a marketing guy, right? Like I had to figure out QuickBooks. I was watching YouTube videos for hours at a time trying to figure out how to send my first invoice sort of thing, you know, but, but it’s, it’s, it was still sort of worth it.

And, and it still is worth it to this day, you know, even figuring out now, like how do I develop my coworker in a way that’s meaningful to her and helpful to the business? and you know, so it’s, it’s constantly, it almost, I guess the sort of maybe the core principle of it all is like, it will never be what you thought it would be.

And it very rarely is what you don’t want, I guess. Right. Like you are shaping it, you are guiding it and you will find the path that fits you best in many cases, right? That’s some organizations fail. So that’s the part of sort of that maybe the excitement of entrepreneurship is that it could go wrong, but you’re constantly trying to find the path where it keeps going right for as long as possible.

Chip Griffin: I really appreciate that you framed that in terms of what you wanted from the business and the focus on getting that back from it. Because I think far too many, not just agency owners, but other entrepreneurs have the business driving them and, and they’re just saying, well, you know, what’s the next logical step for the business and not thinking about what it means for them as the owner.

And I always say, there’s no reason to take on all the stress and all the risk of being a business owner if you’re not getting what you want from it. And as you say, that may evolve over time.

Kristian Alomá: You’re, you’re absolutely right. And I think, I mean, I, I didn’t know that at the start for sure. I thought that a successful business was 25 plus people, right.

And, and I thought that, you know, when you had a really successful year, you’re supposed to hire some more folks that next year to help keep that growth going. And, and it’s, it’s through a lot of coaching and a lot of reflection and a lot of conversations with my wife and others that sort of helped me realize.

I don’t have to follow that path. And that’s what sort of really reinforced it, right? When I came in saying I didn’t want to run an agency that was like every other agency, and then I literally set a playbook that was what every other agency did. It was having that moment to say, that’s, that’s completely wrong, right?

Like I need to think about what I want to do, what kind of lifestyle I want to have. Like, I remember the first time I realized I was on the right track was when my wife and I looked at each other one day and we said, do you want to go to Ikea? And I said, sure. Right. Like in the middle of the day, I couldn’t do that.

If I didn’t run this business and if I didn’t run the business the way I wanted to run the business. Right. And so we went to Ikea and I had some meatballs and we walked around.

Chip Griffin: I was just going to ask you, was it for the meatballs or the furniture? Which was it?

Kristian Alomá: It’s almost always for the meatballs for me. So, but you know, but it was, you know, it’s the kind of thing where like you realize this is the path for me, because I remember.

If I had done that in my previous job, I would have been so anxious, even though they probably wouldn’t care, right? But I’ve been so anxious that they’re looking for me on Slack and, you know, they’re trying to wonder where I am and all this sort of stuff. Where here it was like, the projects were coasting, everyone was good.

I had time. I could have maybe, you know, maybe written a blog post or something, but we wanted to go to Ikea, so we went to Ikea, and that was, that was, that was probably more important than the financial performance at the end of the year.

Chip Griffin: Yeah, absolutely. And I think we’re seeing more employees, frankly, insisting on those same kinds of flexibilities and freedom.

you know, as we’ve come out of the pandemic. You know, one of the things that we’ve talked here about is entrepreneurs being willing to help each other. And I know one of the things we’ve talked about in a previous conversation was the helpfulness mindset. And I think that’s, it is a driving force behind a lot of what I do.

you know, frankly, even shows like this, I don’t have sponsors. I don’t generate any revenue off of this directly, but I, you know, my feeling is if I’m out there being helpful, it’s likely to come back to me. So I’d, I’d like to talk to you a little bit about that and, and kind of get your take on it.

Kristian Alomá: Yeah.

I mean, I, I fully subscribe to the idea that if you put value into the world, value will come back. Right. And, I used to advise clients on this when it came to branding, right? Where it was, it was like, don’t worry about counting every penny with your loyal customers because if you’re generous to them, they’re going to reciprocate, right?

They’re going to pay that back in one way or another, whether it’s financially or it’s just because they’re loyal and they’ll stay with you forever. Right. It’s, it’s, it’s, I used to say it’s sort of the golden rule is golden. Because if you treat others the way you want to be treated, gold follows, right?

That’s what makes it so special, is that you will find success by just sort of being a person of value. And, and, and, and it’s interesting because it’s almost obvious, right? That like, if you are providing value to the world, they will at some point acknowledge and appreciate that value. Right. And that is sort of the way we approach like our marketing, our sales is, you know, I don’t go out there trying to convince you that whatever you’re doing now is wrong and that this is the right way to do it.

And everything is broken and we can fix it. I go out there and I tell a client, Hey, would you like this white paper? you know, can I, can I do a training for you on storytelling? Right. I try to provide them value as quickly as I can. Because that’s one, I think the best way to sort of build a relationship is that they recognize you as someone who provides more value than they probably expect.

And two, you know, to kind of bring it back to the beginning of our conversation. That was the way my family ran their businesses, right? Like, If they had a loyal customer that came in, my family used to run a, a sub, a sub shop, right? And, you know, the guy comes in every morning, you have his coffee and his donut ready.

And if he doesn’t have change that day, you ask him to bring it tomorrow, right? It’s, it’s, it’s those sorts of things that I think make a difference. Not only in the way you run the business, make a difference in people’s lives.

Chip Griffin: Yeah, and I think that agency owners who subscribe to that mindset will end up performing better because it increases the number of opportunities that you have.

I mean, one of the things that always pains me is, and this seems to be a thing that comes around periodically on social media, where people say, well, you know, I got someone wanted to have coffee with me to pick my brain. Well, my time is valuable. I need to charge for that. Yeah. And, and I really just frankly don’t understand that because if, if having coffee with someone completely solves their entire problem, they were never going to hire you anyway.

So, so, you know, to me, I, I view those, you know, anytime someone reaches out and said, I’d like to pick your brain, I say yes, because it does two things. First of all, it builds that relationship and who knows where that might lead, but it also it’s market research. And, and as agency people, we should always be out there trying to figure out, you know, what the, what the audience is interested in, what the pain points are of our potential clients.

So to me, we ought to be doing as much of that as we possibly can. And I know our time is valuable, so we can’t just fill our day entirely with these things. But, but you need to be out there and taking advantage of those opportunities in order to grow.

Kristian Alomá: I totally agree. And I think it’s, it’s, you know, that is one of the ways I often sort of approach and frame a lot of these things that I’ll do either for nonprofits if I do them pro bono, or if it’s a smaller or startup organization that I know doesn’t have the budget for like the full package that we would provide. For me that’s an opportunity to sort of test something, to explore something, right? It’s it’s there is this sort of mutual agreement like I’m going to give them, you know, as much as I can offer them. And I’m also going to see if they can talk to me about what more we could do, right? Because because I could turn that into a service, right?

It might work really well and all and I’m and I’m less likely to just try that on a client who has specifically paid me for this one thing to just you know, All of a sudden go in a different direction. But if I have a sort of a little bit of a testing ground, then I can kind of reflect back and say, well, maybe this is something that is valuable to others, right?

That is something I can build into the way we run this project, or maybe it becomes a whole new service in and of itself. you know, we were just, I was just having a conversation with my coworker today and we were trying to define, you know, some of the principles of our business. Like, what do we stand by?

What, what do we believe in? All these sorts of things. And one of the things I said is I think we have to measure success in a couple of different ways when it comes to our engagements. One is did we have a successful delivery of the project? Right? Like we provided them deliverables specifically what they asked for the PDF and the report is in their hands, but then there’s also the success that’s, did they use that? Did that, was that valuable to them? Right. And so I often will tell my, my coworker. You know, if, if we’ve delivered a project and the client is like, Hey, can you hop on another phone call just to download the agency on the insights that you uncovered? I always say yes. Right?

Because if I’m on one more phone call telling them about what we learned, those insights have greater life. The work that we did is surviving within the organization. And the more that I can do that, I mean, again, within boundary, like if they’re asking me to run a full day workshop, then it turns into an actual project, but if it’s a one hour phone call to sort of help them understand what I did, I absolutely want to do that.

Cause that means it’s more valuable, right? That means it’s going to be used more. It’s going to impact their business in a greater way. And if I can make that happen, that’s real success, whether they got the deliverable or not, that’s table stakes, but do they actually use it or does it sit on a shelf because they don’t get it?

Chip Griffin: Right. And the more of those conversations you have, the more it gives you an opportunity to, to practice your storytelling, which is, which is where I think we’ll head next, because, because obviously, you know, a brand storytelling is something that is, near and dear to you. You’ve written a book about it, and I think it’s, it’s important for the work that agencies do for clients, but it’s also important for agencies themselves, because I can’t tell you how many agencies I talk to.

Who don’t have a compelling brand story of their own that they can easily tell. Now they often have it. It’s just buried so deep that because they’re, they’re so interested in coming out and saying, well, we’re a full service marketing agency. What does that mean? Right. That, that basically just means you are like everybody else under the sun.

And so, so you need to have a better way to tell your story because that doesn’t really explain who you are and what you do.

Kristian Alomá: Yeah. No, it’s, it’s true. And it’s, it’s, I think to your point, right? Those, those stories are out there and it’s actually a couple of different things is they probably have created a version of a story that is sitting on a website somewhere, but it’s not, it’s sort of like what they wanted to say, but isn’t what they’re doing, in some way.

And then there’s also, if they haven’t, the story still exists. It’s just the clients have made up the story and it may not be the story that they actually want clients to be telling about themselves. And so, so it is absolutely critical that they sort of really kind of thoughtfully craft what is their narrative and not just to your point where a full service agency does X, Y, and Z. But when you craft a narrative that actually sort of centers your customers’ problems at the heart of that story, then it’s how do you solve that problem?

That’s the story that you start telling that starts making it really relevant, really motivating to the audience that you’re trying to serve. And that’s, that’s sort of is one of the things I tell folks is, you know, you really want to focus on sort of three key elements when it comes to storytelling. Is it relevant to your audience?

Is it meaningful to your audience? And does it inspire your audience? Because you need all three of those things to get behavior. Right. So relevant is that, you know, if you’re just talking about being a full service agency and they don’t recognize themselves in what your story is, they’re just going to ignore the story, right?

It just slides right by. Meaningful, because you have to actually address some problem they have. So you might be talking to people like them, but if you’re not talking to the problems that they experience, then it’s, it’s also sort of irrelevant. And then you’ve really got to set up sort of an emotionality.

And what I mean by that is it’s not that it has to be like this emotional sort of deep, thoughtful sort of story. But does it create this sort of outcome that is greater than anything they have today, right? Do you promise this sort of glorious future to them? Because if you do, the emotional power of that inspires them to act.

They want to move from what is maybe now looking like a very gray drab world that they’re in today towards that sort of technicolor world you’ve painted for them, of being, you know, the hero of the brand, of creating a new market for their audience, for their business, you know, and all this sort of stuff.

You want to sort of paint that picture for them in that story so that they want to move towards that sort of vision you have.

Chip Griffin: And what you’ve just described puts the audience first, right? So it’s not, it’s not the story you want to tell exclusively. It’s the story that your audience is looking to hear, because if you’re not telling them, if you’re not speaking to them, what’s the point?

And I think we, and this is a mistake I’ve made a lot over the years where I, you know, whether it’s thought leadership content or brand content or whatever, I think about it in terms of what I, what resonates with me. And my peers. And you have to remember that your clients are not you or your peers.

They’re coming to you because you have some expertise or abilities that they do not. And so therefore you need to put that translation layer into your story.

Kristian Alomá: Yeah. And it’s interesting because, you know, What you said was, was I think important is that it’s not just what you tell, but what they hear. And, and actually I want to push that even further because it’s not just what you tell, it’s what, what you enable them to tell as a story, right?

They are trying to tell, this is what narrative psychology is all about, is that we’re all trying to create a story that makes sense of our lives or creates a hero out of our lives, right? And it makes us feel like we’re doing something smart or creative or generous or, or brave. And if you can sort of help them tell that story about themselves, they will love you that much more.

Right. And so, so I totally agree. I think, you know, and I, I mean, I fall into the same traps and I’m studying this day in day out where I’m telling stories I want to hear about myself. That I think my clients want to hear about me and not thinking, what does my client want to hear? And, and so, you know, one of the things I’ve really pushed for, sort of in this work is, you know, I grew up with the sort of positioning model as a marketer, right?

The seven questions you ask to sort of define your brand’s or your organization’s position. And, and I realized after years that positioning exercises is either really sort of broken, or it’s just sort of incomplete because almost all of the questions, except for like one – who is our audience? – are about the organization, right?

What are your benefits? What do you do? What marketplace are you in? All that sort of stuff. If we can sort of shift those questions to be about the audience and then where we fit into their world, that’s positioning, right? That’s what, you know, positioning was meant to be is how you fit into the mind of the audience, not how you fit into the world.

And so we have to sort of understand the mind of the audience. We have to understand their perspective, take their shoes. And it’s very difficult to do that from the perspective we have. And it’s a valuable perspective to be the outsider, right? That’s why outside agencies are hired. It’s why consultants are hired. Because we aren’t part of the organization.

And that gives us cred within the organization to sort of push them and to challenge them and to have them think in different ways. But we also then have to ask them or find ways to discover from them. What are they really looking for? What are they trying to accomplish so that we can build our brands to serve them, not to serve ourselves.

Chip Griffin: So one thing I wanted to pick up with before we, run out of time here is you, you mentioned the stories that your audience tells, that your clients tell, and, and that’s distinct from just that you’re telling it. And to me, I think the, the, the piece that that also requires is that whether it’s you or your, your client, if you’re advising them on their storytelling is that you actually have to to do what you say, right? In other words, if I tell a story, you know, that, that I have, you know, that I am a, a great physical specimen with lots of hair and, you know, all that kind of stuff that you’re going to take one look at me and be like, well, that’s kind of a weird story for you to be telling.

Kristian Alomá: Yeah. I mean, you just don’t have hair, but you’re a great physical specimen. I, I,

Chip Griffin: okay. Yeah. Maybe, maybe I need to work on the focus here a little bit, but anyway, it’s fine. The. But the point is, and in agency terms, if you say you’re a full service marketing agency, and yet you’re not good at doing paid, and you don’t know what SEO is, and you can’t do design work, so really you’re just a PR agency, and I don’t mean just because I love PR agencies, I ran one, you have to be consistent with what you’re actually doing and make sure that you’re living your story, not just telling it.

Kristian Alomá: Yeah, it’s completely true. And I think, you know, my, my old boss used to tell the story of RadioShack. And RadioShack used to have a tagline for those that maybe are that this dates me. I’m sure. Right. RadioShack used to be all of the electronics you could ever want. I think they eventually became the Shack, after a while, things like that.

But their tagline used to be…

Chip Griffin: I loved going and just browsing.

Kristian Alomá: Oh God, it was my favorite place on earth, right? their tagline used to be, you’ve got questions, we’ve got answers. Right. And if anyone had has been or had been before they closed down to a Radio Shack, you realize that you had questions, but the staff very rarely had answers.

They just couldn’t train their staff, especially in the later days that were 18, 19, maybe younger in all the technology that they had in that store. So they were, they had the right story that people wanted to hear, but they couldn’t live up to that story and that really sort of broke the, their brand in many ways.

And so, you’ve really got to make sure, like you said, you, you can live that story. You can deliver on that story because that’s at the heart of then building a trusted relationships, right? These stories aren’t just for the sake of stories and communicating. These stories are for building relationships.

and these relationships have to be built on trust. And trust is about reliability, capability and accountability, right? So can you do the thing that you’re saying you’re going to do? That has to be step number one. And if you’re saying, and I learned this very early when I started the agency, I had like 10 services on my website about what I could do because I thought I don’t want to say no to anybody, right? I don’t want anyone to come and think I can’t help them. But then I realized I had so much that, one, they thought there’s no way I do all of these things, or two, they would ask me if I could do that, and I just really had to kind of like, kind of try to direct them to the thing I could do that I thought was going to be more successful.

So, so it really just sort of burnt me on both ends. When I started just saying, listen, I do these three things. I do them very well, right? I can give you advice on other things, but I do these three things. The audience knew what I did. I knew how to deliver on what I did. And the relationship was then just deepening and building because I had that capability.

And when you have that capability and you’re doing that work, you have that reliability that you can, you can repeatedly do it and you can deliver on it in the very same way in a very high caliber way. Right? and then you’ve got that accountability so that when they need you, if things go wrong, if things shift, you know how to react to that.

You know how to respond to that. You know how to put it back on course if you need to. And that’s what builds trust with folks because they don’t want to assess another agency. They don’t, as much as we might think it, clients don’t like going through the RFP process again, right? They don’t want to build a new or find a new agency of record.

They want to rely on the agency they have. Because they’ve built trust and trust is expensive as far as time is concerned, emotion is concerned, engagement is concerned. And they don’t want to go through that whole process again. So they want to keep that sort of shortcut. They want to keep that relationship as much as they can.

And you’ve got to, you’ve got to sort of fill your part in that as well as an agency owner.

Chip Griffin: You know, I think the other thing, your, your RadioShack example underscores is the importance of evolving your story over time, because I do believe that that used to be true of Radio Shack, that they used to have the answers.

I mean, when I went in there in the early 1980s, you know, the clerks in there, they absolutely knew their stuff. But then, as you say, as technology came along, as it became harder to, you know, to find those kinds of retail workers, it no longer was true, but they did not evolve their story. And so, just as your business is evolving, your story needs to evolve.

Kristian Alomá: Totally. I mean, that’s what Domino’s has done on the flip side of that, right? Domino’s quality business performance were all dropping because they were really focusing on, reducing cost and delivering as fast as possible. And, you know, they had the whole basically apology campaign that was there to like reframe everything.

And now their business is really picking up right. And, and it’s, it’s growing and it’s growing faster than I think anyone expected because they have evolved that story, and now they’re trying to deliver against that story, sorry for the pun, on, on delivering quality pizza, on better ingredients, better tasting pizza, making the, the customer experience more user friendly through the app, through the store, all that sort of stuff, and it’s, and it’s working for them, right?

And, and that’s what I think is important about stories. You know, we oftentimes think we have to brand on an emotion. Emotions are transient, right? Like I might feel great today and tomorrow I feel awful. If we brand ourselves around stories. Stories are chronological. Stories are alive, especially the kinds of stories we’re talking about.

So they can shift. They can adapt, right? So if you’re a brand that’s serving parents with infants, right? You also want to be able to shift when those infants become toddlers and those toddlers become, sort of, you know, tweens and teens and things like that for those parents. And so your story can shift with your customers as well, or shift with the industry, shift even with your own desires, right?

What do you, what kind of business do you want in the next five years? You can, you don’t have to drop everything you’ve done. Just look to see how that story can move in that direction.

Chip Griffin: Well, this has been a great conversation. We could continue this story for a long time, but unfortunately we’ve reached the end of today’s episode.

So before we go, though, if someone is interested in learning about you or Threadline or the book, where should they go?

Kristian Alomá: The best place to find me is on LinkedIn, or through the website threadline.co there’s no M at the end, just. co. and the book is available, basically everywhere books are sold online at this point, Amazon, Barnes and Noble, all those different places.

So, if you like it, reach out to me, let me know. I’d love to hear. otherwise if you don’t like it, I guess tell someone else. but.

Chip Griffin: Excellent. We’ll include all those links in the show notes as well for the convenience of listeners. So if you’re on the treadmill or something right now, you’re safe.

You don’t need to stop and try to write a note. It’ll be in the show notes and you can just click on it and find it. So, with that, Kristian, thank you for your time today. It’s been a great conversation. I think you’ve offered a lot of practical insights for agency owners. And, I would love to have you back again sometime in the future to, to continue this storytelling.

Kristian Alomá: Thank you, Chip. I appreciate it. And I enjoyed being on the show.

Chip Griffin: And thank you all for listening to the latest episode of Chats with Chip, and I look forward to having you all back to hear my next episode.

In this episode, Chip talks with Nicholas Petroski, founder of Promethean Research.

Chip and Nick discuss digital agency salaries and the findings of a recent research report on the topic. They delve into the importance of balancing billable hours, the impact of pricing on agency profitability, and the role of benefits and stipends in attracting and retaining talent.

They also touch on the need for standardization of job titles in the agency industry. 

Nicholas runs Promethean Research, a boutique consultancy that helps digital agencies grow more reliably with higher margins and simpler operations. Since 2015, he’s been helping digital firms better understand their industry and chart more effective paths to success. Prior to co-founding Promethean, he worked as an equity analyst at a Wall St. firm where he covered the enterprise software and semiconductor industries. Before that, he spent a bit of time in corporate finance. When he’s not in the office, you can find him backpacking around the Midwest or making fancy firewood in his woodshop.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of Chats with Chip. I’m your host, Chip Griffin, the founder of SAGA, the Small Agency Growth Alliance, and I am delighted to have with me today, a repeat guest, Nick PetroskI of Promethean Research. Welcome to the show, Nick.

Nicholas Petroski: Thanks so much for having me again.

Chip Griffin: It is great to have you back in particularly because we’re going to talk today about agency salaries, something that I know I get asked about all the time. What’s the right amount to pay my account manager or my project director or whatever the, the role is. And you’ve led some great research on this, just recently. And we’re going to talk about some of your findings and, and, let people know what they would get if they actually were able to download the entire report.

So before we do that, though, why don’t you tell me a little bit about yours or tell listeners rather, I know lots about you, but tell listeners a bit about yourself and Promethean Research.

Nicholas Petroski: For sure. so I’m, I’m Nick, I run Promethean. we do, I try to do the best research in the world on this stuff.

I don’t know if I do, but I like to think that I do. The digital agency industry as a whole is, is really interesting to me. And so I, I’ve just been asking questions since, you know, 2015 and apparently that’s led to a bunch of people looking to me for answers. So it’s worked really well. I do consulting work for, for, digital agencies.

So I help with strategy and kind of guiding how you should position yourself, how you can build, you know, repeatable rev gens is like the big one that I’ve been doing recently. Kind of anything on the strategy side though. And it’s been very interesting. And I love digging into, you know, different shops and seeing what they’re doing.

And because weirdly, when I walked into this, everything I thought, Oh, they’re a digital agency is a digital agency and they’re all the same. Yeah. This can’t be too hard. And they’re not, it is the exact opposite of that. So each one is, is really different.

Chip Griffin: They’re all very different. And I would argue that they ought to be because they’re all reflections of their owners and, and, and ought to be, because as I always tell people, there’s no reason to be running your own agency, if you’re not getting what you want from it. And that means that you have to structure it differently than you or I might, because we’re looking for different things.

Nicholas Petroski: Absolutely. That’s perfect advice. I love it.

Chip Griffin: So, so you’ve done this research on salaries. Tell me a little bit about what the, the research entailed, and then we’ll start talking about some of the findings.

Nicholas Petroski: Yeah. So we, we get this, this is the third time running this. and before I start, I want to say thank you for participating in this one.

Your community was awesome. You know, getting more people involved in this and it only increases that salary transparency. So I wanted to say thank you to you and your community first.

Chip Griffin: Well, thank you. They are a great community and always willing to step up and they’re hungry for information. So if, if it means they have to give some to get some, they’re open to doing that.

Nicholas Petroski: That’s how it works. We’re all sharing here, right? So the research, it’s the third time we’re doing it. And, we really came out of just wanting more transparency around this. You know, you, you have different instances of, of large, recruiting firms and large salary shops, or large shops that will provide some salary data, but it was always kind of hard to tell. Like when you’re looking at those salary ranges displayed, is that what agencies are really paying? Like, what are their costs associated with this? What are they, what are they really paying that developer? and so that’s really what this was born out of back in 2018, I believe.

And so this was our third episode of it. And, it really, it’s just increasing transparency. So we, we go out and we survey, a bunch of different firms and we ask them to just send over their salary data and their benefit data. And then we crunch all the numbers and it results in, in what I think is a, is a really transparent guide on not just what to pay different roles, but also kind of the, the overarching trends of what’s happening in how you compensate your team, which is arguably more important.

Chip Griffin: And you do take a look at all of the levers of compensation, whether that’s salary, whether that’s bonuses, benefits, time off all of those kinds of things, and I think it is important to take a look at the whole picture, because particularly today, employees, I think, are coming in and expecting not just the salary to be good, but also to have some of these other benefits.

I mean, you even look at things like the difference between hybrid and in-person, agencies and, and remote and, and all these different things. You look at, the number of hours billable versus non-billable. There’s just a wealth of data in there to go along with, you know, the expected thing you would see in a salary survey, which is a long list of titles and what the ranges are for those roles.

Nicholas Petroski: Yeah, absolutely. And it was super important to take that into consideration because when we did the first one, we did, but I got a lot of questions that were very detailed that I couldn’t answer. So I’m glad we’re on iteration number three now to be able to answer those a little more completely.

Chip Griffin: Yeah, and like anything, you learn as you go, right?

Nicholas Petroski: Exactly. It gets better, hopefully, right?

Chip Griffin: So what were some of the big takeaways that you had from this edition of the survey?

Nicholas Petroski: Yeah. So, the biggest one is that the, the massive salary growth that we saw in the last survey, has cooled. So last time we did it was in 2022 and we looked at changes from 2019 to 2022 and obviously something big happened in that time period.

And so part of that was a massive pull forward in digital transformation spending and digital marketing spending. What that resulted in was a huge fight for talent and that was kicking salaries up. I believe the average was 25 percent salary increase from 2019 to 2022. Which is just insane. It’s very difficult for a digital agency owner to, to eat that kind of salary increase.

And so what we saw in this one, we specifically checked for this again, was that the, the average growth rate of salaries between 2022 and 2024, was only 7%. So that’s kind of like more in line with, with typical raises and inflation and, you know, cost of living upgrades, that kind of stuff. So it’s much more manageable, especially when you factor in, you know, some of the other work we do is around pricing and price increases.

And so when you factor in the price increases that agencies were able to get in that time period. It kind of offsets, or more than offsets, this increase in salary.

Chip Griffin: Well, and I think that it’s important to be thinking of, of pricing and salaries together because part of the reason why agencies feel so stressed when, when salaries go up is in part because many agencies, not all certainly, but many have traditionally underpaid their employees versus what they might be able to earn somewhere else, in part because they are not pricing high enough in order to generate a profit if they were to pay what are truly fair market salaries for the talent that they’re getting. And then now you’ve got a situation where you had large salary growth.

Now you still got pretty strong. I mean, 7 percent is still pretty strong in a two year window. It’s not nothing. Yet the prices the agencies are charging are not going up at anywhere near that kind of rate. And so, you know, you do need to be thinking about the two hand in hand if you’re going to be running a healthy agency.

Nicholas Petroski: Absolutely. Absolutely. And one of the things that we were telling people, I’m sure you were telling them too, two years ago was don’t compete on, on salary. You know, you’re not going to compete with the large tech companies on what to pay a developer. You’re just, you can’t. So you, you have to build, and this is, this goes into like the benefits and the stuff you brought up earlier.

PTO, number of hours you’re expected to bill, all that kind of stuff, that lifestyle that you offer for your employees and for your team, that’s what you’re competing with. It’s not the salary. You can’t. It’s impossible.

Chip Griffin: Right. Well, I think it’s particularly acute for digital agencies when you’re talking about, you know, development talent, right?

Because that’s just, there is a lot more of the, the frothy tech sector spending that has been going on. It’s certainly been cooling. And we’ve seen layoffs from some of the the major players, but you know, it’s still, they’re always going to be able to offer more just because of the nature of, of what they do.

But I would say that it’s true across the agency community and not just in, in digital spaces that, you know, salary is only one piece of the puzzle. And, you know, if you’re a small agency and you’re competing against on the PR side, say an Edelman, they are likely going to be offering higher salaries, but you as a smaller agency have other things that you have to offer or should be able to offer. And so thinking about the entire package that you’re offering your potential employee or to retain your existing talent is important.

Nicholas Petroski: Absolutely.

Chip Griffin: So I want to talk about this since we started wading into pricing and all that kind of stuff.

You mentioned billable hours, and I was, I found the slide in the report on billable hours to be really interesting because if you listen to a lot of our fellow agency advisors out there, they will spew things like, you know, you’ve got to try to get to 85 percent billable or 90 percent billable for some of your junior employees.

And I always tell them that that’s just rubbish. That you’re, first of all, I, you shouldn’t be managing towards utilization rates. If that’s how you’re managing your team. you’ve completely lost the plot. And so, you know, I can show you plenty of agencies that have really high utilization rates are not profitable, don’t have happy customers, don’t have happy employees.

So you need to look at the bigger picture. But I was really fascinated because across the board in digital agencies, they’re only what, about three quarters billable? Something like that on average, I think it was about 30 hours a week and different roles were even less than that, but that’s the average across the board, counting everybody.

So, you know, you need to really be mindful of that when you’re thinking about utilization rates and not go overboard.

Nicholas Petroski: Absolutely. Right. It’s a, I think you, you captured it really well. It’s a, it’s gotta be a balance because if you’re, if you’re pushing them into that. 80 90 percent you know, utilized. there’s just not enough time for any kind of real thought work.

Like you, I heard it put well when AI kind of hit the scene last year. Like if you do push your kind of menial tasks off onto AI and you can kind of push those menial tasks off onto even, you know, more entry level employees. You’re the challenges that you’re working with that you’re thinking about every day and constantly throughout the day are more difficult.

And if you try to just think about hard things for eight hours a day, you’re gonna burn out. So you if you’re pushing that utilization rate to, you know, crazy high numbers, you’re either A, they’re lying to you. Like those aren’t real utilization, right? Or B, you’re working them so hard that they’re not going to be doing quality work anymore.

They’re not gonna be happy doing it and clients aren’t gonna be happy getting it.

Chip Griffin: Right. And I think more often it does come down to your employees will just lie to get you the number that you want to see, because, I mean, I was a junior account executive many, many moons ago, and I know that I had certain expectations from the owner of the agency that I worked for, and she laid out, you know, how much time we should be spending on certain clients and certain activities.

And so myself, along with all the other employees, I can guarantee you our time sheets always fell within those ranges. Absolutely. I can also guarantee you that in no way reflected what the actual reality was. Because if we didn’t put more time on certain clients, they would yell at us for not getting the job done.

They would complain to our bosses who would then tell us we needed to get the job done, but we also couldn’t spend more time on it. So we just told everybody what they wanted to hear and tried to get through each day as we could. And that is how employees function. It’s not because they’re evil. It’s because they’re human.

Nicholas Petroski: Exactly. The incentives don’t line up for them. They don’t. They don’t own a piece of the company. And even if they do, they don’t own a big enough piece for it to make a, you know, difference in their life.

Chip Griffin: Right. And so I was, I was encouraged by this part of the survey because it suggests that the, the people who were submitting the data to you were being completely honest.

Nicholas Petroski: I think so.

Chip Griffin: At least as best they could understand because otherwise they would be, you know, reporting all sorts of inflated numbers to you to feel good about themselves, right? So, I mean, that is encouraging that they seem to be going down that path.

Nicholas Petroski: Yeah, I thought it was really good. you know, looking at like some of the individual ones, like I think the highest one, where is it?

The highest one was a designer that, you know, on average, the designers were expected to bill 31 hours a week. you know, and then your lowest one was in biz dev and sales, which was only expected to bill 7. 8 hours per week . So you have this kind of really, like you said it earlier, you have this really wide, swath between, you know, what type of role they’re in and what type of billable they’re expected to do.

But nobody, even the, the designer at 31 hours a week, that’s not insane. Like that’s not breaking anybody.

Chip Griffin: No, no, that’s not, that’s not grinding them down. And, and it, and it seems to suggest that it accurately reflects that they do spend time in staff meetings and you know, doing other things and, and contrary to popular belief, all meetings are not bad.

And so, you know, when I talk to an agency owner and they say, we have too many meetings, I need to cut back on the meetings. No, you need to have better quality meetings. You don’t necessarily, it might be less, but it’s the quality of meetings that sucks. Not that the meetings themselves are occurring.

There you go. So, you know, obviously owners care about how much they make. So, you know, there was a, there’s a good section in the report where you address what the owners themselves are taking home. And I was incredibly encouraged by it because I mean, A, it backed up what I generally tell people, which is always good when, when my gut and experience and all that kind of match up with the reality of the data that you’re producing.

But it showed that the owners of small and medium sized agencies made more than owners of large agencies. And it, it isn’t… it, the important thing to take away from that in my mind is it’s not all about grabbing as much revenue as you can, because the more revenue does not necessarily mean the more money in your pocket, right?

Nicholas Petroski: That’s absolutely it. It’s all about what you said it right at the beginning. It’s like, what, what do you want to design your agency to do? What does this vehicle, where does this vehicle need to take you? And then what should that look like to take you there? And if, if it’s, you know, a really nice comp package, maybe stay in that medium or small agency size.

Like the challenges you’re going to deal with are, they only get bigger. Like they only have larger numbers that tie to them. So you might as well deal with less risk and enjoy it.

Chip Griffin: Well, I mean, and the thing is too, I mean, you know, small, small owners do still outpace. Super solos or studios or whatever you want to call the, the, just a couple of employee agencies.

So, you know, there is an advantage to getting at least a little bit bigger from that size. But, but you do hit a point of diminishing returns where, you know, you, you do just have larger scale problems to deal with. and I think it’s, it’s important not to be afraid of some growth, but it shouldn’t be only growth that you’re focused on.

Nicholas Petroski: Yeah, absolutely.

Chip Griffin: So as we, as we think about the actual salaries and the data that, you know, those, the tables in there. Some roles, there was a really wide spread between high and low. I mean, dramatically. Sometimes it was a two X difference between lowest paid and highest paid in it, and some, some, they’re a little bit tighter.

Do you have any observations about those or, you know, things that, that you take away from it?

Nicholas Petroski: One thing that, that really stuck out was how creative, creative agencies are with job titles.

Chip Griffin: There were certainly a lot of them.

Nicholas Petroski: There were so many and so many of them were different variations of guaranteed the same job description.

Absolutely. So I, in looking through it, that was my big takeaway was, maybe some standardization here could be helpful. I see this a lot when you go out to hire, when agencies go out to hire and they say, we’re looking for a business, developer or someone in business development and to the, the outside world and other industries that is communicated as someone who’s going to deal with primarily partnerships. In the agency world they mean that they want a salesperson. And so you have this, that’s a, the most common example, but you have this kind of thing where they’re asking for certain job titles, and what they mean is different than what’s being communicated out there into the larger world. And then they say, well, I’m having a little trouble hiring.

I’m having trouble filling these roles. and if there’s some standardization there with the, you know, broader industries or other industries, I think it could help out pretty significantly.

Chip Griffin: Yeah. And, and, I mean, you’ve got to start with standardizing within your agency. I mean, one of the things that I observe a lot of times is that even within an agency, they don’t have good standardization and they don’t have, you know, consistent salary bands based on title.

And you just, it’s natural. You start small and you just kind of start throwing around titles. And you’re like, Oh, this sounds good. That sounds good. This is what I need to bring in this person. And it’s all of a sudden you look at an org chart and you’re like, this just doesn’t make any sense. Right. And so I always encourage owners to think as early as possible in their evolution, even when they’re just hiring one or two employees to start thinking about the hierarchy of titles and, and how you’re going to compensate them. So you don’t create a problem down the road. Cause I’ve seen too many mid sized agencies really struggling to try to correct this many years down the road.

And it’s really hard when you’ve got a lot of existing people, because nobody wants to take a salary cut. Nobody wants to have their, their title diminished, but if you don’t do some of those things, then you’re going to be in a position where you have, great distortion within your ranks.

Nicholas Petroski: Absolutely.

That’s a great point. I think it’s pretty synonymous with tech debt. So if you have, you know, HR debt is essentially what it is. I don’t know if there’s any firms out there fixing this. If there are, please shoot me an email because I have a lot of challenges, a lot of clients with challenges in this area.

Chip Griffin: Yeah. I mean, essentially what you have to do is you just set it right going forward and then hopefully through attrition you can get to a rational place. I mean, that’s, that’s usually the safest way of, of dealing with it. There isn’t some great magic wand that you can use. but I, I think that, you know, the other thing that that tells you, because you have that kind of lack of standardization across the agency industry is you need to be a little bit careful.

Even when you’re consuming this data, there’s a lot of good data in here, but you also need to think about it in context and understand that your junior designer may not be the same as someone else’s junior designer. For titles like account manager, I mean, that’s all over the map, right? You know, an account manager in one place is like junior on the totem pole, but I’ve seen agencies where the account manager is like the boss of things.

You just don’t know. And a lot of it comes from what the owner’s background was, you know, what, how they had hierarchy of titles in some other agency. And so that’s what they inherit. There’s so many things that go into it. So be careful about saying, well, this data says specifically that, you know, my senior designer should be between X and Y and mine.

It may still be okay.

Nicholas Petroski: Absolutely. And you still, you have. You have individual aspects of that too. Like it’s not just the company, it’s the, you know, how many years of experience do they have? Are they designing in the right world that you’re in? Like, do they have experience doing stuff for product design?

If you do product design, you know, it’s very, it’s very individualized, which just further complicates it. I guess there’s, I guess the big takeaway is there’s no, there’s no easy way to just go about solving the salary challenge.

Chip Griffin: No, but I mean, it does. I think it is helpful when you sit down and you look at it and you’ll say, okay, well.

Are my folks at least in the ballpark here? And, and if they’re not in the ballpark, then, then you start asking, well, why are they not? Are my employees markedly higher or markedly lower than the data that, that you’re sharing? And if you can explain it, then that’s fine. If you can’t, then that’s where you need to keep digging until you can find the explanation for why you have deviated so much from the norm.

Nicholas Petroski: Absolutely. Absolutely.

Chip Griffin: And then ultimately you need to take your own data and figure out, are you actually profitable? Right. You know, if you, if you’re paying your designer $90,000 a year, and so that comes out to whatever it is from an hourly cost basis for you, are you pricing their work high enough that you’re still turning a profit on it?

And if so, it kind of doesn’t matter whether they’re within the market guidelines or not. Because you’re making money.

Nicholas Petroski: Yeah. You said it right at the beginning. You cannot, you know, distance this from the pricing conversation. Right. If you’re up at the higher end on all of your salaries, well, that’s fine if you’re pricing appropriately for that higher quality, like theoretically higher quality work.

You know, you, you should make your margin there. If you’re, if your pricing’s horrible though, and you’re 10 percent higher. And your standard, you know, cost of goods sold is, is 55%. Well, all of a sudden you’re losing 5 percent on your bottom line. Right. And that’s, that’s a hit. That’s a third of your average margins.

Chip Griffin: Right. And geography isn’t as important as it used to be, but it used to be, I mean, if you had an employee at a New York agency, they were naturally going to be paid higher than someone here in New Hampshire. I mean, that just, the cost of living is so much higher. You’re just not, even a junior employee, you’re not going to get to be able to work for you in Manhattan for the same that you could get them to work for in New Hampshire.

Now, obviously with a lot of folks working remotely and, and all of that, it’s a little bit less of a factor, but it still matters.

Nicholas Petroski: Yeah, absolutely. Absolutely. I think we back in, you know, 2019 when we first did this, I think those differences were pretty stark. I did. We didn’t get enough data from people in like the direct high cost of living cities to really do like a blanket kind of, you know, this do this in the report for, for every instance.

But what I did find was that if you’re, if you do live in a high cost of living area, or if you’re hiring from a high cost of living area, add 10 to 20 percent to whatever the base, like the average salary line is, and that’ll get you, that’ll, convert or roughly convert this.

Chip Griffin: Before we’re completely out of time here, I do want to touch base on, you know, one of the other sections of this report, and that’s the benefits. We’ve alluded to a little bit before, but in the benefits section, were there things that jumped out to you? Any key observations that you’d like to share with listeners about the benefits section of the data.

Nicholas Petroski: Yeah. It overall, the benefits, so this was very much a US based report. so we can talk about things like healthcare and, and, things along those lines, stuff they don’t have to worry about in other areas. benefits, they remained largely stable. There weren’t any kind of major deviations from prior years.

So it, it makes me, it’s encouraging to see that, you know, even though 2023 was maybe a very rough year for a lot of agencies, they maintained providing, you know, a good kind of well rounded compensation package for their teams. They didn’t deviate largely from, from the norm. So it is, it’s nice to see that, you know, you, it’s very easy to start saying, okay, well we’re going to cut a bunch of benefits or stipends or, or whatever.

And if you do that, you’re setting yourself up for longer term challenges.

Chip Griffin: And I think that’s another area of the report that’s very beneficial is it talks about, you know, what some typical stipends are, which is not, You know, a lot of agencies are like, well, you know, should I give some kind of a conference stipend or home office stipend or these kinds of things?

And you walk through in the report what some typical numbers are for agencies, at least you have a starting point to think about. On those things.

Nicholas Petroski: Well, you like, you want to be competitive, right? You, ultimately you’re providing a certain lifestyle and a certain amount of compensation. And part of that is those, you know, do they get to go to various conferences?

That can, that can be a sizable perk for certain people.

Chip Griffin: Right. And generally not a huge hit to the agency’s budget. Right. Right. I like agencies offering them because it’s not a huge amount of money. And if you do it with very few strings attached, you can’t just give it, you know, willy nilly, but at the same time, you should really empower the employee to make their own decisions about how that gets spent.

Nicholas Petroski: Yeah, like if I look at the different stipends available, you know, education stipend on average is right around 900 bucks. you can go and get some decent training for that. Like you’re not going to get all your certifications paid for, obviously, but right. That’s a good start. Same thing with the conference stuff.

Conferences did take a little bit of a hit since last time, but, it’s still a few hundred dollars. that’s enough to usually go to a conference a year. and it, it obviously varies by role. So. Dig into the data, but right.

Chip Griffin: And even if you don’t look at the numbers, at least it gives you some ideas of the kinds of things that you might be thinking about as an agency, particularly if you don’t offer any kind of stipends to your team right now, it helps you think about, Oh, is that something that I should offer?

And you know, it’s not even the dollar amount. It’s should you have it? How would you use it? How would your team respond to it? And so it hopefully will open your mind as you read through this report for some of those things.

Nicholas Petroski: Yeah, absolutely. Absolutely.

Chip Griffin: So if someone is interested in getting a copy of the full report, where should they go?

Nicholas Petroski: Yeah, it’s, I think there’s gonna be a link in the show notes, but check out, prometheanresearch.com. all of our research is, is pretty prominently displayed on our, on our homepage and under our Insights tab. I, you know, you can get obviously this full report there, and then there’s a bunch of others that we, we’ve published over the years as well.

Chip Griffin: And as you say, there will be a link in the show notes along with the discount code. So I would encourage all of you to check that out and, pick up a copy for yourself and, and, you know, supplement all of the spouting that I do on my various shows and in my articles, with some actual hard data from Nick and his team.

So, again, my guest today has been Nick PetroskI from Promethean Research. I appreciate your time. I appreciate the research that you’ve done here, and I look forward to having you back again to talk about some more data in the future.

Nicholas Petroski: Absolutely. Thanks so much for having me.

Xaña Winans of Golden Proportions Marketing says that resiliency may be her superpower, and that’s a characteristic many agency owners needed to tap into as the pandemic upset existing business structures.

Like many owners, Xaña has kept her team remote. She shares some of her experience about how she made that transition and manages a team that is no longer full-time in the office. She talks about some of the challenges, as well as opportunities that creates.

In this conversation, Xaña also talks about how she started with a clear focus with the agency — which she has maintained — but also some of the evolution she has made along the way.

Xaña Winans is the founder and CEO of Golden Proportions Marketing, the first strategy based, full-service marketing company exclusively for dentists. Xaña founded and built Golden Proportions Marketing on the belief that dentists deserved a goal-driven, strategic approach to marketing. Transparency, results, and return on investment are the driving forces behind the work her agency provides.

Xaña teaches her audiences the foundational principles of marketing, as well as the actionable strategies necessary to turn brand awareness into actual new patients. She believes that doctors should understand the patient journey in order to attract, capture, and keep new patients in the practice. Audiences will learn valuable internal marketing strategies and leave empowered to better manage and maximize their marketing relationships.

Xaña has been an invited speaker to numerous national dental meetings including GNYDM, Yankee, and the AACD as well as numerous state meetings and study clubs. She has been guest faculty for both Pankey and LVI, teaching marketing to thousands of dentists over her 30 year career. She and her husband Dr. Larry Winans are parents to Ryder and Savannah. Outside of dentistry, they have founded, manage, and market a regional craft brewery.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello, and welcome to another episode of Chats with Chip. I’m your host, Chip Griffin, the founder of SAGA, the Small Agency Growth Alliance. And I’m delighted to have with me an agency owner who I think will be able to share a lot from her experience that will relate to a lot of you who are listening. My guest today is Xaña Winans, the founder of Golden Proportions Marketing. Welcome to the show.

Xaña Winans: Thanks for having me, Chip.

Chip Griffin: And hopefully I didn’t butcher your name too badly because I was thinking about it the whole time. In any case so before we dive into talking about your experiences as an agency founder and some of the evolutions that you’ve had over the years, why don’t you just share a little bit briefly about yourself and the agency to set the table for listeners.

Xaña Winans: Sure. So I founded my agency coming up on 23 years ago by accident, which I think most agency owners are. My husband is a dentist, or actually a former dentist. He now brews beer for a living. But when he was a dentist, I did marketing for his practice and it started getting noticed. And all of a sudden other dentists were calling me.

And so that is literally all we do is marketing for dental practices around the country. So we’re a full service agency, lots of digital these days, but just one thing that we speak solid is teeth.

Chip Griffin: I, I’m still trying to wrap my mind around going from being a dentist to brewing beer, but…

Xaña Winans: It makes him really, really happy.

And that’s all that matters.

Chip Griffin: You know, and that’s, that’s actually a good thing to touch on here because I think that 1 of the things a lot of agency owners forget is that they may have been an accidental agency owner, but they still, they are the owner of the business and they should be designing something that actually works for them and it gives them the financial satisfaction, the psychological satisfaction, and the happiness of, you know, being their own boss. And if you’re not getting that, change something, right? You can be miserable working for someone else.

Xaña Winans: Absolutely. I mean, I don’t know any agency owner that hasn’t been through that cycle.

Any business owner that hasn’t been through that cycle. I’ve hit it a couple of times and still standing so far.

Chip Griffin: Right. So you know, let’s, let’s talk about, I mean, you mentioned being an accidental owner, you know, did there come a point where you sort of said, you know, I really want to grow this into a real business as opposed to just, you know, Hey, we, I picked up some business along the way that most accidental owners are just sort of, you take a contract here or there.

And at some point you have that moment where you’re like, aha, this is a real business. What, what was it for you that, that made you make that decision?

Xaña Winans: Honestly, I think it was like that from the beginning. I, I was very fortunate in that I fell into healthcare marketing right at the time where it was losing its stigma because, you know, back in the day, if, if you had to advertise a healthcare practice there was something wrong with you. So I just managed to catch that perfect moment in time where there was a lot of demand for it. And I honestly really just rode the wave. There wasn’t a point in time where I ever imagined, you know, that this was kind of a temporary thing. It was just full steam ahead from day one.

Chip Griffin: So as, as you evolved through the business you know, we came across the pandemic. And I know you made a big decision coming out of the pandemic as to how you would run the business. So why don’t you share a little bit about that decision? Because I know it’s, it’s something that a lot of owners have, have confronted when they had you know, that event in front of them and an opportunity to change things.

Xaña Winans: So before COVID hit I had this beautiful 1890s farmhouse that we completely renovated. We’re in central Pennsylvania. All of my team was local. They come in every day. We’d have this, you know, great dynamic, but at the same time, all the struggles that happen when you’ve got a bunch of people in each other’s faces all day long. COVID comes along.

Our governor says, if you can work from home, you must work from home. And literally it went from like one day, everyone was in the office to the next day they were never ever there again. So the governor told us we had three months that we were all required to work from home.

And along the way, it was kind of at that point in time where the employees started to have a lot more control about what was going on in a business because they were realizing from COVID, they needed to take control of their lives and was this the thing that made them happy? And I heard a lot of feedback from my team how important it was for them to continue to work from home. It wasn’t my first decision but I agreed that we would try it and we ended up Really benefiting from being a fully remote agency, partially because I live in central Pennsylvania.

I am like four hours from Pittsburgh and three hours from Philly and three hours from New York. So you can imagine the talent around me is we have cows and Amish buggies. So I’ve got a limit to the talent that’s available. And moving remote meant I could recruit people from all across the country. And to be honest, about a third of my team is local now, and the other two thirds are California to Michigan to Florida to Alabama, you name it.

So, it turned out to be a really good thing for us.

Chip Griffin: Well, and access to that talent, I think, is a huge benefit, and it’s a reason why a lot of agencies may have even originated as a virtual agency in the past, right? Because, you know, like you, I’m in a relatively rural area. It is not the kind of place where you tend to have a lot of talent, particularly more junior talent, right?

Because there’s, there’s not a lot of social life in the part of New Hampshire that I’m in, unless you’re, you know, older and married and that kind of stuff. It’s not a singles place. And so, you know, it’s hard to attract what a lot of agencies need in order to thrive and you know, so finding the specialties that you need that certainly benefits from being virtual. But I guess you know, I think there are challenges to being virtual too and so that’s You know not to be the debbie downer but i’d like to drill into that a little bit and how you’ve managed to to continue to hold together a culture for your agency, how you manage to to continue that team effects.

I know a lot of owners are struggling with how they do that in the virtual world, particularly if they were used to doing it in person and you’re used to you know having those water cooler moments or the opportunity to go out to lunch together things that you may not be able to do on a regular basis in a virtual environment.

Xaña Winans: So we definitely have had our challenges. I would say a big one is just zoom fatigue because you’re literally every conversation is on camera. And in the beginning I also got a lot of resistance from my team. Why do I have to have my camera on? Well because i’m not face to face with you. I can’t Read your body language any other way.

They’ve gotten used to it now, but it’s more mentally exhausting to always be on camera. I think it’s because we, it’s harder to make perfect eye contact when you got four or five different faces on the screen and it, it just takes more brain power. The other big challenge was staying connected to them.

You know, early in the pandemic, there were updates every single week and we’re having team meetings and here’s what’s happening and here’s what you can expect. And then it kind of slowed down and just became day to day agency life. And I missed my guys. I missed them a lot. Like I genuinely, that was one of my favorite parts of having an agency was the team that I built.

And now I was interacting with the three people who happened to have a meeting with me in a given day. As opposed to all of them. So we had to learn to be really intentional about how to bring our team together for interaction. So we do a retreat twice a year now, which that took a little while to kind of get off the ground, but now it’s pretty consistent, they expect it.

And every Wednesday and alternating Fridays, there’s some sort of like half hour break in the day. Where anybody who wants to can jump on a link and there might be trivia or a scavenger hunt, or it could just be happy hour. And so that’s helped with some of that connection. It’s still not the same.

I know a lot of agencies are going back into the office, doing a hybrid model. But given where I’ve now found my talent, I don’t really have that as much of an option. So we’ve had to be flexible.

Chip Griffin: Yeah, and it certainly is a challenge and there’s no one right answer, right? I mean it, you know, if you’re an agency in New York City, it may be a different answer than for an agency in the middle of Pennsylvania, right?

There’s there really are different things and the kind of agency and the, the talent pool that you’ve built up and all that, that also affects it as well. But I think one of the things that, that struck me that you said, and I think this is also something that’s a shared experience with a lot of other owners is how much more, not necessarily control, but leverage, let’s say that employees have or at least the perception of it.

I mean, I would argue that that it’s just a little bit more obvious. Owners have realized this a little bit more. Employees have realized it a little bit more than they did in the past. But it certainly is a factor. And it’s not just about being virtual. It’s about all sorts of things, whether that’s flexibility of schedule or the kinds of work that they do or titles.

I mean, there’s so many things that go into this. And so I’m curious, you know, what your experience has been with that with the virtual, but also any other aspect where you’ve seen in the last couple of years, employees taking a, a different view towards things that you’ve had to, to deal with.

Xaña Winans: It was kind of weird being in that position where all of a sudden, even though you’re the boss, you don’t have as much control over your own agency and what you’re asking people to do.

I mean, the world had been moving towards a lot more flexibility. We used to have like you could take two days a month to work from home or we would give them a little bit more of a flexible schedule. First, I mean, I grew up in the era of like, 8 to 5 was the required minimum. Right. And if you wanted to get ahead, you came in early and you stayed late.

And that was not this generation’s culture. They were not willing to give up their family life. So them taking more of that control I will admit it was a bit of a struggle as an owner, cause you almost start feeling held hostage to people that you feel like you’ve given your heart and soul to. I think we finally hit a, a middle ground by kind of just really zeroing in and listening to everything that was important to them.

We, we do a lot of one on one conversations to find out what’s making them happy, where would they like to see changes. We do a quarterly happiness survey, which, you know, everything from, do you have enough connection with me personally? If you want access to me to, are you getting enough continuing education?

Do you have the tools you need to do your job? And so it’s, I think, become a little more of a meet in the middle that I’m hearing more of what’s important to them. And thus I’m able to give it. When I’m ready to give it. I’ve always equated employee benefits as like the upgrades that are planned for cars.

Like we’ve all come to take cupholders for granted, right? But that was a novel, crazy new thing a long time ago. Backup cameras were wild and crazy way back when, and now they’re in every single car from the cheapest car that you can buy. And so I knew I had to kind of stage out these additional benefits over time.

If it was all in one fell swoop, they would have had way too much power and I wouldn’t have been able to keep giving them things to show them how much they, they meant to me. So I think that was, that was a big part of it is for us to both find a voice in how to run this agency. Cause I can’t do it without them, but they can’t do it without me either.

Chip Griffin: Right. And it is a challenge, but you know, I think that a lot of agency owners will have over the years paid lip service to the, you know, the, how important the team is, right? The team is our differentiator. That’s, that’s why we do our best work. And yet there was always this expectation. I know when I was starting in the agency world, just like you were, you know, it was a minimum number of hours, not a maximum.

And, and you just kind of, you kept going and the owners expected that. And that’s, that’s how they made the financial model work. And I think, you know, now we’re in a situation where a lot of owners are realizing that, you know, they were probably either underpriced or over promising on what they could provide because they were relying on employees working more than 40 hours a week in order to balance those books.

And so now it’s causing a fresh look. And I think what you’re talking about in terms of one on ones to understand what the employees are actually looking for is incredibly good advice because, frankly, it’s not even one size fits all from one employee to the next within your own agency. Some, some will value certain things more than others.

Some may value flexibility more. Others may value time off. Others may value their salary for their perceived stature amongst their friend group or whatever. I mean, there’s all sorts of things that can matter and knowing what those are allows you to, yes, it requires more work, but it allows you to customize your solution to them.

Xaña Winans: Yeah, very much so because you’re right. I mean, I have people on my team who I, I would have to drag them kicking and screaming into a week’s vacation out of a year. And then there’s those that use up every single minute before the end of September. And then they’re struggling come Christmas time.

So one of our moves was moving to unlimited PTO obviously within reason. But we were able by giving more, we actually gave them the flexibility that they needed. And so they didn’t feel like they had to take advantage of the benefits that weren’t really important to them. So some, you’re right, needed, you know, flexible PTO whenever they needed it or a flexible working schedule for their kids or whatever it was, the more I gave them, the more we met in the middle. It was kind of odd, actually, to give more and, and for both sides to get what they needed.

Chip Griffin: Well, it really just comes down to that open and honest conversation. And it’s where I also think that it’s important for owners to share with their employees how the model works, right?

So that they understand, you know. I want to work with you. I want to give you what you need. But you also need to understand how it works from, you know, a client delivery standpoint, a financial model standpoint. And I think owners have historically in the agency world in particular, tried to be very opaque about a lot of that, right?

Afraid to let employees know, what’s the scope of this agreement? You know, what is the price of this agreement to the client? And I think, frankly, the more of that you share, the more you can put it in perspective, because employees always think that the owners are doing far better than they actually are.

I don’t think I’ve ever seen a case where I asked an employee to guess what the owner was making, and then the owner told me what they were making, and the employees didn’t guess much, much higher. So, you know, trying to – you don’t need to you tell them everything, but I think it’s, I think it’s important to share more in order to have that meeting in the middle moment.

Xaña Winans: Yeah, we actually moved to profit sharing just about two years ago. We had previously done performance incentives for kind of custom tailored to each person and what we wanted them to get stronger in, but when we moved to profit sharing in January of 2022, lots of resistance to it in the beginning, but it meant that we were much more transparent with our numbers because I wanted them to see how they influenced the amount of profit that they were going to get a share in.

So not just how much the sales team did, but the quality of the work we turned out. Became client retention, which is how we grew the business because we have a lot of recurring revenue retainers, SEO, paid search, social so like we measure all of that stuff and they get to see the nitty gritty of if we lost this many clients this year, here’s how much money the whole company lost.

Here’s how much money you lost in profit sharing, but if we fix these problems, here’s what the gain is. And I get a lot more investment and buy in from them because they see all the nitty gritty details. They still don’t know my personal salary, my take home at the end of the year, but I honestly don’t think most of them would begrudge me what I get because they are getting a healthy share.

Chip Griffin: And I think that’s something that owners need to remember as well that you know that they I think employees expect the owners to do be doing well. But I think the key is that they need to be doing well as well. And so, you know, if you’re going to try to, you know, get away with below market pricing, because you’re underpaying your team or making them work extra hours, it may work short term. It generally doesn’t work out long term, because you have higher turnover, you have more staff issues to deal with and And so I think it’s, it’s a really important area for owners to focus on to make sure that they’re getting that right balance of productivity versus satisfaction from their team.

Xaña Winans: Yeah, kind of on that note, I will tell you one lesson that I learned, and I wish I had learned it a long time ago. It is, you get what you pay for. In terms of your employees. And it takes a while to get to a point where you can pay what feels like an outrageous amount for the talent that you bring on, but boy, when they could hit the ground running when they bring in new ideas, they are worth it times 10. I had too many junior people that I wanted to try and grow in the past, and I wasn’t getting the results and I was getting frustrated. I saved money there, but I lost a lot of money in terms of the growth of the company versus the higher quality talent that I’ve been able to get now being remote.

Chip Griffin: Yeah. And you just have to understand what it is that you need and go out and actually hire for that. Don’t, don’t hire that diamond in the rough if you really need the diamond today, because diamonds take a long time to create. And I think that’s important for folks to remember. You know, obviously we’ve talked a lot about employee satisfaction, but you know, let’s talk about your satisfaction as an agency owner.

What, what have you had to do over the years in order to structure the business so it gave you what you were looking for? And were there changes that you had to make along the way in order to accommodate you and those goals?

Xaña Winans: Oh, gosh, there’s more changes than I could count. I think like most business owners, I’ve hit burnout at a couple of different levels. First time I hit burnout was five years into it, where I was just working until seven o’clock at night and managing every client myself and doing way too many things that I didn’t need to.

And what’s really funny is I actually was nominated for in one, One of the top 50 women in business in the state of Pennsylvania. And yet I was more miserable my agency in that moment than I’d ever been. So, you know, huge burnout happened to connect with a coach, teaches me the importance of building systems and then things get better and then you kind of hit the next level of burnout.

And, and so I think burnout actually goes through a couple of different levels of where the agency is growing. It’s almost inevitable. The, the big difference is being a resilient person. If somebody ever asked what’s my superpower, I would genuinely tell you it’s resiliency. I can just put my head down and keep working through stuff till I get to the other side because I know it will be better if I put the work in.

It’s tempting to want to give up when you’re feeling that level of burnout though.

Chip Griffin: And burnout is something that I’m sure every owner experiences at some point. I know every owner I’ve ever talked to has. Frankly, that’s a lot of times when they come to me as an advisor to try to help them sort that through.

But I, I think, you know, one of the things that you touch on there where you talk about, you know, having to, to work till seven o’clock at night and, and just kind of, you know, Feeling like you’re just grinding through it. I think it’s important that we all remember that as owners, we are also employees.

And so we need to look at ourselves just as we’re having conversations with employees about, you know, how can we make their lives better, structure things better so that it works for them. And one of the things they always talk about is hours and workload and that kind of stuff. We need to look at that ourselves as well.

And, and if we can’t, if we feel like we’re in that situation where we just can’t do it any different, then we need to look at what else needs to change. Is it the pricing? Is it the kind of client? Is it the kind of, you know, what, what can we change so that our own personal situation changes as an employee of our own business?

Xaña Winans: Yeah, it reminds me of when I had my son 26 years ago, good lord. I remember kind of just that like constant demand on your time of having a newborn. And it was at one of his checkup visits that the doctor said how important it was for me to take time to take care of me. And I’m like, but I don’t have that time.

I have to load the dishwasher and make dinner. And I’m also running a business and and, and, and, and, and. And it seemed so unreasonable to not do the other things in order to make time for myself. But once I did it, I had more energy for the other things. So it was very similar. And I’ve had to remind myself that of that as an agency owner, like vacations are, are not an indulgence.

They’re actually a necessity. If I don’t take time away, I can’t refresh my thinking to come back and be more valuable for the people who need me. There’s, it’s hard to have, I think that objectivity in yourself. It helps a lot to have some advisors around you who can let you know when you’re kind of hitting the point that you need to take a step back and, and take a breather.

Chip Griffin: Yeah. And I think, you know, the first thing is obviously recognizing that. And I think most owners recognize it a little on the later side, but they do ultimately recognize it. And I think the other thing to keep in mind is that you don’t have to change everything all at once. And so what I always tell owners who are experiencing burnout is, is try to find the one or two little things that you can change that will make you have the most relief, right?

You know, is, is it just being able to, you know, knock off at, at, you know, six o’clock instead of seven o’clock? So now, now you’re only trying to figure out, okay, how do I, how do I carve out five hours of my week that I either just don’t do something, I can pay someone else to do it, something, right? And, and so trying to break it down into the little chunks.

Once you start feeling the relief, it starts to give you a lot more clarity and ability to make good decisions as opposed to those frustrated, panic borne decisions that usually don’t end up working out.

Xaña Winans: Yeah, I agree. Absolutely. Completely. It’s just when you’re making decisions under stress, they’re never good.

Chip Griffin: So, you know, as you, as you look to the future, you know, how do you see your business continuing to evolve? What changes do you see? I mean, you know, AI obviously comes up a lot. So, you know, it could be that, you know, do you see you know, the workforce changing in a way that’s impacting you, marketing services.

I’m just, I’m curious, sort of, as you look on that horizon over the next couple of years, you know, what are you starting to plan for or at least think about?

Xaña Winans: Great question. What am I planning for? I’m, I’m a constant and never ending improvement kind of person. So often I’m, I’m diving into the things that we have and how to make them better.

But we’re so full service. It’s not like there’s a thing that we’re missing. It’s probably more a matter of changing the way that we do the work. So bringing in more AI, using more subscription tools, even though, dear God, the cost of subscriptions anymore, like it, it’s a huge chunk of my budget for all these tools that we use, but it’s saving us a lot of time and money.

I don’t know that I have like a great vision for where I’m going. You and I should probably talk.

Chip Griffin: Well, I mean, it and so much of it ends up being, you know, very specific to the industries that you serve. And one of the great things that you’ve got going for you is you started out with a very clear niche.

And you’re still in that niche, right? I mean, it’s a lot of agencies that I talk to are still trying to figure out today, you know, maybe 10 or 20 years into their business, you know, who is their ideal client? And I think that You know, by virtue of the evolution that you’ve had in your business and how you started, it’s pretty clear.

And so I think that certainly helps a lot. But a lot of it, looking to the future, is trying to understand how your client base is going to change. What are their needs going to be 2, 3, 4 years down the road? And I always tell owners they’re the best experts in that, right? It’s, you know, you can’t go get that from somebody else.

You’re talking to those clients on a daily basis. And so part of it is just spending time listening. And so I always encourage owners to to just have those open ended conversations with clients, you know, what’s what’s on your mind? What’s what’s going on with you? Just sort of like I asked you here.

It’s a great way to garner that intelligence and help you figure out where that that puck is heading to use a hockey analogy.

Xaña Winans: So one of the things that we have done for 23 years is every client that’s got any kind of ongoing contract has a review call every month or every quarter, depending on the plan that they’re in.

And most of that call isn’t sitting there and reviewing, you know, you got this many phone calls and this many new patients and you generated this much revenue. It’s more of a consulting kind of conversation. That is that tell me what’s going on. Are you having employee stress? Are you, you know, are you having problems with the retention of patients; diving into that entire funnel of their, their business structure.

Because at least for us. Dentists are rarely, they are accidental business owners also. They don’t know how to run a business and they really rely on consultants. And even though I’m a marketing consultant, I know enough about business that we can give them that much greater guidance in those conversations.

And that’s probably why we have the longevity with clients that we do is because they’ve known they can trust us with literally any question out there. We’ve probably got a pretty good answer or someone to refer them to.

Chip Griffin: Right. And it’s one of the real benefits of being a specialist agency you know, who, who understands a particular space because you can veer off into those areas where, you know, if you were serving, you know, dentists and lawyers and restaurants and tech companies and all of that, it becomes a lot more challenging, you can have general business discussions, but not in the same kind of meaningful way where you can say, yeah, we’re seeing a lot of people have that same problem with their, their teams or with their patients or those kinds of things.

And it helps you to identify you know, challenges as, as well as opportunities much more easily you know, than others who may be more generalist.

Xaña Winans: Oh, yeah, absolutely. I mean, I, I do get to see the trends often before they do, because we’ve got hundreds of clients across the country. Like, before the Great Recession hit, I could literally see that it kind of hit from the outside edges of the U.S., from like the West Coast and East Coast, and gradually rolled its way into the middle of the country. Based on the clients I was talking to and when they were starting to feel the stress. So like, I get to see things on a much broader scale. We also have this great advantage because we are so niched that, you know, in a conversation a client might throw out a great idea of something they’re doing.

And then I can broadcast that to hundreds of other clients who get to benefit. So it gives us a lot of layers that does make us, I think, a little more valuable than just working with a local freelancer.

Chip Griffin: Well, you’ve offered some great insight. If, if people are listening and they’d like to learn more about you or get in touch with you, how can they do that?

Xaña Winans: Easiest way is probably to go to our website, which is goldenproportions.com. I’m welcome to take any emails. I’ve got frankly, a couple of other agency owners who have met me at events and said, Hey, can I pick your, your brain about something? So happy to drop me an email. It’s just [email protected]. Somebody helped me get to where I am years ago. I love sharing any knowledge that I’ve got, if it’s helpful.

Chip Griffin: And I always encourage owners to be talking to each other because there’s so much to learn from each other, the shared experiences that, that you all have. And, and so I think it’s incredibly valuable and, and highly encouraged.

So thank you for, for sharing your insights today and being open to connections. My guest today has been Xaña Winans, the founder of Golden Proportions Marketing.

Xaña Winans: Thanks for having me, Chip.

In this episode, Chip talks with Jason Swenk of Agency Mastery 360 about the intricate dynamics of agency growth, operations, and sales. The discussion touches upon multiple challenges that agency owners grapple with daily, offering a number of actionable insights.

Chip and Jason highlight the importance of evolving with the agency. Whether it’s adjusting the business model, understanding financial metrics, or pivoting strategies, staying proactive ensures sustained growth and success.

Jason Swenk: “We’re accidental. We knew how to do something cool. Someone offered us money and then the next thing we knew, we created this great prison around ourselves because we were doing everything.”

Chip Griffin: “If an agency owner is able to define their role effectively, they’re going to be more successful because they’re going to actually enjoy it.”

Jason Swenk: “If you come up with a plan, I don’t care if the plan works or not, you’re going to have so much more certainty in order to make the right decision. Then you’re inspiring your team rather than demotivating them.”

Chip Griffin: “I think that the expectations amongst a lot of agency owners are inflated as far as how easy it is for them to sell, what the sale looks like, how much money they’re going to get from it.”

Jason Swenk is the agency advisor & coach that guides marketing agencies through a proven framework for growing their agency faster.

Jason has literally written the book for growing an agency from nothing to two 8 figure agencies. He is one of the most sought out advisors to agencies in the World, by showing them an 8 system framework that worked for growing his agency, working with brands like AT&T, Hitachi, Lotus Cars, and eventually lead to selling his agency.

Jason currently hosts the Smart Agency Master Class Podcast, the #1 Digital Marketing Agency Owner podcast for sharing the strategies and stories from real agency owners of what is working today in the agency world, and how they got to where they are now.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of Chats with Chip. I’m your host, Chip Griffin, the founder of SAGA, the Small Agency Growth Alliance, and I am delighted to have with me a real expert on agencies, someone who can help guide you in some of the decisions you may have ahead, Jason Swenk. Welcome to the show, Jason.

Jason Swenk: Hey, thanks for having me on.

Chip Griffin: It is great to have you. And before we dive into having our conversation, why don’t you just share a little bit about yourself with listeners who may not already be familiar with you?

Jason Swenk: Yeah. So I started at an early age of you know, 22 of starting my agency. I was an accidental agency owner, like a lot of us and knew how to design a website.

And made fun of my first website I created was called NSHIT. It made fun of NSYNC and one of my friends looked like Justin Timberlake. So it was an easy transition and kind of got started by accident. And then the next thing I knew I was accidental agency owner had over a hundred employees and grew over eight figures and we sold it and then transitioned into doing absolutely nothing for a long time.

And I was completely bored like a lot of us that do that. And I just kept helping my old competitors. And they were like, Hey, how’d you, how’d you sell? How’d you do this? And started a podcast called the Smart Agency Masterclass nine years ago. And been running Agency Owner Masterminds ever since.

Chip Griffin: And I would certainly encourage folks who are not regular listeners to your podcast to become listeners because you have a great array of guests on, particularly agency owners who have been there and done that and experienced some of the pains that I know listeners have as well as some of the opportunities.

So it is definitely worth a listen. And I think that I know I learn the most from just talking with other agency owners. I’m sure you do as well. And so I think one of the common themes that we do see is exactly what you mentioned, which is that many are accidental owners. I know I was, you were, it’s, it’s how you often get started in the business.

And so I guess, you know, as, as you talk to accidental owners, what do you, what do you hear as the common pain points that, you know, maybe most of them are experiencing that they need help with?

Jason Swenk: Well, I mean, the, the one that I think is the most is around clarity and it’s actually the most boring. Like, you know, I have an eight system framework.

I always walk people through, but the first system is really the most boring. It’s around clarity. We’re accidental. We knew how to do something cool. Someone offered us money and we started designing or, you know, started taking on clients. And then what we realized was it, we kept getting the same or similar clients.

Because we were based on referrals. We didn’t have any intention of where we’re going. We didn’t know what we needed to do. We just kept adding services, adding new clients. And then the next thing we knew we were, we created this great prison around ourselves because we were doing everything. We couldn’t delegate anything to our team if we actually hired people, because we never knew where the boat was actually going.

So now everyone’s coming to us for everything, and I, I almost took a job to kind of sum all this up. I almost took a job with NASCAR to be their CMO. And they asked me two questions, they said, what do you love doing every day? What don’t you hate, you know, you never want to do. And I couldn’t think of it in the interview, but I went home that night because I got to a point where we were a couple million in revenue.

And my wife said, just shut the agency down. You’re so miserable. You’re so miserable to be around. I think a lot of us have gotten there. Right. And so I took this interview, I came home and I basically wrote, started writing down everything I hated in the agency that I never wanted to do again. And then I started writing down everything I loved in the agency.

And what I realized was I can actually do this. And when I did this, that’s when the agency started taking off. So the exercise for all of you to do really quick, or, well, spend about a half hour, 45 minutes, take a sheet of paper, put your fist on the sheet of paper, draw a circle around it, spend 30 minutes or 45 minutes of writing everything you do not like doing or never want to do in the agency ever again.

And then after you’re done with that, write down everything in the side of the circle of everything you love doing. And then now this should tell you what your role needs to do. So you can build the business around yourself and then you can start delegating, saying no, using automation, AI, whatever you want.

And then you can get that, you know, that sense of peace and freedom back. Right. That we all wanted.

Chip Griffin: Yeah, I mean, it is, it is amazing to me how you can talk with an agency owner and, and they’re, you know, on paper, it’s a very successful agency, you know, doing great business, having strong profits, but the, the owner is miserable because they’ve allowed inertia to carry them forward to where they are and they haven’t taken the time to get that clarity to make intentional decisions about what the business is going to do for them.

Because ultimately, why take on all the risk and stress of having your own agency if it’s not meeting your needs, giving you the money you want, the kind of work you want, the amount of work you want, the flexibility, all those kinds of things. And so I, I love that exercise that you’ve suggested. And, and I think that if, if an agency owner is able to define their role effectively, they’re going to be more successful because they’re going to actually enjoy it.

Jason Swenk: Yeah. And you got to think about too, like. What types of clients do we want to work with? You know, what types of services are we the most profitable at? You know, if you think about if you’re only going to be paid on performance only after you deliver, which services would you, you offer? Who would you offer that to?

And that’s very specific, right? And then you can turn the agency around. And then you can start bringing people on that believe in the same values that you have, right? In order to really kind of catapult. Because at the growing and scaling, an agency is all about who, not how, and I’m not talking about just who you need to hire, but who do you need to become because your agency is only as, you know, it only scales as fast.

And up to the level that you’re at. So if it actually is at a plateau, you’re at a plateau. So how do you ups, you know, kind of upgrade yourself and get to the next level.

Chip Griffin: And, you know, as, as you work with agency owners and, and they’re trying to overcome this and try to figure out, okay, how do I go to that next level?

I mean, sometimes I find an owner who, who does have an idea of what’s outside that circle, what they don’t want to do, but they don’t really, they can’t figure out how to take that next step. So how do you counsel them to just think about, you know, making that incremental next step forward?

Jason Swenk: Well, they, they first need to know where, what’s that, like, where’s the destination, right?

I mean, that’s everything. Of like, do I want to build, and there’s no right or wrong answer. Do I want to build a lifestyle agency? Do I want to build an incubator agency? Kind of like Gary Vaynerchuk started, you know, VaynerMedia where it just kept building other brands. Do I want to build, you know, a business that I can sell one day.

There’s different ways that we need to go about doing this. And then that will tell you which different types of people do we need to bring in, in order to, you know, help us get there because we can’t do it all ourselves. So if you’re growing your agency right now and you’re like, Oh man, I’m doing all the sales.

I’m doing all marketing, I’m doing all, I’m doing most delivery, right? I’m doing, you know, all these other things. There’s only really kind of five roles as an agency CEO that you need to be. And I always tell people, it’s like, you got to transform from this, from an owner to a CEO, right? So first one, set the vision of where you’re actually going and communicate it to the team often. Like often.

Number two is all about coaching and mentoring your leadership team so you can build them up. And if you have more than five direct reports, you’re shooting yourself in the foot. Like you’ve managed teams before I’m like, because you have to coach them to where they want to be. And where are they, you’re helping them.

Number three, you should be the face of the organization. I know a lot of people, and that’s a whole nother conversation. People be like, Oh, then everybody’s going to want to work with me. Bullshit. Gary Vaynerchuk is a great example. He doesn’t work on any clients for his agency, but he’s the brand. So they need to have a face to the brand.

The next is building strategic relationships. Only owners can, you know, really kind of do that, get it to the next level. And then it really understanding kind of the KPIs or the financials. What is the most important metrics that I need to know if I was on a deserted island to make sure my agency was going.

So when you get those five roles, I’m going to tell you, you’re going to be completely and utterly depressed because you’re going to go into a meeting, right? Like you’re like, you’re laughing too, because I know this has happened to you. Right? Like, you’re like, Hey guys, you needed my help? No, I’m good. Hey, you need my help? No, I’m good. You go to another one. No, I’m good. And, and then you go home to your significant other and you’re like, Oh, it doesn’t, doesn’t need me anymore. The business doesn’t need you for the old stuff. It needs you for the new stuff, which I just explained.

Chip Griffin: Yeah. And it is, I mean, it is as someone who went through that evolution, with a couple of my own businesses, it is a challenge to shift that role because it is not just shifting your role. It’s shifting the mindset, right? And making sure that you’re not getting, you know, too deep into the weeds on some of the things that you had to be involved with in years one and two of the business, but now you need to be focused on something different.

So it does take some real concerted intention on the part of the owner to make that transition.

Exactly.

You know, I, one of the things that you mentioned was, you know, thinking about, you know, what’s your, what you want from the business lifestyle versus selling it versus other options as well. And I think, you know, there’s a lot of people who, you know, hear some of this advice, you know, you shouldn’t be building a lifestyle business, which I think is rubbish.

If that’s what you want, by all means, build it. And the reality is, frankly, most agencies. are more likely to be lifestyle businesses than businesses that you sell. They can sell, you sold yours, I’ve sold a business as well. You know, we, we, it certainly can happen, but I think that the expectations amongst a lot of agency owners are inflated as far as how easy it is for them to sell, what the sale looks like, how much money they’re going to get from it.

And so I spend a lot of time working with agency owners to give them a little bit of a reality check. So, you know, as someone who’s been there, done that. You know, what, what do you say to an agency owner who comes to you and says, look, I’m trying to, I got to get this in shape to sell it. Cause you know, this is, this is my retirement, right?

This is, this is my nest egg.

Jason Swenk: Well, you know, there you, it’s all about figuring out the right systems in, in the right order. Right. In order to get your agency to a point where you can sell. I’ll give you kind of how you can do really quick evaluations of where your agency’s at. So if you do want to sell.

For a significant amount, like there’s people that sell all day long and you see these ads from these people, I sold my agency and I’ll show you how to do the same, but they’re not telling you how much they sold it for or they just kind of transition. Right? So if you’re under a million in EBITDA, which is basically net profit, your agency’s worth anywhere from one to two X.

I’m just giving you a basic formula. So most agencies out there that are maybe a million dollars in top line, right? They think they’re gonna get a multiple on the top line revenue, the gross revenue. And this is the reality check for a lot of people. And if you look at their profitability, then it’s around a hundred thousand, maybe 20 or or a hundred thousand or 200,000.

So meaning they’re worth 200 to 400,000 in valuation. And a lot of times that’s kind of a kick in the gut, honestly. But if you can get over the million in EBITDA, then you can get five to eight X sometimes. And then the next level up is three million in EBITDA. Then you can start kind of calling it out.

Right? Like, so the other agency that I’m a part owner in, we’re a little over 10 million in EBITDA. So, you know, we can start seeing multiples in the 10 X, sometimes even a lot higher. And we bought, and you know, within that agencies, we bought nine different agencies in the past two years, I think… could have been 10, I’ve been losing track, but we’re looking at the net profit. But we’re also looking at how dependent is the business on the actual owners. So if they go away, what goes away with that? And so if you understand kind of the valuation formula, a lot of people look at, then you can go, okay, what do we need to do? And what do we need to set up? And in order to have an opportunity to sell, because Chip, you probably get these, I get these all the time too.

I’m like, Hey, I want to buy your agency. Okay. Oh, but we’re going to do owner’s financing, which means you’re going to pay yourself to give away your company, which is total bullshit.

Chip Griffin: Right. And I mean, the vast majority of deals that people hear about in the agency space are, you know, the, the, the terms are not great.

The total valuations. I mean, and even some of the ones that you see in the trade press, you know, you’ll see such and such an agency sold. And you know, you and I get to see the terms of some of these deals behind the scenes and we know they ain’t all that cool. You know, the the valuation isn’t great.

They tend to come with very heavy earnouts So, you know, it’s it’s not a guaranteed sure thing and also oh by the way, you have to become an employee of the acquirer for two, three, five years after the fact, which a lot of owners simply aren’t prepared to do. And so you need to understand what’s involved.

If that’s what you want, not to say it’s wrong or bad. There’s certainly good reasons to sell, but you need to understand what it actually looks like to get there.

Jason Swenk: My business partners get pissed at me all the time within the agency. Cause I talk out a lot of owners from selling. I’m like, okay, you’ve built this amazing agency.

You don’t work that much anymore, which tells me that the business doesn’t need you for all the old stuff. Kind of like what I was telling you, you’re making millions of dollars in profit that you can personally take away and, you know, figure out ways to not pay the tax man, why do you want to sell? What am I missing?

So I came up with like, and I tell people this, unless you need the money, unless there’s some kind of medical thing, or you just hate it. That’s the only reason you should sell. And then also too if you hate it I want you to have a plan and a very concrete plan of what you want to do next. Because if you just sell going I want the money Like you can create a business now.

Like people think I have to get to the 10 million mark to sell. That’s not the case. And they want to get to the 10 million mark because they think in their heads that, well, then I can go do X, Y, and Z and it gives me more freedom, but that’s not necessarily the case. So if you have that in mind and you mentioned the earn out, I’m going to tell you, like it costs me millions.

I, I did well, but I left millions on the table because I had bad advice from the business broker that we used that we hired after all these companies were coming after us. And like, we never saw that. Like earnouts are made to, designed to make you fail. So be happy with the cash and be happy with all that.

And then also too like, you mentioned it, you got to be an employee of this company, right? So make sure like you like the culture, make sure you believe in this. It’s hard because a lot of us have been doing this for a decade or whatever, however long, if you’re younger and you’ve been doing it for two years and three years.

Or at least three years, it might be a little easier for you, but, you know, for some of the old farts like us, you know, working for someone is going to be a complete nightmare.

Chip Griffin: Right. Yeah. Very, very difficult for sure. You know, I, you mentioned people wanting to sell because they hate their business or hate being in that business or whatever.

And I, you know, I, and I see that a lot as a motivator to sell. And I think that one of the key things that they need to do at that point is figure out what do they hate? Right. You know, use that exercise that, that you suggested earlier in this episode about, you know, writing down what it is that you don’t want to do and what you do want to do.

And, and is there, can you change the business? Can you evolve the business so that you don’t hate it? Because I will tell you that taking a successful business and evolving it Is a whole lot easier than starting over in most cases, unless you’re going in a completely different direction, you know, hey, you know, I want to be a fly fisherman now or something like that, you know, you want to just go hog wild in a different direction.

Then, you know, maybe starting from scratch is better, but more often than not, if it’s anything like the current business, you’re going to be better off taking the success that you’ve had and moving in that direction from that place of success.

Jason Swenk: Yeah. What, what I’ve found is agency owners, their risk tolerance changes over time. Like in the very beginning, we’re not risking very much because we’re nothing, and then we, we, we start building it up a little bit more, you know, it, it actually like we have more to risk. And then, you know, as life progresses to like, we start acquiring more assets, you know, a family, all this kind of stuff.

So it puts more pressure on us. And then when the business kind of starts plateauing because we plateaued, right? It only grows up to the level that you’re leveled up at. They don’t have a strategy for scaling themselves, scaling the business or any of the other things. So then they get worried and they think.

It’s kind of like Tommy Boy, right? Like when he’s doing like the, he’s crashing the car. It’s like, Oh, let’s look at the person with the other brakes and like starts ramming them. And, and that’s what we feel our business is like. We’re on fire and it’s going to burn down tomorrow. And there’s a lot of uncertainty there.

So we’re like, we need to get out. We need to find a new business. We need to go do software. Like I can tell you after I sold my agency, I went to go build an iPhone app. I hated it. The grass is only greener on the side you water. So just remember that, but you, like, if you come up with, you really think where you want to go, how do I level up?

What are the strategies I need to put in place or what’s the plan? If you come up with a plan, I don’t care if the plan works or not, you’re going to have so much more certainty and take away that uncertainty in order to make the right decision. So then you’re inspiring your team rather than demotivating them because you suck.

Like, because your mentally attitude just sucks. And it just brings down the rest of the team. Like we’ve all gone through that. Like all the business is going to shitter and like, we’re blaming all the people and they can, and your whole team senses it. And that’s just a collision disaster. You know, going down to the bottom.

Chip Griffin: Well, I like what you’re talking about in terms of a plan too, because I think that, you know, having a plan is reassuring in and of itself, but more importantly, it’s the process that you go through to create the plan. Yeah. That is what makes the difference. You know, I, I often have a business owner will say to me, you know, do I need to put together a business plan?

Not really, because as soon as you put it together, it’s going to go on a shelf and you’re never ever going to look at it again. But the process that you go through to think through what does the business look like, what direction is it going, all of those things, that process is really important and does help lead to your success.

So, have the plan because of what it takes to do it.

Jason Swenk: I’m glad you mentioned, yeah, because I hate business plans too. Like if you’re just doing a business plan to do a business plan, they’re dumb.

Chip Griffin: They’re stupid, but the process does make you think about things. But just don’t think that this is something that you need to, you know, pull out as your guidebook every week and say, well, you know, in paragraph seven of page three, we said we were going to do this, let’s do this.

Jason Swenk: I mean, you know, it’s like what we’re talking about. Everyone is like, if your business was based on referrals, which just isn’t scalable and it’s just kind of leveled off. We’ll, we’ll come up with a plan of like, how can we generate leads? How can we generate more awareness? Oh, I need to create a content.

Oh, I need to create a podcast. Cool. Like that’s the plan. That’s going to give you the confidence you need to get that momentum, to get that ball rolling up a hill. So then you get to the top and then, then it’s easy sailing. You’re just, you know, you’re pushing it downhill. So.

Chip Griffin: Right. Well, now that you’ve mentioned leads and we’ve talked about people, you know, wanting to get out of the business because they hate it.

A lot of agency owners want to get out of it because they hate having to sell. And, and so they say, you know, I just, I need to wash my hands of this. And, and so, you know, I know that you have agency owners coming to you and saying, Hey, you know, I, I, how do I get it to the next level? How do I, you know, increase that sales engine?

Or worse, you know, Hey, I just lost a whale client. You know, I, I need to replace them tomorrow. How do I do that? So when, when, when an agency owner is coming to you with these challenges, you know, how do you counsel them?

Jason Swenk: Yeah, I look at it as a healthy agency or the perfect agency has a multi channel approach for generating business, right?

They have an inbound strategy for putting out helpful content that’s making people aware and then bringing them and then making them trust. So then when they chat with you there’s no selling. I never sell anything. I’m never trying to convince anybody of anything and neither is any of my team. But they’re coming to us because they’ve seen some of our content talking about how to get the budget 99 percent of the time.

So then they don’t waste time with the wrong prospect. Or, you know, we’re putting out case stories of people that had success from X, Y, and Z. Marty’s a great example. He’s in our mastermind. And we basically told him, I said, and he goes after big brands. We said, let’s do some remarketing ads of just the success stories you had from your brands.

About months went by, a large airline called him, brought him in and he goes into the pitch. And they literally don’t really ask questions which is a bad sign, right, when you’re pitching. You’re like, oh crap, I didn’t get this thing. And they go, when can you start? And he’s like, oh, really?

This was horrible. Like there was no back and forth. And he asked them about like three months later, after like they signed the deal and everything, cause you don’t want to jinx it. Right? Like, why are you going with me? And he goes Hey man, I watched all your videos. We’ve watched all your videos. We know you can do it.

So creating an inbound strategy, putting out the content. Second one is an outbound strategy and please do not hire those companies that promise you 10 appointments guaranteed. I’ve never seen one of them work in past 25 years. I think you could probably agree too, Chip, right? It’s just that’s a whole nother story. But what you can do…

so like, for example, I’ll give you guys a strategy. If you’re a B2C agency and you’re trying, let’s say you’re selling say you want to work with brands in the beauty industry, makeup. Well, what I would do is let’s say this was lipstick. Let me get a pen. Let’s just say this was lipstick. So I would make a list of all the brands that I want to work with that I can help.

That can pay the price that I need. I don’t care how big they are. I want you to buy their lipstick, buy their product. Then what I want you to do is identify the decision makers. Then I want you to create a video, create a note, create whatever it is saying, Hey, Chip, I just bought your lipstick. I love it.

And you’re holding it up. So they know your customer, you might put it on or whatever you want and saying, you know, I love your product, but I felt like something felt short on whatever stage it was. I would love to kind of just tell you about it. Let me know if you have five minutes to jump on a call.

I can promise you, we did this left and right. I interviewed people from international hotel group, IHG, the CMO. I said, how do people get your attention? They’re like, call me up with something unique. So come up with an outbound strategy for that. And then the third is strategic partnerships. Look at the people going after your audience.

It doesn’t, it could be your competition. It could be technology companies, publications, associations, whatever it is. See how you can actually help them. And two plus two equals 80 versus four, right? Mm-hmm. And that’s how we landed LegalZoom, because we were one of the best partners in the world for Sitefinity.

We landed Hitachi because we’re one of the best partners in the world for Microsoft, because we built these relationships that goes back to becoming the agency CEO. So those are the three channels to really create a pipeline for your agency where you can pick and choose your clients.

Chip Griffin: Well, I think we’ve covered a tremendous amount of ground here in just 25 minutes.

We’ve talked about everything about why you want to have the agency to exiting it, to operations and processes, to sales. So if someone though is interested in, in learning more and accessing some of the resources that you have available, how can they learn more about you?

Jason Swenk: Yep. Two, two places you go, you can go to agencymastery360.Com. We have tons of resources out there. And then if you want to make sure that we’re sending you that information, go to swenk.it. So S W E N K dot it. So you got to swenk it.

Chip Griffin: And as you always sign off your videos, have a swenk day. So Jason, I really appreciate you taking the time to share your, your insights and wisdom with the audience here.

I’m sure that many of them will be checking you out and, and I hope that they’re all subscribing to your podcast and your lists and all that, because there are lots of great. Resources available there. Again, my guest today has been Jason Swenk and my name or sorry, and this has been Chats with Chip.

Thanks for joining us.

Few people in the agency world know more about the effective use of Wikipedia than Bill Beutler. As the founder of Beutler Ink, he and his team don’t just advise people about this popular platform, they also help clients communicate more effectively with infographics and other formats.

In this episode, Chip talks with Bill about the evolution of Wikipedia in recent years and how agencies can help their clients navigate the sometimes confusing editing ecosystem without getting themselves into trouble.

The pair also discuss how artificial intelligence impacts Wikipedia and communicators.

William Beutler is the founder and president of Beutler Ink, an award-winning strategic creative agency that helps emerging brands and industry trailblazers tell their stories through engaging content, dynamic social media strategies, and an honest approach to reputation. Founded in 2010 and counting two dozen employees, Beutler Ink is especially known for its pioneering work in public relations for Wikipedia. Outside of agency leadership, William Beutler has also been a blogger, podcaster, and film producer. He began his career as a political journalist in Washington, DC.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of Chats with Chip. I’m your host Chip Griffin and I am delighted to have with me a regular guest on some of my shows a good friend a really smart guy And I think we’re gonna have a great conversation Bill Beutler of Beutler Ink. Welcome to the show Bill.

Bill Beutler: Chip Thank you so much for having me.

It’s been it’s been a moment. I’m glad you think of me as a regular.

Chip Griffin: But I do because I’ve had you on at least twice on different shows, so you know, it’s, it’s, it’s always great to have you and, and you do have a lot of insight and today we’ll be talking about Wikipedia. Which is, you know, for those of us who are seasoned, shall we say, in the business have, have seen it evolve a bit over the years, but it’s, it remains a mainstay, but I think a lot of people with all the developments that are taking place out there with, with AI and the, you know, the, the birth of different kinds of sites and all that kind of stuff, you know, how relevant is it?

Is it a threat? Is it an opportunity? How should they be thinking about it? So we’ll get into that in a minute, but before we start talking about Wikipedia why don’t you just share a little bit about yourself first?

Bill Beutler: Sure thing. So as you said, I have my own agency. It’s called Beutler Ink.

We’re a strategic creative firm where Wikipedia is our primary service, although not our only. We also do content development and social media, and we have a really strong emphasis on visual design. We’ve been in business for about 13 years at this point, and we have a team of about two dozen spread across the contiguous 48.

We’ve never had an office in all the years we’ve been in business. The first person I wanted to work with was in a different state, and then we just kept hiring people where they were and never bothered to have an office. And you know, we’ve going strong and it’s been a blast.

Chip Griffin: Well, it’s great that you talked about how you go beyond Wikipedia.

Cause obviously that’s, that’s how you and I first met many years ago. And, and I always think of you as my go to Wikipedia expert whenever anybody asks, but you guys also do put out a tremendous amount of stuff that, you know, particularly the visual stuff that you guys put out. I really enjoy and think you guys do a bang up job of being able to you know, I, I hate calling them infographics because infographics is one of, it’s one of those terms that I think has been totally distorted over the years and I see these infographics that are really like, you know, 10 page reports that have just been converted into a giant long image. And, and so, you know, you guys do a much better job, I think, of, of turning them into what they, they, Could have or should have been and so I would encourage folks to, to check out the work that you guys are doing in that area as well, because it really is something that even if they don’t work with you, they can learn a lot from.

As far as how to do it the right way.

Bill Beutler: Absolutely. And our, our blog on our website at beutlerink.com there are plenty of posts about data visualization, different approaches. You know, at one point in time, we did think of the creative side of the business as being an infographic shop. And this was roughly 2013, 2014, back when that was the infographics were all the rage.

And they kind of got overdone. I actually met the great data visualization speaker Edward Tufte, and I asked him what agencies should know about infographics and his answer was stop. He just was over it. And this is the guy who is the go to on data biz. And I’m sorry, my cat has just knocked over a table. I thought that everything would be chill, but these cats are not so.

Chip Griffin: Well You know, you it’s what makes these, you know live to tape shows interesting because you never know what pets or children… You know, my, my regular podcast I do with Gini Dietrich her daughter makes an appearance quite frequently in the background on those.

So, you know, it just, it, it adds to the, the, the reality that this is. And, and so I appreciate that. For sure. So, so let’s, let’s let’s weave into Wikipedia a little bit here, though, because, you know, Wikipedia is one of those things, I, you know, I, I think a lot of people aren’t quite sure what to make of it, and so they, you know, some, some people you know, think of Wikipedia as this place where, you know, their, their organization, their business gets trashed, right?

You know, and, and, and particularly, you know I’ve done a lot of work in crisis comms over the years, and, You know, needless to say, any, any business that is involved in a crisis is probably going to have stuff on Wikipedia that they don’t enjoy seeing. It may be factual, right? Because that is the goal of Wikipedia, but they still don’t like it.

And they maybe think it doesn’t have appropriate context or something like that. And so, you know, so you’ve got that camp that just. you know, sees it as, as a fear. You’ve got another camp that sees it as an opportunity. Hey, you know, we want to promote our business. We want to make sure we’ve got a good, robust Wikipedia listing so it can, you know, if someone’s Googling for us, they can find all this good information and it’s from a credible third party source.

So therefore you know, it must be good. And so, you know, those are sort of the two extremes, if you will. And in, in both there’s opportunity, but in both there’s also some risk.

Bill Beutler: I mean, it really does run the gamut just as you say. We will speak to I would say the broad majority of the perspective clients that we talked to and clients we work with, there is already an article. And it just has been kind of neglected. It’s not usually overly negative, although you better believe we talk to people who have been the focus of a campaign to make the page worse. And we also work with a lot of companies who would like to have an article, but do not have one yet.

And that can be a whole challenge of its own, because there are far more companies and individuals and organizations. Who would like to have a page than actually qualify for one. So we really see people with all kinds of different challenges relating to Wikipedia. But it all comes down to the same the same core value proposition/ risk situation that here we are, what, more than 20 years following the establishment of Wikipedia and more than, more than 15 years it’s been, you know, really globally famous that had, to this day, people run a search on something, they want to learn information, and Wikipedia is very often one of the first things that comes up. Even if another website does come up ahead of Wikipedia, on the rare occasions where that happens, well people know what Wikipedia is. They know that it has this authoritative voice.

These days they know that actually Wikipedia is pretty good. The, the, citations have been built out over time. Again, Wikipedia was founded in 2001. So here we are. What is it? It’s now 2023. So it’s about 22 years old at this point. It’s really quite a mature product, if you can speak of it in those terms.

As an encyclopedia, it’s really well developed. It’s a, it’s a place to be seen. And well, if you’re not there, you want to be, and if what people read there is wrong there’s definitely the perception that it matters and this really, really often is the case where we’ll speak to somebody from the communications department at a, at a company where they’re hearing from their CEO that the they happen to read the page or maybe their nephew, like, you know, pulled them aside at Thanksgiving and said, have you seen what the Wikipedia says about the company?

And that’ll start this conversation where they’re looking for somebody to help. And I’m grateful when they find us. We love doing this kind of work. One of the other challenges about Wikipedia, even here 20 years into its existence and long after it’s reached you know, ubiquity, there’s still still really a very small number of consultants or agencies who do this work well. Who do this work in a way that will keep themselves and keep clients out of trouble.

I think because Wikipedia, the editor, the volunteer editor based at Wikipedia, you know, they don’t think of themselves as providing a marketing service. And so they really, you know do not roll out the red carpet for PR and marketing people.

Chip Griffin: In some cases, exactly the opposite. They, they, they view professional communicators is the enemy almost. And so I think that that can be a challenge. I, you know, I, I, I like the fact that you mentioned the maturity of Wikipedia because I think that’s certainly true as far as the you know, the volume, the comprehensiveness of the information itself. The area where I think it’s a little bit less mature, at least in, in technological terms is it’s, it’s user friendliness for those who are interested in editing it.

And, and it, and it remains perhaps intentionally so, a place where you, you, you kind of have to, to really know the system in order to even mechanically go about the edits. It is, you know, if you go to the edit page on a normal page in Wikipedia, I think the average person would look at that and just be absolutely befuddled by it. You know, the, you know, the list of revisions and the way it does it in previous and next and you sit there and you’re like, What the heck does any of this even mean? And so I think that you know that does for agencies who are trying to help clients I think that is an obstacle as well because they, you know you can’t even for many of them get past the technological hurdle of how to do it before you can start stepping into the weeds and making making trouble by doing something you shouldn’t.

Bill Beutler: This is really true actually, this is we we believe it or not, we actually developed a software that we use and that we also offer to to agencies and to clients to, to, to take those confusing lists of edits and turn them into something that is a little more usable. So the software is called WikiWatch.

You can learn more about it at wikiwatch.net. It’s available by subscription. Because truly, Wikipedia is designed for the insiders who have taken the time to learn what it is. And if you are a professional communicator who has other things that you’re doing, it can just take too long to learn how it all works.

So obviously hiring an agency like myself or one of the few others out there who are similarly, you know, qualified and again, ethical in their approach, just because it’s so common for scams. We, we have talked to people a lot who, who have tried to hire a consultant off of Fiverr or someone who’s cold pitched them and they’ve lost thousands of dollars trying to get something that they can’t get. Anyway, if you do want to kind of develop some knowledge yourself. WikiWatch is a great way to start. I will give Wikipedia credit for having done a lot of work over the years to try to make editing easier. But as you say. It doesn’t make it actually easy.

Chip Griffin: Right and and and honestly I’m not sure that the site really has an incentive to make it too easy because then there’s a lot more policing that has to be done, right?

So there there there is a certain advantage to having a barrier to entry on the editing so that you know, the you know those core editors who are involved in trying to help don’t have as much to review. And I think to me, that’s another key point here. You know, part of part of the thing that I hear from agencies is the experience can be very different from one client’s page to another because it really depends on which editors have taken an interest in that particular entry and what their own outlook is, right?

Because there are certain general standards within Wikipedia, but a lot of it comes down to personal interpretation of the editors who are actually participating in that particular page.

Bill Beutler: This is a really excellent point. So Wikipedia has a complex set of policies and guidelines, a whole manual of style for how things should be written, what kinds of sources you should use, how you should write from, et cetera, and learning them is very important.

But, just as you say, ultimately, there is no real editor, you know, editorial structure. There’s no editor in chief, there are not, there are no managing editors, and it doesn’t work like that. It’s purely a volunteer community. And so, there is a bit of the luck of the draw with the editor who, if you are, you know, if you are a PR professional, and you want to interact on the page of a client, you know you may well have heard it’s best not to go in and make direct edits, very strongly discouraged.

However you are welcome to come to the discussion page for that topic and, you know, raise an issue. Even present an argument, present a new draft. And so the idea is that volunteers should help. Well, how helpful will they be? It certainly helps a lot if you can speak their language, you know, cite the right policies and guidelines, and, you know, and come with the right answer the first time.

This is the sort of thing that an agency such as mine can take the guesswork out of. But even so, even for us we still talk to editors we’ve never met before just because myself and and my strategy team have a lot of experience, you know, helping clients solve problems on Wikipedia where a lot of Wikipedia editors we know very well and have a good working relationship with.

And yet there are also folks that have never heard of us before. And so we have to, you know demonstrate good faith every time. And some, some editors are more skeptical of PR than others.

Chip Griffin: That’s a, that’s a very polite way of putting it, Bill.

Bill Beutler: Well, I have to do business there, you know, I’m very pro Wikipedia.

And I think that’s one reason why we are successful. Like, I think that Wikipedia is a great thing.

Chip Griffin: It is a tremendously valuable resource. You know, I, I use Wikipedia on a regular basis when I’m looking for information on things, as I’m sure most of our listeners here today do as well. And and so, you know, it is filling a useful place you know in the market. At the same time, you know It is incredibly frustrating at times when you read things in there and and either you know whether it’s a client or not Sometimes you’ll read things and be like they really shouldn’t say that that way or you know. Because, you know, we also have to remember that all editors are people, right?

And so, you know, yes, you stick to the facts, but, but at some point, someone has to be the arbiter of which facts to include, right? Because particularly on, on, you know, major companies, major topics. You know, you can’t include everything in them. And so ultimately part of an editor’s role is decide what’s in and what’s out.

And that does inevitably reflect the biases of the particular editor, one way or the other. Just, you know, I’ve always argued this with the media, right? You know, it’s, it’s silly for them, the news media to prevent, pretend that they’re impartial. They are not. We all come to the table with biases, whether conscious or not.

And, and they will show through if we look closely enough at anyone’s writing. So, you know, you have to be reasonable in your expectations, I think, of the editors and what you can actually achieve from that perspective.

Bill Beutler: Yes, and, and remember that these editors they really all are volunteers. And if they, if, if you pose a request and somebody comes and answers you, they’re taking time out of another project of theirs to, to help you out.

And so I’ll tell you, we oftentimes will see consultants who try on their own. And they do a good job getting started. They create a user account and you know, they choose the right name. They choose a usable name. They provide the proper disclosures of who their client is and then they go to post a request on the talk page And it’s 2000 words long and they’re asking for every single change in that first edit. Volunteer editors are just going to Ignore that probably for the most part.

You’ll be lucky if somebody says Whoa, can you break this up into something usable? They – I find it’s very common where a company who has tried before comes to us – this also happens with creating a new article. They may have written their own draft, found the articles for creation process, which is how you’re supposed to submit an article if you have a financial connection to the topic, and then they wait three months time, and they just get back a reply from editor that’s like, no. They don’t provide any useful information.

That’s frustrating. It would be great if Wikipedia editors provided more guidance on how to do it right the next time. But you know, they’re not going to do your work for you. There’s there’s a huge, you know, huge, a lot of concern about that, but you know, you’re paid. We’re not, we’re not going to do your work for you.

Chip Griffin: Right. And in my experience, you know targeted edits are much more effective than wholesale rewrites, right? I mean, most, most of the time, at least from what I’ve seen, wholesale rewrites are, are not readily accepted. Whereas if you focus in on particular you know, points that need to be added or, or context provided to, or something like that, and you can make a strong case, you’re much more likely to do that.

And then you can build momentum, right? So if you, if you focus on the things that are the easiest to get changed or update or fixed, focus on those, then you build momentum with the editors that you’re being there as an honest broker. And so therefore much more likely to to evolve in the direction that you’re looking as opposed to a total rewrite, you know Throw out all this garbage that you’ve worked on previously.

It’s no good.

Bill Beutler: I love this. We’re talking strategy actually, I have a slightly different view. I think that you are right a lot of the time but it also depends. I’ll give you an example of where we get sometimes we’ll get like the executive you know, the biography where they have, like, taken a pen and they have marked up all the changes they want to make. And they have so many different things they want to do. If they have, like, like, 20, 25 little changes, at that point, actually, it might be better to just present a clean, you know, fresh version of a section.

That way we can address, like, the five different points in that update in that in that, you know that proposed update rather than asking for five different things But it can take a while. Like we we certainly do completely rewrite articles that should say the volunteers approve rewrites. But it can take a while.

We oftentimes will say that a project, a substantial project should, should be probably about a six month starting we’ll start there and see maybe we finish early, but maybe we take a little bit longer. And there are some where we’ve worked with, you know, like Fortune 500 companies with very long entries, and it can take up to a year.

To do a complete overhaul as we work through section by section.

Chip Griffin: You know, I think the other thing that agencies need to think about here is, particularly PR agencies, how can they be helpful to the editing process beyond the direct edits? Right because one of Wikipedia’s standards is to cite you know third party sources as opposed to so if the company posts something on their website no matter how true it may be Wikipedia frowns upon that typically as a source and would prefer to see it in print somewhere or in digital print as it is today And so, you know agencies who are thinking about this can work to try to get you know, reporters to write about the things that they would like to see covered in Wikipedia, but maybe there’s not an existing story that they can point back to.

And I’ve seen this even with individuals with things that are in their biography, right? You know, because Wikipedia, if you, if you share a link to their official bio from the company, a lot of Wikipedia editors will say, nah, not good enough. And, but if you get a reporter to write a profile piece that mentions it, well, now you’ve got it in a place, even though effectively it’s coming from the same place, right?

Because we all know most reporters don’t verify, you know, the CEO went to, you know, Cornell or whatever. I mean, the, the CEO told just like they told the writer who did their bio, they went to Cornell, but all of a sudden it’s more impactful because it was in a, we can debate the logic of that some other day, but, but it’s the reality.

And so if you think about that as an agency and how you can leverage some of your tools outside of Wikipedia to influence what’s in Wikipedia that can also be valuable.

Bill Beutler: Yes, the, the ontology of Wikipedia and how it knows what is true or that something is true you pull back that, you know, there’s like, you know, creepy crawlers underneath there.

But you are really onto something with when you say profiles because Wikipedia is very careful about which kinds of sources it wants to use, even from a reputable publication. You could have a, let’s say like the Hollywood Reporter is a, you know, reputable publication covering the entertainment industry.

If there is an article about your client and it is a you know, fully, you know, editorial product of the, of the writer and of the editors where, you know, it’s, it’s prose and, you know, quotes are interpolated throughout, you know, that kind of a properly written profile can be quite useful. Now, it’s also, it’s also very common for a major publication like that to also simply write it as a Q&A.

Now, here’s the thing. Wikipedia will not accept Q and A’s, even if it comes from a major publication because the thinking is that it’s just, it’s almost the same thing as a, in terms of the information integrity, it’s the same thing as a press release. It’s just coming right out of the mouth of the executive, and it has not been filtered through fact checking or the editor, editorial process.

And as you say, you and I know that fact checking is not what it used to be, and it may not be any more accurate than just a Q& A. However you know, Wikipedia is trying to plant a flag and say we want there to be some evidence that the publication has considered it and, you know, put their own, you know, their own you know, judgment behind it or, you know, the claim, the publication claims it’s true, not just the interviewee.

And so, like for a lot of you know, a lot of clients of, of. PR you know, professionals and publicists having a Q and A could be a great hit. It could be great sometimes just to be mentioned in a column on the subject of your expertise. However, that is not really useful for Wikipedia’s purpose.

Wikipedia wants to see that article say something about your career. If you’re just quoted about something that you are an expert on, like maybe that could be something that could be added to that other article about that subject, but it doesn’t provide you with anything to add to Wikipedia about it. So the work of PR and Wikipedia, they really are intertwined in some interesting ways but it’s a challenge too.

Chip Griffin: Yeah, I think part of it is, you know agencies need to help educate their clients on you know, what are the important changes that you would like to see to your Wikipedia article versus the ones where it’s just It’s kind of annoying, but it doesn’t really have a difference. Because I’ve talked to a lot of people who you know are concerned about something in a wikipedia article, but it’s more for vanity or Just because they don’t like a certain way something’s described but but at the end of the day It doesn’t really impact reputation.

It doesn’t impact you know the reader’s behavior or something like that. And so I think you also need to to be careful that you don’t let some of those little things get too deep under your skin and you focus on those meaty things that really go to facts, that really go to the heart of the article. Because those are the areas where it’s worth fighting the fight over not the little things that are just like god, you know I wish it didn’t say it that way.

Bill Beutler: Yeah, you have to learn to kind of know where to pick your battles and what to let go. We find that on Wikipedia it’s really rather easy to get a change made if it is a matter of fact. If there’s a fact that is wrong or a fact that is missing that is the sort of thing and of course if we have a reliable source to verify that information that’s relatively easy. If however, it is a matter of perspective and it kind of involves the the judgment of the editor who wrote it If you chose to, you know, like include this detail or that detail if there’s something in there that you just don’t want to be there, but it’s true, then your chances of getting it out are pretty minimal. You’d be better off focused on trying to add other things that you do want that you can verify and not, you know, yeah, obsessing over, well, I don’t want that, you know, particular job to be mentioned because I didn’t have a good time at that job, you know, or, or there’s some scandal that, you know, someone could in the future add to it.

You know what? If it’s factual and it’s relevant to your career, it’s probably going to stay.

Chip Griffin: So we only have a couple of minutes left here, but I would be remiss if I didn’t raise the topic of AI and what that means for Wikipedia, both as a source and, and how AI ends up being potentially a source for Wikipedia stuff.

I mean, so I mean, how are you thinking about how AI and Wikipedia intersect in 2023?

Bill Beutler: You know, it’s interesting. As far back as early last year, we had been asked by prospective clients actually in, in the crypto space was somebody who asked us. Like, they were surprised to learn that we were not using AI to write Wikipedia articles at that time.

Frankly, we were surprised that they thought that that was even feasible. Now, this was pre ChatGPT4, and post ChatGPT, opening up to the public, all of a sudden, you can play around with it and start to see, it’s very good at adopting the style of Wikipedia. But here’s the thing. It’s still nowhere near being able to examine sources, pull out useful information.

Frankly, you’re probably familiar with AI’s tendency to quote unquote hallucinate, or it’ll make up information regardless of it. It just abhors a vacuum. It thinks you want a source, so it’ll give you a source and it’ll make up a source. So we actually did an experiment. And if you go to the Beutler Ink blog we have a post from a couple months ago.

Where we pitted one of our Wikipedia strategists against ChatGPT in writing about a topic that did not yet have a Wikipedia article. And so, you know, if you’re following AI, you probably have a guess what happened that Wikipedia or ChatGPT finished in seconds, and it wrote something that was read quite plausibly.

But it also missed a lot of information and it was and then didn’t have any sources or the sources that made it made up a couple sources are strategists. It took him, you know, three hours or longer, but came back with something that is really, you know, high quality and accurate. And we then uploaded that to Wikipedia and we wrote a blog post about the experience.

I think that there are possible applications of AI within, you know, developing drafts. That could be useful in the near future, but it really has a long way to go before it’s ever going to replace or frankly, before it’s even going to really be a useful tool for doing research and compiling it. I would think that’s something that…

I don’t know. I should not make predictions about AI. It’s surprised me before. But it’s just it’s just not there. It’s intriguing. I’m not worried about AI taking away jobs from most writers. I think AI is very good at mimicking style. It’s not good at actually being interesting or You know, or at all strategic.

Chip Griffin: Well, it’s certainly something to keep an eye on.

And I know that it’s something that you’ll be doing on your blog. And so I would encourage people to become regular followers of your blog for the insights that it provides. If someone is interested in learning more about you and Beutler Ink, Bill, where should they go?

Bill Beutler: Yeah, so certainly beutlerink.com, our website is the place to go.

You know, we have launched a couple of initiatives here in late summer that I think would be really interesting. If you look up you know, our website and ask a wiki expert, we have a series of videos that we are answering questions that we hear frequently, such as, is it true that there are some facts that can’t be added to Wikipedia?

One of my colleagues kind of talks through that and just a short, short form about, you know, no longer than a minute and a half. So we’ll keep doing that through the fall and maybe come back for a season two later. And we’re also we’ve launched a monthly newsletter It’s called WikiWise, so also search Beutler Ink and WikiWise and you will find a place to sign up and receive once a month, we will send out a short, you know, snappy newsletter that we’ll talk about Wikipedia in the context of business and public relations and what’s important about Wikipedia.

So it’s really if you are somebody who’s casually interested in just keeping up on what, you know, what is happening in business and Wikipedia. WikiWise would be the place to go.

Chip Griffin: And if you’ve stuck with us this long, you definitely are interested in Wikipedia, so you should be subscribing right now.

So before you go listen to that next podcast in your playlist, go ahead and subscribe. So Bill, I really appreciate your time today. You’ve provided lots of thought and insight for our listeners. Again, my guest today has been Bill Beutler of Beutler Ink.

If you dread difficult conversations, Allyns Melendez of HR Transformed has some great tips to make them easier — or perhaps to head them off altogether with better communications.

In this episode, Chip and Allyns talk about ways that you can solicit ongoing feedback from agency employees and build a management structure that encourages meaningful two-way conversations.

Of course, difficult conversations can’t always be avoided. When you need to have them, Allyns suggests a framework for those meetings that will make them less painful and more productive.

Allyns has 25+ years of human resources and business management
experience, a Master’s in Business Administration from Temple
University Fox School of Business, a Bachelor’s Degree in Business &
HR Management from Kaplan University, is a certified analyst of two
workplace behavior platforms, is certified in Human Resources
Studies from Cornell’s ILR School, a certified leadership coach and
completed courses in Leadership Strategies from Harvard Business
School and Neuroscience for Business at MIT.

With a passion for human capital and business strategy, she helps
businesses understand the necessary tactics that will help develop,
train, educate and motivate their employees. Allyns currently serves
as CEO at HR Transformed, COO at a national public relations firm and
is a Professor of Continuing Education for Temple University.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of Chats with Chip. I’m your host, Chip Griffin, the founder of SAGA, the Small Agency Growth Alliance, and I am delighted to have with me someone who is going to help us have I don’t know, an easy conversation about difficult conversations and other things. Her name is Allyns, Allyns, ah, see, I knew I was going to mess this up, Allyns Melendez, the CEO of HR Transformed.

I was thinking about it too much, Allyns, I, I, I need to just stop thinking, right? I mean, that’s, that’s the advice I’m sure you give all your clients, just stop thinking, just do. Yes. Yes. No, I think that’s probably not the advice you would, you would give as an HR expert because it’s, it’s really important to think through what you’re going to do when you’re talking to employees and making sure that you’re crossing your T’s, dotting your I’s and all that.

But before we dive into some of the substance of today’s conversation, why don’t you just share a little bit with our listeners about yourself?

Allyns Melendez: Sure. Thank you, Chip. It’s great to be here. Thanks for having me. So I have 26 years of HR experience. And some people say to me, you know, how did you know you wanted to be in HR?

And I’ll tell you that from a super very young age, I mean, like nursery, elementary school level, I always put myself in the other person’s shoes. I’d always be in this super empathetic position of where does everyone stand here? I sympathize with the adults. I sympathize with the children around me. I, I put myself in their shoes and think about how are my words going to land if I need to say something to them, either a positive thing or something that is more constructive.

So HR for me has always been a journey of, of my life. And I built a business around HR and specifically agencies. I think that the agency model is so complex and so dynamic. That there’s less time to work around the people because they’re always looking to collaborate for their clients. And sometimes, you know, we kind of leave people behind.

So HR is just something that I love to do. Anything complex that has to do with people and their behaviors in the workplace is a, is a big love of mine. So that’s why I built a company around HR.

Chip Griffin: Well, and, and as you note, HR is so important in the agency world. Talent is the main thing that agencies have to sell.

A lot of times, agency owners sort of pay lip service to this by saying, oh, yeah, it’s, our team is our differentiator, which is one of my least favorite things to hear because it’s not a differentiator if every agency owner says the same thing. But because the team is so important, it means that the HR function, whether you have a, a full-time HR person, HR consultant, You’re listening to this podcast to get your HR advice, however it is you need to make sure that you are thinking intelligently and acting appropriately in order to get the most from that resource.

Allyns Melendez: And I think that there’s a lot of compliance out there and to grow an agency to do a service or creative ideas and kind of put people to work for your clients in that way. You forget about all the compliance things and having a really strong HR function, whether it be a consultant or an HR services company or an in house HR person, you don’t have time to worry about all the fine details there because again, your clients are going at a million miles per hour, whatever your agency’s set up is. And so having an eye on compliance and having an eye on handling things before they become this bigger, greater thing that takes up so much time.

And then the business owners or the leadership in the company gets resentful of their talent. So they’re sort of talking for both ends. Our people or our talent is our, is our vehicle to provide a great service for you. And yet the time it takes is ignored. And then it just kind of blows up. And then I talk to business owners all the time and they’re telling me the amount of time that I’m taking is all day.

I can’t sell. I can’t get in touch with our clients because I’m handling HR issues all day long. So I’m there to alleviate that. Um, in, in a greater sense, because one, that is my business, but two, I got into business for that purpose. And that’s a huge, huge benefit for the companies that I work with.

Chip Griffin: Yeah.

And I’m a huge advocate of, uh, particularly small agencies working with HR consultants. Uh, in fact, I, I always encourage my clients to find an HR consultant that they can trust and work with and build a relationship with to help them with the compliance issues, because frankly, a lot of agency owners don’t know anything about the sort of the procedural side of running businesses, whether that’s tax accounting, HR, etc.

And they need to surround themselves with people who can frankly help to take the headache away, both in the short term of of the compliance and the long term of failing to comply. And so I think having You know, folks who can help you to navigate those waters is important, but it’s not just about the compliance.

I mean, I think that’s that’s the that’s the table stakes, the minimum thing that you need to do. You need to make sure that you are, you know, handling all of the rules and regulations appropriately doing the right paperwork, paying the right taxes and all that kind of stuff, handling benefits properly, which is a huge area, in my experience, where owners slip up because they don’t understand how to manage benefits amongst their team appropriately.

But a lot of it is also just the interrelationship between the owner, manager, and employees. And so I know one of the things we were talking about in the pre show was difficult conversations. And this is something that, in my experience, a lot of the agency owners I work with, they do almost anything they can to avoid a difficult conversation with an employee.

The employees do the same in the other direction. And the longer you allow those, those situations that deserve a difficult conversation to fester, the harder they become to resolve.

Allyns Melendez: A hundred percent. So I love to get involved with agencies when they are faced with these people issues, um, on both sides.

I’ll start with the employee side first, because that to me is less complex. When an employee has an issue and they try to talk to their manager or try to talk to leadership about it, There is this sense of, I don’t know what to do about this. And in an agency, again, when you’re moving so quickly and your clients are being so demanding and the deadlines are very, very close together, there is this sort of, um, resentment that comes from the lack of communication, but also it shuts down communication for future.

And a lot of agencies don’t want to know what is going on with their employees? I hear the, I rather not know. So I don’t have to deal with it. Because as soon as you hear something’s going on, you know, the amount of time, the amount of conversations, the amount of emotional baggage that is going to come with that.

Is so overwhelming that the avoidance is what is usually the go to that business owners, um, basically do. So one thing that they can do is create a 24 7 virtual suggestion box. So you remember back in the days, you used to put a little piece of paper in a box and. You try to put it in someone else’s handwriting so nobody would know it was you.

Well, there’s these awesome tools everywhere, also homemade tools on very, on free websites like SurveyMonkey, where you can set up a forum, an anonymous area, an anonymous link. Where someone could tell you what’s going on at your company. And a lot of business owners are resistant to that because again, not, not just, I’d rather not know.

I’d rather not deal. I’d rather not do the hard work and the heavy lifting that it takes to solve it and to communicate back. If you start to do that, my biggest advice is use a free tool like Survey Monkey, get feedback from the staff, leave the link open in perpetuity.

Look at it when someone submits something and answer publicly, and I mean publicly, I don’t mean out in the social sphere. I mean, internally say, Hey, we got a suggestion box, uh, posting from someone anonymous. And it basically had to do with X. You don’t have to tell them exactly what it was. And here’s what we’re going to promise you, whoever it was out there.

We want everyone else to know. If it’s a no, you say why. If it’s a yes, thank them for the suggestion. That builds trust. And so what that creates for the employee is an openness of if I do not feel comfortable going to a manager and sharing my, my fears, my concerns, my expectations, my feedback, my negativity, my positivity.

I don’t feel that safety. I’m going to do it anonymously. You give them an outlook for that. And the second thing on, on that, uh, still on the employee side is, are your managers trained enough to receive information and do the right thing with it? So I’m going to, I’m throwing in some compliance at the same time.

A lot of managers, especially in agencies that I’ve been working with, and I’ve been in HR for 26 years and work with in various industries and agencies is my favorite last 15 years spent in an agency. Managers do not understand that being promoted into that like account manager or account supervisor level.

You have an obligation to take information from an employee and bring it to senior management. And when you don’t do that, you put yourself in a situation legally that you don’t want to be. And I’m not an attorney. I studied HR law for many years at Cornell. And I’ve been using this my entire career. The conversation with managers is you have an obligation to the organization to take information to senior management.

Why? If someone comes to you with something serious. It’s on you personally, not just your, you lead the organization, but it’s on you personally, because you have the information. So training the managers and understanding that someone puts something on your plate, you’ve got to handle it, walk it over to someone else and give it to HR, give it to the business owner, business owner can give it to HR and they can handle it.

That again, builds trust. And the training is important, getting people trained up to understand. So now from the management perspective, how scary is it to go into a conversation because you are frustrated and annoyed and you do not have the time because client crisis are happening all the time. The demands from the media are high or whatever your agency is doing.

I mean, the stakes are high. So the anxiety for most managers, especially more junior managers, going into a difficult conversation is I’m just going to tell them what needs to be done. I’m going to direct them in the right direction. And they just need to get it. They just need to go back and do their job.

And that’s the truth, right? That’s exactly the outcome that every manager wants. And you’ve got many different types of managers. You’ve got your super calm sort of empathetic manager. That’s the person who’s not willing to go into a conflict. situation. They don’t want to enter into conflict. So if an employee responds in a very conflict inducing way, that manager is backing down.

Oh, it’s okay. It’s totally fine. You’ll get there in time. You’ll finally figure out how to do this right. You’ve got that manager. That manager is not being the one who is going to protect time. That manager is going to keep letting poor performance kind of infiltrate that team and infiltrate the client work.

Bad deal. Training that manager to being more direct and going into that conversation with a more direct mindset, role playing with someone else, getting a peer mirror, practicing with someone who’s an opposite behavioral style than them is really important for them. Then you’ve got your manager who like doesn’t care for conflict.

Like I could just go right in, tell you what to do and leave. We call those like the, the, the quick, like dominant styles. I could do a lot of discord. Be quick, be brilliant, be gone. That’s the same way they throw feedback around. It’s like, Hey, here’s what you’re doing wrong. Do it better. And I’m going to go back there.

You got any questions? No. Right. Great. All right. I’m leaving. So getting someone to kind of slow down and say, what does this person need? How are my words landing on both ends? Right. You’ve got your super dominant. I can just give you two examples. So many other examples in between, right. But I took the two extremes.

How is my feedback going to land on this person? And, and when you’re going into a difficult conversation, you have to think about mind mapping your feedback. There’s, there’s a five set up for that. One, what is the biggest issue? What are we talking about? Is it meeting deadlines? Is it quality of work? Is it attention to detail?

What is it? Let’s just pick deadlines as one. What is the issue? Meeting deadlines inconsistent. Need to get you on track with that because the client work is coming out late. And, and we’ve got contractual obligations to that client because the client work is not being done on time. Putting that in jeopardy, putting revenue in jeopardy.

So even though, you know, your deadlines feel small and insignificant to you, they have a bigger effect, a bigger impact on client work in general and what we’ve been obligated to do. Second is, I’ve, I’ve taken a look at the quality of work when it comes to the deadlines. And I noticed that when you do miss the work or when you do meet the deadlines, that work isn’t, isn’t great.

Errors, there’s issues, factual errors, stylistic issues, grammar, syntax, whatever it’s going to be. You need to talk about that too. That needs to be buttoned up. And obviously it’s a time crunch because the deadlines are being missed as well. The third part of that, right? You stated the two issues that you found in the work.

The third one is what is the analysis? Have you taken a quicker look? A closer look of if I were in this person’s shoes, what is something that has occurred in the past couple weeks or months that has contributed to this? And I’m not talking personal, I’m talking business. Have I given them five more accounts to work on?

Has their client had a client crisis? Have they been on, I don’t know, press trips? Have they been onboarding a client, which takes a lot more effort on the, on the front end than it does on, you know, when you’re kind of floating by and kind of delivering work over a couple months, like what has changed in their sphere or their scope of work that has contributed to some of this deadline missing.

So that’s the three parts. Then I go into my intention, which is the most important part in the difficult conversation. I am here because I want you to grow. Because I want you to know what you need to do to be better at your job. Because I want you here and my intention is to make it clear that things are not going so well and that potentially your job will be in jeopardy if we don’t work together to fix this.

And that is the, the, where you stop the conversation and say, I want to hear from you, what’s getting in the way. If you start with all of that information and you’ve mind mapped it on a piece of paper, you know, I like to use a nice little fun looking map. It’s got little circles on it and lines, um, or just a piece of paper.

You’ve now also done one thing that’s really important, which is documenting. Very important part of potentially either the growth or the decline of this person’s tenure with you. So then you get into this two way conversation with this employee and you discover some things. And I think the scariest part of difficult conversations for a lot of people is what will happen when they start to talk back, what will it be?

Will it be a health issue? Will it be a personal issue? Will it be nothing associated with work because if it’s beyond work, I do not want to deal with it, which is what the business owners usually think about are those senior leadership. That’s, that’s in that problem. Also the more junior leaders, they’re in that position to say, Oh, I totally understand.

I get it. I go through the same thing myself. And that’s in the purpose of relating, but how can you get to solving? If it’s a personal issue, mental health issue, health issue, family issue, you have to be very clear on that is, not in my area of expertise. I think it’s really important that you see a doctor.

And you know, we’ve got time off for you to do with that, deal with that. Um, and I want to support you with that. So if you need to morrow off or you need to make an appointment, I’m here to do that. I’m here to give you that time. Um, a lot of business owners and people think that they need to solve the problem.

And they’re not supposed to, but you’re supposed to say what you can do, which is support you in that. And what do you do in the meantime? In the meantime, I do expect you to move forward and get better at whatever it is, the issue that we’re talking about in this case, it’s deadlines. I need you to start to make some progress there.

And maybe we can talk about some work related items that can help. You know, can we help with time management? Is there a course you can take? Let me give you some tips. Let me get you with HR. They do a fun time management session that can teach you about time boxing and some of these techniques that may help with some of the health issues that you’re having as well.

The court of compartmentalize the things that you need to do. All these solutions can be thought of. And then the biggest fear is if somebody just breaks down and starts crying, or they start yelling at you, and they start getting super defensive. And there is a time where the business owner or the leader does not know when to actually stop the conversation and give some space.

Right. So the last part of that is if it does go down this road of, wow, we are emotionally charged and I feel like I’m going to be emotionally charged and they’re emotionally charged, whether it’s crying or yelling or just shutting down, that’s an emotion. Shutting down is an emotion to me. That is avoidance.

So if it does go into this place where you do not know how to move forward and you’re sort of stuck. You have to say that, I see that the conversation is not going anywhere. Why don’t we continue tomorrow morning? Let’s both sleep on this, kind of gather our thoughts, and talk in the morning. And I emphasize in the morning, because you cannot let the conversation be picked up a week later, or a month later, or during their performance review five months later.

So acknowledging that it needs to stop is really, really important.

Chip Griffin: If you’re a manager long enough, you will experience these things too, right? I have had the screaming employees, the crying employees. You stick around long enough, you will have them. And so you, you’re better off to be prepared and be thinking about how to handle them.

So I, I, you know, I love that you’re, you’re zeroing in on that because it is, it is something that holds you back, but it shouldn’t because you still need to have those conversations, despite the fact that those things might happen. They’re not going to happen every time. I mean, it’s a very, very small proportion of them in my experience, where you experience, get to that point.

Allyns Melendez: Exactly. And when you are, there’s some that just get really lost. And so being able to role play that it’s really important to pick a peer mirror at your organization. If you’re at the business owner level, find some people outside that are also business owners that can just have fun role playing with you.

Like, let me play this really, you know, hard situation where I’ve got an employee who’s really upset and angry with me. I want you to play this super defensive role and just, just challenge me for a moment. Let’s just play this game. Let’s practice together.

Chip Griffin: And it’s also where it’s helpful to have an expert like you involved who, you know, you can sit there and say, Well, you know, I’m worried, you know, if this happens, what would I do?

And then you can talk it through. And so you can explore those kinds of things in advance. And so, you know, I know that when I’ve had, you know, difficult HR issues, and I’ve worked with my HR advisors on it in the past, you know, I sit there and say, Okay, well, you know, here are the, you know, sort of the worst case scenarios, the reasonable worst case scenarios, at least that might happen, you know, let’s just kind of talk through how we might handle those as, as they crop up so that you feel more prepared.

And so it’s not, you know, that deer in the headlights feeling that you can get if you haven’t had a chance to either role play it or talk it through with an expert or somehow prepare for that eventuality.

Allyns Melendez: The questions I ask then is what is the worst that can happen if you don’t have the conversation and if you do have the conversation.

The benefits are there for having the conversation, especially if you use the words that are clear. An employee will hear your job is in jeopardy. They will not hear, Hey, we need to work on this and fix this. They’re not going to hear that the same. And in reality, the business owners is saying your job is in jeopardy.

I may terminate you if we don’t move, move forward in the right place. And so you have to find the right cadence, the right words, the right ability to close out that conversation with the employee and restating back. I just want to restate this is serious. Your job could potentially be in jeopardy. We want to make sure you’re here long term and if these things don’t shift we’re going to be having a very different conversation in two weeks when we touch base again. That is clear.

Chip Griffin: I think one of the interesting things that you’ve also highlighted as you’ve looked at these different things, whether it be the suggestion box or a middle manager, making sure that they’re hearing what the employee says and reporting it up the chain uh, when necessary. Even in the difficult conversation, pausing and giving the employee a chance to respond, react, share, et cetera. I, I think a lot of people, when they first become a manager, they think my job is to direct and tell you what to do. And that is absolutely a piece of it. But another large piece of it, and one that I think a lot of managers overlook to their own peril, is the listening part.

You need to create an environment where the employees are you know, willing to have that community. I mean, the, the suggestion box is a great idea, but hopefully you’re creating enough of an environment that most of the time they will actually go to their direct manager or to you as the owner and not feel like they need to use the suggestion box as a shield because that listening process is ingrained in the whole management of the agency.

Allyns Melendez: And that’s how you build the trust. You allow those folks who are not willing to reveal who they are and they start seeing this sort of public reveal of the answers. And they start to build trust in management, and that’s what you want. And also, the listening part is so important, because the different personalities that you find at the top of an organization listen very differently.

And they shut down very differently. A very calm, collected, patient leader is going to listen a lot better than a higher strung, very, uh, high sense of urgency individual. And usually in an agency at the top, there’s a lot of high sense of urgency individuals and I am one of them. And if you take the time to pause and it can be just crucial to just pause and say, what do you think and truly listen in that moment that needs to become part of the sense of urgency that act needs to become urgent for that person to listen.

Chip Griffin: Well, and a huge part of creating the culture of listening is how you react when you do take in information, right? So if you, if you immediately become defensive or you immediately respond to a criticism of you with a criticism of the person who’s offering it or something like that, it makes people much more reluctant to share.

And so, you know, I always encourage, uh, managers that I’m training to, to feel like they can, they can take on almost any of them, even if it’s a very brutal, direct, maybe even in their minds, completely inaccurate, uh, complaint. They need to take it in. They need to, as you say, pause. That you, you can’t just react in the moment because that’s when bad things happen.

And, and so sometimes you need to reflect on it. Sometimes that timeout is not because the, you know, the employee needs timeout till the next morning. You may need to timeout to think about it and say, you know, is there really some truth to this? You know, do I, do I need to really consider whether I’m the one who is maybe not in the wrong, but maybe I’m not entirely right either.

Allyns Melendez: And Chip, the person receiving that information in the moment needs to be able to say wow. I didn’t know you felt that way. I didn’t know that I was coming across that way. And you can say, if it’s true and authentic, it was not my intention. And I’m sorry for that. Or again, some business owners or some leaders don’t want to apologize for something.

They didn’t think they did wrong, right? These are the right/wrong looking for the flaw sort of people mindset. You can just say, I didn’t realize that that is the effect that my words had on you. And I’m sorry for that. Right. Not that I’m sorry I said it. I’m sorry for that. There’s, there’s ways to really work around the defensiveness and allowing conversations to stay open as opposed to closing it down and saying that’s not true.

Chip Griffin: So what advice do you have for, you know, a lot of small agency owners, as we’ve mentioned, don’t have a lot of their own managerial experience, right? They, they may have done, they may have had a management role at another agency or something like that before they started their own, but, but oftentimes it’s not a lot.

It’s not very deep. And so they’re, they’re sort of learning on the job and then they start as they grow, you know, 5, 10 employees, they start putting in some level of middle management and those people almost certainly don’t have any prior managerial experience. Right. So, in some respects, you almost have the blind leading the blind when it comes to uh, management skills. So how do you suggest that, that agency owners go about upleveling their own management skills, as well as making sure that they’re helping to guide their own new set of managers? Because if, if they don’t, then they’re going to have a massive talent problem on their hands sooner rather than later.

Allyns Melendez: So their junior leadership is going to believe that success looks like the owner of the company. And if the owner of the company is acting this way, I must act this way. So truly focusing on the business owner and getting them individualized coaching, bringing problem solving to the table. So, you know, there’s, there’s coaching, which is all Q and A, and then there’s coaching consulting training.

It’s sort of a continuum that we’re really good at is really understanding. There’s more to us than just coaching. I’m not gonna ask you a question and try to pull the answer out of you for 24 sessions. It is okay. What do you need? What’s your biggest pain point this week or this month? Let’s try to solve that.

And then I’m going to show you how we got there because you don’t have time. Agencies just don’t have the time to ask 45, 000 questions to elicit the answer. Sometimes, sometimes you just have to give them the answer. And then we kind of go backwards and say, how did we get to that answer? And tell me why it worked.

So coaching – really strong coaching would be really great with that continuum, getting some training, some coaching, some guidance, some consulting. And then start to see the shift in the other people. Do a 360. Get feedback about yourself before and after. See if you actually are making a positive impact on the people around you and what success looks like.

Then second, I would say as a company starts to grow, everyone who gets leveled up into a supervisor or management role needs an intro to supervising. They do. And it’s not that difficult. It’s like a two hour session or, you know, like really talk to them about obligations, legal stuff, compliance, kind of scare the crap out of them at first and say, listen, you’ve got a new role.

It means something. It doesn’t just mean more money and a better salary, you know, a better salary, better title. It means some responsibility. I am trusting you with my brand. You’re an extension. You’re, you’re, you’re leadership here, right? You’re, you’re managing someone, you’re impacting someone. I want to show you how it’s done.

I’m also going to give you the tools so that you can figure it out because the way that business owner learns. It’s not the same way that that supervisor new manager is going to learn. So think about the adult learning styles. Maybe they’re a reader. Maybe they’ll be good at reading a book like The Hard Thing About Hard Things or you know, uh Atlas of the Heart from Brene Brown. Like there’s so many ways that they can learn to be better managers finding that nice mix is going to be really important and also making that available to all of the leadership on a consistent basis because guess what?

No one’s situation is going to be the same, which is why I love HR. It’s like, give it to me. Oh, I’ve never seen that before. Let’s get in there.

Chip Griffin: Well, I think the basic training for new managers is, is, is so critically important. And frankly, not even for just people who are becoming managers, but people who are doing manager like things like participating in interviews of prospective employees.

I have seen some absolutely outrageous questions asked by you know, mid level people who are not managers, but are still involved in the hiring process and the questions I’ve seen them ask candidates, just they’re mind boggling. Yeah. And, and the risk that that is creating for your business cannot be overstated.

And so you need to make sure that if you’re going to have someone participate in job interviews, they need to be trained on what they can and can’t ask. Right. Managers need to know just the very basics of not even good management, but just, you know, non nuclear management. So you don’t make things so much worse. But I think I really want to highlight as we’re drawing to a close here, the, the, what you said, as far as the owner, the, the managers look to the owner for cues on how to behave. And so, if you are managing in one particular way, you cannot expect those managers underneath you to behave differently. They will model your behavior, so you need to make sure that you are setting the example for them that you want to see from them. And I, if you hadn’t, if I gave no other piece of advice to an owner who’s working with a new manager, that would be it.

Because I think it’s just all of the agencies that I run into that have management problems, it usually is rooted in how the owner has acted previously with those team members.

Allyns Melendez: Spot on. 100%.

Chip Griffin: So, uh, this has been a great conversation. I think you’ve given some great tips for folks on not just difficult conversations, but how you can avoid the difficult conversation, hopefully in the first place, because you’ve had good processes, good communications, good management leading up to that.

If someone would like to learn more about you, uh, or tap into the resources that you provide, where should they go?

Allyns Melendez: They can go to our website, www.hrtransformed.com. And we also have an Instagram, HR_transformed. We’ve got some free resources on there and some great, um, info on our blog, on our website. So download some free content and get in touch with us.

Chip Griffin: Excellent. Well, it has been great to have you. I appreciate all of the advice that you give have given today. Again, my guest has been Allyns Melendez, the CEO of HR Transformed. Thanks for joining us.

Allyns Melendez: Thanks Chip.