Winning Partnerships – It’s Time to Rethink

We’ve all had good and bad work colleagues.

Successful client-agency engagements are very much the same.

Sure, personality can play a part, but isn’t everyone working towards the same goal? Shouldn’t it be easy to work together for the common joy of achievement? Not entirely.

There are often underlying strategic differences, baked in to the relationship from day one, that make mutual success difficult to achieve. Whether it’s your work colleague on the desk opposite or your agency team, it’s almost impossible to deliver a productive, successful outcome unless the KPI’s that measure success are shared.

So what can (and often does) go wrong?

If you’ve been responsible for any significant digital project (either client or agency side) you know the answer to this is ‘almost anything’. Fixed budgets, rapid software development, a constantly evolving digital retail eco-system and the expectations of business critical transformative success makes for a challenging career choice in anyone’s language. When you add to this tinder box the unknown quantity of an agency, the stakes for attaining success rise again.

Simply put, this is because an agency is a business in it’s own right.

That means the agency operates with a management who expect financial results, growth and other generic KPI’s familiar to us all. The problem is that these KPI’s are almost certainly at odds with the core success metrics of your fixed budget, fixed timeline re-platforming project, in-store technology roll out or social media campaign. Whilst you both inherently want an outcome you are proud of, you have baked in such polarising KPI’s from day dot that you are forever eyeing each other with a degree of suspicion.

At our agency we spend a significant amount of time working on the trust, transparency and mutuality factors that govern successful client partnerships. This is our view on what it takes, from the other side:

The Brief: Strategic Outcomes NOT Tactical Projects

The moment an agency is instructed to simply build something, the agency is disenfranchised from the actual purpose of the task. Before briefing the agency on your next e-com enabled mobile app, share with them the business imperative that is driving the brief. Ask them to challenge you, if they are worth their salt they should be able to provide you with a couple of alternatives based on industry trends and analytical insights.

Bottom line: Share your marco/strategic KPI’s with your agency and then bake them in to every brief. It’s more rewarding when you work together to identify tactical executions.

The Financials

IE was fortunate enough to be invited to join the International Society of Digital Agencies several years ago and I, in turn, was fortunate enough to meet top agency executives from all over the world. What I can tell you from this experience is that agency financials are almost all the same, and if you’re going to build a strong partnership, it’s worth understanding them.

In essence almost all agencies in the world sell time, with 80% utilisation targets for each resource. They then take on risk in the form of fixed budgets and then work extremely hard to manage the vagaries of the original brief to eek out a bottom line profit of ~20%. Those vagaries arrive back in your inbox as a nasty little thing called a change request, possibly unexpected, occasionally disputed and almost always a paper cut in the trusted partnership. Therefore, if the agency is going to charge you for every hour you use, why not work openly and transparently together to get the best outcome?

Bottom line: Show your agency the fabled budget spreadsheet (including that sneaky contingency) and ask them to help you manage it. After all, you’re in this together.

The Contract

First of all, if it ever makes it back on the table, you’re both in a world of trouble. Having said that, the way in which the contract (be that a master services agreement or statement of work) is structured will flavour the partnership from day one. In our experience, the challenge is that 3rd parties often govern this. This could be external legal, procurement or a layer of management that will never have to practically deal with the consequences.

Take the time to understand the contract in the context of what is actually trying to be achieved. Fixed budgets and vaguely defined deliverables are the curse that haunts the partnership from day one.

Wherever possible develop a contract that takes in to account the reality that the agency makes money by selling time and that you want to buy that time, whilst having the agency operate at the optimal velocity (optimum amount of time), to help you achieve your macro/strategic KPI’s.

Bottom line: Gear the contract so the agency can profitably and transparently help you smash your KPI’s.

The Operations

We all dream of a utopian place called Agile. Agile project management was born out of a frustration with too much documentation, too much top down management and not enough productivity. Sound familiar? There’s a huge amount of information freely available about Agile online, so I won’t go in to it here.

What I will say is that at IE we are striving to move the entire agency model to be a pure agile environment. This is for the simple reason that the clients we already work with on this basis are the ones that we share the greatest successes with.

Bottom Line: Agile was designed to fix the problems we encounter every single day. Embrace it, we all should – for sake of our sanity and our success.

Mutual Admiration

I was going to call this mutual respect, but the truth is, when we’re winning with our clients we’re often in awe of each other, just contemplating how on earth we did it. Our clients are protecting us from a tsunami of stakeholders (who often come out of the woodwork at the last minute), we’re solving vastly complex problems at a velocity not witnessed at any other time in the technology revolution and together we’re reinventing businesses by dragging them kicking and screaming in to the new age of omnichannel retailing.

This is just the tip of the iceberg in terms of the challenge, if you’re successful in achieving momentum, then you, together with your agency have been monumentally successful.

The Ultimate Bottom Line: Align your KPI’s from day one, be open and transparent about every aspect of the engagement and most importantly aim for the long term. Great agency partnerships in the age of the omnichannel revolution aren’t about this weeks eDM or next weeks instore technology implementation, they are about long-term visionary goals that will transform your business forever.

We think it’s time to RETHINK.

Rhys HayesStrategy, Insights