Old Agency Players Need to Change the Game

I was recently reminded of a good old saying, “Don’t blame the player, blame the game!”

In business if the leaders set up an environment that measures short-term Key Performance Indicators (KPI’s), the employees are going to react accordingly.

The problem today is that our business world is full of copy cats and followers. Not many executives really have the guts to manage a business outside of the box. I blame much of this on the financial and investment community. These investors and lenders want accountability, which wouldn’t be so bad if it wasn’t that they demand SHORT-TERM accountability.

The end result is that most companies within any industry end up with the same short-term KPI’s. The more executives focus on short-term KPI’s, the less creative they become in running their businesses. On occasions, such nearsightedness have spiraled a thriving industry downward as outside competitors’ fresh perspectives prevails. Think US auto industry.

Throughout history, protection of status quo by those in power have brought down empires: The Roman Senate, the Chinese aristocrats, General Motors.

I believe today’s marketing service companies are in jeopardy because of short-term vision. Agencies have traditionally measured their utilization and billing rates as KPI’s. That, in turn, has affected the behavior of their teams. Many times highly billable behavior is rewarded above innovative problem-solving for clients.

In the near horizon, however, the rapid change facilitated by the internet, further advancements in other technologies, the globalization of the job markets, and the continual spread of business English skills will drastically change the rules to the game. New, more efficient models are already arising that will make the old KPI’s obsolete. It’s already happened in the field of web development, for example.

Today, agencies still try to hold onto their billable hours rather than finding new ways to add value to clients at more efficient rates. Within this environment, the players are playing the game laid before them:  Horde hours, don’t share work outside one’s group, bring layers of project management.

Don’t blame the player, blame the game — or the organizers of the game.