7 Years Of Agency Operating Lessons (Part 1)

Today we are going to talk about 7 years of operating lessons from, well, taking over my ad agency Single Grain. And this is going to be a multi-part series that talks about a, well, a couple lessons that I've learned. It's more than a couple lessons, but just to give you some context. So Single Grain is the ad agency that I own and I bought the agency for $2 out of pocket and I paid the rest of the, The rest of the transaction was through a buyout. So it was $2 upfront and then the rest of it was through a buyout. And, um, you know, over time and, you know, basically what I also said, a contingency as well, saying that if the company failed, I would owe nothing. So that was kind of my first foray, um, unintentionally into, you know, air quoting right now, mergers and acquisitions. And, um, I learned a lot. And at the time I was about 27 years old or so. I didn't know what I didn't know, but at least I got the deal done in a favorable way. And keep in mind, the agency, when I took it over, we were negative in terms of, negative in terms of profit. And it was a business that was no longer working because the services that we're providing, namely SEO, the Google algorithm updates hit. And when I joined the company, it was already on its way down. And basically I bought a distressed asset. That's the, the right way to look at it. So, um, I— long story short, I bought the company, but, um, I made it even worse because I didn't know what I was doing. I tried to transition the company to going from an SEO company to a content marketing, uh, company agency, and, um, because it seemed like the next logical progression. But, um, you know, I made a lot of mistakes along the way, and I'm happy to talk about, um, you know, some of these lessons, some of the mistakes, some of the good things, the bad things, and all that. And, um, we also dropped all the way down to one employee as well. So it was, it was tough sledding, and I actually I almost ended up taking a job that was a really good job offer and I almost, I did give the verbal yes a year into taking over the company. But the next day I just knew that it wasn't the right fit for me and I'm so glad that I ended up sticking it out with Single Grain. So, the first lesson has to do with people. So, in the early days, because I performed really well as a marketer and I was leading marketing at, you know, a couple different startups, I started with SEO first and I grew into more of a generalist and then I started managing a team. And so I thought that because I came from tech, I knew everything and, you know, whatever I said was gospel because I came from tech and this was a lowly agency. What could they possibly know? And so I came into the company and I didn't realize how important it was to not so much focus on how good I was, but to focus on— The people. Because ultimately at the end of the day, it doesn't matter how good one person is. And to be frank, looking at— looking backwards, I wasn't that good because I wasn't able to build rapport with people. And because I had— I thought my ego told me everything I said would be correct and we should go in that direction. So, I didn't try to listen to people. I didn't build rapport with people. And that's why we dropped all the way down to one employee. Employees were dropping left and right and completely my fault. So first thing is people, right? But even beyond that, it's hiring the right people to help you because once you hire the right people to help you, a lot of stuff comes off your plate. And it's again, it's if they can do the job maybe at a 7 out of 10 or 8 out of 10 compared to you, then that's, that's pretty damn good. Okay. So that's, that's the first piece. Now the second piece, uh, I know you're, a lot of you are watching this. This is a marketing channel, but again, it doesn't matter how good you are as a marketer if you do not understand as a leader of a company, The culture that you're building is everything. Because if people are the most important thing, then you have to build the culture because the culture is the operating system that— it's how you do things. And the best CEOs in the world, they all obsess over culture. You look at Zoom, right? They always are at the top when it comes to Glassdoor, you know, in terms of their employee engagement. Same thing with other companies like Google, and you have other amazing companies up there as well. So, you know, first thing is I'm talking about hiring really great people. You know, people that are better than you, hopefully. And then the second part has to do with culture. Now, the third thing is, you know, coming into the company, what I learned was that yes, people are important, but building the rapport with people and listening to people is really important. So number 3 is more so around listening, right? So listening to the people, because when I came in, I interviewed a bunch of people, but I didn't try to, I didn't bother to build a relationship with them, and I started making sweeping changes. But in order to get buy-in, you have to— people have to feel like you're listening to them and people have to feel like you're on their side and you're looking out in their best interests. I came in as, again, I thought I was the savior of the company and in many instances I was hired to come help to save the company because the last company I was at, that's basically what I was tasked with doing and I was able to do it successfully with a great team, with a great product. This was a different scenario where we had a service that was no longer working and, you know, the team might not have been relevant for the future. So, Just, you know, made sweeping changes. I laid off a couple of people too. Um, and so a lot of cringeworthy stuff, but ultimately it comes down to listening to your people. And nowadays what we do when it comes to listening to people is, you know, we have a weekly, uh, employee engagement tool called 15Five, which we love. That's the number 15 and then spell out 5. And we use it. We love it. We also use the quarterly review system that it has. We do 360 reviews as well. Um, and there's just a whole host of things. Feedback that we get. We run quarterly anonymous employee engagement surveys as well. We just try to collect as much feedback as we can to listen, partly because I made such a, you know, such a boo-boo when it came to, well, listening to people, right? Because I screwed up so much in the beginning, now when we have new people join— and by the way, I've seen new people screw up on this too— where new people will join and they'll make the same mistake I made. They'll come in and they'll make sweeping changes. They won't bother to try to listen as much as they can. And so now we have a rule where if someone's more senior and they come in, they actually cannot implement anything, they cannot suggest anything and they just, they just have to listen for the first 30 days or so, if not even more than that. And so doing that gives them the context that they need because sometimes what happens is they'll want to make this change in the first like, oh, it seems like that's wrong. But after they hang out with the group for like 2 weeks or so, they'll be like, oh, I actually understand, that's, that's why they do it that way. And in many cases, some of the things that are suggested, we've often tried in the past as well. Not saying it doesn't make sense to try it again, but just keep in mind, listening takes you a long way. And I'm, I'm, um, I think these things are all very, um, they're high-level things, but they're, they're really important in terms of, um, taking you, taking you far and, you know, not making stupid mistakes like myself. You have to also constantly be asking yourself, you know, the 4th thing would be, you know, the people that you're working with, do you think they can do the job long-term? Because often what you're gonna find, especially if you're in startup mode, is you hire someone, they do a great job for the first year, the first 2 years, but as you get bigger and bigger, they cap out at a certain point. And a lot of people I found cap out. And one of my biggest mistakes was trusting that people can grow to take it to the next level because I thought, look, if I'm so growth-oriented, I'm reading a lot all the time and I'm constantly getting better, why can't they do it? Because I didn't perform well, that well in school growing up. I was, you know, in many cases seen as average. So if I can do it, why can't they do it, right? So, I have a very competitive side to me, it's like, you know, you want to see them grow, you challenge them to grow. And in many cases, they break and they're unable to do it. You know, whoever gets you from point A to point B might not necessarily be the person to take you from point B to point C. And same thing for C and D as well. So, you have to keep evolving and, you know, in many cases, the person that you have really grown to love as a person, they cannot scale. And so, what might need to happen is you might need to reassign them. Or you might need to just move them on and give them a great severance. The problem— what you cannot do is you cannot demote them because anybody that you demote, they're going to have a sense of resentment. So, uh, keep that in mind. You want to constantly be asking yourself, you know, do you have the, the, the person in the right seat, right? The right person in the right seat. And, um, I can tell you every single time I've had a gut feeling in my mind, um, about that person, it's like, I don't really think they can do it. I've been right 100% of the time. Like there's been no failure at all. So trust your gut there. The 5th point is moving quickly on people, personnel decisions when it comes to having to let someone go. All right? So when it comes to hiring someone, take your time, be very deliberate, be— do extreme reference checking. We check 6 references, right? We check their 2 direct reports, we check their 2 peers, and we check their, their 2 bosses, right? And you know, sometimes if they're more junior, you might eliminate some of them. But we do extreme reference checking, we ask a ton of questions, and we try to keep it uniform. In the very beginning of the interview process, we follow a book called Who? It's W-H-O with a question mark. And we do screening, we have scorecards and a lot of different things. And then we'll always run them through a test as well. They'll go through a couple of interviews. Um, but we, we are, we're very rigorous and still we miss a lot, right? But that's what a good hiring process should be. It should be very rigorous, right? You want to, people say the cliché is you hire slow and you fire fast. And that's exactly what we try to do. But I will be very honest, I'll be the first person to tell you that I don't fire quickly enough. And that is, I think, a very important lesson. The 6th thing over here is if you are going to fire someone, what I found to work really well, and I've gotten used to it, it was a little awkward at first, was I— one of my friends, Bob Glazer, he runs a company called Acceleration Partners and they do affiliate marketing. And he created this thing called the mindful transition. And so the mindful transition, instead of saying, hey, I'm going to fire you, you're done today. You'll say, hey, you know what? You've done good work for us for the last, you know, year, two years, whatever it is exactly. We're going to transition you out. We're going to give you, depending on how much you like them or how much you know how much how long they've been with you, we're going to give you thirty to forty-five days, maybe even up to sixty days. In some cases, I've done even seventy-five days or so. You want to give people a chance, and so you give them a chance, and or you give them a chance to find something else. And so, and you message it well too. You say, hey, look, it's it's you're going to tell everyone it's it's a transition. You've been discussing the transition. You're going to volunteer to be a reference for them as well. And they're going to continue to do work. So it's not like there's a disruption to the workflow, right? Because if you just fire someone, there's a disruption in their workflow. And then also at the same time, you know, people will feel comfortable coming up to you saying, instead of giving you a 2-week notice or a 3-week notice to be, hey, like I want to work out a transition plan. And that's how you do it. So there's no surprises on either side. And sometimes it gets emotional for sure because people have been with you for a while. But the mindful transition, it has been a godsend and it just seems to align incentives a little more. The 7th part would be related to process or people. So I got this quote from David Cancel, the CEO of Drift, but 95% of the time— so this is from one of his tweets— 95% of the time it is a process problem, 5% of the time it is a people problem. So what I would say to that is if you find yourself doing something 2 to 3 times at least, just document it. You know, we love using Notion. Notion is a great wiki for us. And people can just search for things. You know, you try to keep it updated every 6 months or so because processes are constantly changing. But we use Notion, and Notion has been— well, Notion is the tool. There's obviously other tools you can use, but you create great processes, people follow them, and then, you know, every now and then people might veer off a little bit. But the process is what will liberate you, and, you know, it makes it much easier because if you need to hire someone new, if you— let's say you go on a hiring spree, Here's a question to ask yourself. If your business 10x's in the next day or 100x's the next day, are you, are you ready for that growth? Right? Are you ready for that growth? And process is going to help make you a lot more ready for that growth, a lot more prepared for that growth. All right. So if you enjoyed this and you want to start or grow your consulting agency service type of business, you can go to singlegrain.com/call to book a call with one of our team members. Strategy call to help you grow and start your agency type of business. Or you can go to singlegrain.com/agency-accelerator. Um, and you can actually watch a video on how to do that as well, but singlegrain.com/call to book a strategy call. And that is it for today. Hope you enjoyed it. And we will see you in the next piece of content.