Managing people: The third critical agency growth hurdle on the way to £5m income

18th October 2023 – by Paul Muggeridge-Breene, Thrive CEO

If you’ve passed the £2 million income mark, it means you’ve cleared the two most challenging hurdles of agency growth. Take a moment to recognise your achievements – not only have you managed to let go as the leader, you’ve also created a robust agency structure and workflows. Hopefully, you’re now speeding on towards an income of £3 million.

That’s where you’ll hit the next critical hurdle on the way to £5 million, and the sooner you start preparing for this one the better.

The challenge

Between £2 million and £3 million income, the key challenge you’ll face is an increase in the number and complexity of people issues. Your business is changing – it’s certainly no longer small – and the way your employees are engaging with it is also changing. Where they may, largely, have kept quiet about many problems beforehand, now the floodgates are opening and issues are being presented with increasing regularity. New team members will also have different expectations and demands – they’re joining a medium-sized, established agency, after all.

If this isn’t handled properly, your agency’s culture can be severely damaged. As can productivity, not to mention the quality of the work you’re producing for your clients. If you’re not careful, you’ll even start to lose employees. Dealing with all of these challenges can easily dominate the time and attention of you and your senior team, at the expense of the growth plan and wider strategic work.

The solution

To clear this hurdle, you need to implement a robust and considered approach to managing your agency’s people. As with the first two hurdles, this needs to be seen as a significant piece of work, with sufficient time, energy and resources dedicated to it.

And, again, the aim here isn’t a quick fix for the most urgent problems you’re facing today – it’s to create something that works for the long term. Think about your business twice as big as it is now to help with this.

Every agency is different and so there’s no cut-and-paste solution, but here are some of the key areas to consider:

  • Line management: It’s hard to overstate the impact good line management will have on your agency – it’s one of the key differentiators between good businesses and great businesses. It’s equally hard to overstate the damage that bad line management will do. But, while very few people know, innately, what good line management looks like, most businesses are full of managers who’ve had little to no training in this area and have no understanding of what’s really expected of them. So, you need to ensure you understand what good line management looks like and then work hard to set clear expectations for everyone in a management role.
  • Management time: You also need to ensure that each manager doesn’t have too many direct reports and that they’re given sufficient time to carry out their line management duties, in line with the expectations you’ve set. It’s so easy for client work and other urgent tasks to push line management responsibilities down the priority list, but you need to work hard to avoid this happening. Modelling best-practice yourself is one of the most effective ways of instilling the right mindset throughout your agency.
  • Performance management: To create a really high-performing team, you need to embed clear systems and expectations around how performance is managed. This should cover everyone, at all times, not just certain individuals when their performance is inadequate and you want to manage them out of the business. So, you should ensure each employee has a role outline with a clear description of what’s expected from them. There need to be regular, consistent, sessions between team members and line managers where performance is discussed. You should also develop systems for gathering and conveying feedback – both good and bad. And, lastly, there needs to be a standard approach and policy covering what happens if performance is considered inadequate for an extended period of time.
  • Personal development: For your employees, this is obviously one of the most important aspects of their role. But in many agencies it’s often not given nearly enough attention, prominence or budget. Development doesn’t always have to mean external training courses, although they can and should form part of the mix. Development can involve things like job shadowing, skills mentoring, joining specialism groups, etc etc. But it should all be planned out in a considered way, aiming to align personal ambitions with those of the agency as far as possible. And, of course, team members need to be given time to complete the development work.

If you don’t already have some form of HR support, you should certainly consider it. A multiskilled HR manager (or fractional equivalent) will be able to help you with everything above and also, potentially, recruitment. It’s well worth exploring.

Finally, it’s important to remember that you’ll always experience people issues – we’re all human, after all. But, by implementing the approaches and policies outlined here, you should be able to avoid the worst kinds of challenges. And you’ll be able to manage any that do arise calmly and thoughtfully, while also continuing to achieve your growth plans.

Paul Muggeridge-Breene is CEO of Thrive, a former agency MD, former international journalist and a member of the British Psychological Society. Please get in touch if you’d like to discuss how Thrive can help you.