Hello. Sometimes ignorance is not bliss, as you'll see in our lead article about money management mistakes some agency
owners make. They're easily avoidable with the right protocols. Not quite so easy is what separates really successful agency leaders
from also-rans. In Courage at the Top see if you're using 7 fundamental operating standards that the best use to run their agencies
right. And if you've got others to suggest, just drop a line.
Joe Grant
joe@joegrantconsulting.com
P.S. You're welcome to forward this to your colleagues or they can
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The Agency's Checkbook & Yours
 Don't you find it pretty amazing that major public corporation CEOs now have to swear that the numbers on their financial statements are true? I always thought the top banana had an obvious responsibility to make sure the financials were accurate - after all, isn't he the one responsible for P&L? Shouldn't he know what the company makes, spends, and owes?
Yet complicit CEOs would have us believe that they only approve what their CFOs and accountants tell them. Boy, what a mistake that can be.
Here are a couple of stories from the agency world you may find instructive. To the best of our knowledge, these are true:
Agency A: Widely reported in the trade press, this agency owner trusted his CFO's money management skills implicitly until it was discovered the CFO, who'd worked there over a decade, had skimmed the 60-something CEO's retirement fund leaving the poor guy with zero at the end of his career. Shortly thereafter the CFO shot himself.
Agency B: The accounting manager at this regional agency so conned the three partners that they spent more than $250K on new computers, phones, and swanky furniture thinking it would all be paid for with cash on hand. Turns out the finance guy's monthly reports were total fiction. When he was canned the owners found the top drawer of his desk stuffed with unpaid supplier invoices, some going back over six months. These guys had to stake every thing they owned to get a loan from their friendly banker/client to save the place. And they're still digging out.
Agency C: The partners at this shop were so proud of their CFO's abilities that they openly bragged getting an outside audit would be a waste of money. Until they discovered, after the CFO left town suddenly, that he'd failed to make the right tax calculations. They discovered this oversight when the second IRS penalty-&-interest letter arrived demanding payment of more than $600K within 10 days. The agency doesn't exist anymore but the principals, now employed elsewhere, are still writing personal checks every month made out to the U.S. Treasury.
Here's the obvious lesson. Never, NEVER abdicate your stewardship for total financial responsibility when you're at the helm. It doesn't matter how much you trust your good ole' accounting department manager.
Now, look - we don't want to sow distrust among your ranks and certainly there are more honest than dishonest folks, but the point here is when you own a company what you really own is total financial responsibility. Anything less than complete control is like sitting in the driver's seat while letting the person next to you steer.
From the best run shops we know, here are three practical rules to help you sail a tight ship:
Pay no bills without a matching purchase order that's been written and approved in advance.
Sign every check yourself by hand. Yes, you read that right. Don't just glance at a report or budget recap. Too busy, you say? I know several agencies billing over $100 million where the CEO signs because it's the best way to limit misguided spending.
Get an outside audit annually by the toughest, strictest green eye-shaded S.O.B.s you can find. You don't need to drink or golf with or even like these people. Then switch firms every few years.
And to help you stay focused, put this simple CEO job description on your desk:
My primary responsibility is to keep this business in business. Everything else is secondary.
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Courage At The Top
The following excerpt by Joe Grant is from this month's guest column on the Talent Zoo website (see the write-up in Links). Read the entire article by going to www.talentzoo.com.
There's real consistency about what CEOs do at better-run agencies. The following 7 imperatives are just one man's opinion, folks, but maybe they'll give you something to talk about at your next management team meeting.
Plant your flag. Have agencies collapsed into mere commodity services? If you do basically the same thing as the guy down the street, prospects and clients will be forced to make decisions only on price. Successful agencies don't run like Wal-Mart where pennies and 'price slashers' dominate. They know who they are, how they're really different than others, and most importantly they know how to sell the DIFFERENCE not the price.
The reason agencies get beaten down on price is they've allowed themselves to be treated that way. Stand for something! Lots of big agencies got that way because they had guts when they were small.
Make the tough decisions. Most agency execs know exactly what to do but often lack the juice to pull the trigger. Face it: you know who's performing, who's skating, who the troublemakers are, and who should be fired. We've seen entire agencies held hostage by a single scheming employee that agency management didn't have the courage to get rid of. You get paid to do the tough stuff; don't be a sissy about doing what you (and everyone else) knows must be done. Running a business is really only a series of incremental experiments. Take action and move on. If it doesn't work, try something else.
[to read the entire article, click www.talentzoo.com and go to 'Guest Columnist' on the main page]
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Graphic Inspiration |
Creatives will love this. One of our clients, Maring Kanefield Weissman in St. Louis, has a no-sales pitch-here resource of inspiring,
beautiful, and technically outstanding websites created by companies from around the world. It's good stuff. Find it
here.
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Easy Info |
| We discovered a terrific agency resource recently when Amelia Kassel and I
were the featured speakers at the Marketing Communications Agency Network (MCAN) Fall meeting in New Orleans. Amelia runs
MareketingBASE which provides specialized research for ad agencies for new business presentations and strategic planning. The company
was founded by two former agency executives who believed that small- and mid-sized agencies could benefit from easy access to industry,
company, and other strategic information on the web. . . if they only knew how to get to it easily. Amelia solves that problem with a
slick array of products and services described at www.marketingbase.com. Check it out before
your next pitch or client meeting.
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Received Grant's Report? |
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The mailman should have delivered Grant's Report to your door last week.
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How To Find The Best Agency People |
| If you don't know about Talent Zoo, it's a good bet your employees do - it's
the largest search firm exclusively serving the marketing/advertising industry. Their website
www.talentzoo.com offers a wealth of information for job-seekers and employers both. Must do: check out salaries for job openings
around the country (as we said, your employees probably already go there). And don't miss this month's guest column by an eminent
agency management expert.
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Client Brief Details |
You're reading a complimentary electronic newsletter with insight and comment for
agency principals and senior management teams based on the consulting experiences, workshops, and articles of Joe Grant. Copyright 2002
Grant Consulting Associates, Inc. All rights reserved. We encourage sharing in whole or in part if copyright and attribution are
included.
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About Grant Consulting
Grant Consulting, formed in 1992 by Joe Grant, is a consultative resource for advertising agency principals who want to improve their
agencies. The Chicago area firm works exclusively with agency senior managers to help them discover and then reach their full
potential. Contact us at:
Grant Consulting
847-726-9898.
joe@joegrantconsulting.com
www.joegrantconsulting.com |
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