Your Agency’s Biggest Vulnerability Is Hiding In Plain Sight

In this post, I’ll explore traditional organizational structure — the type found in most full-service and creative agencies. These structures limit an agency’s ability to deliver work with the speed, flexibility, and value that brand clients expect from agency partners today. If you have a similar type of structure in your agency, it is likely the root cause behind many of your challenges. 

What You Need To Know About Your Agency’s Structure

The image below depicts a simplified version of a traditional organizational structure. The example may not apply perfectly to your business, but the points I’m about to make most likely will.

Image credit: Lodestar Agency Consulting

This type of structure is used by most organizations today and features functional silos. Within agencies that use this type of structure, work moves from one silo to another. Each discipline adds its contribution to the work passing through, applying its own internal process. Typically, greater consideration is given to a discipline’s own approach than to what other groups need down the line to do their best work. This siloed approach increases the risk of having to do rework downstream. It also requires greater effort and coordination from individuals trying to collaborate and communicate across disciplines, slowing down delivery.

I’ll give you an example. In full-service agencies, I often hear about creative teams concepting without involving digital production. Instead, they throw their print concepts “over the wall” for their digital counterparts to translate to web or mobile. However, the creative team hasn’t given much thought to screen sizes, responsive layout, people’s attention spans or frame of mind on mobile, etc. Great work doesn’t happen this way, not today, not without cross-functional collaboration. If this is how teams work at your agency, your creative product doesn’t stand a chance of reaching its full potential.

Further, every time a handoff occurs between one silo and another, it costs your agency in terms of time, risk, and loss of information. In the book, “Implementing Lean Software Development: From Concept to Cash,” authors Mary and Tom Poppendieck claim that at least 50% of information is lost in each handoff on a project. 

Image credit: Lodestar Agency Consulting

I’ve experienced this first-hand while managing agency projects; perhaps you have too. I recall having to go back and hunt down key foundational information and context that had influenced earlier strategic decisions to help us make better execution decisions.

Usually, you also need someone to manage all of the handoffs as work moves from one silo to another. This is typically why project managers get introduced into an agency. But making project managers responsible for cross-discipline handoffs creates a different problem. 

Image credit: Lodestar Agency Consulting

Project managers move from silo to silo, trying to get work from people who don’t report to them. It’s a setup for micro-management and interpersonal conflict. Project managers could provide much more value to the agency if they didn’t need to shepherd the work this way. 

All of this begs the question: Why do organizations work this way? Why do we choose to run our businesses within this limiting structure?

“But It’s Always Been Done This Way”

The siloed structure I’ve been discussing stems from an outdated model designed over a century ago. Many businesses still turn to this “command and control” model to scale their business simply because it’s always been done this way. 

Here’s an example. This chart depicts a structure that could easily represent any traditional organization. This one happens to be from 1917 (over 100 years ago!!) from the company that would eventually become IBM.

Image credit: Tabulating Machine Co., December 1917; Picture by Marcin Wichary, CC BY 2.5 https://creativecommons.org/licenses/by/2.5, via Wikimedia Commons

Does your agency’s structure resemble this example? Outdated models like this are one of the most common and poorly understood reasons why the performance of many agencies begin to plateau as they grow. Adding more people compounds the issues this structure causes. Read on to learn why.

The Cause Of Your Most Significant Challenges

Command and control management was designed for manufacturing during the second industrial revolution. At the time, the business world was more stable, slow-moving, and predictable compared to today. To make critical business decisions, managers would report up to directors, who report to VPs, who then report to officers, and finally to the CEO. The CEO would be the only one with a full-picture view to guide the direction of the company.

Attributes of command and control management:

• Perspective: Top-down and hierarchical.
• Mindset: Staff needs to be controlled.
• Design: Organizations divided into (ostensibly) independent functional silos.
• Goal planning: Arbitrary targets analyzed in comparison to previous time periods.
• Decision-making: Separated from those doing the work.
• Change: Planned and controlled with waterfall-based project management.
• Motivation: Control-by-seduction (carrot) and control-by-fear (stick).
• Attitude to suppliers and customers: Contractual.
Adapted from Wikipedia

This model was fine for its time but is ill-suited to today’s fast-paced world with disruptive technology, social media, and unpredictable consumer behaviors. 

As an agency supporting your client’s brands, you need to make fast decisions and respond quickly to market opportunities and crises. With technology, it’s much easier to share information in real-time, so the traditional reporting lines and control over who makes decisions are no longer as valuable. In fact, it’s the opposite. Today, slow decisions work against you.

Back in 1917, managers didn’t view assembly line workers as educated or intelligent, but they wanted to scale their business. To do that, they designed systems of standardization and control to ensure consistency, quality, and safety.

The command and control model wasn’t designed for knowledge work like the marketing and creative you produce today. It wasn’t designed for agencies whose business relies on creativity and fast ideas from a workforce of highly-educated, intelligent experts. 

Using a command and control structure out of context promotes controlling management styles that result in minimal autonomy from your employees. That, in turn, results in poor employee engagement. Which then results in poor productivity and poor performance. Ultimately, it can impact employee retention and your agency’s reputation. You can see how using a dated model to structure modern ways of working can quickly become an agency’s biggest weakness.

Read up on Fredrick Taylor and his theory of Scientific Management or Max Weber’s Bureaucratic Model if you’d like to learn more about where your agency’s structure likely derives from. 

You Can Do Better

As you think about your agency’s structure, the goal is to move away from controlling hierarchies and functional silos. They are inward-focused. They’re slow. And they promote the optimization of individual disciplines. 

Instead, we should focus on optimizing cross-functional collaboration for greater integrated thinking and faster delivery of our work to our clients.

Image credit: Lodestar Agency Consulting

You can do this by moving away from the traditional, hierarchical structures to form specialized or cross-functional teams and autonomous ways of working.

Restructuring in this way is typically one of the more difficult tasks for my clients. Mostly because it means unlearning what they believe today and picking up new concepts that require experimentation to learn. I like to start by discussing what makes a bad organizational structure for agencies and a good organizational structure for agencies, which I’ll cover in a future post. 

Get ready to think about some new ways of working.