Every agency’s organizational structure and operating model are currently being stress tested. Over this past year, agencies quickly learned how to work in a remote or hybrid model. Many have also had to change their business model or adjust their core services to remain relevant in our current environment. And now, with new business coming back for most, the latest challenge is recruiting and retaining new talent to deliver without burning out employees. All this points to a need for agencies to rethink how they work.
Progressive agencies have already proactively moved away from using a traditional hierarchical organizational structure to adopt more fluid working methods. As a result, they’ve been able to weather the pandemic far better than others and have gained a competitive advantage in the process. They can operate leaner, deliver work faster, and smoothly adapt to unexpected changes in priorities.
Any growth-focused agency should always look for new ways to improve their performance, but even more so today in our current climate. So I’d like to challenge you to consider whether your agency’s organizational structure would be the right place for your business to focus.
Assess your structure
Is your agency’s structure intentionally designed to support your business strategy? Does it effectively deliver on what your clients and employees want from your agency? Take this 5-minute assessment to pinpoint precisely where you have the most significant potential to improve work quality, delivery speed, capacity, and profitability.
The purpose of agency structure
The purpose of your agency’s structure is to support your vision and business strategy. It will guide your people down a pathway that helps them fulfill that strategy. In other words, your structure should also prevent your people from going down paths that can distract or divide your focus.
Foundational agency structure
Every agency has a foundational layer of structure. However, not every agency views its business in this way.
Your foundational structure is the elements of your business that create significant efficacy in your operations. An example would be a single collaboration application that everyone in your agency consistently uses in their day-to-day work. Your business benefits from having a single source of truth for all work within your agency. If a group in your agency wanted to use a different system, the cost of doing so would likely be greater than the value your agency would retain from having everyone continue to use the same software.
An initial step to redesigning your agency’s structure is to separate foundational layers from less important ones. Then, optimize the foundational aspects and evaluate whether it’s worth holding on to the less critical components.
Effective vs. ineffective structure
As a thought experiment, consider what an optimized structure could look like for your agency. But as you do, you should be aware of the differences between effective and ineffective structures.
Characteristics of ineffective agency structures:
- They are not realistic. Ineffective structures don’t take into consideration your available resources or other business constraints. An example would be a policy or process that requires your people to invest a significant amount of time that pulls them away from their core responsibilities.
- They are complicated. An example is a matrix org structure that creates multiple reporting lines for employees. This structure organizes staff into disciplines with a reporting line to a discipline director, but they also include a reporting line to an account leader for their project work. Responsibilities and reporting in these environments are often unclear and confusing. As a result, there’s also usually low accountability, and quality tends to be inconsistent across the agency.
- They don’t deliver on the purpose of the structure. Ineffective structures do not produce an operational advantage or support your strategy.
Characteristics of effective agency structures:
- They are simple. There’s too much complexity within an organization to plan a perfect structure. An effective structure will begin as a simple, thoughtful design that is easy to explain and can evolve without complication, which brings us to the next point.
- They evolve with the market. An effective structure iterates in parallel with any shifts in the needs and expectations of your market and talent pool.
- They improve gradually through experimentation. A structure that allows regular improvements through experimentation fosters a safe and non-disruptive approach to optimizing your agency.
The bottom line here is that there’s not a one-size-fits-all solution for an ideal structure, and there shouldn’t be. Your structure supports your unique positioning. Therefore, your structure should also be unique in a way that furthers your competitive advantage.
I’ll share some examples of modern agency structures in a future post for inspiration. If you’d like to receive these, sign-up for our email list. Until then, check out three goals to keep in mind as you think through your agency’s structure.