Intrinsically motivated As defined in Daniel Pink's cla.s.sic book, Drive, intrinsically motivated people seek: autonomy, the desire to direct their own lives; mastery:, the urge to get better and better at something that matters; and purpose, the yearning to contribute to something greater than themselves.2 The "it" factor: They maintain a strong presence and positive aura. They command attention when they walk into a room and exude confidence without an air of arrogance. They have an intangible element that cannot be defined, but it makes them uniquely capable of succeeding in an agency. They are born leaders.

Listener: They excel at listening and understanding the needs of others. They are adept at making others the focus of conversations.

Positive: They bring a positive energy to the agency that is uplifting and encouraging to the entire team. They make favorable first impressions. People want to be around them and work with them.

Relationship-builder: They know that strong relationships are the key to success in business, and proactively build connections with peers, clients, media, partners, and vendors. They are strong communicators who do the little things that matter, such as sending personal notes to recognize achievements and milestones.

Risk-taker: They take calculated risks. They do not let fear of failure hold them back, and, as a result, they tend to be more aggressive and proactive professionals on behalf of the agency and its clients.

Social web savvy: They monitor and partic.i.p.ate in forums and social networks relevant to their interests and the industry. They engage with peers and influencers, and they maintain a professional presence on all social networks that positively represents themselves and their agencies.

Strategic: They are capable of fully a.s.sessing situations, and considering short- and long-term outcomes. They know how decisions and activities affect different audiences, and how they work to achieve business goals. They make seemingly unrelated connections others commonly miss.

Team player: They function extremely well within a team environment, but they also excel when working independently. They always seek opportunities to support team members and encourage collaborative learning.

Tech-savvy: They stay immersed in technology news and trends. They continually evaluate emerging products and solutions for opportunities to improve efficiency and performance.

Writer: They possess exceptional writing skills and the capability to clearly and concisely articulate their thoughts. They use creative and technically sound writing to produce powerful and effective communications. Copywriting is one of the most valuable competencies in a marketing-agency professional.

Building through the Draft.

The top firms, which will lead industry transformation and deliver the most value, are built from within. Like professional sports teams that build through the draft, these model agencies excel at identifying and nurturing high-potential young talent, ideally straight out of school. These professionals are groomed within defined systems and trained to adhere to agency standards for performance.

Top performing young professionals are the most important foundation for hybrid agencies, specifically disruptors. In order to excel and continually differentiate, agencies must have a solid strategy to recruit, advance, and retain emerging talent. Standard processes enable agencies to quickly get professionals...o...b..ard and transition them into revenue-producing roles. Meanwhile, the shift to predominantly digital marketing services transitions the balance of work to basic and intermediate levels, keeping labor costs low, pricing affordable, and profit margins high.

However, agencies cannot push growth beyond their capability to service it. One of the most challenging aspects of building through the draft is what I call the patience of potential. Although your recruits may have A-player potential, not all top picks are ready for primetime right away. Any number of factors can influence how quickly they adapt from college life to the real world and embrace the opportunities ahead of them. These are a few of the more common factors agencies face: Commitment: It is common for professionals in their early-to-mid-20s to struggle and even question their career choices as they adapt and seek balance in their lives. Those who resist fully committing to their careers in the early years risk falling significantly behind their peers' development, and stalling the agency's growth. This is why it is imperative to recruit internally driven professionals who have an insatiable desire to improve, advance, and succeed. They will put in the extra time and energy needed to build a solid foundation of knowledge that will rapidly propel them into leadership positions. Intelligence becomes secondary to effort in the agency world.

Perspective: Some young professionals lack the perspective to appreciate opportunities presented to them. They may feel underpaid or undervalued because they do not understand the economics of agencies. Or they may have a skewed sense of ent.i.tlement and not want to put in the work necessary to advance. A lack of perspective can be poisonous to agency cultures, and it may lead to high turnover rates, so agencies must be transparent and open with young professionals.

Speed: You often hear National Football League quarterbacks talk about how fast the game moves when they transition from college to the pros. The game plans are more complex, the compet.i.tion is stronger and quicker, and they can no longer get by on athleticism and instincts alone. Marketing agency professionals experience the same phenomenon. Expectations are high, and things move so quickly in the first year. In addition, mistakes are common, which can negatively affect a young professional's confidence. Eventually, everything slows down as their knowledge and experience grow, and they are able to gradually improve their performance.

Some professionals are born ready, and others need help to realize and embrace their capacity for greatness. Agency leaders must be able to identify high-potential talent and have the patience to develop and nurture these emerging leaders.

Bringing in Free Agents.

In professional sports, teams sign free agents with proven track records of success in order to strengthen their organizations. When the time is right, agencies have to do the same and make the move to bring in seasoned talent. Their experience and capabilities enhance the team's capacity for growth, and they add much-needed leadership to help develop and advance young professionals.

However, be cautious when bringing in free agents. Professionals shifting from larger, more established agencies, or those coming from less demanding corporate and nonprofit jobs may struggle in the early going to adjust to the speed of agency life. This can directly impact the agency's efficiency and productivity, and if they do not quickly adjust, their higher salaries can have an undesirable affect on profitability. Additionally, each hire adds a new dynamic to the agency culture, which is delicate during early growth phases.

To avoid making costly hiring mistakes, it is important to have very clear and open dialogue about opportunities and expectations. Make sure candidates understand the systems they will be asked to work within, and buy into the agency's vision. There cannot be any doubt on either end, or else it will never work in the long run.

View free agents as the final pieces to the puzzle, rather than the building blocks of your agency. Use the infusion of experienced talent and fresh perspective to push the agency to the next level.

Hire, Retain, and Advance Hybrid Professionals.

Although recruiting talent is a primary responsibility of the agency CEO, prospecting for the next great hire should be top of mind for every team member. Whether you are acquiring young professionals through the draft, or enhancing your mid- and upper-level staff with free agents, the two best sources for prospects are inbound candidates-those who complete an online form or submit unsolicited resumes-and social candidates-students and professionals who separate themselves through their use of social media.

Let's examine nine steps agencies can take to build strong pipelines of both inbound and social candidates: 1. Start with brand and culture: You must define and differentiate your brand in the market and create a dynamic culture that attracts young professionals and free agents. Top talent is drawn to innovative organizations with strong reputations.

2. Define the career path: Highly motivated professionals will always be looking ahead and striving to advance. Although organizational charts evolve and new positions develop, there needs to be clearly defined career paths in place. Do not get too caught up in t.i.tles but focus on creating logical career milestones, and understand how important it is for professionals to feel that they are developing and advancing.

3. Maintain a strong online presence: Social media partic.i.p.ation is essential to build reach and engage with professionals, and a strong agency website is the hub for educating and capturing candidates. Model agencies connect with professionals through the agency brand, and extend their networks through the personal brands of their employees. A strong online presence includes the essential elements of website, blog, Facebook, Twitter, and LinkedIn, as well as any secondary accounts and sites that are proven recruiting channels.

4. Capture inbound candidates: Build a careers page on your website with calls to action that enable you to capture candidates, gather intelligence, and grade their interest, just as you would with new business leads. Encourage professionals to connect on your social networks as well, and watch for candidates who differentiate themselves by engaging with the agency brand and its employees.

Also, consider adding a brief online survey on your careers page that professionals can complete to further qualify themselves. We use SurveyMonkey for this purpose, and it has been very effective at filling the pipeline with candidates.

5. Invest in informational interviews: Even when you are not hiring, take the time to conduct 30-minute interviews with qualified candidates at all levels. This enables you to build goodwill, extend your network, and identify top talent, should hiring needs change.

6. Be selective: Model agencies never settle for less qualified talent. Commit to excelling at recruiting and retaining the best. As a starting point, refer to the competencies and traits of A players featured earlier in this chapter.

7. Monitor and engage with social candidates: Use social media channels to monitor and stay connected to top candidates. Private Twitter lists are a great way to keep close tabs on prospective hires that have demonstrated A-player potential. Also, look for professionals who continually differentiate themselves through their actions, activity level, and interest in your agency.

Candidates can also disqualify themselves from consideration by being overly aggressive and persistent in their use of social media.

8. Go offline: Do not forget to make time for traditional networking. Get out to marketing club events, industry a.s.sociation gatherings, conferences, and professional happy hours. Nothing replaces the value of a good face-to-face conversation.

Support employees who demonstrate a desire to be active in the industry and business community. Consider covering their membership fees and event costs, and providing flexible schedules that enable them to get involved in committees. These are great ways to meet candidates.

9. Activate a standard candidate grading system: Talent evaluation requires systems that can be taught and implemented agency wide. Consider the traits and competencies most important to your agency, and build a simple grading chart to a.s.sess and compare candidates based on their interviews.

Following are sample factors to consider. I suggest a 1- to 5-point scale for each factor, with 1 being poor and 5 being excellent. This will give you a basic overall rating for each interviewee: First impression.

Social media savvy.

Tech savvy.

Experience.

Confidence.

Listening skills.

Verbal communication.

Goal focused.

Preparation.

Most importantly, include a yes/no field for "it" factor. If you are not sure, the answer is no. Not all A players have the "it" factor, but you will know it when they do. It is usually obvious within the first minute of the interview.

When Is It Time to Hire?

Agencies are most productive and efficient when functioning near capacity. The heavy, yet manageable, workloads keep professionals focused and in rhythm. Hiring too early and overstaffing in small and early-stage growth agencies are dangerous propositions that can lead to cash-flow crunches and productivity losses.

If there is not enough revenue-generating work to go around, it is only human nature to relax and not push as hard. Temporary lulls can be beneficial to recharge professionals, but challenges arise and bad habits form when they start to extend beyond a few days. There is no perfect formula to tell you when it is time to hire, but, with the right system, agencies have far greater intelligence to make educated decisions.

Let's examine the key elements of a reliable system.

Know Your Capacity.

Start with a breakdown of your client-hour capacity across the agency. If we revisit the example five-person agency from Chapter 1, the monthly capacity looks like this: So we know the agency has the capability to deliver just less than 500 hours in a month at a 100 percent productivity rate. In theory, the team is performing at its peak, and the agency is very profitable at this threshold. However, this is what I consider a soft capacity, meaning that there is room to flex above if needed to meet short-term demands for major projects and campaign fluctuations.

These one-time spikes can create false hiring signals, so it is recommended to take a quarterly approach to forecasts when nearing soft capacity. Exceeding soft capacity for one or two months is not the right trigger point to hire. Although there are exceptions, you should be able to predict sustained growth for at least three months before you commit to a new hire.

It is important when forecasting and determining when to hire to leave room for a 20 percent spike above the soft capacity, or what I call the absolute capacity. In other words, if soft capacity is 490, and next month's forecasts call for 540 client hours (approximately 10 percent above soft capacity), you should be able to deliver up to standards with the current staff. You will notice in the example agency that the CEO, vice president, and senior account executive all have some room to pitch in during heavy months if they temporarily shift priorities.

However, if forecasts exceed 588, or 20 percent above, then you are in the danger zone. Your team will be spread too thin, deadlines will be missed, and quality will suffer if you do not take action. This means either making an immediate hire, outsourcing to a trusted partner in the ecosystem, or, as a last resort, delaying project deliverables.

Build a Strong Forecasting and Reporting Model Hiring decisions must be data driven, otherwise you are putting your agency's financial stability at risk. Monthly forecasts give you predictive data-what you antic.i.p.ate will happen-and time-tracking software provides the historical data-what has happened to date. Both are essential.

For predictive data, managers should be able to view and edit monthly forecasts by client and employee. Unfortunately, I have yet to find a reliable software product to perform this task, so we have built an Agency Manager dashboard in Microsoft Excel (Figure 3.1). It requires manual updates, so it is not ideal, but it works well for PR 20/20. If you figure out ways to improve on the template, I would love to hear about it.

Figure 3.1 Basic Version of the PR 20/20 Agency Manager Template For historical data, I have always relied on TimeFox by FunctionFox (www.FunctionFox.com). As I mentioned in Chapter 1, accurate time tracking is essential to build an efficient and profitable hybrid agency. TimeFox gives agency professionals the ability to run real-time reports on hours by project, client, and employee. This information is vital to keep campaigns and budgets on track, produce monthly activity reports and invoices, and also incredibly valuable when conducting professional performance reviews.

Shift to Campaigns.

Concentrate on shifting 80 percent or more of your client base to long-term contracts, which creates predictable recurring revenue and workflow. For agencies that are predominantly project based, forecasting is nothing more than futile guesswork. If you plan to grow a stable and scalable agency, you must build a campaign-based agency.

Define Ahead-of-Need Triggers.

Sometimes you have to throw out all logic and data, take a leap of faith, and hire ahead of need. The triggers will be different for each agency, but common ones include: Launching a major growth initiative.

Antic.i.p.ation of significant demand from a new partnership.

Deep new-business pipeline with potential for a number of short-term conversions.

Preparation for the transitioning of underperforming employees.

Understaffed core campaign accounts.

Opportunity to land a high-potential A player.

The Retention Issue.

Identifying and recruiting A players is challenging, but retaining them long term can prove to be even more difficult, especially given the industry's employee retention issue. According to the Transforming Talent Management report from the American a.s.sociation of Advertising Agencies (4A) and Havas' Arnold Worldwide, 30 percent of the collective agency workforce will be gone in 12 months, and 70 percent of employees would call a recruiter back if one reached out to them.3 Model agencies recruit to retain. They seek to hire career professionals who view the agency as a destination rather than a steppingstone. Although some top employees will move on to lead or found other agencies, the goal is to maintain stability through retention. As professionals advance and compensation packages increase, this becomes more difficult, so agencies must grow and continually evolve to offer compet.i.tive pay and rewarding environments.

Keep in mind that A players are in high demand. Just like free agency in professional sports, there is always another organization willing and able to pay more. This is why culture and the pursuit of purpose, which we investigate in Chapter 10, are so essential to your agency's success.

Retention starts by hiring intrinsically motivated talent. Although everyone has baseline financial needs that must be met through salary, bonuses, and benefits, money is not the primary motivating factor for these professionals. Compensation certainly must be fair and compet.i.tive, but once they reach certain financial thresholds, and all their basic needs are met, more money has minimal impact on their motivation or happiness.

a.s.suming that an agency maintains compet.i.tive compensation packages, if someone leaves on their own free will, and it is a solely money-motivated decision, then they were not a fit for the firm from the start or they lost their connection to the culture and purpose somewhere along the way. In either case, as hard as it is to replace top talent, it is probably for the best that they leave.

Model agencies are built around loyal professionals who pa.s.sionately believe in the mission, vision, and values. They are your greatest a.s.set, and the only means by which you will create a significant and lasting brand.

Training Hybrid Pros.

The most valued talent in the emerging marketing agency ecosystem will themselves be hybrids. Although specialists, connectors, and soloists can still excel with focused competencies and service offerings, disruptors are built on the versatility of social media and tech-savvy professionals. They possess exceptional copywriting skills, along with dynamic personalities that enable them to build strong personal brands.

Hybrid professionals are trained to deliver services across search, mobile, social, content, a.n.a.lytics, web, PR, and e-mail marketing. They provide integrated solutions that used to require multiple agencies and consultants. However, because there are not any college programs that I am aware of producing graduates with these diverse skill sets, the onus falls on agencies to develop customized training programs.

Agencies can mold young professionals into valuable consultants and pract.i.tioners by mixing internal curriculum and exercises with the wealth of education and resources available on the web. Agency training programs should be structured like internal academies, with standard curriculum and milestones. Let's take a look at key components of a powerful agency program.

Webinars.

Content-savvy organizations are using webinars as lead-generating and thought-leadership tools. These are commonly free, and often available on demand, which makes them incredibly efficient training resources. Agency leaders should identify priority webinars on an ongoing basis, and make them required viewing for professionals.

Books.

Never underestimate the value of a great book. Create a recommended reading list, share outlines, and even consider starting an agency book club. Although there certainly are some great t.i.tles available that deal with specific services and disciplines, here is a list of some of my favorite general business, marketing, and management books to get you started: Anderson, Chris. The Long Tail: Why the Future of Business Is Selling Less of More. New York: Hyperion, 2006.

Bedbury, Scott, and Stephen Fenich.e.l.l. A New Brand World: Eight Principles for Achieving Brand Leadership in the Twenty-First Century. New York: Penguin, 2003.

Christensen, Clayton M. The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business. New York: HarperCollins, 2003.

Collins, Jim. Good to Great: Why Some Companies Make the Leap. . . and Others Don't. New York: HarperCollins, 2001.

Fried, Jason, and David H. Hansson. Rework. New York: Crown Publishing Group, 2010.

Halligan, Brian, and Dharmesh Shah. Inbound Marketing: Get Found Using Google, Social Media, and Blogs. Hoboken, NJ: John Wiley & Sons, Inc., 2010.

Harnish, Verne. Mastering the Rockefeller Habits. New York: SelectBooks, 2002.

Maister, David H. Managing the Professional Service Firm. New York: Simon & Schuster, 1993.

Medina, John. Brain Rules: 12 Principles for Surviving and Thriving at Work, Home, and School. Seattle: Pear Press, 2009.

Murray, Alan. The Wall Street Journal Essential Guide to Management: Lasting Lessons from the Best Leadership Minds of Our Time. New York: HarperCollins, 2010.

Pink, Daniel H. Drive: The Surprising Truth About What Motivates Us. New York: Penguin, 2009.

Scott, David M. New Rules of Marketing & PR: How to Use Social Media, Blogs, News Releases, Online Video, and Viral Marketing to Reach Buyers Directly, 3rd ed. Hoboken, NJ: John Wiley & Sons, Inc., 2011.

Smart, Bradford D. Topgrading: How Leading Companies Win by Hiring, Coaching, and Keeping the Best People. New York: Penguin, 2005.

Tellis, Gerard J., and Peter N. Golder. Will and Vision: How Latecomers Grow to Dominate Markets. New York: McGraw-Hill, 2002.

Zyman, Sergio. The End of Marketing as We Know It. New York: HarperCollins, 1999.

Real-Time Sharing Find reliable solutions for the sharing of communications, experiences, and ideas with employees as they happen. It is so easy, especially for senior personnel, to go about their days conducting meetings, communicating with clients, and making key strategic decisions about the agency without thinking to share what they are doing and why they are doing it. However, these types of activities are some of the most practical learning experiences for young professionals. Furthermore, it keeps all employees engaged in the agency and encourages a more collaborative culture.

We rely on two platforms-Yammer, and Highrise by 37Signals-for the majority of our real-time, agency-wide sharing.