By Pamela Phillips.
As a business owner, it’s likely that you’re often (or always!) thinking in a commercial way. Return on investment (and effort) is probably something you’re constantly internally debating in your mind. Alongside this, it’s likely that you are always trying to do your best to ensure that all activities have a direct benefit for the business and ultimately the customer.
However, this way of thinking may not be inherently built into all your colleagues. Many of your team members are extremely busy and stuck in the day-to-day momentum of keeping clients happy and trying to be as efficient and effective as possible. Your management team needs to have the time and headspace to be able to think commercially whenever the opportunity arises. This bigger picture thinking is often a privilege but time needs to be carved out for this. Your staff also needs to fully ‘get’ that this is a priority and by being more commercial everyone in the business benefits.
If your team isn’t thinking and acting commercially then you may soon start to see a negative impact on your business. This could include missing out on new opportunities or even going over budget on projects.
How do you lead a more commercial team though?
If you are going over budget on projects or overspending in other ways, then business profits are inevitably going to decrease. This means that there is less budget to spend on marketing, hiring new colleagues, and consequently developing your agency.
Unfortunately, this could also mean that you run into cash flow problems when your projects or retainers are not as profitable as they need to be.
To ensure you aren't stuck in a rut, or worse, losing out you need to build a culture of commercial thinking in your agency.
Here are 10 things you can do to help build this culture....
1. Create clear playbooks for everything.
A ‘playbook’ is a simple, user-friendly, and very practical guide that summarises a set process or a distinct flow of work. You should have these set up for all the important streams of work in your business. From how to budget for a job, how to run a job, through to how to win new clients. Everything should be covered so that you can train new colleagues or another colleague can cover if there’s an absent team member for any foreseen or unforeseen reason.
Often business owners have all this information in their heads and it can feel frustrating that other colleagues don’t do things in the same way. Don’t assume - things aren’t always obvious. Keep processes transparent and readily available so that everyone can learn. Ultimately you want at least 2 people that can manage every stream of work so that you can have resilience (and reliability) for all your processes.
2. Clearly define scope for projects.
This may seem like an obvious one, but it’s hugely important. Be strict about sticking to the scope of a project and renegotiating when things overrun. Your time is extremely valuable and even a day or two extra could be the difference in making a significant income from a project. Project tracking helps do this ‘live’ and also helps maintain healthy and transparent conversations with your clients.
Be clear when a task is outside the remit of your project. Charge for this separately or say you can complete this task if there’s spare time at the end of the project. Having sensible boundaries is not just great for your work/life balance but essential to keep your books balanced too!
3. Track time spent on projects.
Expanding on the point above - it’s fundamentally important that you track your time. This will help you understand how profitable jobs are and this will then mean the team sees this too. We encourage you to share this information with the project team so that they can really start to understand how every hour matters.
This can be a tricky behaviour to adopt and roll out as it may feel a bit old-fashioned or like you are ‘checking up' on the team. However, there are so many benefits to time tracking. This will help you challenge assumptions you’ve made around duration of work (e.g. you might not be as quick at certain tasks as you previously thought and you could be quicker at others you thought were time-consuming). It will also help you build efficiencies or bulk certain tasks for a better return-on-effort. Ultimately, it’s important to remember that time wasted means money wasted.
4. Embrace regular feedback loops.
Feedback is essential for any flourishing business. The quicker you imbed feedback loops the quicker you’ll see improvements to your business. We encourage you to set up feedback loops, forums, reports, and whatever other format works for you.
You can use these spaces to openly discuss project profitability and the lessons that have been learned. For example, this could include internal learnings for a more efficient project or account management or it could be a readjustment to your pricing.
5. Ensure transparency with the numbers.
I pride myself on being transparent with my team about the numbers behind the business. When you’re transparent about the financial performance of your business (and its forecast) then the team feels like you’re in it together. This is useful and beneficial for so many reasons, including:
- Boosting your team spirit: This is not only great for team morale, but it’s exciting and rewarding to get everyone on board with your growth journey.
- Seizing new opportunities: As your team starts to fully get the numbers they may start identifying opportunities to improve or expand. Benefit from wider conversations and more networks than just your own.
- Helping the team understand decision making: The team will begin to understand how the numbers impact them which will ultimately help them feel more fulfilled and involved. For example, they’ll understand why you can or cannot hire new staff and how the numbers directly affect their pay and perks.
6. Enable incentivisation.
As your business grows and begins to scale up, you may want to start thinking about a staff bonus scheme or an incentive programme.
We can help you with setting this up or support you with ways to approach this concept. This could be a really powerful way to help your team feel more motivated, involved, and empowered to support the growth or the business.
7. Instigate a regular fee review cycle.
Ensure you have regular meetings throughout the year to review your fees. This is an important part of becoming the most commercial that you can be. Reviewing your fees is essential to ensure you are still providing the best service for your clients.
This process will also mean that you’re able to sustainably and realistically grow your business in accordance with your business and personal objectives. If you work on a retainer basis then we encourage you to have regular fee reviews (we review ours quarterly) to identify where the level of service needed has grown.
8. Focus on what you do as an agency.
It’s all too easy to get absorbed into the chaos of the weekly to-do list and sometimes forget the real reason why we’re doing what we’re doing. Make sure your company vision, purpose, and values are embedded across your team and that you ‘practice’ these on a daily and weekly basis. This will ensure that everything you and your team does aligns with where you want to be. It’ll also help you all stay focused and not take on projects or clients that are not part of your core business.
Some ways to help embed your vision, purpose & values could include:
- Physically having these on the interiors of your building, meeting rooms, and/or physical stationary.
- Including your values in your personal development conversations/appraisal frameworks to ensure team members are aligning their personal objectives to the company vision and values.
- Regularly having wider team meetings about the development and vision of your company.
9. Be conscientious with recruitment.
We get that it’s hard to always recruit colleagues that have a commercial mindset. Many candidates have amazing skills and expertise but may fall short when it comes to being naturally commercial. Not everyone has a commercial mindset and it can be hard to train individuals in this way of thinking.
We encourage you to be conscientious during the recruitment process. Not everyone can be trained to be commercial so it’s important that you ask the most appropriate and relevant questions to ensure you’re recruiting the right person. Even if the candidate doesn’t have relevant experience in this area it’s important to recognise their potential. There are many ways to do this. For example, you could gear the interview questions around commerciality (e.g. have they explored your competitors, do they know much about your target market and what would they suggest for your business growth plan?). You could also test for these skills prior to making an offer. If you need help with this process, please get in touch!
10. Make the most of training opportunities.
Being commercially minded isn’t always easy. We are sure you have many extremely talented colleagues that are great at what they do and may not have had to be commercial before. We have discussed a few ways you can start to create a commercially minded culture, however, we also encourage you to be as practical as possible with your approach. Training is a huge part of this process and an area that shouldn’t be neglected.
- Can you do some in-house training to support your team to feel more confident with having fee uplift/scope creep conversations with clients? This is tricky but there are ways to ‘teach’ this.
- Do you have any team members that are interested in marketing and business development? Google Digital Garage (for example) offers many free mini-courses to help individuals grow the business they’re working for (and grow their career prospects).
- Can you have regular growth meetings where you meet as a management team to talk about gaps in terms of team capacity and skills? This may be an opportunity to look at in-house mentoring and coaching between colleagues or to explore external training opportunities too.
This is something you could easily delegate to the Managers in your team. Can they also add this process to your playbook?
We can be your finance team!
I have spent many years working with agencies and mentoring and coaching them to become more commercially minded. I have seen challenges that regularly come up with business leaders and I get the struggles they may be facing whilst managing their own workloads and their teams. These challenges could be anything from cashflow issues, through to process efficiencies through to building a sustainable sales pipeline.
If you’d like to find out more about how we can be your finance team, then check out more details here.
We’d love to explore options and discuss how we can help you become more efficient and effective and ultimately evolve as a business.