In 2013, I blew up my agency by creating a Credo. It magnetized the team and both repelled, and attracted, talent. Over the next 90 days, I experienced 85 percent employee turnover. Through the difficult process of rebuilding my company, I learned a great deal about myself, my teammates, clients, and business. In the end, The Credo helped refocus myself, my agency and an entirely new team. The result was a high valuation when I sold the business in 2022. I hope my lessons will help effectively optimize your business as well.
Accountability is Key
There are two common reactions people have when reading The Credo: inspiration and ambivalence. While I prefer the former, the later reaction has taught me a good deal about Anvil B.C. (Before Credo). Knowing half my team left within weeks of unveiling The Credo, seasoned professionals who read The Credo asked me what it was that rubbed former employees the wrong way. After clarifying people that left were likely unhappy B.C., it acted as a catalyst to push them out rather than pull them in. The most common theme I’ve found in the departure of employees was a general lack of interest in (greater) accountability. Everyone likes to enjoy the spoils of victory, but nobody was willing to accept their role in times of defeat. I realized I’d been compensating employees well on one hand, but not holding them accountable when things went sour (lost clients, lost deals, lost talent, etc.). Lesson: responsibility without accountability is deadly. Resolution: establish clear metrics based on job description, set goals and timelines for each employee and have regular check-ins to manage and align expectations. Result: greater alignment and clarity of roles at A.C. Anvil has led to increased happiness and effectiveness.
Profitability can be Dangerous
Perhaps the most powerful lesson I’ve learned over the past year or two was rooted in Anvil’s financial success. As a five-year veteran of Portland Business Journal’s Fastest Growing Companies, our profitability and employee retention was healthy through 2011. With strong lagging indicators, I didn’t feel the need to peek under the hood and “fix” anything when nothing appeared to be broken. That oversight was costly to me the past two years. After we fired our largest client and lost our second-largest client, the significant decrease in revenue triggered a series of events that led to deeper analysis of the team structure in 2011. Changes that were made were not sufficient to change the tides that led to The Credo. Lesson: don’t be lulled into complacency by success. Don’t let the destination (big $$) distract you from the journey. Resolution: create a series of checks and balances to ensure you have a clear understanding of your business operations at every level. I have monthly check-ins with every employee and now receive monthly reports from all of my executive team that tie to company and personal goals, so we can measure and manage progress. Result: I have a much higher degree of trust, respect and understanding of my core management team and am better able to empower them to be successful, which translates to the company’s success.
You can’t buy Love
Everyone is motivated differently, but there are common factors to pull from when recruiting and retaining talent. One of the least effective and most expensive is offering monetary incentives like big salaries and bonuses. The idea is to find employees that are motivated by the work and making an impact, not cashing a check. At B.C. Anvil, management (with my approval of course) threw money at talent to solve problems. This was not an effective long-term strategy. My highest-paid employees have been the least loyal. The largest bonus Anvil ever paid was used to start a competing agency, for example. Lesson: you can’t buy passion, loyalty or retention, so don’t try. Resolution: focus on creating a recruiting process and building a company culture where creating value and demonstrating commitment are rewarded. Result: the most loyal employees through the transition have been nicely rewarded for their contributions and new hires are both more accountable yet more motivated to grow and succeed through The Credo.
Check-in or be Checked-out
If you’re the type of business owner that believes in hiring smart people and getting out of their way is the best way to grow a business, pay close attention. Up until recently, that was my approach to building an agency, but it can backfire in a big way, when you give too much autonomy to people without checks and balances. The previous lessons mentioned above compounded the impact of my decision, in that the talented individuals I hired and trusted to manage my business were not checking in with me regularly and in a meaningful way, which led to them getting in over their heads and me being unaware. By the time I figured out what was going on, it was too late. Resolution: create regular check-ins, from weekly to monthly instead of quarterly or annually. Result: the weekly status reports and monthly IDP updates have given me deeper insight and appreciation for what my new team is doing and I’m better able to support their success and happiness in the process.
Topgrade new Hires
Once half of my team left after I presented the Anvil Credo and new direction, I realized hiring was our #1 priority. As the owner, I have 100 percent accountability for my hires, even when I did not make the hiring decisions. As such, I realized I would need to get more involved in the hiring process. Through Entrepreneurs’ Organization (EO) I learned about Topgrading a few years ago, but we only incorporated a few elements from the hiring methodology. I also hadn’t been active in the recruiting process for years and we hadn’t proactively pursued talent since I made my first hire. Instead, we would post a job position and pick the best of the crop of respondents. Resolution: spend a good deal more time identifying and engaging industry leaders and fleshing out their true talents, strengths and cultural fit in the interview process. Result: we now have greater depth of industry experience, passion and enthusiasm than ever before. Morale is the highest it has been in years and clients are taking notice.
Experience is Overrated
Anvil was able to achieve its goal of being “Most Respected” over the years, based on client and peer feedback. That being said, the level of passion and enthusiasm waned in recent years, even as competency increased. The net result was uninspired work, a lack of innovation and unhappy clients. We had tons of industry “experience” that was not being leveraged to its full potential and as the chief-in-charge that was my responsibility to fix. Resolution: realizing I was failing to inspire the current team, I created the Credo, set a new direction and replaced a majority of the team with talented, passionate individuals whenever possible. In some situations, we went with less SEM-specific industry experience to gain more strategic experience (i.e. management or planning capabilities) and a good deal more enthusiasm, knowing we can teach the relevant skills where lacking. Result: we’ve managed to upgrade on both enthusiasm and years of relevant experience across the board through our proactive hiring process. Our client retention is higher now than it was before the Credo, despite 80 percent employee turnover in the process. For more information, read: Hire for Culture, Talent and Traits, not Skills, Knowledge or Experience.
Connect with Clients
Anvil’s early success was due, in part, to my involvement with account work. I attended client strategy meetings regularly and maintained relationships with key contacts. While I’ve maintained a level of connectivity with key clients over the years, I was not looped in on strategic meetings and even encouraged to step away by members of my team. They felt I wasn’t as relevant as I used to be, as I wasn’t keeping up with the latest changes in the industry. While I agreed I wasn’t working “in” the business, in order to work “on” the business, I should have pushed back about my role in client meetings as a seasoned voice with strategic perspective. Validation came to me during a recent exit interview with a senior team member, who encouraged me to get more involved with clients, despite being one who supported the idea of me stepping out years earlier. Resolution: I’ve now set the expectation with my team that I am to be invited to all appropriate quarterly client strategy meetings, even if I don’t charge for my time. Result: although it is still early in the process, clients are already noticing and appreciating my greater level of engagement and the team appreciates the additional perspective and support.
Relationships trump Results
As I’ve discussed in a previous article, you must Delight before you Elevate, if you want to retain clients. From previous experience working with clients, I quickly realized I could easily lose a client if I didn’t connect with them on a personal level, but to this day I’ve only lost a handful of clients due to a lack of results. Resolution: armed with this knowledge, I directed the new team to manage through our transition by focusing on delighting the clients first, then delivering results. Result: while the old Anvil normally lost 1 or 2 clients each month to natural attrition (which I attribute to a lack of Delight), we’ve only lost 2 clients since instituting The Credo, and I’m confident inability to deliver results was not the issue. While the new team has done an admiral job focusing on Delighting and Elevating, with such high turnover, some Client attrition was expected. Impressively, I didn’t expect a DECREASE in attrition during this critical time, which only validates the power of Delight.
Be future Forward
I’m not only the father of two agencies; I’m a father of children. My experiences as a parent have helped inform me as a business owner. One key learning that came from a parenting class: never talk badly about the other parent, as it reflects poorly on you in the child’s eyes. Had I taken that lesson to heart at work, I would have realized talking badly about former employees eroded my team’s confidence in me. It’s been a struggle to talk about our new direction and why we’re doing what we’re doing without referencing the past, but I have no intention of living there as much as learning from the experience. Resolution: I’m not a fan of history repeating itself, so I’ve built my communications (including this article) around key lessons from the past and how to leverage the learning to improve myself and the business. Hopefully, you as a reader notice. Result: the few remaining long-term team members appreciated my forward-looking focus at our recent offsite, which was a huge improvement over the previous offsite. The team left the offsite energized, focused and connected, which has been critical to our recent success.
Fountain vs. Firehose
Years ago, I decided to create a business around the “fountain” metaphor: something unique, interesting and amazing that naturally attracted talent and passion. That indeed was the case for many years at Anvil, but something happened: the rest of the industry grew up around us and there were simply too many fountains to choose from. Instead of going the fire hose route and knocking people down with our “brilliance,” I decided to build a newer, more remarkable fountain. With so many people leaving at the unveiling of the new fountain, my hopes were crushed. Then something amazing happened, the fountain (aka Credo) started attracting people. Our new Office Manager read the Anvil Credo in the Business Journal and applied. She is now one of our greatest new stars. Resolution: stay true to yourself (or your Credo) and good things will happen. Result: in the 90 days following the Credo unveiling, I was able to replace my entire team with individuals passionate about their discipline and The Credo. Morale is higher than ever, not only with the team, but I feel a renewed vigor and passion for Anvil, our team and our clients. The journey has been difficult but very much worthwhile
