Why your agency needs a methodology.

Recently we talked about what really lies behind your agency brand. Having the right people is important, but it needs to be about more than that. Yes, a service product is about people, but it’s also about technology and tooling, and more importantly, it’s about business process. I want to explore how tech and tooling, and business process are critical to transitioning to a Product Thinking mindset.

Case studies are not enough.

We’ve all seen the case study section in RFP responses and pitch decks. The 2 or 3 handpicked examples of where we did our best work and can (sometimes) show the results. The case study is a critical part of the process of winning new business and showing the calibre of your organisation. Yet, there’s one major flaw about the case study - it says you once did something brilliant for a client, yet it only suggests that you can replicate that outcome for someone else.

When I was on client side, what I wanted to know from an agency pitch was not just that they had some examples of success. I wanted to know whether I could be absolutely confident that this example could be replicated for my company. Sadly, this is often where agencies fall down. They frequently show case studies, but when pushed to describe a methodology, they suddenly become vague. In my experience this is for one of two reasons:

1.  The agency does things in a systematic way, but they’ve just not bothered to document it.

2.  They genuinely don’t have any consistent method of delivery.

The fact is that many agencies are probably in 2, but whether the reason is 1 or 2 is irrelevant. Without a way of articulating your methodology, it all looks like 2 to the client.

It’s the methodology, stupid.

The only way to transition away from selling FTEs by the day is via selling productised services. A product promises a certain output or outcome, for a price. In doing so it places the responsibility on the agency to take the risk on ensuring the outcome. This is where a methodology is critical.

For the agency a methodology establishes a common and repeatable means of addressing the client challenge. This has several advantages:

1. By standardising around a common process, you can produce consistent and predictable results – meaning you can make promises about client outcomes.
2. By working consistently, you can introduce tooling and automation to increase speed and lower cost – meaning you improve margins.
3. By having a consistent documented process, you can continuously innovate for improved performance in a controlled way, supported by testing – meaning you can differentiate on demonstrable quality.
4. You can re-use elements of your process in other products – meaning faster and cheaper new product development or adaptation.

A methodology becomes a provable means to demonstrate to a client that you know what you’re doing, and that you stand behind the results you promise. It’s a way of showing the client that what worked in the case study will also work for them.

Methodology v’s creativity

It’s a commonly held misconception that establishing a methodology is the enemy of creativity. In fact, it’s the opposite. Innovation and continual improvement are intrinsic to the product process. The only difference is that productisation aims to bake new innovations into the process so they can be reused. Every new creative innovation is like a coat of varnish,  layered on top of all the innovations that have come before it.

Instead of reinventing our solutions every time, we focus our creativity on the areas that will deliver improvement and make a difference. Even more than that, it values creativity across the business. Innovation doesn’t just come from the creative team. It comes from anyone that delivers client value – innovation in billing, innovation in testing, innovation in automation, innovation in selling and many other places.

There can be only 4,981

Does this mean only one methodology can be the best? Will the agency with the best methodology wipe out everyone else? The answer is no. The value of the methodology is relative and contextual. If your method is better than the way the client currently works, then it’ll represent a demonstrable and valuable improvement in performance. It’ll certainly represent an improvement in consistency.

There may be other competing methods out there, but yours may also have a specific set of circumstances that make your approach work better than the competition – within a certain market, sector, geography, channel or for a certain client type. Context is everything. This also helps you to be more targeted about the types of clients you pitch for.

If you keep innovating around your methods, keep applying new techniques and automation, then not only will your approach become more competitive, but it’ll deliver better profit.

"But our client wants us to work their way"

Quite bluntly, if you commit yourself to work according to your client’s methods, you’ll never break out of the FTE model, you’ll always be building your business around a single client’s unique ways of working. Client designed processes are only ever designed to serve one client, while an agency wants to serve many clients. By adopting the client’s methods, not only will you risk being sub-scale and inefficient, but you’ll also struggle to differentiate your offering from the competition. Effectively you’re just acting as a temping agency supplying headcount. You won’t be leading your client to do things in a better way, you’ll just be following client instructions. If you can prove your method is more consistent and delivers better results, then these are strong reasons for a client to adopt your ways of working.

What about technology and tooling?

At the start we said that a service product is about people, process, and technology. So where does the tech play a role in all of this?

There are several areas where technology can come in. By standardising on a process, there’s much more scope for building tools and automations to make the process faster and more efficient. You’re much more able to choose specific areas of the process to introduce things such as AI or machine learning, for example. The best part is that because you’ve moved to an outcome-based model, you’re not charging for FTE hours, so you’re not disincentivised to be more efficient.

You might be using some off-the-shelf technology or tools, or it may mean that you’ve developed something proprietary yourself. If it’s proprietary, then this creates two other possibilities:

First you may choose to only use those tools internally to improve efficiency and effectiveness. This doesn’t mean they should remain invisible to the client. Proprietary tools are an excellent way of substantiating and differentiating your process. They are proof points that you can deliver faster, and more effectively and set you apart from your competition. Make use of these in your client facing story because they really help to justify any premium you set in your pricing.

The second possibility is that you take these tools and sell them to clients or even competitors. Plenty of businesses have made this transition. But a word of caution, selling software licences is a vastly different business, requiring new skills and approaches, appealing to different buyers and often with tough competitors. Consider how much effort would be needed to transform from an agency to a software company and proceed with caution.

Bringing it all together

So now you have good people, consistent and proven processes, and maybe even proprietary technology. These are all strong building blocks for building a unique and valuable offer. By bundling together your people, your processes, and your technology, you can develop a clear proposition with the freedom to choose the right economic and pricing model to deliver results, both for your client, and your business. You’ll have a productised and differentiated offer that isn’t limited by the finite number of billable hours your business can get out of your people, but rather by the value it brings to clients.