At UGURUS, a business school for digital agencies, my team and I spend thousands of hours a year consulting and coaching owners in groups or one on one. Our aim is simple: To help you achieve freedom in your business and life. And inevitably that comes down to how to scale your agency.
One of the ways we do that is by helping digital agency owners work ON their business, not just IN them.
“When you recognize that the purpose of your life is not to serve your business, but that the primary purpose of your business is to serve your life, you can then go to work on your business, rather than in it, with a full understanding of why it is absolutely necessary for you to do so.” -Michael E. Gerber, E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It
For agency owners, achieving freedom usually means:
- Working fewer hours (less than sixty is a start)
- Making more money (getting paid a healthy salary)
- Sitting in fewer seats (helping you do better work)
There’s a commonly-accepted fallacy out there that most entrepreneurs are working towards an early retirement and days filled with sitting on the beach drinking fruity cocktails. However, most entrepreneurs I meet love the work they do, and have no intention of retiring early.
The standard definition of the term “exit” in entrepreneur-speak is to sell your business, but most agency owners I meet aren’t anywhere near this point. They haven’t built a company that is worth anything beyond themselves. They’re involved in every aspect of the business from generating leads, converting those leads into clients, and delivering the work.
They’ve built themselves a job. A stressful. Demanding. Underpaying. J-O-B.
For these owners, “exit” means being able to take a vacation from time to time without the business falling apart or stopping in its tracks. And since getting paid the equivalent of a market-based wage isn’t being realized (i.e., generating six figures take home), they’re also not quite “living the dream” they set out to build. Owners want these benefits without sacrificing the quality of their work product.
I push them to think bigger than that:
I push them to increase their work quality while growing their revenues and take-home pay, decrease their time in the business and begin building an asset that has value beyond the daily input of hours.
Demystifying Your Business, Overcome the Wizard Complex
What I’m about to talk about involves a small word with a significant impact: Ego. Here is how ego shows up in our businesses:
- “I’m the only person that can sell what we do.”
- “I need to be involved with every client – they’re buying access to me.”
- “If I don’t do it, it won’t get done correctly.”
We’ve all had these thoughts at some level. I have. You have. And it might even be showing up with more statements than my three examples.
I call this the Wizard Complex, and while it makes us feel important in the short term, in the long run, it starves our business of the much-needed insight that resides inside your brain. You think only you can scale your agency.
“Ego is the enemy of what you want and of what you have: Of mastering a craft. Of real creative insight. Of working well with others. Of building loyalty and support. Of longevity. Of repeating and retaining your success.” – Ryan Holiday, Ego Is the Enemy
Any time you believe you are the only person who can do XYZ role in your business, I want you to stop and ask yourself:
Is the belief I have about this true? Or am I just refusing to do the hard work of defining what it is I’m trying to accomplish and delegating the seat so someone else can be successful?
One hundred times out of one hundred you are not an irreplaceable unicorn. We are all special and have unique abilities, but none of them are one-of-a-kind. You can scale your agency and let go.
I was recently listening to Tony Robbins’ audiobook, MONEY Master the Game, and he only read the first chapter himself. Another member of his team read the remainder of the book to “save his voice.” While I’m sure Tony has a sizeable ego, letting someone else record your audiobook is a big deal. That is letting go and empowering others.
The big problem with the Wizard Complex and operating ego-first in your business is that it gets in the way of actually building a business. Not only that, but it leaves you, the owner, totally stressed out and overworked. You cannot scale your agency if you’re left feeling this way—it won’t work.
Coaching it Out
Recently I was working with a student for an extended one-on-one consulting engagement we call “VIP.” One of the problems we’d identified during our onboarding process was that one of the owners of his business was working way too hard (I define this as over 35 hours per week, but he was working closer to 80 or 90).
Not only was he overworking, but their agency had capped out at how many clients they could handle due to him needing to be involved in every client. Since his team was unable to get the results on its own, they stressed and wallowed in failure until the owner swooped in and did his ninjitsu.
He would say things like, “my team just can’t get the results I can…” and “No one is going to be able to sell like I can…” which to him meant that he needed to:
- Be involved in every client relationship, and
- Personally sell every deal.
On average, this owner was spending about twelve hours with each client on a monthly basis. Add to that the twelve hours it took to sell a new client (six with the client he won, and six with the client he lost – since he was averaging about fifty percent close rate. At a close rate of about three clients a month, here is what his typical month looked like:
- Monthly hours breakdown
- Client service: 240
- Sales call: 36
- Weekly leadership meeting: 9
- Weekly team meeting: 9
- Marketing: 30
- Misc. business admin: 22
- Total hours in the business: 346 (~80 hours/week)
And that’s how this agency owner was getting to an eighty-hour work week. The problems? His business wanted to demand even more of him since they had more leads than they could handle. There was one other major problem: Client retention had become an issue.
Where to Start?
So we dug in. While I saw a significant revenue opportunity on the sales side, I wanted to go where there was the most pain: Client service. I knew that if we didn’t get him out of this situation, the future of the business was at stake. My goal wasn’t to get him completely out of client service, but to unshackle him from being involved with 100 percent of client work. Until that happened, the agency’s capacity would remain limited since he had to work with every client.
Like many agency owners before him, this owner convinced himself that clients were buying him. If this sounds like you, you won’t be able to scale your agency.
That was the first belief I had to unpack and destroy. Here’s about how that conversation went:
“Why do you think your clients are buying access to you?”
“Because I’m the expert. I have been in this industry forever, and they know my reputation.”
“What’s your reputation?”
“That I can get results for my clients.”
“So are they buying you or the results you can get them?”
“I guess the results…”
The real conversation took a bit longer and more energy, but you get the idea. No matter how talented you think you are in your business, don’t peg your clients as shallow. They aren’t buying you. I promise. They are investing in the results they think you can get them. This is critical to keep in mind if you want to scale your agency.
The next trick was first to figure out what results he was providing his clients, then reverse engineer how he was getting them.
Like many agencies, they had done an excellent job at creating heaps and heaps of task lists for the specific scope of work items for their clients. However, what they hadn’t done was generate documentation for the desired outcomes of those work items and why they did certain things to get these particular outcomes for clients.
This documentation was the missing link.
The agency team failed to get the same results as the owner because they were missing information, namely around outcomes. They had documentation around specific tasks and lots of checklists, but they didn’t understand why they were doing those things — and didn’t have the freedom the owner had to step outside those checklists to experiment and try new things that would get the outcomes promised.
I started asking a lot of WHY questions. Followed with open ended probes…
“You’re having this team member do this, why?”
“Why do they do that?”
“How does that work?”
“Can you tell me more about…”
And so on.
It turns out there was a hidden “model” inside of the owner’s head. The reams and reams of tasks he had outlined for their employees had a purpose, but only he knew that purpose.
So we unpacked it. It was painful and took up a lot of whiteboard space, but by the end of a few sessions, we had worked out a success model for their business along with a proven process. The sketches and documentation we created became the why behind everything they did.
The many lists of tasks now had context.
There was one unintended consequence of this exercise. By the end of us mapping out the process and secret formula for getting his clients the results he promised, we realized that the team he had was ill-equipped to do this type of work.
The existing team was only capable of executing checklists. They didn’t have the critical thinking skills and relevant work experience to achieve what he promised his clients. That is why he was stuck working with every client, every month, until the end of time.
It was time to make hard decisions. People lost jobs. New jobs were created. Instead of looking for people that knew how to do all of the tasks on the checklists, they were now hiring for people that had successfully achieved the outcomes they promised their clients. They wanted new team members who could leverage the strategies in their model with proven processes. The new hires were more expensive but much more capable.
Over the subsequent twelve months, the agency grew by 100 percent, not because they were in more demand than they previously were, but because the owner decoupled himself from client service and hired staff who could execute his plans. They were able to do more for more clients, while he reduced his overall time in client service down to about 100 hours per month. They were finally able to sell to the demand that already existed for their business. You can do all of this to scale your agency too.
The First Domino
What surprised me most about this case was that a year after the big work we did, they applied this same approach to getting the owner out of the sales seat. This is one of the hardest things I see agency owners do, but when done right, it creates a groundswell of growth that’s hard to stop.
While many owners enjoy sales, they don’t have the unfettered calendar to do it well. A dedicated sales seat can outsell a busy owner even if they are 75 percent as effective. A dedicated sales person makes up incredible ground because they have 100 percent of their open calendar to take meetings with prospective clients. Over time as they learn the business, they might even get on par with the owner – or perhaps even better. Now we’re talking.
But the same unpacking is necessary to make it work, and it’s not enough on its own. You also need to make decisions at a business level around who your ideal customer is, what problems you want to solve, a general pricing strategy, and lead generation (i.e., marketing) so your sales lead can focus on the business of sales. When you do all of these things, the owner gets a unique opportunity.
They get to elevate to broadcast mode and instead of worrying about the day to day details of selling to new prospects or delivering work. They can start standing on stages, appearing on podcasts, and doing high-level networking that can lead to explosive growth within a market.
When owners are out of general business operations, they can start to think clearly about their business as an asset. They can ask questions like, “Where is this headed? What can I do to get there faster? Who do I need to know to make it happen?”
All of these ideas are transformational and less available to the owner stuck in the grind.
The other day I was talking with this client, and they shared some exciting news. This new-found freedom had led to three speaking opportunities. The problem at hand was now something like this:
“Is it possible to make an offer to over seven hundred people at the same time at a conference? And we have another conference where we think there is a high probability that we’ll earn twenty-five customers over a single weekend.”
For most agencies, the prospect of this type of growth is out of reach. You can’t scale your agency. Taking your business to the next level with productized services, scalable offerings, and selling at scale wouldn’t make the least bit of sense—because it’s just you. While you’re on stage, writing your keynote, and networking to get to speak in the first place, no one is selling or leading the client delivery charge.
But this agency was beyond that. The owner was able to do all of those things while growing the business because he was out of key seats that thrive much better with full-time attention.
So Here You Are
Demystifying what you do is no small task. Not because it’s impossible, but because you likely shift between seats without thinking. Or when you think of what needs to be done, you think of these twenty tasks – forgetting that the first thing you did was consider what needs to be done to accomplish a specific outcome.
The best way to help people overcome the wizard complex looks something like this:
- Admit to yourself that everything you do in your business could be done by someone else as long as they were the right person and equipped with the proper instructions and help.
- Take time to “zoom out” from your business and think of what you are doing today to accomplish specific outcomes. I like to imagine my company as an ant hill where I can’t see names or faces or titles… just ants doing a job.
- Write out what those jobs are. Over time, you’ll see patterns and realize how to organize those jobs into specific seats and then assign them to others.
- Keep focused on what you see the ants doing right now versus imagining what the ants could be doing. The goal is to demystify what’s already happening and then put people in charge of those jobs that have more capacity to execute them than you do. When the time comes, they’ll discover other things they can do.
- Make sure each job is clear on the outcomes they’re working towards. The fewer the outcomes, the better. Too many and it’s hard to focus. The best outcomes can be measured with a single number.
- Then “let go of the vine” as Gino Wickman likes to say in his book Traction.
When talking to owners about this last step— especially when it involves a seat they’ve become addicted to in their business—it can be a big mindset hurdle to overcome. I get comments like:
“But I like sales, why would I give that up?”
The answer is simple: there’s a higher calling for owners. If you like sales, then sell from the stage. If you like marketing, then start a podcast for your industry. Become an amplifier for your business.
If you don’t know what you would do if you weren’t selling or delivering client work, that’s okay. Figure that out when you have your time and capacity back. Sometimes you won’t know what you’ll do with that time until you have it. You can’t see the massive opportunity sitting in front of you when your head is down in the sand grinding out eighty hours a week.
The Big Objections
When I first introduce this concept to new consulting clients, I will often get a couple of “this won’t work for me” type statements. They are:
- My business is too complicated and
- I can’t afford to hire anyone right now
The first is the result of a failure to make big decisions as an agency as to what you’re all about. If you meander through markets and services and disciplines based on your floating professional interests, you’ll never be able to scale your agency.
If you want to scale your agency you have to make a choice, a commitment, and accept constraints. That being said, most of the time owners think their businesses are far more complex than they are. When you keep your business plan in your head instead of on paper, all those thoughts jumble around and feel complex. Once we unpack them to a whiteboard or paper, you’ll quickly see how simple what you’re doing is.
Second, I promise you that you can afford at least one person right now. The new economy has given the labor market millions of fractional employees with insanely narrow skill sets.
I have a highly skilled financial controller who does four hours of work a month like a well-oiled machine. I have an outsourced assistant in India that takes on any repetitive task that anyone in my company has and can document and put to a schedule. Both resources work for a tiny fraction of what a full-time team member would require.
And they both free up my time to do owner-level things.
Scale Your Agency – Start Today
The next time you catch yourself thinking, “I’m the only one that can do [whatever job you’re doing]” or “No one can do this as well as I can,” I want you to stop yourself. Recognize that you are engaging in Wizard Complex thinking. Take a moment to grab a pen and paper and start writing out this thing you’re doing.
Dig deep to uncover what makes the way you do it so unique.
Whether you can design this thing into a seat and hire out for it in the immediate term doesn’t matter. The goal is to demystify, to bring a sense of awareness to yourself and your business so that over time, you can build a high performing business and not just a well-paying job for yourself.
This often brings about a short-term hit to the ego. This process will make you feel less special in the day to day as you systematize the unique value you add to your business.
But the upside is well worth it. You’ll apply your unique skills to new challenges – and those will help you break through to new challenges and so forth. You’ll be able to scale your agency.
The original version of this article was first published on Agency Management Institute.
- How to Scale Your Agency–Overcome the Wizard Complex - October 3, 2018