How is it for you? Are you seeing the green shoots of recovery growing into robust saplings? The Government would like us to believe that the economic recovery is well under way. The Bank of England seems to agree, and has upgraded its UK 2014 growth forecast from 2.8 per cent to 3.4 per cent. Other positive macro indicators include the unemployment rate dropping to 7.2 per cent and more women in work than at any time since records began, at just over 14 million.
While I am not entirely convinced that we are out of the woods, I have been approached by several agencies over the past three months that are looking to develop their businesses in response to what they see as a real improvement in the economy.
Either way, it is well worth giving serious consideration to how best to plan for the next 12 months, with an upturn in mind. We have all got very used to planning for a flat or shrinking market: keep investment to the minimum, overheads as low and as flexible as possible, and have a laser-like focus on new business. But if things are going to get better, how can we plan to take advantage?
A good start is a shift in mindset. Taking the view that growing, rather than protecting, is the way forward will bring rewards not only in terms of a wider and more engaged professional network, but also hard commercial advantage. I am not suggesting giving your skills and time away for free, but expecting abundance rather than famine makes a huge difference to your decisions and the likely outcome.
It can be very hard to look up occasionally from delivering quarterly and annual targets. But those agencies with a clear idea of where they want to be in 36 months, rather than just the next 12, consistently retain staff, build stronger reputations and deliver more consistent and robust margins.
Understanding the real growth drivers for your agency gives you a real management focus and your very own ‘engine for growth’. These will differ from agency to agency, but they might well include a concerted effort to grow existing clients as budgets free up. Alternatively, you might feel now is the time to invest in the creation of a stand-out service proposition. I am assuming that you have a smoothly oiled new-business machine, but if not, now is the time to get it sorted.
Once you know which drivers are going to deliver your growth, dividing up the actions needed to deliver each into years and then quarters makes it a lot more doable. Assigning an owner to each objective dramatically increases the likelihood of them being achieved. This does not mean that one person does all the work, but that the objective is kept in sight and progress monitored.
During the recent downturn, many agency heads have focused on keeping a lid on people costs. With an upturn, a different approach is required. As the economy strengthens, employees have more choices as to where to develop their careers, while you may have more flexibility on what you can offer to attract new talent.
The usual hard commercial measures should be maintained while recruiting – upturn or no upturn. The success of the process can be measured by the time it takes to hire. Are you aiming to complete the process in fewer than 60 days? Has the cost of the recruitment process exceeded more than 15 per cent of the package being offered? Have you achieved zero staff turnover in the first three months of joining the agency?
Development of consultants will become more relevant as the economy strengthens. Again from a planning perspective, hard numbers can be used to measure its success. Is the training and development budget on a par with the industry average? Are 90 per cent of staff attending their planned training? Are staff reviews and objective-setting meetings held within 30 days of the due date?
Opportunities to expand your client portfolio are one of the obvious benefits of a lifting market. But what is your strategy for striking the right balance of hiring before or after the business is won? If you don’t use freelancers, now might be the time to look at it seriously. Get it right and they provide a flexible resource that can often be more experienced than you could otherwise afford. Plus, it allows you to dip your toe in the water if you are not as confident as the Chancellor about the recovery.
Whether you are convinced that the good times are coming or a recovery sceptic, it is time to think about how you might shift your mindset to an abundance mentality. Consider how a lifting economy will affect your staff’s view of their jobs and provide client growth opportunities. You have nothing to lose but your recession pallor.
Richard Houghton is associate partner at Agency People