The official blog of Ignition Consulting Group
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-Business Models-
Grow or die. It's embedded in the capitalist psyche. But is there such a thing as "bad" growth? Or more to the point, "bad" profit? The answer is yes, and many companies -- including professional service firms -- are engaged in a short-sighted harvesting strategy that yields revenues in the current year but fails to plant the seed corn to produce profit pools in the years to come …
Advertising agencies are facing competition from every dimension and direction. Upstream, they complete with marketing consultancies and brand strategy firms who seek to provide planning and strategy services to marketers. Downstream are production companies, independent freelancers, and even media companies who now aim to not just sell media but produce content. Traditional agencies are arguably in the worst place of all – right in the middle …
There is a cardinal belief in professional services that our inventory is not parts, but people. If that’s true, professional firms are facing unprecedented inventory shortages. Competition for the best people has always been fierce, but is now intensified by the economic impact of a global pandemic. The roots of the current talent war actually go back decades — especially for agencies — thanks to the devastating consequences of agency remuneration structures. A business model that bills for employee time can’t possibly compete with other companies that are looking to hire the same caliber talent …
Imagine a work environment in which you are judged solely by your effectiveness. Not by how many emails you answered, how many online meetings you attended, or how many hours you logged on a timesheet. In a world where only effectiveness matters, you’re have all the incentives you need to focus on the most important emails, participate in the most critical meetings, and execute the most essential tasks. Trivial pursuits are much less of a temptation, because distractions seriously erode your ability to produce results …
While advertising agencies are famous for innovating on behalf of their clients, only rarely are they recognized for applying original thinking to their own business model. At the root of this enigma is the belief among agency executives that they are in the service business. True, agencies provide specific services in response to specific client needs. The problem is the mindset; the “client service” mentality that centers on responding to client requests instead of proactively solving client problems …
Dutifully filling scopes of work for clients is "thin value." You're doing what's asked, meeting your deadlines, and staying within budget. “Thick value” is created when we help our clients explore and answer the question "What is possible?" Instead of just helping them meet their needs today, we're helping them define and develop what they should be doing tomorrow …
Surveys show that client organizations are unfortunately critical of agencies’ willingness and ability to deliver proactive thinking. They praise agencies for being responsive (reactive) but give them failing grades for being proactive. We can lay much of the blame at the feet of the hourly rate …
Have you ever had the frustrating experience of trying to execute a “multi-pronged strategy?” It never goes well for the simple reason that a strategy with multiple prongs isn’t a strategy at all — it’s just a wish list. By definition, you can’t have multiple priorities. You can’t win a battle if you send your army off marching in multiple directions, and you can’t have a winning positioning strategy if it is constructed like a Swiss army knife …
Like food on grocery store shelves, the services offered by professional service firms have a “sell by” date. There’s no law compelling you to disclose outdated offerings, but if there were, the menu of competencies in many firms might be significantly reduced. In an era of exponential change, capabilities can abruptly outlive their usefulness …
Have you experienced the “life-changing magic of tidying up” your residence? Such is the promise of the Japanese art of decluttering and organizing. The same exact principles apply to your business strategy. A firm that attempts to serve a broad swath of markets with a “complete” set of offerings has a cluttered business strategy …
Do the people in your firm complain about an overwhelming number of simultaneous priorities? Does every task and client request have an ASAP attached to it? Not every client has paid the price of a first-class seat in your organization, and your organization doesn’t have the human or economic resources to lavish first-class service on clients who only paid a coach price …
If a talented art director in your firm can design a brilliant logo in five minutes instead of five weeks, should you get paid less — or more — for it? In the flawed pay-by-the-hour system, the only way your firm could possibly capture the value you have created is for the art director to misrepresent the truth on her timesheet …
Business professionals have a voracious appetite for the “best practices” in their industry. But transformative changes in society are always the result of changing our thinking, not changing our practices. When we reform our paradigm — our mental map — we can’t help but change our practices …
It’s a curious fact that advertising agencies don’t know much about selling — at least when it comes to selling their own brand. Even though agency professionals show good sense (and sometimes sheer brilliance) when crafting messaging strategies for their clients, this is rarely applied to how they market themselves…
“Buyer beware” might also be described as “sold as is” — a warning about deals that seem too good to be true. Given the power currently ceded to procurement professionals inside client organizations, “caveat emptor” applies to agency-client relationships more than ever before...
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