Why is there so much rework on a lot of agency projects? Because most agencies are so submerged with “rush” work (now the rule instead of the exception) that most assignments are initiated with incomplete information, no brief, no briefing – only a job number and a due date. It’s little wonder that when the work is presented to the client it’s usually in need of additional work, if not a complete re-do. Agencies fail to invest the necessary time on the front end to make sure they get it right the first time. Then on the back end, they fail to track revisions and “scope creep,” which has trained most clients to expect endless rounds of revisions at no charge.
Herein lays one of the strongest arguments for abandoning the time-based way of getting paid. By some estimates, the average agency spends up to 20% of its time and energy recording, tracking, capturing, estimating, billing, and adjusting it’s time. Imagine if you took that same time and energy and instead invested it in doing a better job of identifying and managing both the scope of value and scope of work. What if you traded the time spent in column A for time spent in column B?
[Chasing the wrong rabbit chart]
If you turned your agency’s focus to column B, would the quality of your work be better? Would the client receive better value from the agency? Would you earn better margins on each assignment, and therefore on the client as a whole? The answer to all of these questions is yes. What exactly, then, is the counter-argument? Why should we stay trapped in a model that serves neither party well?
An efficient doctor or an effective doctor?
In the quest to improve margins, agencies are chasing the wrong rabbit. Their focus is usually on how they can be more efficient. But imagine that you have a condition that requires surgery. Would you rather have an efficient surgeon or an effective one?
It’s effectiveness – not efficiency – that creates value. After all, one can be extremely efficient doing thewrong things.
Value-based agency-client relationships focus on effectiveness rather than efficiency. A business does not exist to be efficient; it exists to create wealth outside of itself. An obsessive compulsion to increase efficiency (doing things right) reduces the firm’s effectiveness at doing the right things. The relentless pursuit of efficiency can hinder the client and agency from focusing on the things that truly matter most.
Effectiveness means that imprecise measurements of the right things are infinitely more valuable than precise measurements of the wrong things. It is more important to be approximately right rather than precisely wrong.