In the last post, we talked about EHR (effective hourly rate) and how to use it to find the levers to achieve a 20% increase in operating profit (that’s the profit from 2.4 additional months of work per year, without the work).
That all sounds lovely. We smile and nod our heads. But few agencies will do the work to capture that profit.
Why?
Because even though it may be simple, it’s not easy. It takes focused, deliberate effort, something most agency leaders don’t have to spare.
Your best ways to add value as an agency owner are:
- Overall Strategy
- Leadership Development
- Revenue Development
Someone else needs to be responsible for improving profitability. It's valuable yet delegatable. It must be someone who:
- Knows agency economics and operations end-to-end
- Works well with everyone to create buy-in, coordinate action, and get results
- Has the headspace, incentive, and empowerment to be effective
Consider carefully: do you have someone to champion profitability who checks all those boxes?
In most agencies, improving profitability will never be a full-time role. Without the right champion, it gets crowded out by other work.
This is where you come in: to see the problem (and opportunity) and ensure the right person is set up well to maximize profit. A lot is at stake.