Is your agency facing one of these woes?

Some team members are drowning in work, while others are twiddling their thumbs.
You keep hiring freelancers despite having in-house capacity.
Your team invests endless hours, but the output falls short.
Clients aren't thrilled with the "dream team's" work.

If any of this sounds familiar, your team's skillsets may be out of sync with the work you take on and you need to align talent and revenue. Faulty infrastructure is a common reason for business failures, and agencies are no exception.

In this article I look at the benefits of alignment and provide one approach on how to do it. Before we begin, let me share two stories from my own experience.

Story 1: Why Isn’t The Team Delivering?

_{The agency had a sizable team of almost 100 people. This team size} was aligned to the revenue number it was supposed to deliver. However, the team struggled to meet clients’ expectations. They were failing at the basics. The output quality disappointed, and deadlines were constantly missed. Internally, some individuals were overwhelmed and perpetually overworked while others felt undervalued and underutilized.

The heart of the matter? 70% of the team came from traditional ATL and branding backgrounds, while the remaining 30% were digitally trained. However, the agency’s revenue composition was the exact opposite - 70% of the agency’s revenue was coming from digital projects with traditional ATL and branding work making up the outstanding 30%.

Mismatched skills were preventing the agency from delivering what it could achieve.

Story 2: A Lack of Strategic Thinking?

This agency kept getting negative feedback from a few clients on their performance. These clients said the agency had failed to understand their business pillars and lacked the strategic thinking necessary to drive their business forward effectively.

The planning team blamed the quality of work on vague briefs and frequent changes by the clients.

The real issue? 75% of agency revenue came from integrated marketing communications planning. The planning team consisted of highly-regarded talents, all with the right industry experience but only one out of the six on the team had integrated marketing communications planning experience, the rest were traditional brand planners.

The Benefits of Aligning Talent and Revenue

As we've seen from these two real-life stories, the challenges of skillset alignment can have far-reaching implications, impacting both client satisfaction and internal team dynamics, and ultimately agency success.

The benefits of achieving alignment are numerous and impactful:

Increased Operational Efficiency: Aligning talent skillsets leads to increased operational efficiency by reducing overwork and redundancy. Streamlining workflows and minimizing the need for rework enhances the overall efficiency of agency operations.

Enhanced Output Quality: Alignment enhances output quality by ensuring that the right talents are assigned to the right projects. When team members' skills are aligned with project requirements, the likelihood of delivering high-quality work significantly improves.

Saved Costs: Aligning talent skillsets saves costs by reducing the reliance on hiring freelancers or temporary staff. By optimizing the in-house talent pool, agencies can effectively curtail external hiring expenses and achieve cost savings.

Improved Team Morale:  Alignment boosts team morale. When team members see their skills being utilized effectively and witness the positive impact on client satisfaction, it naturally contributes to higher team morale.

One Strategy for Aligning Your Team with Revenue

There are two rational approaches to this assessment. In this article, I’m going to zoom in on the "Percentage of Resources" approach.

"Percentage of Resources" Approach

Below is a template outlining the high-level steps for implementing this approach (click to expand image):

1. Identify Project Types: Develop a list of primary project types for each client, including projected new business.
2. Estimate Time Allocation: Determine the percentage of time required for each talent level.
3. Calculate Required Headcounts: Sum the totals for each talent level to establish necessary headcounts. For instance, if you require 245% of a digital art director's capacity, you'll need at least two individuals at this level.
4. Compare with Current Headcounts: Assess the "required/ideal" headcounts against your existing team to identify any gaps.

While this approach is robust and reliable, it's vital to acknowledge that alignment is an ongoing process. Proactively review your agency portfolio, aligning it with client needs against your talent pool. Consistent efforts in this area provide insights into whether your agency's offerings align with market needs and pinpoint areas for developing a robust talent bench.

Concluding Thoughts

To wrap things up, I can't stress enough how crucial it is to connect the dots between revenue and talent. The stories I shared show the deep interlink between client satisfaction, revenue and team performance.

Alignment drives efficiency, improves quality of work, cost savings and a team that is not just working but thriving and happy. The “Percentage of Resources” approach I went through is straightforward and a solid way to calibrate resources against revenue. But remember, it's not a one-and-done deal. Alignment is an ongoing process. Constantly keep an eye on your clients' changing needs, your agency portfolio of work and adjust accordingly.