We’re gearing up for a team-wide retreat in NYC in mid-October. We’ll have 30+ people from all over the country (and a few from outside the US) coming in for a few days of team bonding and various activities. The planning is both exciting and challenging – we’re trying to balance out having enough planned activities vs. giving people the space and room to hang out with each other.
The primary goal of the retreat is to give our team the opportunity to get to know each other in-person outside the Zoom window, and to share some fun and memorable experiences together. I’m also very eager to impress out-of-towners, especially those who’ve never been to NYC, with the best that the city has to offer. I’ll share more details in October after everything happens.
About Agency Journey: This is a monthly series detailing the happenings at my agency Barrel, founded in 2006. You can find previous episodes here.
Vaulted Oak Celebrates 1 Year of Being in Business
Vaulted Oak, our website support and maintenance agency that we spun out of Barrel in August 2021, celebrated its first full year of being in business. Jason Fan, who runs Vaulted Oak, has done a tremendous job of growing the business over the last year. What started as a seed portfolio of around 18 client accounts from Barrel has grown to nearly 40 accounts, most of them on sticky quarterly retainer plans that characterizes Vaulted Oak’s focused offering. Jason has also scaled the team from just himself to over a dozen other active team members across project management, design, and development roles.
Barrel will continue to be a feeder of new accounts into Vaulted Oak especially as we wrap up large redesign projects and clients opt to scale down to smaller retainers. Since we’ve structured Barrel to best service retainers that are typically 100+ hours per month, Vaulted Oak has become a great option for clients who need less. Beyond Barrel, Jason has built partnerships with other agencies to ensure a steady flow of new opportunities. The future looks bright for Vaulted Oak and we’re very much encouraged by the progress 1 year in.
Continued Momentum with New Client Wins & Sales Efficiency
Summer is coming to a close on a high note with some new wins and client project launches. We recently landed the following:
- A maker of organic skincare products led by a popular founder
- A new alcoholic beverage brand
- An adaptogenic supplement brand
The initial engagements with these clients will be on the smaller side versus a full-on redesign project or large retainer, but we’re confident in our ability to quickly deliver value and establish long-term relationships.
Overall, our volume of leads is down over 22% year-over-year. A part of this is due to our cutback on use of Google Ads earlier in the year, which used to bring a handful of leads every week, most of them poor fits. However, we ended up qualifying and sending proposals to a greater percent of our leads in 2022 versus 2021. The best part is that our win rate in 2022, close to 50% versus 36% in 2021, is much better and we’ve been able to close more deals year-over-year. I’m very pleased with the increasing efficiency with which we are qualifying new prospects, aligning on scope, and winning new work. It’s a process that’s continually being tweaked with input from all of our team leads and partners. The sales process, led by our Director of Business Development Dan Fleishaker and supported by our Business Development Coordinator Riley Stone, has become a very robust system with tight record-keeping, checklists, and reporting.
While I’m happy about the overall numbers, I’m also wary of basking for too long in our sales wins. There’s always the chance that a cold streak is right around the corner. For example, we currently have a handful of opportunities where we’re being considered as finalists. It’s very possible that all, some, or none of them may hit. I like for us to prepare for the “none” possibility and keep focusing on ways to increase opportunities with existing clients. We were overly optimistic last year and made some errors like over-hiring for certain roles before we had the work signed. This time around, we’ll play it more conservatively and be okay with scrambling with staffing if the best-case sales scenario happens and we end up winning everything all at once.
New Client Website Launches
We launched a couple of new ecommerce websites for our Barrel clients in August. One was for GoodGood, a pet wellness brand launching with a line of dog supplements. The other was for our long-term client Rowing Blazers who, in partnership with Social Change Fund and The Arthur Ashe Legacy at UCLA, launched the Arthur Ashe brand just in time for the US Open. ArthurAshe.com features clothes and accessories inspired by the iconic tennis legend.
Both sites are built on Shopify and continue to reflect Barrel’s focus on direct-to-consumer ecommerce website experiences.
Going on the Offensive with Talent
Without going into specifics, I wanted to highlight a few trends that we’ve seen and also how we’re thinking about talent now and into the future.
For certain types of full-time roles, especially ones that are more technical, we’ll continue to see more competition in hiring and outside pressures that make retention harder. Recruiters will keep banging on doors with the promise of better compensation, giving people a compelling reason to find fault with their current situation. If we’re doing a good job, we’ll be able to keep people as they ignore other opportunities. In some cases, our employees might ask for salary increases, either as part of their comp review or out of cycle. And in response, we may or may not offer increases, based on the ask (how does it compare to industry standards), the company’s financial ability to shoulder the increase, the person’s impact on the business if they were to leave, their growth prospects in the organization, and our ability to replace the role in a timely manner. Whether or not we provide a salary increase, the person may still opt to take another job. We just have to be mentally prepared for anything.
We won’t stand still and be in reactive mode in this game of landing and keeping talent. As a distributed remote-first company, we have some options. Here are a couple:
- South America: We’ve expanded our geographic reach and started recruiting more actively in various South American countries for roles that were traditionally strictly kept to the domestic US. Hiring in this region will help us relieve some salary pressures while still providing a team member in an overlapping time zone. We’re looking to increase headcount in this region, especially as countries such as Brazil, Argentina, and Colombia present some strong English-speaking candidates with technical backgrounds.
- Freelancer network: We’ve continued to invest in recruiting, testing out, and engaging with freelancers across different disciplines. We believe that while many people opt for the steady paycheck of a full-time job, there are increasing number of people who are comfortable living in the gig economy and able to thrive on freelance contracts with brands and agencies. These are people who are not interested in becoming full-time employees but are happy to work together on numerous projects and on an on-going basis provided they have the freedom to choose when and how they work. With our best freelance contacts, these relationships have worked out beautifully. There are pitfalls and misses from time to time, but we’ll be doubling down in expanding our pool of freelancers to help support our full-time team during busy periods and as insurance in cases where we’re unable to retain certain full-time employees.
Going after, landing, and keeping good people is a very competitive and tough game. It’s at the core of what makes an agency ultimately a successful business. It also requires us to continually evolve and try new approaches in order to stay competitive.
Top of Mind
Focusing on the Basics: Revisiting and Reframing Our 2022 Theme
Towards the end of last year, I mentioned that we were embracing the theme of “Focusing on the Basics” at Barrel to help rebuild a shaky foundation of execution and delivering reliably for our clients. Nearly 8 months later, I wanted to revisit this theme and share how things have progressed as well as what we’ve been paying attention to on a weekly basis.
For context, I’ve pasted the 3P’s model I used to think about the basics back in December:
- Having the right number of people in the right roles doing the right kinds of projects
- Having a robust recruiting, hiring, and onboarding process and keeping a strong talent pipeline
- Providing ongoing training, support, and mentorship to ensure everyone is set up for success
- Having clear, repeatable, and well-documented steps to getting projects done
- Having quality control checklists and check points to ensure consistency across all departments
- Conducting project debriefs and other meetings to surface issues and roll out process adjustments
- Having well-defined services that reflect the firm’s expertise and solve a real problem for clients
- Finding opportunities to provide complementary and recurring services to clients
- Delivering excellent and thoughtful end-to-end service to win client loyalty & gain referrals
For the most part, all of these points have been relevant and important in our efforts, but if I were to reframe this list, it would look something like the following:
Key Components of Focusing on the Basics
- Cost Control: target 40% gross profit margin or higher on all projects through pricing, staffing, and scope management. Avoid overstaffing on projects. Keep close eye on utilization on a weekly basis to ensure gross profit margin at the org level and avoid over-hiring.
- Accounts Oversight: a system of accountability and check-ins with Executive Sponsors and Account Leads to ensure delivery and client satisfaction; quick escalation and resolution of any issues (see Barrel Chief Experience Officer Lucas Ballasy’s blog post our system of weekly account reviews). Also includes weekly financial reviews of accounts and highlighting of any risks to maintaining margin.
- Scope Management: for all new projects, setting our team up for success by being clear and specific about the requirements and what needs to be delivered. Also being vigilant around scope creep or any scope uncertainties and ensuring proper change orders or clarifications are made as quickly as possible.
- Project Schedules: presenting and continually maintaining a clear and easy-to-understand project schedule both internally and with the client with every project team member fully aware of milestones and responsibilities.
- Project Debriefs: a system of after-action reflection on the part of the project team and discussion about team leadership that lead to immediate process and collaboration improvements.
- Pipeline: a suite of activities to ensure we are attracting, qualifying, and nurturing the next wave of work from new clients and existing accounts. This includes our marketing activities to stay top of mind and showcase our expertise & work for clients, outbound sales activity to reach target audiences, rekindling discussions with past prospects, and having forward-looking discussions with existing clients to identify potential opportunities. We keep a close eye on the size of the weighted pipeline on a weekly basis.
- Talent Management: ongoing recruitment activities to hire full-time roles as needed and to expand our freelance network. Also includes onboarding, training, staffing, compensation, and performance management. At the most basic level, talent management for us has been about quickly finding good fits for our culture and the projects we have and also quickly cycling out people who underperform or are not good culture fits.
Of all the components above, Talent Management is one area where we’ve shifted gears quite a bit in the past few months. The early part of the year was focused on right-sizing the company and scaling down headcount in order to improve business fundamentals and to get back to profitability. We’re now at a point where we’ve started to hire more actively again, and as I mentioned in the previous section on talent, we need to be ready to replace people who leave the company.
I’ve continued to ask myself the same question over and over again these past few weeks: “How can we make sure to avoid the issues and struggles of late 2021/early 2022 this time around?” I’ve revisited my notes, our numbers, and talked to team members to get their thoughts. What’s clear is that a lot of the “basic” components I’ve outlined above were either non-existent or underdeveloped last year. We were constantly fighting fires reactively or doing our best to ignore them (not deliberately, but talking ourselves into thinking that “someone on the team will figure it out”) until the problems got too big. We still face a wide range of setbacks every week, but having many systems in place makes things feel more manageable and addressable.
The other piece I’ll never let myself forget is something I mentioned above regarding new business. Last year, we were overly optimistic about our pipeline and proceeded to over-hire for various roles. When the work did not come, we kept on holding out for deals to close while payroll dutifully paid those who were idle. Even a few months like this put us in a deep financial hole. We finally acted and got costs under control. It was a painful experience but one that catalyzed many of the things that came to fall under the theme of Focusing on the Basics.
As we head into the final stretch of 2022 and into 2023, we’ll continue to obsess over the basics and count our blessings that what could have been a disastrous year has evolved into a foundational one.
Shared with Partners
“The quality of your life will, to a large extent, be decided by with whom you elect to spend your time.” (Ethan Hawke, Rules for a Knight)
I feel lucky in this regard and am grateful for my family, my friends, and my co-workers. It’s also a good rule to invert – anytime there are people who seem to detract from quality of life, it’s best to act swiftly and distance myself from them.
“If people are reluctant to answer “Why?” questions in their lives, they also tend to have trouble with “Why not?” The latter implies risk. Steeped in habit and fearful of change, most of us are to some degree risk-averse. Particularly in activities that may involve rejection, we tend to act as if our sense of ourselves is fragile and must be protected.” (Gordon Livingston, Too Soon Old, Too Late Smart)
This is a profound insight and it goes much deeper than just surface-level rejection. Things like asking people for help, trying to reconnect with someone, or sharing feedback on sensitive matters–I’m often surprised by how much fear I have wrapped up in doing these things, especially the fear of being rejected.
“A good way to recognize health is to look for the signs that indicate an organization has it. These include minimal politics and confusion, high degrees of morale and productivity, and very low turnover among good employees.” (Patrick M. Lencioni, The Advantage)
The distinction I picked up in here is “low turnover among good employees” (emphasis mine) vs. low turnover among employees in general. A sign of a strong culture is one where the standards are so clear and agreed upon by the top performers that those who don’t buy into the standards and put in the necessary effort are quickly cycled out (see my blog post on strong company culture vs. weak company culture). Turnover is okay if it’s a way of protecting the team from holding on to underperforming employees.