Is your agency purpose-driven? A shared purpose is something your employees will rally around and identify with. It is critical to create a sense of belonging and have their buy-in. Today’s guest built a successful agency with a great culture his employees really appreciated. When he exited the agency, he felt so inspired by the outpour of messages from those impacted by its culture that he decided to write a book on creating an agency with a purpose and a soul.

Ralf Specht is an author and business leader dedicated to making soulless companies a thing of the past. As the CEO of a global digital agency, he focused on building a culture focused on connecting the different teams. Years later, he received many messages thanking him for the agency culture he had created.

In this episode we’ll discuss:

His proven framework for building culture.
Why you should have a purpose if you want a successful agency.
How he made culture a hard fact.

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E2M Solutions: Today's episode of the Smart Agency Masterclass is sponsored by E2M Solutions, a web design and development agency that has provided white label services for the past 10 years to agencies all over the world. Check out e2msolutions.com/smartagency and get 10% off for the first three months of service.

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Building a Global Agency

When Ralf accepted the challenge of creating a global agency, it started with offices in four countries and 80 people. It was certainly a challenge but he remembers it as the highlight of his career. He focused on creating a sense of belonging and a culture that really motivates employees.

All companies should have a purpose and a soul and that should come before any revenue goal you may have. You should also have core values that speak to the behavior you want to see in your agency. This will be the way to establish yourself and really start growing.

By the time he left years later, Ralf had grown the agency to 19 offices and 1200 people. When he retired, he received many messages thanking him for the culture he had created for the agency. He felt this message was too valuable to keep it to himself, so he was inspired to write Building Corporate Soul and Beyond The Startup.

3-Step Framework for Building a Great Agency Culture

Hiring based on beliefs, attitudes, and soft skills are buzzwords that get thrown around a lot these days. In their beginnings, Ralf and his partners sat down to think about the culture and values they wanted to see in their agency. At first, they set out to write a list of the behaviors they wanted to see in the agency. This proved to be difficult so they changed their approach to list the behaviors they did NOT want to see. It was easy starting from there and it also helped them shape an idea of who they wanted to become.

This exercise eventually led them to figure out their purpose. It’s an exercise he recommends to all agency owners because answering the question “why are you here?” will be crucial to implementing this framework:

Shared Purpose (Being): We’ve been discussing purpose in the agency world for years. However, Ralf believes that if the end game of a purpose conversation is a great PowerPoint deck, then you achieve nothing. He prefers to talk about shared purpose, which has to be a.) shared by the company’s leadership and b.) shared with all stakeholders.
Shared Understanding (Believing): This includes all strategic elements like the mission, vision, and values plus an often overlooked fourth element “spirit.” For Ralf, spirit speaks to the intended company culture. As the agency leader, what sort of culture do you want to see in the organization?
Shared Behaviors (Belonging): Studies show that the number one reason why employees are now leaving their workplaces in spades is that they don’t have a sense of belonging. The real work will start after you have shared purpose and shared understanding defined on paper. Up to that point, it is all about strategic thinking. Now you have to actually make sure that the behaviors in your agency reflect what you wrote to establish shared behaviors.

Agencies are not any different than any other company in the sense that they very much need to implement these principles as much as they would recommend their clients to do so.

Creating Consistent Culture Across Different Agency Offices

Ralf’s agency started as a global agency, which posed the challenge of building a culture where the different teams felt part of a whole. To address this, he and his partners enforced a single P&L mindset and a mantra of better, faster, cheaper, with an emphasis on better always being #1. With that, everything within the organization was set up to support collaboration rather than competition between offices. They also designed complementary roles across the four offices. Therefore, the offices had to work together or they would not be able to deliver on the various client briefs.

As to the belonging element, Ralf believes if a CEO tells you his agency has a soul, it doesn’t necessarily mean anything. If you want to know whether or not a company has a soul and a great culture you don’t need to ask the CEO. You should ask the employees - they are the soul of the organization.

This is why he implemented a formal evaluation structure four times a year. Under this structure, every manager talked to their team to understand what mattered to them. This evaluation included which parts of the company worked for them and which didn’t. Those evaluations included a score and financial benefit depending on the score and worked very well for them.

Finally, they implemented exchange programs to encourage better communication between the different offices. This way, employees had the opportunity to make connections and understand other work cultures.

A Great Culture Gets You Through Difficult Times

In his book, Ralf studies cases of companies that do culture right. There’s so much to learn from companies like Airbnb and Salesforce that place belonging at the center of their operations. As we know, culture really shows when things get difficult. It’s always easy when things are going well and everybody feels good. However, not every company has a culture that can get them through the bad days.

Airbnb gave a great example during the pandemic when the hospitality industry went through some really difficult times. You may not know that this company had to let go of 25% of its workforce. This is because they did it the right way. We all learned of similar cases where the companies, unfortunately, did everything wrong (like firing hundreds of employees via a Zoom call) and the whole world knew within a few hours.

Airbnb had been honest with its staff since the beginning of the pandemic. It was unknown territory for everyone, after all. They sent several memos throughout the year with updates and finally sent a written communication notifying them of their decision and detailing their reasons.

The main reasons this was such a great example in protecting culture through difficult times is:

The company made sure the people who had to leave didn’t leave with a trauma.
Those who stayed understood those who were leaving were a critical part of the company’s success thus far.
The people who had to leave received a lot of support from the company.

All in all, it was a master class in ensuring that your company’s soul remained intact after such a difficult time.

Why Internal Culture is #1 in an Agency's Reputation

When we talk about culture, there is this perception we’re talking about an airy and soft thing. Ralf made it a hard fact. This is why his book contains real-life examples of companies with souls. Employee votes really matter more than anything else when it comes to the companies’ soul index. When it comes to agencies, they are companies like any others and should strive to have strong cultures.

However, it is common to see an agency’s value propositions do not match its external value propositions, which are usually about what they do for their clients. In fact, very often there is no internal value proposition. There should be one and it should be in sync with the company’s external value proposition. Studies indicate that internal culture is one of the most important factors of a company’s reputation. You can’t fake it. It has to be real and it starts with a shared purpose.

To create a sense of belonging:

Ask yourself, what does it feel like to belong in your agency?
How can you create belonging and help others feel like they belong there?

Some people want to build a $100 million agency and have no purpose beyond that. As someone who’s run a very successful 8-figure agency, Ralf says you don’t get to that level of success without a purpose. Remember without a purpose and something they can get behind employees will not feel identified with the company or feel empowered to make decisions. This way, the company will never run without you, which should eventually be one of your goals.

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