Every Shitshow is Different: Running An Agency In A Crisis

If you run an agency, you’re going to face tough times. There’s no avoiding them.

I can offer very little advice, but in 25 years, I’ve seen some things and learned from painful trial and error. My thoughts:

Every Shitshow Is Different

The first time my agency got kicked in teeth was 2000. Everyone suddenly realized you couldn’t pay someone $150k/year because they knew HTML, and that “be acquired for lots of money” wasn’t a great business plan. The dot-com crash hit, took financial markets into a toilet-bowl death spiral, and wiped out half our clients. I laid people off, went home, and cried for an hour. I learned from the experience: I diversified our client base and turned away the dreamier startups.

The next time was about six months later. 9/11 kicked us all in our individual teeth. People were scared for their physical well-being, for their jobs, and for their businesses. Over the next year, several of our biggest clients reduced budgets. I laid people off and felt like shit for a month. I learned from it: I put more money in the bank and established a line of credit.

2008 rolled around. An overheated real estate market and this thing called a Default Credit Swap pureed the economy. We lost a third of our client base. Between cash reserves and a credit line, we might have emerged unscathed. But Wells Fargo deemed us a bad risk and, because we hadn’t used our line, shut it down. Banks always have a sense of humor. I had to lay people off. I learned again: I switched banks and always used a little bit of the line of credit.

I can’t blame it all on economic calamity and terrorism. Portent (my agency) went through two other rough spots, thanks to my own terrible decisions. In one case, I had to lay people off. In another, I had to cut my own pay.

Every shitshow is different. You’ll never be 100% ready for the next one. When they hit, try to do what’s right, dust yourself off, and get back to work.

And try these things. They got me and my agency through every crisis:

Don’t Make Promises You Can’t Keep

Never say “everyone’s job is safe” or “we aren’t going to lose any clients” or “everything will be fine.” Don’t tell clients, “we’re with you no matter what.” You don’t know that. You can’t know that.

Instead, try “you’re an amazing team, and we’re going to get through this” and “we’re in this together.” You can know that.

Keep Promises You Make

If you tell everyone you’re going to take a pay cut, take a pay cut. Don’t get cute and extract money from the business another way (I saw a CEO do this).

If you have to lay people off, be human about it, but yank off the whole bandage so you can honestly tell the team, “we won’t have to do this again.”

Don’t Be A Robot. Don’t Be Nice.

I keep talking about layoffs because they are by far the most gut-wrenching thing you’ll have to do as a CEO. But this advice works for any hard decision:

Show a little humanity. If you make a hard decision that affects those around you, look them in the eye. Don’t give them the stupid someday-you-won’t-remember-this-you’re-going-to-be-fine horse manure. Someday doesn’t matter. They just lost their damn job, and it wasn’t their fault. It sucks.

If the economy tanks and a client’s business ends up on the rocks, work with them on a payment plan. It’s a win-win: You get paid (eventually), and they love you for it.

But make the hard decision. Whatever you’re doing—cutting a budget, cutting staff, firing a client—will be infinitely worse if you wait two months because you can’t face it.

Be Transparent, But Not Too Transparent

In 2000 I literally wrote our finances on a whiteboard, line-by-line, pointing out what we had to cut. I told clients the internal changes I was making in excruciating detail. I did the same thing in 2001.

Terrible idea. No matter how financially sound your budget is, people don’t need to see your total payroll is $X, and they’re only getting $X/100. They don’t want to see that you spend $1,500 on Adobe software.

They sure as hell don’t need/want to see that you just lost a million-dollar client which is one-quarter of your total revenue and oh god we’re all screwed.

Share what’s helpful: “We lost Acme Corp (not a real company). It’s a significant hit. If we’re going to recover, we’ll need to land two clients the same size as Screaming Goat Corp. In the meantime, we’re going to stop buying new software, cancel the big offsite, and I’m going cut my pay 10%. That gives us some runway.”

Then they’ll ask, “how much runway?”

Your answer is (insert the right timespan), “a month, and then we’ll see how we’re doing.”

Also, Don’t Freak Out

You can show humanity without leaping off the ship.

It’s perfectly OK to say “I’m stressed, and this sucks” as long as you say (see above) “but we’re going to get through this.”

It is not OK, ever, to say, “I’m thinking about shutting us down.” Nope. No. Uh-uh. It might be cathartic. But this isn’t about you. It’s about the team and the agency. Tone down the panic.

Keep Doing The Work

People love the work (if they don’t, you have bigger problems). They want to do it. The last thing you want to do is leave them sitting at their desks wondering where the next client’s coming from.

If you don’t have enough client work, consider an internal project. Don’t make it busy work. Create a new toolset, or a few websites that might generate revenue. Or run a training boot camp.

Even better, go to your team and say, “We’ve got an opportunity to do a project, just for us. Give me some ideas.”

If a client’s in a funk and out of ideas, give them a few.

Do something. 50% of leadership is making sure your team feels they’re contributing. 50% is making sure they are.

Plan For The Win

Crisis doesn’t create opportunity. It creates anxiety. But someday, somehow, the crisis will pass. When it does, you’ll grow. Take care of your team and keep nurturing them (and yourself). You’ll need to be ready when those clients come back.

If you need to vent or want some questionable advice, send me a note. Twitter’s the easiest way to reach me: @ianlurie.

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