Spinning risk into gold

Issue 2 of 5: Is your agency reactive or proactive?

This is the second instalment of our mini-series on how empowered PMs turn scope creep and risk into gold.

Issue 1: How healthy agencies handle risk and rein in scope creep
Issue 2: Is your agency reactive or proactive?
Issue 3: How PMs spin risk into gold
Issue 4: Yanking off scope creep’s cloak of mystery
Issue 5: A note about the future (your PMs can see it)

The reactive way that many agencies and digital departments operate can create a project hellscape. So it’s no surprise project managers are exhausted, grumpy, or have wandering job-seeking eyes. What can you do about that, my troubled troubadour?

What’s a reactive agency?

With average profit margins sitting around 17% and falling this year due to inflation and a recession, agencies and departments have to fight to keep their profit margins in the black. Burning 15% over on even half of your projects can absolutely destroy your margins and ruin your cashflow. If you’re reactive, you need projects, and you need them fast. You can become obsessed with filling the sales pipeline with any kind of project (including the stinkers) just to avert crisis mode and avoid layoffs. Reactive agencies are often hurting.

The problem is that before you know it, projects pile up like disjointed Tetris blocks, each one more lopsided than the next until your team goes cross-eyed, staring at a pile of projects they can’t even start. Team members are stressed and burn out or leave with little notice. Your clients sense the chaos and ghost on repeat work or make your lives miserable with delays. That helpless feeling in the pit of your stomach? That’s a warning, my friend.

I’m gonna give it to you straight. If these nightmares sound familiar, you might be suffering from a case of reactivity.

Quiz: is your agency reactive?

Give yourself a point for every sentence that hits:

  1. What you sell and what you build are completely different scopes and budgets
  2. Your team members get yanked viciously from one project to another
  3. Your team avoids or tanks hard conversations
  4. Your team members are burning out and leaving in droves
  5. Your projects fall victim to the “bumper car effect” (when project slowdowns prevent new ones from starting)
  6. Your project quality sucks or is inconsistent
  7. Handovers are disjointed and lack clarity
  8. Cashflow hiccups are a part of your regularly unbalanced breakfast
  9. Projects regularly run more than 10% over budget and/or time
  10. You keep losing your project managers
  11. You keep losing your mind

Okay, here’s the deal. If you scored two points or more, you’re in the reactivity danger zone. You are going to continue to bleed cash, lose your talent, and wish you were a prehistoric shrimp trolling the bottom of the ocean rather than get out of bed Monday. The good news is you don’t need to stay there.

Putting on your proactive pants

Last week, I talked about how well-trained PMs can transform an unsustainable business into a sustainable one. Sustainable companies (with help from their teams) drive healthy businesses and live healthy lives. They turn off the computer and see their families, hug their friends, sleep, cook, make out, live—sounds pretty freaking good, right?

They can do this because they:

  • Limit PMs to a maximum of 2–3 longer-term projects
  • Prioritize task and project alignment
  • Foster repeat business
  • Treat workers as human beings
  • Launch projects on time
  • Make time to do quality assurance
  • Create (and follow) documentation for clear handover processes
  • Have a healthy reserve fund
  • Aren’t surprised by predictable expenses
  • Say no to risky projects

Another way to say this: they’re proactive.

Reactivity is only a death sentence for your agency or internal team if it’s left untreated. You can turn your agency from re- to proactive by involving your PM early. When agencies include PMs in big-picture strategic decision-making and give them transparent access to scope sales leads and support business ops, they make your business proactive.

Project managers are expert telescopes and microscope operators, effortlessly zooming in to fix and smooth out task flows, zooming out to report on project and people health and anticipate hires or future pipeline capacity. Look through their eyes and you’ll see a path for a healthier business—and a plan to get you there.

Up next

Can’t get enough? Good. Next week we’ll be talking about the difference between how expert PMs create opportunities out of red flags and risks (and how they’re different).