Scaling Draper & Olsen: Navigating the Pitfalls of a Growing Services Firm
As a fractional COO, I’ve encountered two common, often interacting conditions that can make scaling both professional and creative services firms more challenging:
A gifted founder CEO, often with a vague-at-best exit strategy, who is both the lead technician and the company’s best/only salesperson.
A resistance to standardization, usually attributed to the bespoke, variable, heuristic, or technical nature of the work itself.
Often such businesses are great candidates for hiring a fractional COO and/or fractional CSO, provided the founder CEO is truly ready to try something different.
To illustrate some common ways these two conditions can complicate matters, I’ve made up the following scenario:
Imagine a brilliant founder CEO of a small creative agency – Mad Men’s Don Draper, starting his own agency after taking a few years off to pursue a career as a yoga instructor at the Esalen Institute. By virtue of his brand recognition, reputation, and connections, Don starts opening doors again with relative ease. Pitching in virtual boardrooms, he works his visionary magic. Mesmerized by Don’s charisma and creative genius, prospective clients are eager to sign on the dotted line and willing to pay a premium for it.
So far, so good. But…
Don doesn’t have the team in place to support all these new clients. He doesn’t have a real account manager. He doesn’t have a production manager. Nor does his agency have a clear org chart, job descriptions, or standard operating procedures. And that’s just the tip of the iceberg.
To be fair, these are exactly the kinds of operational details Don never wants to think about and shouldn’t have to. But, of course, someone has to…
Toward that end, Don hired Peggy Olsen, his trusted protégé, to be Creative Director and all-purpose work spouse. Peggy knows nearly everything about running a successful agency, and Don trusts her to handle all the details. But, to her credit, Peggy’s read Codependent No More, and she’s already let Don know that her current workload is unsustainable. He better find the help he needs soon, or she’s gonna burn out and walk.
To complicate this scenario further: Don doesn’t really want to be in the advertising game anymore. After tuning into the creative power of meditation and meeting his next wife at Esalen, he has a new vision for the future: together, they’ll build a retreat center for recovering creatives on Kaua’i, where she owns a small piece of property.
The plan is to grow the agency for a few years, invest most of the profits in the retreat center, and then sell the agency for a nice multiple to fund the remainder of their shared dream.
Alternatively, if the agency really takes off, Don might simply hand the business off to Peggy, while retaining majority ownership, so the income keeps flowing indefinitely.
Either way, it’s a beautiful dream. What could possibly go wrong?
In real life, I might not know all these details until I’ve worked with a client for weeks or even months. But, in this case, if I were Don’s prospective fractional COO, I would probe deeper to see if and how best I might help him realize his dream.
For one thing, it’s clear already that Don’s current sales velocity is outpacing the agency’s delivery capacity.
As a result, Don lost one new client after just three months, and another client gave notice last week. At this rate, he could start churning clients faster than he can replace them. In fact, if he doesn’t turn things around soon, his reputation — and the business itself — could tank and never recover.
After establishing that Don will need to slow down on sales while I stabilize the operation, rationalize workflows, and get the right people in the right seats, we explore his “highest and best use” for the immediate future.
As we talk, it becomes clear that Don doesn’t believe anyone can do exactly what he does – be it pitching clients or delivering world-class creative. In fact, Don seems to think his approach is so unique and original, it simply can’t be replicated. “How can you standardize something as mysterious and complex as the creative process?” he asks. “That’s like catching lightning in a bottle.”
And so, Don’s stuck in a vicious circle – he doesn’t want to be in the business, but he doesn’t see a way out of it.
The good news is, we don’t have to do things just like Don to get the business results he wants. He and I talk about the steps involved in moving from a founder-led to a founder-inspired business.
But I also remind him: “If we can’t standardize your business’s operational processes, it can’t scale. And if the business can’t scale, it doesn’t grow. And if it doesn’t grow, it doesn’t sell. And if it doesn't sell, there’s no retreat center on Kau’i.”
Don nods his head and stares out the window, contemplating all we’ve discussed.
I’ve told him, if he decides to hire me one to two days per week, I’d expect to be back on a steady, sustainable growth curve within a year. At that point, I could see hiring a CSO with strong sales ops skills to gradually replace Don with a structured process and disciplined team that can succeed him longer term.
But first Don must decide if he’s ready to take the plunge. It’s a big decision. A trust fall of epic proportions. Then, again, he’s always managed to land on his feet. And what’s the alternative? Failure?