The Iron Triangle - How does motivation emphasis create an agency environment?
I remember when I first heard about the Iron Triangle. It sounded sinister, Evil Empire like, and not really something I could embrace in my fluffy idealistic agency brain. Just to be clear in this article I am talking about the Project Management version, not the US political system version… which is sinister and is just like the Evil Empire.
Back then I was speaking to my then boss, a man who I credit with opening my eyes to a great deal to how an agency works and, more importantly, how it should work. He was explaining in typically simple eloquence, how he wanted us to set expectation with clients.
‘If they want it fast and cheap, that means we can’t spend time or man power on it so we can’t guarantee the highest quality. If they want it good and fast, then we will put lots of bodies on it and it will need to cost more. If they want it good and cheap, then we will fit it around things and we will take the time to craft it but the client can expect it tomorrow.’
- Good and Cheap means compromising on Speed.
- Fast and Good means compromising on Cost.
- Cheap and Fast means compromising on Quality.
It does not take a genius to work out that you should attempt to avoid the last option at all costs. Because cheap and fast means that you are going to disappoint with the end product and probably disillusion the people doing the work. I have always liked the simplicity of this model and while I acknowledge that sometimes there are exceptions to the rule, for the most part, I find it to be accurate. I have had a business partner, who shall remain nameless, who will swear you can have all three… but he is dangerously unhinged so lets move on.
Fast forward two agencies on two different continents and I started to think about this model in a different way. Can we define motivation within a studio* in a similar model?
What if you could work out the kind of agency environment you were creating from a management perspective, simply by looking at what emphasis you were putting on certain aspects of the business.
With this in mind, I stood in front of the agency on one of those beery Friday afternoon meetings and put the following forward.
‘I believe agency staff are motivated in three distinct ways. Money, Product and People. A combination of each creates a type of working environment.’
If I have a team focussed on money then I am offering great salaries and financial perks (not a pizza every now and again, perks… like proper financial bonuses). The challenge here is two fold. I have opened my doors to bounty hunters who are looking for the money first and foremost. However much I pay them, if someone else comes along with a bigger package then I am eventually going to lose out.
Also if I do focus on paying great money, what happens to the agency? Well, I need to get more work in. This usually means sacrificing the nicer boutique jobs, because invariably they pay less, and also I must ensure that work is continually pushed through at a rate that increases pressure on the teams to deliver. This environment can lead to a hostile agency with sharks looking for money and caring little for the product.
Product people are awesome. They honestly believe that the work they are doing will change the world (Seriously though, relax it’s a banner advert). They want to do great things and are willing to sacrifice their home lives, health and finances to achieve the next milestone. Sadly the individual who believes in the product is often so motivated by what they are producing they often forget about the bottom line. So while the detailing on the hand stamped wax bottle seal or the elegant one line of code that replaced the thirty lines is awesome it is also the reason that they have not slept in a week and still missed the deadline.
This agency is a passion pit and the management have a hard time impressing that a deadline is a deadline and a budget is a budget. Sadly we grizzled few know what comes next. Miss a few deadlines, screw up the budget and you are losing money. No money and you start shedding staff and eventually you are reminiscing over what would have been a great product or agency ‘...if only we hadn’t had to close the doors.’
Finally we people who come for the people. These guys would turn up for no money and probably if there was nothing to do, simply because they love the people they work with. Friday night beers always turn into Saturday morning chips on the way home from a club. Who cares if you are broke and the work you are doing is pretty average. We are all awesome at table tennis and having a great time.
This agency is a wonderful environment. The kind that you tell your mates in Financial Services about and they think it is some sort of mad utopia. This is the agency that your clients all think you are running all the time. The reality is that this is as much a snapshot in time as anything because people move on, they get partners who are not in the agency, they have kids, dogs or mortgages. Having fun does not always equal paying the bills and so people leave and then you end up with the; ‘Do you remember that time… This place has changed…’
With these explanations in place, like with the productivity triangle, I suggested that there is a motivation triangle:
An emphasis on Product and People means Less Renumeration.
If I put my management focus on the product and creating an awesome team environment then I have to expect that time will become elastic. You have to let the geniuses be geniuses and that takes time, but then the money comes from delivering on time, in budget. Miss the deadline and we miss the opportunity for profit. Less profit means that we can’t pay top salaries or bonuses.
An emphasis on Renumeration and People means Average Product.
If I pay top money and have a great team environment I should have an awesome agency right? Well not entirely. Because to pay the bills and treat the staff I need a high productivity turnover. Sadly all the good things in life do not come for free. The choice here is that you must sacrifice some of the billable time (or available profit) because you don’t want to shatter the environment by putting the pressure on your team. This means that the quality is compromised.
An emphasis on Product and Renumeration means High Turnover of People.
If I focus on having a great product and ensure I pay the most competitive salaries then the pressure is on the people. It is not just that we have a pressure environment to constantly deliver on budget, on time and to the highest standards. We also invite competition between team members and prospective team members. Everyone is aware that the bottom line is tied directly to the weakest link this forces turnover as the pressure pushes those links out.
I am sure that there are exceptions to these rules, in fact I know businesses that can and do create a balance, but in the main I find them to be true. The key for management is to try to create the environment that you want to be part of and that you are ethically comfortable with. None are fundamentally wrong but each has it’s downside and just like the Iron Triangle, much as some people want, you can’t have them all.
*I say studio because more and more businesses are taking agencies in house
- November 27th, 2015