Hidden overservicing by agency employees

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Chip Griffin: Hello and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin.

Gini Dietrich: And I’m Gini Dietrich.

Chip Griffin: Gini, I have a confession. I’ve been doing some work secretly on this podcast, and I haven’t been telling you about it.

Gini Dietrich: Oh, was it you or Jen?

Chip Griffin: I guess we’ll find out right after this.

Okay, fine, you, you, you caught me. I don’t do any actual work. I just sit here on screen and Kibbitz and Jen does all the real work.

Gini Dietrich: I know, I know, I’m aware.

Chip Griffin: I think, I think she’s secretly been putting in more time than I realize. Oh dear. To, to make the podcast as good as it is.

Gini Dietrich: Oh, my. Okay. But that is the topic today.

Chip Griffin: That is the topic. Not about Jen.

Not Jen. No, we’re not, no, we’re not going to talk about the amount of work that she does or doesn’t do. It’s, you know, that is what it is. But, a lot of you have employees in your agencies who are probably doing work for your clients that you don’t realize that they’re doing.

Even if you have a really good time tracking program in place. It’s entirely possible that they’re not reporting it entirely accurately to you. And if you don’t have time tracking, well, then I can guarantee you right there, they’re over servicing clients and you don’t even realize it.

Gini Dietrich: Yeah. And part of the reason this, this topic came up is because I relayed a story of how several years ago an employee left and about a month after he was gone, the client called and said, Hey, I really hate to bring this up, but something’s off. And I said, okay, like talk to me about it. And she said, well, you know, when so and so was here working on the account, we got all this stuff done. We did, you know, five blog posts a month or a week, and we did a webinar and we did a white paper and we were doing social media and as she’s talking, my head is going ready to explode because they were paying us $3,000 a month and trust me, that was not in the scope of work.

And I said to her. You’re getting all of that every month. And she said, yes. And I said, not every quarter. And she said, no, every month. And so I had to explain to her that I needed to do some investigation, but what it sounded like is that said employee was over servicing. And giving her way more than had been scoped or that she was paying for.

And now obviously the new person on the account was doing what was in the scope of work and it felt like less because it was less. and she was like, oh my gosh, I’m so sorry. I hope I didn’t get this person in trouble. And I’m like, well, they’re already gone, so like, can’t be in trouble now. And I did some investigation and found out that sure enough, this person had been over servicing and not tracking their, like they were putting in the proper amount of time.

So it looked like we were doing what we were supposed to be doing, but then all the over servicing that they were doing was not tracked at all. And this client, after about three months of that, of the new quote unquote person, she ended up leaving because she wasn’t getting the same amount of service in her eyes that, that she had before.

And I was like, well, congratulations. You just got three years worth of free work. So yeah, you!

Chip Griffin: Right. And I’ve had similar experiences too. And usually you discover these when an employee leaves, right? That is typically the time when you realize that this has been happening because something falls through the cracks because it wasn’t on the list of things that we’re generally doing.

And so now, you know, the client says, well, wait a minute, what about this report? Or what about these things that we’ve been doing? Or why isn’t this being done as quickly and turned around in the same way? Right. It typically shows itself when you have employee turnover. And it can be incredibly frustrating, not just for you, but also for the client, because the client…

sometimes the, particularly the day to day, depending on the client relationship, the day to day contact may not even be aware that what they were getting was out of scope. Sure. And so it’s even more jarring to them when it gets taken away. Right. And it does impact them because now their bosses have an expectation.

It’s, it’s one of the reasons why I always say whether the, whether it’s out of scope work that you’re aware of or not, you need to put an end to it as quickly as possible. Because the longer it happens, the harder it is to undo.

Gini Dietrich: For sure. Yeah. Yeah, yeah. I mean, in this particular instance, it literally had been three years and…

this person was just over servicing and over servicing. And I think probably they were afraid to tell them no, or to say, yeah, we’re happy to do that, but you’re, this is what is included in the scope. And we’re going to have to either take some things away or increase our retainer. Like those are your two options.

And instead of doing that, they were working overtime in their personal time to keep this, this client happy. And it’s funny because as I think back on it now, like… there were larger clients and more exciting work, in my opinion, that they could have done that with. And for some reason they chose this one client to just literally give her three years worth of work for free.

Chip Griffin: Well, I think, I mean, it, it, it’s interesting. I think employees engage in over servicing of clients for a whole range of reasons, right? Sometimes it’s just that they like the client, they’ve got a good rapport. So they want to try to be helpful. Sometimes it’s because, I mean, I know as I think back to my first agency job, you know, I used to over service clients and I used to fib on my timesheets because I was caught in a position as a junior where I was either going to get yelled at by my bosses for spending too much time on a client or I was going to get yelled at by the client for not getting them what they needed.

And so as a junior, you try to find oftentimes that path of least resistance where it’s going to be causing the least issues for you. And so you go down that path. You know, and I think part of it too, is frankly, we as leaders often don’t help educate our teams enough. about what the scope even is for a project, right?

I mean, if they’ve never seen the scope of work, how do they know it’s not within scope to agree to something? And so, you know, if you want employees to live within scope, they need to know what that scope is, what their limits are, because otherwise they don’t even know to flag it to you.

And the final thing I would say is you need to, to look at your own actions as an agency owner when these things happen, because quite often, I know in my case, when I’ve had situations where I’ve discovered this after an employee left, part of me kind of always knew something was going on, you know, if you really, if you’re honest with yourself, you sit there and say, yeah, you know, I, I kind of sensed that maybe something might be going, but I just, I didn’t want to know, I didn’t want to, the client was happy they were paying so I just kind of I turned a gentle blind eye to it. Or in some cases it can be because You know, the leaders are pushing you so much to just do what the client wants and just figure out how to get it within scope. And so, you know, if you’re in that position as, as a leader, where you’re just pushing your team just to get it done, well, then, then you share some of the blame here as well.

Gini Dietrich: And I would also add, if you are a kind of leader that quote unquote sets the example and you’re over servicing as well, like I have lots of, of clients who say, well, it’s just my time. I don’t get paid for my time. You do get paid for your time, like the business pays you, it should pay you. So it’s, your time is not free either.

And so when people, and I certainly have been guilty of that as well. So when your team sees that you’re over servicing and not charging the client, they just assume that that’s how things are done.

Chip Griffin: But I’m glad you said that because I get asked a lot of times by agency owners, you know, how can we create this culture or that culture, or… it all goes back to you as the owner, particularly in a small agency. What you do is the culture.

You don’t create culture. Yep. You act in a certain way and others around you mirror that. Yep. And you, you encourage certain behavior. And so that becomes the culture. So you can’t, you can’t sit there and say, well, I need to build a culture of not over servicing unless you yourself are living by that.

That’s right. Objective yourself and that you’re telling people about and you’re educating them about and you have to educate them why it’s a bad thing. I mean, I think it’s really important to explain to your team how just one extra hour a week can make a huge difference in the profitability of individual projects. Because it’s very easy to sit there as a junior or even as a senior and say, well, it’s just an extra 30 minutes, just an extra 60 minutes.

And then it kind of adds up and now you sit there and say, okay, well, we had budgeted 10 hours a month for this client. We did an extra hour a week. We figured that’s not a big deal. That’s a 40 percent increase in cost. Right. Right. If I went to, because if I go to you and say, can we spend an extra hour a week on this client?

Whatever. It’s an hour. But if I go to you and say, I’d like to spend 40 percent more to service this client. You’d say, heck no. And that’s perhaps an extreme example, but these are real. And the problem with most over servicing that employees are doing is it’s, it just keeps adding up because you over service once and it’s not just once. Because once you’ve made the exception that one time, it then becomes the expected behavior.

That’s right. And then you, you say yes to something else and now you’ve, you’ve compounded it because you’re already doing the one bit of over servicing you already were doing, now you’re doing a second bit. Yep. And so now, you know, it’s, it’s like Senator Dirksen said many years ago, you know, a billion here, a billion there, and pretty soon you’re talking real money.

Actually, it was so long ago, it was probably a million here and a million there, but anyway, you know, nowadays it’s, you know, a trillion here, a trillion there, and pretty soon you’re talking real money. It’s lovely how inflation works.

Gini Dietrich: Inflation works.

Chip Griffin: But so, so you need to be on top of this as quickly as possible and you need to build a culture where your team is comfortable coming to you.

And saying, Hey, I got asked to do this. Is that okay? Can I, is this, is this within scope? And if it’s not, you’ve got to figure out how you work with them to push back. And, and it is the culture because that’s how you behave. If, if so, if someone comes to you and you say, I don’t have time for this, just get it done.

Well, now you have condoned the, and I was guilty of that many times. I just – small client, I just don’t even think about it. Not worth my time. Well, it is worth your time because if you’re if you end up over servicing them to such a degree that that 10 minutes of time that you spent solving it three years ago would have headed it off.

You would have come out ahead. Yeah. Penny wise pound foolish.

Gini Dietrich: Yeah. So how as agency owners, do we mitigate this risk and ensure that this stuff doesn’t happen? I mean, it’s happened to you. It’s happened to me. I’m sure it’s happening to lots of listeners. How do we mitigate it?

Chip Griffin: Well, I mean, I think, like I said, first thing is education.

You really have to educate your team about what the scope is and why scope matters. Because if you’re not doing those things, then you haven’t even, you know, put the basic building blocks in place. But I think the second thing is, frankly, you got to have time tracking. Yes. And I, I know a lot of you hate this, but you got to have time tracking.

Yes. And you have to have, you have to create that environment in which accurate time tracking is never penalized. Never. I don’t care what your utilization rate is. I don’t care if you, if you actually spent more time doing something for, just tell me you did. Right. I need to know. If I don’t know what reality is, I can’t make a change.

That’s right. Because if I’m looking at fictitious data, that doesn’t get me anywhere.

Gini Dietrich: Right. You don’t know how much it costs to do, realistically do things like if you’re looking at data and saying, Oh yeah, like we were totally in scope with this client, so I’m going to budget the same for the next client that wants something similar.

And all of a sudden you’re like, no, actually it costs three times as much. That’s we have to have that kind of data. Just like you have to have data to be able to show results and measure the work that you’re doing for your clients. You have to have the right kind of data to be able to make decisions in your, your business.

So I love the idea of not penalizing accurate reporting because that’s what it is. Like I, when I worked for the big agency, they didn’t want me to bill my time for client entertainment. Well, why? Because I’m with the clients. If I weren’t with the client, I’d be at home watching TV, right? Or catching up on emails or something.

I would not be. So why would I not tell you that this is what they expect, especially when we’re traveling together, they expect dinner and you know, going out or whatever it happens to be. And that should, that’s time. That’s how we’re paid. So you should know that. And so it ended up that I did the same thing, I just didn’t track that time.

Which is dumb, because then they weren’t accurately, and I was exhausted. They weren’t getting an accurate picture of what the client truly expected.

Chip Griffin: Well, and again, this starts with you as the owner. You need to be tracking your time, and you need to be honest about the amount of time that you’re spending on various clients.

And it’s a real simple test. If you wouldn’t have done, if you wouldn’t have spent that time with that person, if that organization was not a client, it’s client time. That’s right. You don’t get to just say, well, it’s just relationship building or it’s, it’s for the renewal. Those are all things you would not be doing but for the fact that they are a client therefore It is client time and needs to be recorded as such. And if you don’t then you are not getting an accurate picture of how profitable that work is. So you don’t know whether it is priced correctly. And you don’t have the information that you need to price better for the next prospect that comes down the road. You need this information. It needs to be accurate. If you are not encouraging an environment where people report accurately, you are Enron.

And for all you youngsters out there, go look it up.

Gini Dietrich: You know, I have some friends who do time tracking. And they, they do it well and they expect, you know, everything that we’ve just talked about, but they create buckets in their time tracking system, like admin, where all of this stuff falls. But then it’s all bucketed together.

Like client dinners are put into admin, but then it’s bucketed with every other client and then all the admin stuff that you’re doing for the agency. And right. So you can’t, you still don’t have an accurate picture. So if you’re going to subtract, or if you’re going to move that into a different bucket, which is fine, keep it under the client so you know how much extra time they’re spending on things like that, which, which you would consider relationship building or renewal or client entertainment or whatever it happens to be, but keep it under the client in the time tracking system so that you know this is how much actual time we’re spending with this client. Because the actual time you’re spending with the client means you can’t spend it with somebody else.

So if it’s not profitable and you’re over servicing, that means that you’re losing, you’re literally leaving money on the table. You’re like, here’s 10 grand, take it, I’m going to walk away. And when you think about it that way, you’re like, no, we’re not going to do this. So you have to actually have accurate data to be able to make the right decisions and to bill correctly.

Chip Griffin: Yeah. And those, you know, there are two buckets that most agencies have in their time tracking that are the ones where most of this stuff gets hidden. And that is the admin or internal and business development.

Gini Dietrich: Yep. Business development. Yep.

Chip Griffin: Back when I was in the agency world, those, those were our two favorite places to bury anything that we didn’t want to have to report otherwise. Either because we were over servicing a client or because frankly, we were just goofing off. Maybe not fully goofing off, but like reading industry newsletters or something, which, which back in those days, folks, came by fax. So we would sit there at the fax machine waiting for, you know, the, the, the various industry newsletters to come in and then we would sit around reading them and we often put that down as business development because you never got penalized for anything that you called business development.

That’s right. If you have a lot of time in your business development bucket by a lot of members of your team, you better be growing really quickly. Otherwise, something’s probably being tucked away in there that doesn’t really belong. And so, but but these are, you know, again, if you if you are not even starting to try to track this, and you’re not creating that environment where people are comfortable coming to you and raising these questions, it will go on and it will only get worse over time.

These problems do not solve themselves. And over servicing, scope creep, these are the biggest problems that most agencies have. It’s not about getting new clients. Everybody always focuses on, well, we, you know, we got to struggle. We got to get more revenue. And well, yes, but the reason why you’re not focusing on that, you don’t have enough time to do this because you’re wasting so much time over servicing clients. And, and you need to at least be aware of how much of that is going on.

And so you need to work with your team members to just come out and be honest with you. And you need to not turn that blind eye towards it. You need to actually ask questions. And when it feels like, jeez, it seems like you spend a lot of time working for, you know, Acme Industries, ask what they’re really up to.

I don’t know, maybe even read their weekly reports instead of just kind of skimming past them in your inbox because you’re like, yeah, you know, nobody’s really complaining.

Gini Dietrich: Checking out the client’s website. That would give you a clue or two. Right.

Chip Griffin: Right. I mean, and this is, this is another one of those places where I will repeat my plea that you have weekly one on ones with all of your direct reports. Ask them questions, make sure they’re talking about different clients, make sure that they’re sharing information with you. If something just doesn’t feel right, ask them about it. Encourage them to do the same with their direct reports, assuming that you’ve got a middle layer of management in your agency.

And this is how you surface those things. And you need to make sure that everybody at every level is bubbling this stuff up so that it actually gets dealt with in as near real time as possible. Otherwise, it’s just going to keep getting hidden away and you’ll have happy clients and you’ll have happy ish employees in the near term, but it will all blow up somewhere down the road.

Gini Dietrich: Yes, it does. Three years later. Three years later. You’re welcome. Congratulations.

Chip Griffin: But, but keep in mind, it is not the employee’s fault. No, no, and that is that is a mistake I often see is that owners get very angry when they find out an employee has been doing this, but it is… there are reasons why it is happening and you need to address those reasons the root causes and not in at least 90 some percent of the cases lay the blame at the feet of the employee. Because most employees are not out to get you. They’re not out to waste your resources. They’re not out to intentionally over service somebody because they can stick it to you. I mean, it does happen, but it’s so rare that that shouldn’t be your response.

Your response should be what kind of changes do we need to make? Do I need to make as the owner in order to create a better environment for this not to occur down the road?

Gini Dietrich: Yeah. And in my situation, you know, I learned I was really angry at first. But I learned that I wasn’t asking the right questions in our one to ones because I, I do all the things that we talk about, right?

I have one to one, I read through what weekly reports in some cases she was hiding the information in the weekly reports because she knew that it was going to explode. But they, like, I could have easily gone to the client’s website and seen that there were five blog posts every week. That were written by us and that is not in scope.

I could have very easily checked out their social media. Like I should be doing that anyway, you know, to share stuff or, and so those are the things that I learned is these are the types of questions I should be asking in every one to one. I should be, you know, digging in. I should be visiting client websites and social media at least once a month, just to see what’s going on.

You know, in some cases it’s… It comes up automatically when I open my social media and other ways and other cases I have to go search it out But those are the kinds of things that I think you should be doing as the owner to ensure that this stuff doesn’t happen

Chip Griffin: Yeah, I think the other one is just to make sure that you’re having regular interaction with your clients. Even once you’ve gotten yourself out of the day to day, right?

It’s it’s not Yep. We always preach getting out of the day to day with most of your client work, unless that’s that’s really your passion. That’s why you’re in the business. And so you’ve got some other system you set up, but most agency owners should be pulling themselves out of the day to day. But I often see where that pendulum swings too far and owners have no contact anymore with clients.

And so you need to find a way to have the right balance, whether that’s quarterly or semi annually or something like that, having a more meaningful conversation with the clients because usually they will say something in there like, Oh, you know, it’s great that Sally, you know, turns these things around in the middle of the night for us.

And you’re like, I’m sorry, maybe I should go ask Sally, what’s going on here, about the middle of the night but, but those are the kinds of things that you will pick up if you’re having those conversations on a regular basis. Not every little thing. I mean, things will still slip through the cracks. You’re not, I’m not going to sit here and tell you that if you implement all of these things, that you will always find everything that’s going on. You will not. But you need to minimize it as much as possible and then learn from each individual circumstance. So when you, when you get burned on one thing, now keep a closer eye out for that specific behavior and make sure that you’re asking those questions, that you’re modeling the right behavior, and that you’re educating your team so that they will at least raise the issue of over servicing sooner rather than later and not just do whatever the client asks just to keep them happy.

Gini Dietrich: Yes. And when they get stuck in that, and some of them do, You’re there to help them coach them through it, or even say, like, let’s have a meeting to discuss the overage and what we’re doing and how to do this so that you can teach them. You can coach them through how to how to handle it. Because in some cases, you’re right.

There are, there are employees who are for whatever reason, scared to say no to the client. And so they just do the work, and then it gets you into this bad conundrum.

Chip Griffin: I think most employees are, and it’s because we as owners tell them that they need to keep the client happy. Right. Fair. And when a client comes to us upset, what do we do oftentimes?

We go and we, maybe not literally yell at the employee, but we yell at the employee, effectively. Yeah. So, you know, they are learning that if client unhappy, owner unhappy with me. We need to make clear that that is not what we’re trying to do. And you do need to remember in this and all other things that, that you are not just a manager who is there for accountability.

You are there to teach, to mentor, to educate. Because these are folks who don’t have the same level of experience that you do. And frankly, you are doing some of the same bad things that they are doing.

Gini Dietrich: That’s right. Yes, you are.

Chip Griffin: So pop up the mirror and take a look at all of the things you’re doing to over service clients.

Because it’s not just your team.

Gini Dietrich: Yeah, absolutely. I mean, It is definitely setting an example of the way that you want. And to your point at the very beginning, which is about culture building, you are the culture. So if you want a culture of accountability and openness and transparency and not over servicing, you have to set that yourself.

If you’re not doing those things, nobody else is going to either.

Chip Griffin: That is right. And I guess that’s probably a good point to make sure that we’re not over servicing you by staying too long with this episode. So, we will draw this episode of the Agency Leadership Podcast to a close. I’m Chip Griffin.

Gini Dietrich: I’m Gini Dietrich.

Chip Griffin: And it depends.