Difficult strategic decisions: 10 step-by-step agency examples

Ready to make some tough strategic decisions at your agency, but need some tips on where to start? Read on!

In my work, I’ve noticed certain strategic decisions that occur in many agencies. Each scenario is unique… but there are similarities in how to approach the decision process.

Last week, I shared my 5-step framework for making hard decisions—around narrowing your options to 2-3 finalists, writing an Advance Retrospective visualization for each one, and seeing which one feels right.

Today, I’ll share 10 step-by-step examples, to help you start thinking about solving your specific challenge(s). Those examples are:

1. “Should I sell my agency, keep running it, or just shut it down?”
2. “Should we be a generalist or specialist agency?”
3. “Which client industry should I choose as our agency specialization?”
4. “Do I still want to do client-facing work?”`
5. “Can I trust my current team to handle more client-facing work?”
6. “Should I hire an internal or external successor as agency CEO?”
7. “Should I fire <ProblematicClientName>?”
8. “Should I fire <ProblematicEmployeeName>?”
9. “When do I want to retire?”
10. “I have a different, unique situation; how do I decide?”

Read on for my step-by-step advice on each agency-specific example!

Difficult strategic decisions: 10 agency examples

These 10 scenarios reflect what I typically see in my work as an agency consultant and coach. As a further shortcut, I’ve included 2-3 sample options for each scenario; of course, you’ll want to customize to your specific situation.

I’m confident you already know what you want—my decisionmaking framework helps you narrow the decision to make your choice(s) clear. As you can see in the 10th example, the decisionmaking process is flexible—you can use it to help you make nearly any hard decision as an agency owner.

Note that some of the questions include the loaded word “should.” In theory, there’s no should, but I hear it often from clients. This involves a mindset shift—you can do almost anything you want at your agency, because it’s your business.

Example #1: “Should I sell my agency, keep running it, or just shut it down?”

This existential question is a version of asking “What do I want to be when I grow up?” That is—do you want to be an agency owner, or do you want to move on to do something else?

The answer will be unique to you and your agency, and I’ve seen it shift for clients on an annual or even quarterly basis. The “shut it down” option tends to come up after agency owners face a series of setbacks that make them question whether it’s still worth it.

Here are examples of options to consider for this existential scenario:

• Option 1: Sell my agency to a TBD (currently unknown) buyer.
• Option 2: Fix current problems, and keep running the agency (but shift my role to spend my time doing what I want to be doing).
• Option 3: Just shut down the agency, and walk away from the business.

In your Advance Retrospectives for this scenario, I recommend looking 3-10 years in the future… or sooner (1-3 years) if you’re feeling antsy about it.

• Even if you decide today to sell, you likely need to make some changes to get a good price and other favorable terms.
• If a random buyer shows up tomorrow, it’s still probably 6+ months before the deal closes… and still likely involves a 1-2 year earnout where you’d need (and want) to stick around.
• Even if you decide to shut it all down today, you’ll need to transition employees, clients, and other commitments. Retainers and leases don’t just disappear.

Wondering how much your agency might sell for? I recommend you hire fellow agency consultant David C. Baker for his in-depth agency valuation service. Or if you prefer to start with a “quickie” estimate, you can use the DIY valuation calculator in my Agency Profitability Toolkit™.

Example #2: “Should we be a generalist or specialist agency?”

On its face, this question is partly about choosing specialization(s)… but it’s also about the kind of agency you want to run. Some of my clients are happy running generalist agencies… but I find specialist agencies tend to make more money while making the owners less-stressed. Vertical specialization also helps you expand beyond your geographic region, to find the best clients regardless of location.

Here are some options to consider for the “generalist vs. specialist” positioning scenario:

• Option 1: Stay as a generalist agency, focusing primarily on referrals and clients in your geographic area.
• Option 2: Choose to specialize in a client vertical.
• Option 3: Explore 2-3 verticals (potentially under new brands) before you commit to 1-2 specialties.

In your Advance Retrospectives for this scenario, I recommend looking 2-4 years in the future. There are things you can do to accelerate the process—but even if you make a decision today, it’ll take time to transition. For instance, you’d need more time if you ultimately choose to go from full generalist to full specialist. especially if it’s a specialty where you have limited current experience.

Example #3: “Which client industry should I choose as our agency specialization?”

Once you’ve chosen to specialize, you need to pick which specialty (or specialties) to pursue. This article will help… but it helps to choose the general direction first.

Here are some options to consider for the “which vertical” positioning scenario:

• Option 1: Pivot to focus 100% of new business on a specialty where we currently have in-depth experience, connections, and portfolio examples.
• Option 2: Pursue 2-3 vertical specialties simultaneously, to test which works best for us (and then commit to the one we like best).
• Option 3: Pursue an “ideal on paper” vertical where we currently have limited or no prior experience, under a new brand or otherwise on a “discreet” basis.

In your Advance Retrospectives for this scenario, I recommend looking 2-4 years in the future. There are things you can do to accelerate the process—but even if you make a decision today, it’ll take time to transition. For instance, you’d need more time if you ultimately choose to go from full generalist to full specialist. especially if it’s a specialty where you have limited current experience.

Example #4: “Do I still want to do client-facing work?”

This question is an extension of the existential “What do I want to be when I grow up?”—but it focuses more on the nature of your day-to-day role. After all, our day-to-day workload tends to impact how we feel about running our business, since we’re not making purely strategic decisions 24/7.

Here are some options to consider for this scenario:

• Option 1: Continue working with clients like I do today, with small tweaks.
• Option 2: Make a big change in how I work with clients.
• Option 3: Reboot my role so that I never talk to clients again.

In your Advance Retrospectives for this scenario, I recommend looking 1-2 years in the future; that’ll give you time to create and implement a transition plan. Among other things, consider:

• If you’re exploring the “never” option, that may take longer to execute—especially if you’re currently more than 30% billable today.)
• If you’re ultimately the primary “strategy consult” person, consider that it’ll be harder to sell the agency (since you’re necessary rather than merely needed). But that might not be an issue if you don’t intend to sell (example #1 above).

For most agency owners, there’s an inherent “part 2” to this scenario—read on for example #5.

Example #5: “Can I trust my current team to handle more client-facing work?”

This question is ostensibly about your team… but it’s also about whether you trust people. Delegation requires people who can do the work. But I sometimes see agency owners struggle to “let go,” even when their team has the Desire, Competence, and Capacity to take on your old workload.

Once you’ve answered the core question in example #4 above, here are some options to consider for this scenario:

• Option 1: Employees “own” day-to-day Account Management (AM), but I’ll continue to lead Client Strategy and handle Sales.
• Option 2: Employees “own” both Account Management (AM) and Client Strategy, but I’ll continue to handle Sales.
• Option 3: I have no client or prospect contact, beyond coaching the team on client challenges and talking to each client perhaps once a year.

In your Advance Retrospectives for this scenario, I recommend looking 6-18 months in the future, to allow time for potential leadership transitions (but don’t wait forever).

Beware that examples #4 and #5 may lead to further questions! For instance, I observed the following progression in a single phone call:

1. An agency owner asked me for advice on how to staff delivering strategy advice to her clients. She wasn’t sure her current junior-ish team could handle strategy consults without her, as she’d been shifting the agency to serve increasingly high-end clients.
2. We explored that “it depends” structure and staffing question… but it quickly became clear to me that that she was really asking whether she still wanted to do client-facing work (example #4 above).
3. Finally, it turned into whether she actually wanted to keep running the agency in the first place (example #1 above).

As her “homework” for our next coaching call, I assigned her to explore example #1 (sell vs. keep running the agency) first—a hard question that made the other decisions a lot easier.

Example #6: “Should I hire an internal or external successor as agency CEO?”

This question is about trust, but it’s also a review of your current succession planning process. You might consider options like this:

• Option 1: Promote long-time employee Sara to become the new CEO (after collaborating with her to build a 6-24 month ramp-up transition plan to confirm she can succeed in the role).
• Option 2: Hire a new employee to serve as CEO (focusing on candidates who’ve served as an agency CEO or COO before).

In your Advance Retrospectives for this scenario, I recommend looking 2-3 years in the future. That’ll give you time to create and implement a plan, including if you need to hire externally or if you need to ramp-up a current employee to step into the role.

It’s ultimately about looking at whether a current employee has the potential to become the CEO (with you as Chair), or you stay as CEO in title, but they run everything day-to-day as “President” or “COO.”

Example #7: “Should I fire <ProblematicClientName>?”

The answer is easy: Yes, fire the toxic client ASAP—they’re driving away your best employees, making your life miserable, and potentially putting your business’s future at risk.

If the client in question is more than 20% of your business (aka a Client Concentration problem), you’ll want to replace the revenue first… or risk layoffs when the revenue disappears. But “do nothing” is still risky—consider that the revenue could disappear suddenly anyway, if the toxic client chooses to fire you first.

This is really a question about how soon to fire the client. Consider these options:

• Option 1: Call them next week, giving them 30 days notice that you can’t serve them any more. [You may not ultimately do this one, but see how it feels.]
• Option 2: Create a plan to replace their revenue, so that they’re gone within 3-6 months.
• Option 3: Never fire the client. [I don’t recommend choosing this option, but it may help to explore what it would look and feel like.]

In your Advance Retrospectives for this scenario, I recommend looking 3-6 months in the future, or longer if you’d need to replace a lot of revenue first.

Which of the options feels best? Which is most pragmatic? The right choice is probably somewhere in between those two.

Example #8: “Should I fire <ProblematicEmployeeName>?”

Again, the answer is easy: Yes, fire the Wet Twine employee ASAP—the longer you tolerate their terribleness, the more your great New Rope employees consider quitting. And I bet they’re a key contributor to your stress as an agency owner.

This is really a question about how soon to terminate the problematic employee. Consider these options:

• Option 1: Fire them tomorrow. [I don’t recommend choosing this option, but explore what it would look and feel like.]
• Option 2: Start them on a Performance Improvement Plan (PIP) within a month, giving them a deadline to turn things around… or else.
• Option 3: Never fire them. [I don’t recommend this option, either—but see how it feels.]

In your Advance Retrospectives for this scenario, I recommend looking 3-12 months in the future; if you make a decision today, it’ll take time to transition.

Ultimately, the problematic Wet Twine employees are fighting your ability to reach your long-term personal and business goals. As I asked one of my clients, “Would you trust so-and-so to invest your retirement account?” Not surprisingly, the answer was a strong “No”—but that’s kind of what you’re doing, considering your agency is likely your #1 or #2 financial asset.

Example #9: “When do I want to retire?”

Your ideal retirement date will likely evolve over time. During his intake process, my financial planner—Russell Kroeger, CFP®, EA—asked me when I wanted to retire. (Compared to the many other financial planners I considered, I love that Russell’s intake process felt more like life coaching than an endless list of financial questions.)

My initial reaction was something like, “I have no idea!” In high school, I wanted to retire early—in my 40s like my dad did (although his Army pension made that easier). I love my work—so why would I want to stop? As a management consultant, my grandfather continued working into his late 70s. I picked my mid-60s as a placeholder.

Here are some options to consider for this scenario:

• Option 1: Retire early, and never work again.
• Option 2: Semi-retire early, and work part-time on something you like.
• Option 3: Work forever, or maybe a little less than “forever.”

In your Advance Retrospectives for this scenario, I recommend looking 10-20 years in the future. That might feel like a long time, but this decision works best when you’re “looking back” from a more distant future, since it helps you put yourself into a long-term mindset.

Example #10: “I have a different, unique situation; how do I decide?”

What if you’re facing hard decisions that aren’t among the examples above? That’s OK— you can still use the five-step decisionmaking process. To recap: identify potential directions, narrow them to 2-3 options, write an Advance Retrospective for each finalist, reflect on which one feels best, and draft a “version 0” plan to get there.

As you build your list of “no more than 3” options, consider extremes plus a moderate option:

• Option 1: Extreme choice in one direction.
• Option 2: Extreme choice in the opposite direction as the first option.
• Option 3: Moderate choice between the first and second options.

You might ultimately pursue a direction that’s between an extreme and a moderate… but starting with the extremes makes it easier to see which way you “lean.”

If you need support working through this (or another scenario), I’m glad to work with you one-on-one (whether via a one-off consulting call or a more in-depth process).

Question: What’s your next agency strategy decision?