I once pulled up at a traffic light behind a cyclist with a yoga mat strapped across their back. Clearly on the way to or from their yoga class—a healthy choice. But they were also smoking a cigarette as they pedaled downtown.
Biking to yoga: good. Smoking: not ideal. Doing both at once: a contradictory mix of healthy and unhealthy.
Agencies do a version of this all the time. Leaders talk about focusing on profitability, but then chase growth at any cost. They want to deliver great service to clients, but then overload their teams until people quit. On the surface, the agency looks successful. Underneath, those contradictions quietly slow everything down.
That’s what happens when leaders pull in different directions: eventually, growth plateaus. And it doesn’t just stall revenue: it erodes morale, profitability, and even the agency’s long-term valuation.
Let’s examine what the problem looks like, the hidden costs of misalignment, how even good leaders can face alignment problems, and the shortcut to make things better.
What misalignment looks like inside an agency
When I talk about “misalignment,” it’s not a buzzword—it’s what happens when people who should be rowing together are rowing in different directions. Here’s how it shows up:
- Owners with competing visions: One founder is laser-focused on scaling and selling; another wants to stay boutique. Or one wants to expand into a new service line while the other insists on sticking with the core business.
- Leadership vs. staff disconnect: Executives declare the agency is a “strategic partner,” but the account team still gets treated like order-takers. Staff are left wondering which message to follow.
- Clients experiencing inconsistency: Biz dev promises “white-glove consulting,” but the delivery team provides something closer to execution. Clients feel a gap between the pitch and the reality—and that gap undermines trust.
At first, these disconnects feel like friction you can work around. But as the agency grows, they stop being annoyances and start being roadblocks.
The hidden costs of pulling in different directions
The most expensive problems in agencies are often the ones nobody notices at first. Misalignment is one of them.
- Financial costs: When leaders aren’t on the same page, projects drag, scope creep slips through, and margins quietly erode.
- Cultural costs: Talented employees burn out or leave because they’re tired of being whipsawed by conflicting priorities. A leadership vacuum forms: people wait for clarity that never comes.
- Client costs: Inconsistent delivery makes clients question whether they can rely on you. Once that doubt creeps in, it’s hard to win back trust.
- Opportunity costs: When the leadership team is firefighting, nobody’s thinking about the next growth play, developing the next leader, or planning the next stage.
Think of it like a leaky pipe: every drip seems small, but over time the basement floods. A 45-person agency can feel like it has only 30-35 productive people once you add up the lost time, missed margin, and churn.
Why even good leaders drift out of alignment
It’s tempting to think misalignment happens only at “bad agencies.” Not true. I’ve seen it in firms with strong leadership teams, where leaders genuinely care. Here’s why it creeps in:
- Growth outpaces systems: The processes that worked at 10 people don’t work at 45 people—but leaders keep trying to stretch the old ways.
- Different time horizons: A founder who wants to retire in five years makes very different decisions than a COO thinking about quarterly KPIs.
- Avoidance of tough conversations: When leaders kick the can down the road on disagreements, the tension doesn’t just disappear; it leaks into staff morale and client relationships.
- Lack of shared data: Without benchmarks, every opinion feels equally valid. Leaders argue in circles because nobody can prove which direction makes sense.
These are normal dynamics. But if you ignore them, normal problems become expensive problems.
Example: a 45-person agency at a leadership crossroads
Imagine a 45-person digital agency with a strong track record serving mid-market clients. The majority owner, holding 70% of the equity, wanted to grow revenue by bringing on enterprise clients. His junior partner, with a minority stake, resisted. She worried—correctly—that the agency’s systems, pricing, and account management weren’t ready. The majority owner often steamrolled those objections, insisting that “bigger clients mean bigger profits.”
The new business team started pursuing enterprise prospects. But enterprise isn’t just “big small clients.” The sales cycle stretched to 12-18 months. When the agency finally did land a marquee client, delivery cracks appeared immediately. Account managers trained for mid-market expectations were overwhelmed by the complexity. Enterprise clients demand more stakeholders, more handholding, and higher stakes.
Within 18 months, the agency had lost two enterprise clients, staff morale was shaky, and the pipeline was clogged with opportunities that might never close. Growth had flatlined.
The turning point? The majority owner was less than five years from retirement. He finally realized that the misalignment wasn’t just frustrating—it was dragging down the agency’s valuation. Worse, his junior partner was weighing whether to buy him out, and she wasn’t confident in the firm’s direction. That urgency forced them to confront the issue. With outside perspective, data, and some very tough conversations, they started working toward a shared vision instead of talking past each other.
How to spot leadership misalignment in your agency
Sometimes leaders suspect there’s misalignment. Other times, they’re blind to it until staff or clients force the issue. Here are common red flags:
- Leadership meetings circle the same issues without real decisions.
- Ask three leaders about the agency’s strategy, and you get three different answers.
- Staff complain about “whiplash” from shifting priorities.
- Clients say, “We’re not sure what you’re best at anymore.”
If you see even one or two of these, you’re likely paying the price already.
What alignment makes possible
Alignment doesn’t add work; it removes drag. The leadership vacuum closes, decisions speed up, and accountability sticks.
- Decisions speed up: Leaders stop debating and start executing.
- Staff get clarity: Employees know where the agency is going and how their work fits in. They stay longer, and they work smarter.
- Clients feel the consistency: They stop getting mixed messages. Trust grows.
- Valuation increases: Buyers (or successors) always pay more for an agency that runs on alignment, not personality.
Alignment doesn’t solve every problem—but it removes the friction that makes every problem harder.
Creating space to align: the Agency Growth Diagnostic
Here’s the hard truth: alignment doesn’t happen by accident. It takes structured time, data, and usually an outside facilitator. When you’re in the middle of it, every disagreement feels personal—which makes it harder to solve.
That’s why I created the Agency Growth Diagnostic (AGD).
The AGD doesn’t just tell you where leaders disagree. It creates the right atmosphere for alignment:
- A clear, data-driven snapshot of where the agency is strong and where it’s straining.
- A framework for surfacing disagreements without finger-pointing.
- A structured space for leaders to move from “who’s right” to “what’s right for the agency.”
For some teams, the AGD becomes the turning point—the moment when partners finally stop having the same argument and start rowing in the same direction. If your growth has plateaued, if you’re tired of endless debates or staff confusion, the AGD is the fastest way to uncover the truth and start realigning.
And if you’re thinking about an eventual exit? Remember this: leadership misalignment hurts your valuation. Acquirers pay for profitable, smooth-running agencies with momentum. You can’t hide misalignment; if you make it to due diligence, they’ll find it. Fix it now, before it costs you.
Question: How can you improve leadership alignment at your agency?
