Why New Business Directors Turn Over So Rapidly, Part II

I previously wrote about why new business people turn over so quickly.  I reread the post the other day after interviewing a very successful new business director who had recently been let go.  Like all CMO’s, the heads of new business have rapid turnover.  I realize that I had previously addressed only some of the issues, so I thought I would complete my thoughts here.

Some agencies approach the hiring of new business people as a “quick fix”.  The principals of the agency know full well that it takes months, even years to cultivate a prospect.  

Many agency principals are egocentric enough to believe that no matter what a new business person does for him or her, it is always that principal who brings in the business.  So what do they need a new business person for?  The answer is complicated, but the simple version is that new business people do for the agency management what management cannot or have not done for themselves.

The first thing a new business person or marketing director does is to learn that agency’s business.  They do this so that they may properly position and sell the agency. Learning the business may entail spending hours with creative people, planners, account people and others who are involved with running accounts and pitches.  It may take weeks, if not months, to learn the strengths and weaknesses and processes of an agency.

Secondly, the new business person has to develop the tools for presentations, RFP’s, etc.  Quite often, agencies lack the necessary case histories and other information required for the new business chase – Power Point presentations, material needed to fill out most questionnaires.  Developing this material may also take months.  (I know one new business person who spent over six months just getting the agency to agree on how to position itself.  It took another three months to develop materials.)

Finally, they have to develop a prospect list. This often leads to tremendous disagreements. But this list is critical to the process.  But when finally determined, it is time to start prospecting.

The problem is often that by the time the new business person is in full swing, doesn’t matter if it is a month or six months,  management often gets antsy for results.  And these expectations often get in the way.  We all know that it takes years to cultivate prospects.  So realistically, if it takes six months for the agency new business person to get into full swing, that means that results may not happen for a full 18 months.  Many companies, despite protestations to the contrary, are not prepared to invest for that long.

So what happens? During the 18 months, business turns down and management looks at cutting costs.  Well then new business material is complete, the prospect list has been developed and some have been cultivated.  And the agency CEO or COO or ECD decides that he or she can take over the new business program so the marketing director becomes expendable.  After all, they are not directly tied to an account. 

But what is often forgotten is two-fold: first, while a new business person is not directly tied to an account, they are indeed tied to revenue, even if it is not measurable.   Second, few CEO’s have time for all the prospecting and cultivation. They are tied up on the exigencies of their day-to-day business. New business momentum takes time to build. (I learned when I ran an agency that if I stopped spending a huge percentage of my time on new business for even three weeks, that it took six weeks to catch up to where I should have been.)  If account hunting is given up for even four months, it may never recover.   

So when the agency gets ants in their pants over the current new business person, it lets him or her go and then what does the agency do?  It hires a new new business person and starts all over again.

And that is the definition of insanity.