Stayin’ alive. Is there a secret to longevity in business?

“Whether you're a brother or whether you're a mother?

You're stayin' alive, stayin' alive?

Feel the city breakin' and everybody shakin'?

And we're stayin' alive, stayin' alive…”

[The Bee Gees, 1977.]?

What does it take to last in business? Many great Scottish agencies have come and gone, yet The Union is still here. On 1st March this year we celebrated our 29th birthday. So here we are, in our 30th year.

I must pinch myself to check this is true, as I can’t quite believe it. And as many who are of my vintage, I’m sure ask themselves, where did all the years go? So, I’ve taken the opportunity to reflect on The Union’s journey so far - what we got right, the mistakes we learned from, and the key factors that have helped us thrive for nearly three decades.

Nothing lasts forever

I vividly recall our first meeting with Bank of Scotland manager Peter Smith in his imposing office on St Andrew Square. We were starting The Union and needed a bank account. As part of our pitch, we outlined the competitive agency landscape. (I still have the chart deck.)?

It was early in 1996 and Faulds and Leith were the clear leaders. The second division included Morgan, Barkers, Bridge-Alliance, Marr Associates, McCann-Erickson and 1576. In the third division, we put Smarts, WAM, Grey Scotland, Covey, Levy McCallum, Strathern, Adpartners, Coltas, Tait & McLay, and Riley.

Fast-forward nearly 30 years, and none of these agencies exist in their original form. Some, like Leith and Levy McCallum, still operate under different ownership structures, but the rest have all long since disappeared.

And to be clear, many of these agencies were brilliant businesses, led by hugely talented people. (Faulds was the number one, vying with large London agencies for accounts. Leith set the standard for creativity with stunning work for Irn Bru and Tennents. 1576 were the new kids on the block and were flying high. Colin Marr was a highly respected creative leader.)

So why do some agencies survive while others disappear? And can any lessons learned apply beyond advertising??

As the Union approaches the milestone of almost 30 years in business, it has caused me to reflect on what we’ve learned about longevity in business.

Multiple points of failure

There is no single reason for the relative brevity of the average agency lifespan. Unfortunately, there are multiple pitfalls. Here is my rogue’s gallery of reasons for agency failure.

Failure to adapt

Darwin never said it was about the ‘survival of the fittest’. His theory of evolution was founded on the principle of successful adaptation to change. And in a marketing world that has evolved rapidly, it’s mostly those agencies that have failed to embrace change (digital transformation, new skillsets, or shifting client needs) that have quickly become obsolete.

Over-reliance on major clients

Big accounts fuel growth, but when a business depends too much on one or two, the risk is existential. Newhaven was flying high - until losing its place on the Scottish Government roster and a key client’s budget cuts forced its closure. Faulds collapsed after losing the Kwik-Fit account. At The Union, we’ve always sought a balance: we have large clients, but we also work with over 50 active accounts. No single client should determine your fate.?

Not looking after the pennies

If I’m the Captain of the Good Ship Union, Heather Blair, our Finance Director, is the First Mate. Navigating ahead is often fraught with difficulty. Rocks, reefs, storms, and sea monsters lie in wait. But one thing that makes our management team’s job easier is knowing exactly where we are on the map. Heather provides us with timely and reliable financial accounts to help us all know exactly where we are. Without this, we would almost certainly fail. This might seem simple and obvious, and yet I’m struck by how many agencies appear to lose their way through poor financial management. Always keep a healthy balance sheet, and never, ever, if you can avoid it, owe the bank money.

"The three most dreaded words in the English language: Negative cash flow." [David Tang]

Loss of momentum and culture

It's a cliché that an agency’s assets leave the office every day at 5.30 pm. (A cliché that’s perhaps no longer relevant in a post-COVID world.) My old boss at Saatchi, David Kershaw, advised me that leading an agency that’s winning is the easiest job in the world. However, he continued, leading an agency that’s losing is the hardest.

Michael Hart, our Creative Director is a great believer in the power of momentum. A busy agency, that’s winning, that has energy, is a force to be reckoned with. There’s a buzz in the air and it’s noticeable how this is infectious. Everyone is focused and a ‘can-do’ spirit permeates the business.

Of course, the strength of an agency lies in its people. Thus, a toxic or directionless culture leads to high turnover, talent drain, and instability. An agency without momentum, without a buzz, will fail. So, as agency leaders we care deeply about our culture; we know it’s the secret sauce that helps us to thrive. Most agencies that fail have lost their mojo; something has gone badly wrong in the culture.

Leadership fractures

It's also true that any agency, to be successful, needs a balanced and talented team. Usually, this requires a four-legged stool. Talent to deliver insightful strategy. Talent to produce original and brilliant creative work. Someone to look after the clients and ensure that the service is faultless. And, last but not least, an ability to win pitches and gain new business.

All the agencies mentioned above had this mix of talent. This got me thinking, is there another critical ingredient to success?

Reflecting on the challenges of the last 29 years, including several ‘squeaky bum’ moments, I’ve concluded that there is one overriding factor that, above all, is a key to success – and it’s the consistency of leadership.?

"A house divided against itself cannot stand." [Abraham Lincoln]

Many of the agencies that have come and gone in Scotland and elsewhere have collapsed because the founders and/or leaders failed to remain united. For myriad reasons, leaders often fall out. Starting is the easy bit; the excitement and adrenalin of the early days bond founders together. It’s only after a while that the stresses and strains start to create division and disagreement. As with any relationship, the early passion soon wears off. And that’s when the business can begin to fail, sometimes with dramatic bust-ups that inevitably impact client relationships and the agency workforce.

?I’m aware that my analysis is perhaps obvious. But it begs the question, if the reasons for failure are so self-evident, why do so many businesses in our sector fade away?

So why is the Union still here?

The Union https://www.union.co.uk very nearly went bust. Within ten months we were running out of cash. We had only a handful of clients, and despite our pedigree and the considerable talents of my three co-founders, we were unable to secure bigger client accounts. It’s brutally hard to get anyone to go with a new start-up. Who, in their right mind, wants to take the risk?

Indeed, if it hadn’t been for the grandmother of one of the founders (Simon Scott) loaning us ￡20,000, we would have gone to the wall. It gave us just enough time to finally turn things around.

That got us through the first through years, but what has sustained us for almost thirty?

I wish I could say that we survived and thrived as a result of smart business strategy. To be honest, we were very na?ve at the start, and much of the time we were muddling through. But I suppose, as time went on, we made some good decisions and often got lucky.?

Looking back, I can now see a pattern, where somehow, we managed to avoid most of the pitfalls described above. Plus, we were helped by an innovative mindset which helped us to grow and grasp opportunities.

So, what were the things we did that worked?

Adapt or die

Although we had no master plan, one thing that defined our approach was that we were open-minded and always prepared to try new ideas. We were more opportunistic than strategic.?

"The mind is like a parachute. It doesn’t work if it is not open." [Frank Zappa]

We were driven by the realisation early on that to stay alive we needed to adapt and evolve our services and our methods.

The creation of Union Direct (direct marketing and CRM https://www.union.co.uk/union-direct), Union Connect (field marketing, promotions, and experiential)https://www.union.co.uk/union-connect, and Union Data (profiling, segmentation, data management) https://www.union.co.uk/union-data all came about through opportunities that were presented to us. We were prepared to take a risk, we decided to invest in people we believed in.

From day one, we set out to master the digital space. Very few ‘traditional’ advertising agencies have been able to make the switch to web development and digital marketing in a meaningful way. Perhaps because The Union was born during the flurry of excitement at the birth of the internet, we were always determined to be a player in the digital marketing arena.

However, it was not plain sailing. At times we almost gave up; the cultural differences between an old-school ad agency and the new techno-geek kids on the block led to many disagreements and misunderstandings.

Indeed, it’s only in the last few years that we have finally developed a successful and sizeable digital business, Union Digital https://www.union.co.uk/union-digital, with an amazing team of specialists, who are, crucially, integrated with the rest of the agency.

Right up to the present day, we have continued to evolve and adapt. Our Union Insight https://www.union.co.uk/union-insight team now offers all forms of quantitative and qualitative research. And last year we set up Big Church Productions https://www.union.co.uk/big-church-productions to deliver film and video production for clients.

There is no doubt in my mind that it has been our ability, as a team, to evolve and adapt our services, integrating both laterally and vertically, that has helped us get to where we are today.

Failure was always an option

This isn’t a sugar-coated success story. We’ve made mistakes. Some ventures didn’t work out.? We had a thriving Leeds office for years, but client losses forced us to close it. We launched Union Tech as a standalone web development business, but when its founder left for Dubai, we folded it into Union Digital.?

Failures were part of the journey, but each one taught us something.?

We stuck to a simple formula

When we started, we had no sophisticated management formula. No mission, values, or vision. We were simply four enthusiastic ad men.

The only mantra we agreed on had four elements. We wanted to produce great work. (Without outstanding creative work, we knew we would fail.) We wanted to deliver a great service for our clients. (Ours is a highly focused customer-centric business.) We wanted to make money. (Without profitability we wouldn’t be in business for very long.) And finally, we wanted to have fun. (We were only going to recruit and retain the best people if our culture was positive and joyful.)

We stuck to the formula. It’s simple, but it worked.

The client isn’t always right

But the client is always the client. I learned a long time ago that if we pushed a client too far, insisting that the agency was right, the relationship would be short-lived. And this is tough, because agency people are passionate, and we’re hard-wired to go for unusual and off-the-wall ideas. But if, in pushing for what we believe in, we lose the trust and confidence of our clients, the relationship is only going to end up one way.

Client relationships are the cornerstone of a successful agency. And therefore, long-term relationships, which evolve to become partnerships, are even more important in helping to sustain agencies.

We have been fortunate to have benefited from many long-term client relationships. Some have lasted for over 25 years. Some clients have left us and then we’ve won them back. And for our newer clients, our goal is always to turn them into long-term clients.

We survey our clients every six months, checking for the ‘pulse’ of our relationship. The results affirm that for most clients we have a good relationship. (96% at the last survey said they would recommend us.) And for those where we are below par, it allows us to set things right. Our client account team, led by our Deputy Managing Directors Louise Killough and Emma Campbell, sets high standards, and this is undoubtedly the bedrock of a strong and stable business.

(I would advise any business in our sector – or similar professional/service sector – to survey their clients on a regular and systematic basis. It takes courage and organisation, but the results are like gold dust.)

An agency is a tribe

At its core, an agency is a collective of people working towards a common goal. The strength of that collective - its culture, its energy, and its shared purpose - determines whether it thrives or falters. A strong agency culture fosters creativity, collaboration, and commitment. When people feel part of something bigger than themselves, they produce their best work.

"Customers will never love a company until the employees love it first." [Simon Sinek]

I estimate that our leadership team spends as much (if not more) time discussing our culture and our staff's well-being as any other topic. We have always put our people and our culture front and centre of our management of the business. Despite this, it’s not easy to create the culture that you want. Yes, the culture may be influenced from the top, and leadership may set the context and create the atmosphere for a positive culture to thrive, but ultimately it comes from the people; and this can never be controlled or artificially created.

Having said that, our regular staff surveys tell us that we run a happy ship (although never perfect), so we must be doing something right.

Never owe the bank manager

As I highlighted above, sound financial controls are essential to longevity.

Our near-catastrophic start has played a big role in shaping how we feel about money. We always aim to maintain a strong balance sheet, with plenty of ’rainy day money’, as we call it, in reserve. Also, if at all possible, we don’t want to owe the bank manager anything – as we know if the going gets tough, he or she won’t rescue us. (We also didn’t like having our houses on the line, having to give personal guarantees to the bank at the beginning.)

We keep our feet on the ground; we never create fanciful targets or unrealistic forecasts. Indeed, we have a very pessimistic approach to money. Prepare for the worst. And we never, never, count our chickens when it comes to pitching. The business is only won when the contract is signed.

Cash flow is king. If you run out of money, it’s game over - no matter how talented your people are or how great your work is.

This doesn’t mean we haven’t invested and taken risks. In total, we’ve launched seven businesses in the last three decades. But we’ve only been able to do this because of our financial strength, and because we have diversified our revenue streams.

“I am Spartacus”

We called the agency ‘Union’ to reflect our desire for teamwork, equality, and mutual respect. I think those who help me lead the agency today will agree that we’ve managed to achieve these goals more often than not. We stand side by side with each other, and this is the way we have led the business through the decades.

I mentioned above the importance of leadership, and above all, the consistency of leadership. We have been fortunate to have had amazing consistency in our leadership. This is not by accident. We have evolved with care, nurtured our talent, and always had one eye on succession and continuity. There is no doubt in my mind that this has been the most important factor in our story so far.

What next?

As we look forward, we know the challenges will only increase. The agency world is facing seismic shifts. The role of AI in marketing is growing. How agencies harness technology while maintaining human creativity will be crucial.

But AI is just one of many challenges. We’re still wrestling with the post-pandemic changes to office working whilst striving to maintain a strong agency culture.

We have no doubt that to stay relevant, we must keep evolving, investing in our people, and staying ahead of trends.

Dum spiro spero

A friend introduced me to this Latin phrase, attributed to Cicero: “While I breathe, I hope.” It has stayed with me ever since.?

The Union has survived near-bankruptcy, economic crashes, major account losses, the untimely passing of our MD, a pandemic, and more. Each challenge reinforced one truth: as long as you keep moving forward, there’s always hope.?

Longevity in business is not a given; it’s earned through adaptability, relationships, culture, and financial wisdom. The same principles that apply to The Union apply to any business that aspires to sustain success over the long term.

I am pleased to report that, as we enter our 30th year in business, The Union is in great shape, having just finished one of our most successful years ever. But more important than that, the team we have now is one of the best, if not the best, that I have ever worked with.

So, as we celebrate this anniversary, we do so with gratitude - to our clients, suppliers, partners, our team, and everyone who has been part of the journey. (And that includes hundreds of former 'Unionites'.) And we do so with a commitment to keep evolving, keep learning, and keep delivering great work.

Which is why I expect The Union to be ‘stayin’ alive’ for years to come.

Author's note: From time to time I blog on subjects as varied as marketing, advertising, design, agency life, management and creativity. During the pandemic I shared some of my all-staff emails, and I wrote about my experience of quarantine during August 2020. You can find more articles here.

https://www.dhirubhai.net/in/ian-mcateer-union/recent-activity/articles/

www.union.co.uk

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