Expanding the Creative Remit

A recently launched research report makes weclome reading for the creative services industry's financial directors. The report offers a framework that will allow process and creativity to co-exist for the greater good of agencies and the clients they serve.

ACCOUNTING FOR CREATIVITY

The Accounting for Creativity report, commissioned by Maconomy, provider of business solutions to the creative services industry, and conducted by independent research company Loudhouse, explores the changing dynamic of the agency-client relationship and the need for greater transparency and financial controls in agency environments.

It also highlights the cost of too strong a focus on creativity in terms of compromising transparency and trust. The poor financial habits of creative account teams are revealed too, and while most of these are seen as surmountable, the prevailing attitude to financial discipline among creative teams remains one of reluctant compliance.

The research revealed that less than half (42%) of agencies' clients view them as trustworthy, with only one in five (21%) considered transparent on costs. However, 67% (the highest percentage) felt that their clients would primarily associate them with creative excellence.

This perceived lack of creative trust on the part of clients should be ringing alarm bells throughout agencies, and not just in finance departments. After all, trust is the basis of all long-term business relationship, and a key first step towards building or rebuilding trust is being open and honest with clients on all fronts, including costs and processes.

INCREASE TRANSPARENCY

Although creativity will always be king in the creative services sector, a number of trends have conspired to ensure that process rigour is climbing the management agenda. The arrival of procurement personnel in pitch situations is one such trend, and has necessitated a new approach with clients, forcing agencies to support creative brilliance with excellent time and management processes.

This was reflected in the research, with more than half (56%) the agencies believing that their clients are demanding more transparency, which could be attributed as much to fears about working within Sarbanes Oxley legislation as it is lifting the veil on processes for the benefit of clients. In fact, many appear to be struggling to embed this new mindset within their businesses, let alone their client base.

It is clear, therefore, that agencies need to focus more on the operational, process side of their business if they are to satisfy procurement departments in pitch situations. This, however, should not be the only motivation for process improvement. After all, while revenues may strengthen an agency's top line, superior processes can bolster the bottom line if they become embedded in the way an agency operates.

While a management team may develop operational strategies and enforce new processes within the business, the reliability and success of such strategies relies heavily on the cooperation of the workforce as a whole.

Stories of tensions between creative teams and account management or finance departments are well worn, but unless resolved, more than tempers can fray. After all, what is the point of having an agreed budget if creative teams working in silos choose to ignore it?

COLLECTIVE RESPONSIBILITY

The survey highlights the fact that agency creative teams are not always 100% behind operational initiatives. This can seriously hamper efforts to manage costs at company level. Most agency finance directors would describe creative teams in their agency as compliant with process, albeit reluctantly (41%), although one in five agencies describe the creatives they employ as 'oblivious to the need for financial process' (21%).

At the heart of this creative reluctance is the feeling that financial responsibility rests elsewhere (58%), and is perceived as dull and not part of the creative remit (41%).

Creative teams then, are not unduly concerned about process nor are they particularly resistant to change or new technology. The frustrations experienced by financial and creative forces within an agency seem more linked to fundamental differences in job roles and focus.

In the same way that finance directors are rarely present in brainstorms and pitches, creative teams spend little time dedicated to 'the numbers'. However, the difference is that there is now an onus on client-facing employees to be accountable. It is this audience that is required to raise its game in terms of processes and accountability.

Clearly, some effort is needed within agencies to educate creative teams about financial discipline and even at a more general level to redefine job roles and expectations to reflect a collective financial responsibility within agency environments.

CURING BAD HABITS

This sense of collective responsibility could begin with something as simple as ensuring that expenses are submitted on time, with the report revealing that poor expense submission tops the list of financial bad habits among creative teams.

79% of agency finance directors complain that creative employees often submit expenses late, a problem compounded by the fact that 72% of state expenses are submitted without receipts.

One result of this is the amount of extra work it creates for finance directors, in terms of chasing up or checking erroneous information. 60% see this as the main effect of creative reluctance to take financial responsibility.

Given that 85% of finance directors have company responsibilities in addition to finance, most notably HR and IT, this creative reluctance is potentially causing ructions within the company and undermining productivity.

Training and education are seen as the primary tools in combating this reluctance (54%) followed by a need for better communication between finance and creative departments (29%).

Such methods are more likely to result in long-term behaviour change rather than short-term fixes of an incentive or penalty approach. One in five finance directors believe it is impossible to instil a sense of financial responsibility in creative account teams.

REDEFINING RESPONSIBILITIES

However, finance directors should not be resigned to defeat in this continuing struggle to advance financial responsibility in the creative arm.

Encouraging creative staff to be proactive when it comes to managing costs, by filling in timesheets and expense claims on time and accurately, is one way to change things for the better, but this is only a small part of the solution.

While training and better communication between departments are steps in the right direction, there is a need for a more radical stance within the industry. In this respect the very definition of what it means to be creative must be expanded beyond the usual remit, to ensure that everyone is striving towards the same goal.