Can agencies afford to be agile

As I roam around the internet, I see a lot of suggestions that creative agencies should adopt agile practices as an operationally efficient approach to delivering client work. As someone who has quoted and managed several million pounds worth of projects in my time, my spidey senses worry.

Agile, with its set of values and principles, allows teams to tailor their approach to meet the unique needs of each project and charge through a series of sprints. Utilizing methods like stand-ups and scrum, Agile methodology promotes good resource management, transparent communication, and early risk identification, ultimately enabling creators to adapt quickly to changing client needs.

On the surface of it, this sounds ideal for creative agencies, given the unpredictable nature of creativity. Design is a journey involving exploration of ideas, blue-sky ideation over here and following a few rabbit holes over there. The creative process is an inherently collaborative partnership with the client and agencies are expected to work in an agile way, being responsive to change requests and be flexible about timing, so agile methodology appears desirable for agencies.

Yet the classic agency pricing model doesn’t reflect this agility. Instead, agencies bill in a series of fixed stages based on an hourly rate with agreed deliverables. Agile relies on an iterative sprint approach with no fixed number of stages.

The pricing model and scope management is one of the major hurdles agencies face today. Over the years, agencies have explored many pricing models — hourly rates, blended rates, value-based, performance-based, retainer models. The most common model being the fixed priced model with a specified number of stages and x rounds of work. Proposals act as a budget benchmark for negotiation to reach a final budget agreement. Change requests are made in the pursuit of a creative ideal and the spirit of the relationship. Too many change requests cause problems — timelines delayed, resourcing challenges, over-spent budgets. Negotiating additional budget during the project can be a tightrope walk, considering clients are also tightening their belts to cover all their annual goals — now with smaller budgets.

Agile requires agencies to have capacity in their studio and strategy team so new requests can be quickly resourced and catered to, but capacity is an old-fashioned notion across all forms of business. No resource can be left idling. Agencies cannot offer an agile approach in practice without there being an agile approach in financial recompense. So the real question is whether clients can accept a pricing model that pays for agile methodology. Phases are unquantifiable sprints rather than five fixed stages? The risk being run-away budgets.

Undeniably, great work would result. There would be time to consult and guide the client on their change request, a defined brief, a studio structured to match resourcing demands, a budget and timeline that accommodates change. What a wonderful world it would be.

How could it realistically be achieved? Maybe a sprint-based charging model is unrealistic, but how about a blended model — a fixed quote for upfront discovery or definition which informs the proposal for the rest of the project, which could be fixed-phase with sprint-phases to be utilised as required. Or should agencies offer the client a choice — a fixed phase approach versus an agile approach where phases of work are quoted as sprints? Horses for courses.

What do you think? As an agency, can you set your agency up in order to support a truly agile approach? As a client, can you adopt an open-ended sprint-based charging approach in order to reap the benefits of agile?