Episode 523 Creating a Future-Ready Agency with Rishad Tobaccowala

Hey everybody, Drew here. You know, we are always looking for more ways to be helpful and meet you wherever you're at to help you grow your agency. It's one of the reasons why we've produced this podcast for so long. And I'm super grateful that you listen as often as you do. However... There are some topics that are better suited for quick, hyper-focused answers in under 10 minutes. That's where our YouTube channel really comes in. Again, that's YouTube.com slash.

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The Build a Better Agency podcast presented by White Label IQ will expose you to the best practices that drive growth, client and employee retention, and profitability. bringing his 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McClellan.

Hey everybody, Drew McClellan here back with another episode of Build a Better Agency. Looking forward to spending the next hour with you and you are going to be super glad you joined us for this conversation. I'm really excited about it. Before I tell you a little bit about our guest, I want to remind you that every month we are offering two free webinars. It's the first and third Tuesday of every month.

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Every once in a while, I'll read a book and as I'm reading the book, I'm taking notes and I'm thinking, and one of the thoughts I on occasion have is, oh my gosh, I have to get this person on the podcast. So when I was reading Rashad Tabakawala's book, I was like, I have to have this man on the podcast. He is brilliant. He has an agency background. A lot of his examples come from our world.

but it's all about rethinking work and the data he provides in the book and the insights he provides and the wisdom that his thinking combined with what he has gathered together from a data point of view is really spectacular. It's one of the most thought-provoking books I have read in a really, really long time.

So I am super excited to have him on the show today. I have... seven hours of questions to ask him so i know i won't get through them all but i will do my best to ask the questions that i think you would want to ask him because i think you're going to find him as fascinating as i do so let's welcome him to the show

Rashad, welcome to the podcast. Thanks for joining us. Thank you for having me, Drew. I have to tell you, I have been really excited about this conversation. When I read the book, I have probably 12 hours of questions for you that I'm going to try and pack into an hour, but the book was fascinating. So do me a favor and tell everybody a little bit about your background and how you came to write the book before I start peppering you with questions. Sure. So quick.

Background I spent, grew up in India, got a degree in math, got a business degree from the University of Chicago, worked for 37 years in a marketing services company called the Publicis Group, doing lots of different things. In the last five years, I was the chief strategist and growth officer of the company. And then I moved to career 2.0. I still remain an advisor to the group, but I moved to career 2.0.

where I help people see, think and feel differently about how to grow themselves, their teams and their business. And one of the ways I do it is through writing. And this book, Rethinking Work, is my second book. I also write a substack, etc., which we'll talk about at the very end. But the book, Rethinking Work, was written for the following reasons. One is...

i've come to understand that there are three key factors that keep people satisfied or happy with their lives and there's a slight difference between happiness and satisfaction but let's say in that area One of them is good relationships. And another one is some modicum of good mental and physical health. And third is purposeful, meaningful, rewarding work. So true. And if you have those three, you're more likely to be satisfied and happy.

than if one of those are missing in a big way. What also became very clear is that meaningful purposeful rewarding work is associated with living longer and better relationships.

So in effect, meaningful purposeful rewarding work is very important to the human condition. Yeah, it is. And I also saw and believed that between 2019 and 2029, work would change more. in these 10 years than in the previous 50. So the thing that is singly most important to the human being is going to change and no one's talking about it, right?

And when people talk about it, they talk about it for one reason. And this is the answering why. There are five reasons. There are more than five, but five broad reasons. The one that people talk about is the impact of COVID and where you work. While that is interesting, that isn't even the most important thing that COVID actually did. So COVID is one of the five factors. But what COVID did is, yes, it made you wonder where you work.

But more important, it made people wonder why they work and who they work for. And what we figured out was people were not only asking, should I go back to the office, but why am I reporting to this person? And how do I try to fit now work into my life versus fitting life into my work? Yeah, huge shift. Huge shift. But the other four factors are changing demographics, aging populations, declining populations.

different mindsets, rise of technology, AI being one of them, clearly. New marketplaces, the ability for all of us to either get or sell our services around the world, whether it's... on uber or shopify or etsy or fiverr and then that in many countries including in the US, in the next year or two, as many people will get a 1099. So they'll have freelance work as they have full-time work. In fact, globally, 39% of people have...

Non-full-time work. And so one of the fallacies is that work and jobs are the same thing. They're not. You can basically have work without a job. And finally...

obviously the impact of sort of COVID. So those are the five factors. So do you think had COVID not happened, do you think we'd be having this conversation? So did COVID just accelerate the inevitable or did COVID? markedly change the direction we are going with work? I think COVID primarily accelerated what was already happening.

Because of the other factors. Because of the other factors. The first four factors were existing anyway. Right. Right. And my first book has two chapters in it. Chapter two, which my first book keeps selling. It's called Restoring the Soul of Business, Staying Human in the Age of Data. And people now read that as staying human in the age of AI. Yeah. And the second chapter of that book talks about distributed work. And this book came out before COVID.

And the last chapter talks about AI, right? So these factors were already happening. So yes, it accelerated. It did have one shift though. And the shift... was because most of us spent 18 to 24 months in our little cocoons. We began to rewire our brains, including As we saw people in the first year who we knew getting very sick or dying, we began to ask existential questions. That happened because of COVID specifically. The rest of it, it just accelerated. Yeah.

yeah it's fascinating so given all of that as we are you know small you know most of our listeners are what i would call small business owners so they have under 300 employees and likely under 100 employees How have all of these things changed differently for smaller companies versus like corporations or large organizations? So my book, and it's become very popular with small and medium businesses. That's a great book.

Even though I worked in large companies, but many of the clients I had worked with small businesses because they were franchises, affiliates, et cetera. So my book basically says that... All these shifts are actually moving power from large to small and from capital to talent. And that in the future.

Most companies will be smaller companies and very few companies will be large companies. And an indication of that is this year we are likely to see the opening of six million new businesses in America. That's crazy. This is a record like never before. Okay. So part of what this new future of work has done is people have said.

With the slight exception of this one problem we have called healthcare in the United States, okay? Every other thing, basically, people are saying, hey, you know what? I can get the world's best AI for $20 to $40 to $60. Right. I can access anything I want using these modern marketplaces. Shopify, Etsy, Uber, whatever, Stripe. I can do all of that.

I can take agency over my own career, and it's clear that the social contract has broken, and I can do my own thing. And if so, why don't I work, either start my own business or work for a small company?

because a small company i know who the proprietors or owners are whoever she or him are i can get more agency to do things i might share in the upside because it's still small OK, so all these significantly benefit small companies, because what now begins to happen is closeness to the customer, knowledge of the business and speed become important versus.

technology, capital, and infrastructure. Right. Because those now are commodities. Those are commodities. So I remind people that when someone tells me that they're a better company because they got advanced AI. I tell them two things. A, I don't think any company's got better advanced AI, unless you're like Meta or Google or something like that, because we all use the same seven LLMs and we all have the same thing. But as importantly, do you go around?

saying that your business is better than another business because you got better electricity. Right. And AI is going to be like electricity. Yes, if you don't have it, you won't be able to compete. But who do you compete with? today that uses candlelight. Right. Yeah. Really, really great analogy. So when we think about this idea of the 6 million businesses opening and people choosing to either hang up their own shingle or...

to work differently how do we as as agency owners how this this sort of this hybrid work model and and we're already seeing it you know it used to be everybody who worked at an agency worked 48 hours a week lived in the city where the agency was, went to the office every day. And pre-COVID and certainly post-COVID, what our employee base looks like, where they live, how many hours they work, all of that is changing.

How do you see this fractional employment or project-based teams, how do you see that working in practice for agencies who are largely all about talent? Yes. First, I will make three points which will make you think that I'm very old school. And then I'm going to suddenly explain why that old school thinking requires new ways of working. Okay. So number one is I believe that in-person interaction tends to be important. Agreed. Totally agree. Yep. Number two, since...

It's true for every business, but if you claim to be the marketing business, different audiences have different needs, which means different strokes for different folks. Yep. Okay. That's old school, which is in-person interaction. Different strokes for different, that's traditional marketing, right? And third is attracting and retaining talent is critical to every organization, particularly the agency businesses.

so that's about old school as you get right yep okay now let me bust open i believe those three and i believe in order to do those three you have to no longer force people back into an office Okay, here is why. Three reasons. First, what many companies do is they basically say, we want to get everybody back into the office three to four days a week.

And because we need to get better in-person interaction. So I said, okay, now we've broken rule number one, which is different strokes for different folks. Right. Okay. Depending on the job somebody is doing and their tenure, you may actually have different models now. You can't have one. So, for instance, younger people...

You may need them to be more in the office because they're trained, are being trained. And younger people may want to be in the office because of the social aspects of it. Right. As will often many of the most senior people. But middle-aged people who have families and who live further because they need more space and may have aging parents or young kids to look after.

That's less attractive to come all the time to the office. So the fact that you say you're a marketing organization and then you have one size fits all makes no sense. Second. is when somebody comes into the office, are you actually programming for interaction or are you programming for them to do exactly what they did at work?

I mean, at home, but they do it in the office. Right. That's a big one. That's a huge one. So what are you doing to earn the commute? Right. Okay. So at the end of the show, I'll talk about...

My book, I've also launched a new show called The Rethinking Work Show. It's a free show. And this particular free show, which is The Rethinking Work Show, one of my guests is a Harvard Business School professor who's done research on... distributed work his book is called work uh the world is your office you can work from anywhere and he has shown three things number one get this Unless somebody is working 75 feet from you, you are not going to meet them. That's crazy. Okay.

yeah because there are most people don't there's no water coolers people drink from water bottles so like it's right so it's this whole water cooler is total bullshit so if they don't work 75 feet it doesn't happen second is when you force people into the office, everybody, you lose some of your best performers because they have options and you tend to lose women. Sure. Okay. Third is in many cases, if you can get people three to four days a month, but you program those four days.

for interactions, concerts, brainstorming, pitches. It's much better than getting people just sitting there doing their office work. So you have to redesign your space, right? And I actually have on the Rethinking Work show a CEO of an agency, a 100-person agency, who when I was writing the book heard me say, the offices of today will be like the...

horse and buggy in the Smithsonian. And it impacted him so much that he talked to me and my book was still a year and a half away. He got out of his leases. They were up to. He changed the way he did his leases. He said, I'm not looking for leases, I'm looking for hospitality. Interesting. So he still had spaces, but he bought more expensive but smaller space. He redesigned the space.

what was behind you and the ceilings looked really great because you'd still be on like perpetual selfie, perpetual selfie. He became in his category. the best place to work for for two years and his business grew 15 to 20 percent and people loved coming into the office but he said these are the these are the days i'd like you to be there but the rest of it you can do what you want but people would come in

So the idea basically is, yes, if you want in person interaction, make sure you don't have one rule for everybody. Second is actually program for in person interaction. And third is manage your costs because a new agency coming up today will not have expensive real estate and force people to come into the office because it limits where you can get talent from. Yeah.

So I always tell people who run businesses, if you were to start a business today with everything you know, would you design it the way you currently are? They said no. So I said, why don't you do the new thing? Because your competition doesn't have this old stuff. Right. And really what it is, is space bringing people in is important, but you don't need that much. I think eventually for most companies is three to four days a month is the maximum. Okay.

Again, if you have a particular client, you have a particular thing, all those are exceptions. So what we really have is a failure of leadership, not a failure of space. Because most people... are still thinking they're bosses with zones of control. And we moved into an age of debossification where people want zones of influence. I was just going to ask you about the whole debossification. Talk more about that.

So one of the basic beliefs is this. When I did some research as to why people were resenting coming to the office, returning to the office, there were three reasons. Number three was... The whole stuff is it's going to take a whole bunch of time. It's going to cost an extra in daycare. I don't know what the hell I'm doing. Number two is they did not like the way they were being.

mandated to return. Right? So the best way of describing it is the animals have left the cages in the zoo and now you're whipping them back into the cages and they don't like that. But number one is they questioned who they were working for. And they basically said, I was doing perfectly well without this person hovering over me, checking in, controlling me.

I just get the work done. And in effect, they said, I'd like a leader. I don't need a boss. Okay. I don't need somebody to have a zone of control, monitor, delegate, measure. micromanage, check-in. I need somebody who can create, build, mentor, guide, help, inspire. So really, I tell a lot of people, People are not wanting not to come back to the office. They don't want to come back to you. Yeah, ouch. Right. So if somebody's hearing you say that and they're like,

okay, they don't want a boss, they want a leader, they don't want somebody sort of micromanaging them. Yeah, you need some management, you need some leader, but very little bossing. So how do I evolve from one to the other? What does that evolution look like for somebody who's owned and run an agency for 20 years and been the boss? So while they've been a boss, it doesn't mean that they aren't also a leader.

So my stuff is you suppress your boss-like tendencies and increase your leader-like tendencies. As someone who's running a business or in a business, you have massive talent. So one of the interesting things in my book is when I say things that are provocative, I don't say things that are disrespectful. So people read my book. I'm not basically saying, Drew, you suck.

Right. No one's going to listen to me. First of all, they'll say, you suck. Okay. And we're just going through that whole thing. So I say, hey, Drew, here's the issue that you have is this way you're behaving is less relevant than this way. And you can behave both ways.

So up this, down this, for this reason. It doesn't mean you have no bossing and no managing, otherwise you can't run a company. But, you know, it's that. So that's the one thing do I say. The second one, I basically sort of ask, is pay a lot of attention, especially depending on how old you are, to how different the generations think about certain things. So if you're younger...

I'll give you three facts about younger people which are very different than what most people think. The first one is younger people really want to work hard and they would like to get wealthy. and they would like to have power, just like we do. So it's not like they don't. They just don't want to do it the way we did. So they don't believe we made the right choices. Okay, that's number one.

Number two is many of us who are older are likely to believe in the system. They don't believe in the system. So 66% of baby boomers believe in capitalism. only 22% of Gen Z believe in capitalism. Okay. And third is they don't actually think like you because they have had a very different experience growing up. including three facts. And I recently did a big presentation with MasterCard. So both MasterCard senior management and media presentation. And the MasterCard folk put up a slide.

They were going through a presentation. I'll give you the three key takeaways from it. But they started the presentation because it was speaking to a bunch of bankers, older bankers. They said, what we were about to show you. is based on millions and billions of data points from mastercard but it is not a political statement okay and here are the three things that i remind people

By the end of this decade, 40% of America's wealth will be held by women. Because people think it's going to go from baby boomers to Gen Z, not before it goes through women. Because most men marry three years younger and women live three to four years older. So most, there'll be the seven years from the back of man dies to the money moving somewhere else.

So women will control 40% of the wealth and 51% of all new car purchases are made by women. Did anybody tell the dealers that? Because most women aren't dealers, right? Fifth largest economy in the world is the Hispanic population in the United States, of which 82% were born in the United States. And every Gen Z is different from the other Gen Z, so it's not like a Gen Z.

But 49% of them identify as non-Caucasian. Okay? Yeah. You want to know why your business is weakening? You may not be actually talking to the audience of tomorrow. Or building your business for the audience of tomorrow. Right. And my whole stuff is why? Because you're hanging out with people like yourselves. Right. Right. So that's one of the things that I basically say is, listen, when you were young, the world was different. Right. When these people grew up, the.

the world will also be different. So this is not a behavior that we have, but as we get more successful, we hang out with people like ourselves and we sometimes lose the plot. Yeah, so true. I want to take a quick break, but when we come back, I want you to talk a little bit about what you think the average agency's employee base will look like.

full-time, part-time, what will that look like? So let's take a quick break and then we'll talk about, as we think about the future and we're thinking about where we work and how we work, who's going to work with and for us. So let's take a quick break and then we'll cover that.

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Hey, everybody. Just want to remind you before we get back to the show that we have a very engaged Facebook group. It's a private group just for podcast listeners and agency owners that are in the AMI community. To find it, if you're not a member, head over to facebook.com slash groups slash BABA podcast. So again, facebook.com slash groups slash.

All you have to do is answer a few questions to make sure that you are an actual agency owner or leader, and we will let you right in. And you can join over 1,700 other agency owners and leaders. And I'm telling you, there's probably 10 or 15 conversations that are started every day that are going to be of value to you. So come join us. All right, we are back. And right before the break, I was saying...

I'm curious your thoughts about what our workforce will look like. And not so much demographically, but in terms of they will come to work. How? Again, are they contractors? Are they full-time employees? Are they part-time? What is that composition, do you think, going to look like? So I believe that most agencies will have five types of employees.

They will continue to have full-time employees, which is employees who are full-time on the calendar. And those employees may work from anywhere, but they may be full-time employees. They will have freelance employees as they have today. And they will have contract employees which are less prevalent in the agency business.

But companies like Google, most of their employees are not Google employees. They contract employees from Accenture or some other place. But there'll be two other types of employees. One will be a fractionalized employee. And a fractionalized employee is a person who has all the benefits of a full-time employee, but gets paid 60 or 80% of their salary if they work three or four days a week, but they have full health care.

If there's a bonus program, they get 60 to 80% of their bonus or 60% of equity investing. And why is that going to be important? Because A, AI is going to make most jobs, 20% of most jobs. disappear right and instead of laying off 20 of the people you can actually give people the option of working 60 or 80 percent of the time in most companies if you ask people

Some people want to work 100, some people want to work 80, some people want to work 60. Most people want to work on average about 80%. So you could actually reduce the cost while actually making people get exactly what they want. Interesting. But as importantly, you're going to try to attract and retain people who might be aging, who want to work a little bit less. You might be wanting to basically have people who want to go back to school or people who have to get trained on AI.

Or people who say, you know, I'd like to spend three days doing this, but a day or two doing a non-competitive selling my sculptures on Etsy. Right. Right. So that is the next. And then the last type of employee is aliens. And I'm not talking about immigrant aliens, but alien intelligence, which is the way I describe AI. So they're going to be agents. So one of the people I interviewed on my Rethinking Work show is an Israeli company.

that for small and medium businesses have created and small and medium agencies have created agents for $500 a month who will do all your SEO, SEM optimization and social media. It's crazy. Okay. And so you're going to say, okay, I have agents, I have fractionalized, I have contract, I have full-time, and I have freelance. And then based on your company's strategy, your client's needs.

You'll need to control costs and agility. You'll combine them in different ways. You're likely to have far less space than you have today. Far less space. And the new metric you're going to measure... is revenue per employee. Not number of employees you have, but revenue per full employee.

That's interesting because that's one of the metrics we teach now in terms of being able to tell whether or not you can afford to add more people to the team. is adjusted gross income per full-time employee. Yeah, and that number will grow up. So last week, Because my books turned out to be very popular. So in addition to students, I'm doing stuff with universities and I'm doing conferences around it. So I did a conference about the future of work with Northwestern University in Chicago.

And we had lots of different speakers and I wrote about it in my, I write a sub stack, which I'll tell people about. It was called the future of work less and more. Okay. And the biggest less and the example I give. is Microsoft today became the first $4 trillion company. Every number it has goes up to the right. Last week it laid off another 9,000 people, right?

So Satya Nadella wrote a note saying the enigma of what's going on. Right. And his basic belief is we are no longer going to be able to sell software. We're going to sell engines so people can write their own software. So our business is different. And we're competing with new types of people. But my piece starts with AI native companies. So companies that are obviously tech, they're not agencies, but they're AI native. Right.

They have now $2.5 million of revenue per employee. That's crazy. The best agencies have $200,000 of revenue per employee. It's usually $100,000 to $200,000. So it's 200,000 versus 2.5 million. So what agencies will do, they're not going to go to 2.5 billion, but they're going to use these AI, alien life forms, new ways of working to take whatever they have up 30 or 40%.

which as an agency owner or an agency thing, imagine if you could take your revenue up 30 to 40% without a major change in your cost structure. Yeah. Right. And that's the future of work.

It's not returning people to the office. It's about reimagining your business. It's exciting. So all of that suggests that how our businesses are structured organizationally. is also going to have to change. Yes. So how do you think that's going to play out? So the big shifts are the following. I think for most organizations, most of their talent...

will not work for the company, but will work outside the company. So that contractor... Contractor, freelance, alien agents, whatever it is. Okay, what is that? Second... is that most of the work will be done outside versus inside. Third is companies that are... ability to partner with other people will win over companies that cannot partner well with other people. So you're going to have this sort of plug and play, right?

is the model is going to be much more jazz versus classical. So current organizational structures are, you have the boss or the leader, like the conductor. And then, okay, violence, you play now. Right? Yeah. But if you think about jazz, it's about improvisation. There isn't a, there's a bad leader, but people play off each other. Yeah. So organizational design will change significantly.

Because many of what we have currently is a classical structure where most of the employees are full-time, the work gets done inside the organization, and it will be turned inside out. So it's an interesting...

It's an interesting thought given that what I hear a lot is that agencies struggle and it may be the... organization creates this problem, agencies struggle to get their people to think independently, to not just do what they're told to do. So what do you think as an agency owner, if I have to go from orchestra leader, right? The conductor to really putting together my jazz ensemble where everybody is playing off of each other. What can I do to encourage that sort of

improvisation, that innovation, that thinking independently, that freedom and lack of fear to try new things. Like how do I create that kind of culture and environment? So whenever you go from where you want to go to where you want to get to, you have to do three things. You have to prune. You have to upgrade. And you have to buy. Okay? Yep. So some people are not fit for the future of your organization. And in the most humane way possible, you have to see them out.

The world's worst thing is to actually keep people who are not going to help your company long after they should be gone. It doesn't help you. It doesn't help them. But obviously, how you do it is very important. Of course. The second is you're going to require new types of skills. But one of the things you want to hire is you want to hire people who'd like to work 60 to 80 percent of the time.

Because they already are doing independent stuff and are thinking independently. They're already entrepreneurs. So you hire entrepreneurs, but entrepreneurs would like to have health care. entrepreneurs would like to have some stability of income, not all of it. So you get those people in. Does that make sense? So I would go hire people who want to do other things. And then I would encourage your existing people.

You know what? I'm going to give you a budget for you to go figure out what your particular passion is and can you launch a little business around it? Interesting. Okay. Create entrepreneurs. Create entrepreneurs. Because here's what happens is today you don't have to, it's like I was, I spent my entire working career in one large company. But if you look at my LinkedIn profile, it looks like I was changing my job every three years. And I launched five companies from scratch.

So I was an intrapreneur. I was too scared to be a true entrepreneur, right? But too weird to be a full-time actual corporate person. And so I found the mix and I attracted the right people. And the company, like any leader... has to have, okay, I need some people like this and some people like this and some people like this, right? So if everybody is like dallying around, you might not be able to run the place. But if everybody is like one way, you may not.

be relevant in the future. Yeah. So you've mentioned healthcare a couple of times. So it makes me curious, do you think how work will evolve is going to be different in the United States versus the rest of the world? where health care is not something that is provided by your employer? Yeah. So right now, the biggest issue in the U.S. are that health care and retirement.

non-social security retirement is connected to a job rather than being connected to work yeah okay yeah and at some stage it has to be connected to work versus connected to a job because I would say, and I'm making this number up, the quote is from Thoreau from Walden. He says, many men live lives of quiet desperation.

Yeah. Okay. I believe that one out of three people working in a company today are doing it only because they would like to launch their own stuff, but they can't get healthcare. Okay. That's sad. Yeah, because a lot of people, like, I'll give you an idea. Like, I loved what I did. But because of a variety of reasons, I knew that at 55, I would be grandfathered into healthcare for my company.

till Medicare started. Yeah. So immediately at 55, I said, what else can I do? I didn't leave for another five years, but my whole stuff was now I have much more options. Right. I'm free to do other things. Right. And because I had much more options and was thinking about it, I felt freer. So I could keep up with some of the challenges at work. I didn't feel trapped.

Does that make sense? Yeah. So I tell people the more options you give your employees, the more likely is that they will stay. Makes perfect sense. And so the thing with health care is I think the U.S. is going to have to fix it. Because right now we know that the system doesn't work because healthcare is okay, but we spend three times more than most countries. Right.

The people who are underwriting this is the world of business. If you ask people in business, you know, one of the key things is they have to pay a whole bunch of money for healthcare. Yeah, it's astronomical. And for larger companies, but not for smaller companies, but for larger companies, some of the larger companies self-insure. I don't think small companies know that.

And so when two or three of their senior people or someone gets sick with cancer and they need a million, $2 million, it shows up in their earnings. Right. So literally, these companies, instead of being in the product of agencies, are now a product of healthcare. Right. That has to be disconnected. But right now, the only thing I can say is it's the reason why I'm a big believer in fractionalized.

employment so you can get healthcare if you work 60 to 80%. Right. You still qualify, right? You still qualify for healthcare from your company and you can do other things and your company gets the best of both worlds. They get you. But at a reduced cost, they get an entrepreneur also with the whole thing. And so the chapter called Fractualized Employees is being used by a lot of people. And there's nothing that prevents any agency from.

creating a fractionalized employee. That doesn't require new healthcare rules. Right. So for our listeners outside of the US, this all becomes more accelerated. It becomes much more accelerated. The reality of your book.

can be their reality faster because they don't have that area. Yeah. So the thing that the reality of my book that becomes much faster for them is the fractionalized employment. Right. Right. The rest of my book is happening everywhere. In some cases happening faster in the U.S. because there are certain things in the U.S. that it's a.

better off society so that we can afford AI faster. We have... better access to different marketplaces where we can sell and things like that so some places the us will be ahead some places europe and asia will be ahead but it's moving really really rapidly and The thing I always tell managers and agencies is this is actually one of the best times to be an agency because everyone talks about being creative.

Imagine you're going to be playing with the creation. You have everything is open. You can now create a new type of agency. Right. So if you're a creative person, go ahead now, show us what we can do.

So if you were given your history of working in agencies, if you were going to create an agency today, that would be the model that everybody wished they had created by 2030. What would it look like? Obviously, this will differ based on country, what I'm trying to do, what type of clients, there'll be modifications. But with that being said, I think these would be some of the principles I'd have. I would basically hire...

fewer people, but I would pay them 30 to 50% more than what the market is paying. So in effect, I would get better people because I believe technology. allows better people to scale really well. Okay. So I always basically say that technology is like a lever, but if you've got real capability. and you've got this lever. Like, if I'm playing with, against Serena Williams, and both of us are using yesterday's rackets, she would beat me.

And if we suddenly move to today's rackets, she would beat me even more. Yeah, right. Because as she gets better technology, the difference matters. So I would basically place a premium on getting the best talent. That's number one. Okay. I'd pay more, but I'd hire fewer people. Okay. So that's the first thing I'd do because talent is the major cost. Okay. The second cost is I would have space, whether it's WeWork or regular space.

I did the regular space, but much less. But I would design it like I was designing a concert, live concert, and I keep it open to every other person. So basically. I'd have less square footage, but in a better area. So people will more want to come to it. Sure. And I would open it up to other people in my building or things that would be like buzzing. So it'd be more like a bazaar than an office.

Okay. But I would have a space because space also makes for this in-person interaction, et cetera. But I'd have less space. But my budgets would be changed. The third thing that I would basically do is I would... massively, massively rethink my entire business, assuming that it's AI first. Okay? So I wouldn't add AI.

To me, I would rethink my business. So what does that mean? So a lot of businesses today, including agencies, are going to say, how do I use AI to make my process more efficient or effective? Right. That's important. But imagine if the New York Times, when the digital world came around, did what every other newspaper did, which is how do I make digital?

to make my printing presses work better and my trucks move around faster and schedule better page one meetings. When the actual thing wasn't efficiency and effectiveness, it was existential threats and existential opportunities. And they quickly figured out, and I was part of the team, that they were not in the printing business, the truck business, or even the page one business. And maybe they were not even in the news business. 30% of their revenues aren't news. And so...

Part of it is, okay, what business are we in? Which is kind of very interesting. And in addition to making our current business more efficient and effective, if we were launching a business altogether from scratch, what would it look like?

So those are the things I would do today. I like it. So as agency owners are, so it's an interesting time. A lot of agency owners came out of COVID and right into. you know, the great resignation and all the challenges that we've had post COVID and now AI is here. And so I see a, I see a shift. So some agency owners are like, they're fatigued. This is exhausting. All of this change and other people are.

I get to reinvent everything and they're super excited. If I'm in the, I'm kind of exhausted stage, what could or should I do to reignite the fire to really re re look at. how incredible the opportunity is to rethink about, to do it. Basically what you said is reinvent my business and my opportunity. Where would you find inspiration? If you were on the fatigue side, which obviously you are not, if you were on the fatigue side, what would you do to refill your bucket?

and get that optimism and enthusiasm because your book is very optimistic about the future. So what basically happens is the only pushback I've got on my book, interestingly, people love it. But a certain group of people say, how can you be so optimistic and realistic at the same time? And I said, because I'm pragmatically enthusiastic. I'm protopian. I'm not either utopian or dystopian. And I believe that.

If you look back every 10, 20, 30 years, things always tend to get better, right? Right. So with that being said, I will give the listeners two exercises and one mindset that they can do right away. So the two exercises are, get some of your senior most people or some talented people, take them out to dinner or lunch.

I suggest this, but I'm not necessarily suggesting everybody has to do it. Have some alcohol, okay? Or whatever, chill out. They're agency people, so there's going to be alcohol, right? And then basically say... Let me identify a problem or solution, a problem that I have or an opportunity. And how would I go after it if I had all the assets of my company?

all the people of my company, all my partnerships, to go after this, but with no constraints excepting three. A, whatever I do has to be legal. Whatever I do has to be scientifically possible. And whatever I do has to break even in a year or less. Interesting. What would I do? Okay.

You will come up with amazing, amazing ideas. And then I'd say, why aren't you doing that? So that's one exercise. Yep. Another exercise after you've had another drink is you basically say that Rashad and Drew company absolutely. suck. Let's put them out of business. So Rashad and Drew decide how to destroy the Rashad and Drew company. So instead of defending, go into attack mode. Interesting. Attack yourself.

Right. It's really fun. Break it down. Destroy yourself. And when you do that, you'll figure out how easy it is to destroy yourself. But you can also find. Oh, my God, I figured out my weaknesses. Now I know what to do. Yeah. Those are two exercises. And this mindset, and again, this is not a political statement, but the mindset is think like an immigrant. So what do I mean by that?

All of us are immigrating to a new country called the future. Yeah. Okay. We're all immigrating into the future. So what do immigrants who are successful do? They think like outsiders. They challenge the status quo. They think like underdogs. So when somebody says, I have a castle with a moat around it.

I say, you have a castle and I have a source of water with which I will flood you out of your castle. Right? Yeah. And third is I'm willing to take short-term pain for long-term gain. Yeah. Right? Think like an immigrant because we're all immigrating into the future. So that's the mindset. Love it. And everybody can do those two exercises in that mindset.

This has been fascinating. Like I said, I barely scratched the surface of my question. So we'll have to have you back. But in the meantime, tell everybody how they can keep learning from you and Substack and all the other ways.

There are three sources, and everything I'm going to suggest is 100% free. So it's free of subscription, no advertising, even though I was in the business, no email marketing, harvesting, nothing. The only email marketing is if you sign up on the substack, which is at Rashad. 30,000 people read it every Sunday. You'll get a piece from me every Sunday on different topics. I have a podcast called What Next, which you can type and find as What Next Publicist Group.

That's my old place of work produces this, but it's mine where I talk to a leader in different fields, not just advertising about what's in the future. So I just most recently, the world of advertising spoke to Sir John Hegarty of BBDH. Will creativity survive in an AI age? And it was amazing. And he also defined creativity in a good way. And there are 150 of those, all completely free, okay, which you can find on any platform you use, Spotify, Apple, whatever you want.

And the third is eight weeks ago, I launched at RethinkingWork.io, which is my site, which is lots about my book, lots of conversations, a Rethinking Work show, which is also on YouTube, podcast, et cetera. where i talk to a different person inventing the future of work including three people of the first night first two of the first eight and coming soon are a lot of other people in the agency space so what is a new type of agency

that combines full-time with part-time using an operating system. One is the CEO of this agency who redesigned his entire space, 100-person company and how we did it. So you'll have live stories, everything completely free. Awesome. This has been a fascinating conversation. And your book is so thought-provoking and so optimistic. When I finished reading it, I couldn't wait to reinvent.

which is really inspiring. So I'm super grateful for you being on the show, but also for you just sharing the way you think and how we should all start thinking. Well, Drew, thank you for inviting me. Thank you for supporting the book. You know, hopefully a few more people will go buy it.

But the book's really useful for people. And when you buy it, I get three bucks. All the rest of my stuff is free. You don't have to buy it. But it keeps me in business with HarperCollins. There you go. All right. We will definitely talk about having you back. Thank you. Thank you very much. You bet. All right, you guys. So homework from this episode. So first of all, those exercises sound like a blast. I'm already making my guest list of how I'm going to.

buy people some dinner, buy people some drinks, and think differently about how AMI can show up in the world. I don't think it's just agencies. I think it's folks like us too. So you have homework to do. I challenge you to invite some people who don't really understand what you do, like get some different thinkers, right? You have lots of people in your world that are interesting thinkers and creators and entrepreneurs. And so make sure that that table is filled with interesting thinkers.

And go do the homework. Great book. And really, this is a book you want to read. And this is probably a book. It would be fascinating to read it with your leadership team and just talk about. how you together can think about reinventing the agency and i think your employees would have a lot to say about it how they want to help you reinvent the future of your business so don't this is not a monologue i think this is a dialogue uh that you can have

with lots of people in your world. So please, please, please make the effort to do that. Want to make sure I thank our friends at White Label IQ. You know, they're the presenting sponsor and you know, they actually, this is how they came to be is they. There was a problem and they needed to invent a future that did not exist back when they started. And now today they serve hundreds of agencies all over the world by being their white label partner for design dev and PPC.

They're a great model, actually, of this sort of future thinking. So head over to White Label. iq.com slash ami to learn more about how they could serve you and your team. They are a great example of what Rashad is talking about, about that partner, that outside partner who brings a fresh perspective into your business.

And you know what? I love these conversations. I love doing the homework. I love reading the books. I love meeting the authors. I love having these conversations. And so I'm going to come back next week with another guest and I hope you will join me. I will see you then. In the meantime, have a great week. Enjoy getting excited about thinking about the future. I think we have some great things to do together and I'm looking forward to it. I hope you are too. I'll see you next week.

Come back next week for another episode designed to help you build a stronger, more stable and sustainable agency. Check out our workshops coaching and consulting packages and other professional development opportunities at agency management institute.com.