Photo courtesy of The James Agency
Running an advertising agency in one of the fastest-growing metropolitan areas in the country has never been easy. When COVID-19 arrived, that challenge became a business owner’s worst nightmare.
At The James Agency (TJA), we lost a net 62% of our business overnight in March 2020, much of it tied to hospitality, tourism, and food and beverage. We survived. I diversified our portfolio, restructured operations and protected our margins while retaining our entire team. By most traditional measures, we had weathered the storm.
When the crisis was over, we realized the agency was stable again but the industry around us had changed. Clients were asking different questions, technology was accelerating and the value of deliverable production wasn’t enough. Waiting for revenue to tell us our business model was aging would have meant waiting too long.
A business model can remain profitable while simultaneously becoming less relevant. That realization prompted us to evolve from a traditional full-service agency into a strategy-led consultancy.
The best time to rethink a business model? When everything is still working.
The Warning Before the Revenue Drop
Aging business models rarely announce themselves with dramatic failure. More often, the warning signs show up in much smaller ways:
- Customers ask for outcomes instead of outputs
- Once-profitable services become easier to commoditize
- Teams spend more effort producing the same value
- The strongest business opportunities consistently fall outside the company’s scope
These inconveniences are signals that something is shifting at the foundational level of the operation.
Revenue is a lagging indicator. By the time it declines, clients may already have changed how they buy. Competitors may already have changed how they show up. Employees may already feel the friction of working inside a model that isn’t keeping up.
Leaders should pay attention when a company is still successful, but success is becoming harder to produce. Profitability isn’t proof that a business model should remain unchanged.
AI is Exposing Where Value Really Lives
Artificial intelligence has accelerated conversations about value, productivity and scalability in essentially every industry. Work that once required significant time, labor and cost can now be done faster, which means businesses can no longer rely on the time-honored equation: effort = value.
AI can accelerate research, synthesis, production, analysis and creative iteration. What it can’t replace is judgment: understanding a client’s problems, recognizing what’s important, challenging assumptions, exercising taste or making decisions.
Technology is most valuable when it creates more room for those human-based capabilities.
That distinction helped clarify where the business needed to evolve. The future wasn’t about creating more “things.” It was about helping clients make stronger decisions about what should be created, why it should be created and who it should serve. AI helps us shorten that mile — and was a key component of our evolution.
Photo courtesy of The James Agency
Change the Model, Not the Soul
When a business model changes, it is tempting to focus on tangible pieces: new services, processes, org charts and roles. But culture can get lost in the transition.
Roles change, expectations are reset, workflows adjust and employees redefine their contributions. The hardest part of transformation isn’t always determining what the business should become. It is maintaining the values that made people want to be part of it in the first place.
During TJA’s evolution, the goal was not to preserve every process from the traditional agency model. It was to preserve the value underneath them.
Creativity still mattered. Collaboration still mattered. Client partnership, curiosity and end-user emotion still mattered. But those had to show up differently in a company that was now asking its people to think more strategically, advise clients confidently and connect their work to a clear business outcome.
That also meant continuing to invest in the less-measurable elements of the culture: honest conversations from leaders who care, opportunities for people to connect, a sense of humor and tasty snacks.
Those things may not appear on an organizational chart, but they can determine whether employees experience change as something happening to them or something they are helping build.
With intentional investment in our culture, our new model stopped feeling like a transformation and became the new normal.
Know When to Move
Every business should examine what their customers are actually paying for. Leaders should look for the things that bring value, how they can do those better and which parts remain beautifully human.
The answers may require changes to staffing, services, processes or even the entire business model. That is not necessarily a sign that something is broken. It may be a sign that the business is paying attention.
The companies best positioned for the future are the ones willing to reconsider how they create value while they still have the time and resources to make thoughtful changes. The question isn’t whether the current model is working. It is whether that model will continue creating value as customers, technology and expectations change.
By the time the numbers make the answer obvious, the opportunity to evolve may already be gone.
Veronique James is the founder and CEO of The James Agency, a nationally recognized full-service integrated marketing agency dedicated to making brands matter to people. Since founding the firm in 2005, she has established it as one of the Southwest’s leading independent agencies, helping clients build relevance, drive growth and achieve measurable outcomes.
