Just like everybody else, I’ve spent many hours of my life pondering the question “Why must I pay an extra $2 for Guacamole?”

What exactly is it that elevates, or perhaps relegates, this one particular element of the burrito to a unique category of ingredient tariff where it demands an additional surcharge?

Lately however, my musings on the economic status of mashed avocado have taken on a more germane character. The last time I ordered a Pescado Frito, it wasn’t just the guacamole that I was thinking about, it was the future of creative strategy.

For all our talk of disrupting other people’s businesses, creative agencies have proven reluctant to disrupt our own.

Having myself attempted to ‘impose’ agile models in the past with varying degrees of success, I can see why: new means trading certainty of incremental efficiency for a mere possibility of exponential effectiveness. Without the institutional knowledge of the process needed to maximize efficiency, mistakes, hiccups, headaches and hassle becomes inevitable.

 (The most important ingredient for success when doing something new is a sense of humour. In particular, you need a gifted account lead to minimize things going off the rails, and one who is also ‘great craic’, so you can survive when things inevitably go off the rails. I’m grateful for Alanna McGill Tagg, Amy Crowe and Ben Caulfield on those projects where planes have been built mid-flight, rails have been abandoned, and we had a stressful but hilarious time doing it.)

This musing isn’t about my disdain for waterfall processes or how to deploy ‘agile’ models though. It’s about Guacamole. It’s about the future of strategy and where it sits in the fallout of the imminent reckoning between how agencies make money today and the proper adoption of artificial intelligence tomorrow.

Unlike buying a burrito, where you select what you want in the burrito, and then pay a fixed cost for it (guacamole notwithstanding), advertising agencies today tend to charge their clients based on the amount of time spent doing something.

It’s a bit bonkers, really: an industry that could only exist within the framework of consumer capitalism using a remuneration model inspired by the labour theory of value, an essentially discredited way of thinking about economics most closely associated with the Marxist planned economies.

AI, which can do in moments the work of weeks, will certainly put an end to charging clients through billable hours.

Someone whose writing on agency business models I find illuminating is Brian Kessman. I’m paraphrasing him to the extreme here, but in essence - ‘billable hours has always been a bit crap, and over time they’ve become more and more untethered from usefulness as a remuneration model, but when AI really gets going they’re going to be completely obsolete’.

I am inclined to agree. I also think it's a good thing. The value of what we do for clients shouldn’t be measured by how long we take to do it, it would ideally be measured by the value it creates for clients, and if not that then at least something better than the time spent doing it. 

Sadly, I doubt we’ll go for a model that reflects value. The reasons for this are twofold: firstly, the majority of advertising is so bad it doesn’t actually work. Secondly, measuring the value created is a gargantuan task in itself.

What's looking most likely to replace billable hours is some variation on a productized agency model.

Services will be bundled up and sold to clients to solve their problems. How exactly this ends up working once the dust has settled is anyone's guess.  The simplest approach would be flogging campaigns as a toolkit with a defined variety of media assets at a set cost. Alternatively maybe we sell products based on specific objectives - something like ‘a TVC that improves awareness scores by 20%’. Or maybe we sell products based on process milestones in a weird gamified way where each tissue session costs a set amount.

In short, I do not know where this nets out. Perhaps smarter people than I have some good ideas and might leave them in the comments. What I do know though, is that there are some enormous benefits in moving the industry away from a bedrock of billable hours. Not least less of the single worst part of the job - timesheets.

The most potent shift will be a new model that empowers agencies to hire and build teams based on the marginal impact individuals bring to the agency, rather than the hours they can get clients to pay for. Beyond that, it removes the odd incentive around adding complexity for the sake of spending more time on a project. I might expand on some of these points in a future ‘part 2’ of Guacamole Armageddon, but for now the focus is strategy.

So to recap, timesheets = crap, AI = disruptive, future = productised.

Now this is where things get interesting… Because it begs the question: In the productized agency, what is the burrito, and what is the guacamole?

If you’ve followed along and ignored some of the more oblique tangents then you no doubt have guessed where this is going… the imminent danger on the ‘AI induced productization horizon’ for strategists is that we become guacamole.

I can see the appeal to agency management - in a kind of ‘What if we could pull a RyanAir?’ way, where they lure clients in the door with a cheap product then upsell other more expensive services - ‘We’ll do you a campaign for $Xm, but you have to pay extra for the strategy, extra for the testing, extra for the experiential, extra for the social, extra to have a bathroom break during the presentation’ etc.

This portends our departmental doom. Becoming guacamole will move strategy further away from shaping the work, relegating it to being something that merely sits alongside the work - ironically, it would see us entirely relinquishing control of the strategy.

Today in the timesheets model, we strategists, somewhat counterintuitively, already spend more of our time validating rather than creating strategy. Counter counterintuitively, this isn’t actually the worst thing in the world - there's a craft to what we do, having to provide the rationale for a strategy is a great way for junior talent to learn and develop, going through the validation process can spark new ideas, it really does help you spot your biases, and clients very much enjoy seeing that the strategy is likely to work.

There's also another significant part to strategic validation that's more relevant to this essay - robust validation takes a lot of time, and lots of time means bigger scope, and therefore more money to pay for strategists…

The ‘validating it’ bit of strategy is, and always will be, far easier to turn into a process than the ‘creating it’ bit of strategy. It’s something you can put finite timings against, and as such it’s very easy to see how it might be transformed into a guacamolified upsell in the future.

In contrast, the ephemeral, imaginative, and unpredictable bit of actually creating a strategy is highly resistant to being turned into a process. To all intents and purposes it is just having an idea nobody else has had before, as therefore it's far harder to quantify or estimate with any degree of certainty how long it will take to do or what might stimulate it.

I suspect that the ‘validating it’ bit has up until now financially insulated strategists enough to give us the time to do the ‘creating it’ bit of strategy.  Paraphrasing Rory Sutherland here, but it’s far easier to post-rationalise a brilliant strategy than to pre-rationalise one. It just so happens that the value we create for brands is creating a brilliant strategy, however the way we get accounted for in scopes and agency budgets is post-rationalising it.

In the world of the productized agency, it’s not hard to imagine a strategic armageddon scenario where this little sleight of hand, the trick that gives us the opportunity to create value for brands, disappears. Then we’re only left with the post-rationalisation, the validation, and the construction of superfluous decks - all of the stuff that is easy to quantify, easy to turn into a process, and easy to sell as campaign guacamole. 

For that reason let this be a call to arms for all strategists, now is the time to stake our claim to being an intrinsic component of the creativity burrito. If we’re anything, we are in fact the tortilla, the thing that wraps all the other ingredients - the creative meat, the media rice, the digital cheese - and brings them together to give them synergistic meaning. Yes, we can also provide the guacamole of post-rationalisation and validation, but that's not the true role of strategy.