An agency experiences a record-breaking revenue quarter followed by tanking margins. We’ve seen this play out in fast-growing agencies.

Everyone's celebrating top-line growth, but internal financials tell a different story:

• Scopes ballooned mid-project

• Project managers didn’t track margin during delivery

• Finance caught the issue weeks too late

• Delivery teams focused on “getting it done” rather than “getting it done profitably”

• Scope changes weren’t formally addressed with clients
  
  

Here’s how we’d tackle it across our Barrel Holdings agencies:

1. First, map the breakdown.

The problem isn’t just financial, it’s systemic.

• No formal process to manage scope changes with clients

• No real-time visibility into project margin

• No clear margin targets

• PMs weren’t trained or expected to manage profitability
  
  
  

2. Reground the team in core principles.

• Profit must be designed, not hoped for

• Margin goals need to be simple, visible, and shared

• Every miss is a lesson

• Communication is a performance tool, not a formality
  
  
  

3. Fix the operational gaps.

• Tighten scoping with templates, risk buffers, and pre-mortems

• Show margin vs. estimate in real time during delivery

• Train PMs on margin literacy (make it part of the role)

• Report margins monthly (or biweekly) at the leadership level
  
  
  

4. Reinforce with structure, rhythm, and feedback:

• Assign PMs as margin owners

• Review margins weekly alongside delivery updates

• Surface margin metrics in dashboards

• Celebrate margin wins not just project completion

• Feed learnings into future scoping and pricing
  
  
  

5. Watch for ripple effects:

• Stronger scope control might cause client friction; train AMs to frame it as professionalism

• Teams may resist at first; confidence comes with repetition

• Sales must evolve to take margin into account; no more “close the deal and figure it out later”
  
  
  

Success looks like:

• 85–90% of projects hitting margin goals within a quarter

• PMs discussing margin in every project debrief

• Change orders becoming standard practice, not a conflict

• Clients staying satisfied even with firmer boundaries
  
  
  

This isn’t about adding process for the sake of process but about shifting the culture. Margin becomes a shared, measurable, and learnable responsibility.

Some of our agencies have undergone this transformation and others are in the process of going through it. It's never an immediate fix but a series of many tweaks & changes over time.