2Bobs—with David C. Baker and Blair Enns

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Debriefing After a New Business Call Jan 16, 2019

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David asks Blair about using "after action reviews" following sales calls, and the two key questions that should be asked as a part of that debriefing process. LINKS Episode #15 - The Best Learning Method Ever Devised: After Action Reviews, from The Soul of Enterprise Podcast with Ron Baker and Ed Kless TRANSCRIPT DAVID C. BAKER: Blair, today we are going to talk about debriefing after a new business call. Not after just a business call, but a new business call, right? So how did this topic come to your mind? What got you thinking about this? BLAIR ENNS: I'm a fan of Ron Baker and Ed Kless' podcast, The Soul of Enterprise. They had a podcast way back when and they made the comment that they see the after action review as the most powerful ... I'm gonna get this wrong, but is the most powerful knowledge tool ever invented. DAVID: Wow. BLAIR: That's a big statement. But we were using after action reviews in our business. And we still use them. There's various forms of them. Their origin actually came out of the US Military in the Vietnam War as a way of looking at campaigns. It's a way of essentially reviewing what happened without being critical of any individual and keeping the whole thing positive so that you can figure out what you would do next time. In fact, an after action review is really just okay what was the goal of the thing that we did, whatever the thing we did is, what went well, and then what would we do differently next time? And then there's some protocols around who speaks first and who speaks last, and how a rank is supposed to be unimportant. But I'm listening to their podcast, I realize, oh, yeah we do this all the time in our business. And it is really valuable. And I'd never thought of it as maybe the most valuable knowledge tool ever. But it occurred to me that I've never really advocated for after action reviews in sales. But I think it's probably a pretty good idea especially if you or employee who's on the front lines doing sales or doing new business development, if they're new or they've just come out of some training. Or you're stuck and things aren't going your way. BLAIR: But it's probably a good idea to review all of the key opportunities. The ones that you win and the ones that you lose. But even in the early days, I think just a new business meeting like a phone call. A kind of a lengthier phone call. Something lengthier than no we're not interested, thanks, goodbye. Or a face to face meeting I think is probably a really good idea to review. Let's just review what happened, and decide what went well, and decide what we would do differently next time. DAVID: So just a couple of housekeeping things here, if it's a meeting where you and somebody that works with you and you're gonna do the review, how soon do you do this? Is it important to do it right away after the meeting ends? Even before you get back to the office? I've got several housekeeping questions, but that's the first one. BLAIR: Generally speaking, the sooner the better. We were recording this on a Friday at the end of the week, we had two after action reviews this week of bigger things that happened. One was quite big. The sales period that just passed. That's about two months long. So what happened there. And another one's kind of a smaller thing that we're working on that's quite detailed. And sometimes it makes sense for a little bit of time to go by so that you can process what actually happened. BLAIR: But I think in the early days, if this is new for you, then the sooner the better. And then the times when you are allowing a little bit of processing time or gestation time, you know enough to make notes as things occur to you. Because the danger is if you leave it too long, you're going to forget a lot of the valuable points. Or you're going to forget the specifics of what happened or how you felt in certain situations. And those can be really valuable. DAVID: It seems like if it's you and let's say you're training somebody that's newer to your firm, sometimes it might make sense to have that person give their perspective before you give yours so that you get some independence, I would guess too. So that's interesting. And I could see this happening then after a meeting that both of you attended or maybe after a phone call where you're on speakerphone. How do you handle it when you're not on speakerphone? I presume half of the states in the US allow you to record a call without the other person's consent. But I presume you're not necessarily recording the calls. How do you handle that? How do you get feedback from somebody else if they weren't actually on the call? BLAIR: Yeah. Let me just speak to that issue of kind of rank or who goes first that you touched on. Coming out of the US Military, the idea is when they walk into an after action review, everybody basically takes a hat off and puts their insignias face down on the table. So the idea is that rank goes away. And I think a further idea is that you generally encourage the lower rank people to speak first. So the last thing I know when we're doing an after action review, I make sure that I'm not the first one to contribute. I don't want people saying, "Yeah, I agree with what you said." You really want to hear what others have to say. So that's kind of the housekeeping point. BLAIR: And then your question around- DAVID: Recording. BLAIR: Recording. In some ways, we don't actually do this in our training program. We think about it and talk about it quite a bit. The idea of we should have our clients record some of these calls and bring them to class or to interact with their coach to get some feedback on that. And I haven't closed the door on it, but there is something that I find a little bit troubling about recording a phone call when the other party doesn't know it's happening. But I don't think it's necessary to record it. To me, there's really two key review questions that you want to think about in your after action review or debriefing meeting when you're debriefing on a new business interaction. BLAIR: And the first one is what assumptions did I make in the sale? We can break that down into different categories where you would ask that question. And then the second one would simply, where did I feel uncomfortable? DAVID: Ah, so keeping it very simple there, right? BLAIR: Yeah. DAVID: Because that's gonna surface some things for you to talk about. BLAIR: Yeah. DAVID: You mentioned that you use a checklist for this. I find checklists really interesting. Have you read the book A Checklist Manifesto, by the way? BLAIR: No, I've heard of it. Haven't read it though. DAVID: Ah, it's a really interesting ... So pilots use checklists just to make sure they don't do something stupid like GUMPS. Gas, undercarriage, mixture, pump, seat belt. So you don't land without the- BLAIR: Forrest Gumps? DAVID: No, it's spelled differently. BLAIR: I would be thinking GUMPS, Forrest Gumps. That was a pretty good movie. Why was he jogging ... Crash. DAVID: And then you'd land on your belly of the plane because you didn't put the gear down. BLAIR: Yeah. DAVID: So you have a checklist of four things and it's NATB. So let's break that down. Need, authority, time frame, budget. Let's go down one by one. DAVID: So there's two questions. What assumptions did I make during the call and then where did I feel uncomfortable? So under the first question, what assumptions did I make? There's four things. The first one is need. So talk about that. BLAIR: Yeah. And so the first assumption we're making here is this is what I would call a qualifying call. So a qualifying call or a qualifying conversation is when where you are assessing the lead. A lead is a clue to a possible sale. So you've got a lead represented by an individual. You're getting that person on the phone or you're having a face to face conversation. And then you're vetting that lead to determine if the opportunity exists. Some sales people just work through that conversation subjectively. They feel their way through it. But it's really good to have a framework. And the most common framework is as you call it, NATB. Or sometimes referred to as BANT. We don't use either of those acronyms. But they're helpful here. So it's need, authority or decision makers, time frame, and budget. BLAIR: So assuming we're in a qualifying conversation, that's the framework we're using. So the first thing we're doing is we're essentially uncovering need. And the question is what assumptions did you make around need? And the first big mistake around need is the client says we need a new website. And then you just take that. Okay, new website. And you move onto authority or decision makers to talk about who are the decision makers, what's the decision making process. DAVID: So what should they do differently rather than just the website? You're suggesting they dig deeper than just the website when they're uncovering that need? BLAIR: Yeah. So there's an understanding in sales that the first stated need that you get from the client is usually some sort of tactical need or at the very least, it's what I would call self-diagnosed. So I understand my problem, I understand the solution that I need, and here's the solution that I need. But you as the practitioner, you need to understand for yourself. And you need to validate the client's self-diagnosis. And you might not fully validate in the sale. You might have to sell a diagnostic. So you might have to do some further validation in the engagement. But in the sale, you do have some obligation to do some initial assessment. So beyond just taking the client's word for it, yeah, we need a website, there's a school of thought. It's called the Five Why's School of Thought that says you ask five why's. Okay, well, why do you need a new website? DAVID: Yeah. BLAIR: We need a new website because online sales are dropping. Well, why are online sales dropping? And then you kind of continue to peel the onion in this five why's way. One day I woke up and I realized it's one of these things that just repeated a lot. This idea of five why's, I heard it before and I thought it made a lot of sense. And I woke up and I realized, man, if you have to ask five why's, your first question is a pretty shitty one. DAVID: I love that. So the idea is you're getting to the most powerful underlying need. The one that they're gonna be willing to pay you the most money to fix, right? Because if they land on the tactical, that's part of how they're framing this relationship with you is that maybe they want to pay you as a tactician rather than as a strategist. BLAIR: Yeah, I mean, I'll ask my clients, how often have you been hired? Clients said, "We need X," you said, "Okay." You were hired to do X, you started delivering on X, and you realized, "Oh my god, they don't need X, they need Y." And everybody nods knowingly. It happens all the time, doesn't it? And that's because you made assumptions in that qualifying conversation around the topic of need. And essentially you took the client at face value for is this what they really needed? And you didn't either peel the onion or come at it another way. And I don't want to go too deep down that rabbit hole, but you can look at need as expressed tactical need and then you can get to the underlying business need. And the underlying business need is we're no longer relevant. Clients are buying from somebody else. DAVID: That's much deeper, yeah. BLAIR: Right? So that's a deeper need than ... Well, you don't need a new website, you might need to be repositioned. You might need to rethink what business you're in. You might need to launch new product offerings, et cetera. You might need to think of new service lines. Whatever it is. And then there's ... We can talk about needs versus wants. And maybe that's a subject of another webcast because you've got the corporate needs that the person might be expressing. But really, if you want to win the sale, you're gonna have a significant advantage if you can get to what it is that that personal individual human being wants. BLAIR: Again, that's a deeper topic. But the question is what assumptions did it make under the area of need? DAVID: Right. And that's the first one. BLAIR: Yeah. So it's great if you have somebody asking these questions of you. Okay, what assumptions did we make around the area of need? What did the client need? Could that have been misinterpreted? Is it possible that they need something else? Did you explore? Did you ask five why's? Did you get to the individual wants? Et cetera. So that's the first one. DAVID: Okay. The second one is around authority or decision makers. And I'll tell you, this one perplexes me because if I could do this like on the forms of my website for instance, I would say are you a decision maker or you aren't? And the problem I have is that people won't be honest about that because they can't tell me that they're not a decision maker because they want to be a decision maker even though they know they aren't, right? You can't say, "Are you a decision maker? Are you a loser? Check the box." Nobody's filling out my form. This explains it. So how do you get to authority? I'm really interested in how you probe around this to surface the right answer. BLAIR: Yeah. So this is the most common area where people make the most assumptions and they're most likely to be tripped up later on in the sale because they made an assumption about decision makers and decision making process. And the problem as you pointed out is people are not immediately forthcoming about authority that they do not have. So if you were to ask the closed ended question, are you the decision maker on this project? Is it your responsibility to hire a firm like ours? You're almost always going to get, yes. DAVID: Yeah, of course. Right. Why else would I be talking to you? BLAIR: So a great opening question would be, in addition to yourself, who else needs to be involved in this process to hire a firm like ours? Right? So open with that question. And then you want to rely on your kind of hunch and start probing in specific areas. So you might say if you think this person's needs to be involved you would say, "Does your boss, the CEO, does she need to be involved in the decision?" And you might hear, no, no, no, no. DAVID: I just tell them, after I make the decision, I'll disinform them. BLAIR: Yeah. And then so a great follow up question to that would be does anybody need to approve your decision once you've made it? DAVID: That's a nonsense question, right? On the face of it. BLAIR: But it's a fantastic question. Does anybody need to approve your decision once you've made it? Yeah. The CEO needs ... It's a rubber stamp. Okay, the CEO is the decision maker. And you'll find, especially with new salespeople, if you're the coach and you're facilitating this after action review, you're going to find that repeatedly, the big assumptions are made here. And later on, they'll be the expensive ones. DAVID: Okay. So first one is need. Second one is authority or decision making. The third is time frame. This one stumps me a little because I don't even know why it…

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Shoot - Now What Do We Do? Jan 02, 2019

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Blair asks David to make some predictions about the new year, and then they discuss some ways that businesses can prepare for and react to (God forbid) an economic downturn. TRANSCRIPT BLAIR ENNS: David, predict the future. Coming year, the year ahead ... It doesn't matter when people are listening to this or when we've recorded it, but in the year ahead is it going to be a year of abundance or is it batten the hatches, we've got trouble? DAVID C. BAKER: I think it'll probably be right in the middle. I think it'll be- BLAIR: Oh, come on. Make a guess. DAVID: Oh, no but that is a real prediction. BLAIR: Don't you love driving through these small towns and rural parts of whatever country and you see these fortune tellers that read the cards or whatever? And they're all in these shitty little offices. I'm just wondering, how does that work? DAVID: How come they're not in palaces? BLAIR: Yeah. Right. Or the 49th floor of some high rise condominium. DAVID: You talk with your clients, a lot of them every week, and I do as well, it'd be interesting to see what you're feeling right now. What they're feeling right now. My sense is that there's quite a bit of uncertainty, like the stock market wasn't great through last year, and unemployment is still low, and there's some political uncertainty. The world feels a little bit fragile. But really that's kind of in our heads. DAVID: The actual business results have been pretty good for almost everybody in the marketing field. There are a few isolated examples of firms that have struggled a lot. Often because they lost one big client or something like that. But it's generally, firms have been doing really well, and there's thinking okay, is this next year, is this year, 2019, going to be as good as last year? DAVID: I don't think it will be better. I don't think it will be a whole lot worse. I think we'll be lucky to have a similar year. But what do you think? BLAIR: For context, we're recording this on December 21st, 2018. So Happy Solstice by the way. So we're going into 2019 wondering how things are going to shake out. And the stock market, see I don't pay much attention to the stock market but I just noticed that all the gains for the year have been wiped out in the last few weeks. So the market is down. There is discussion within the broader financial markets about whether, or not we're headed for another 2008-ish crisis. There is the global political unrest and uncertainty. BLAIR: But in the face of all that, if you ask me to make a prediction of the year ahead ... this has nothing to do with reality, I realize as I was thinking about it. And only to do with whatever is going on inside of me. But I always believe my future is bigger than my past, to steal a phrase from Dan Sullivan, from Strategic Coach. So I'm an eternal optimist. BLAIR: Now it doesn't mean I think that the market conditions are going to improve next year. I actually don't spend a whole lot of time thinking about this. That's why I'm going to interview you on it. Because you've spent some time thinking about it. And this can't be right, but it's a great way to go through life. I actually think it really doesn't matter what the markets do. BLAIR: If I'm running a well run business, I will be able to survive anything. So, that's the way I think about. And then how I think about a bad year, looking back on it, might be entirely different. But I go into it with this, you might call it naiveté, around what's going to happen. But you should hope for the best and prepare for the worst. Is that the saying? DAVID: Yeah. That's a really interesting perspective. And by the way, you are so messed up in the head. BLAIR: I know. I acknowledge that. DAVID: You think I wouldn't be surprised anymore by the stuff you say. BLAIR: What surprised you? DAVID: Well, you said something really powerful, that I don't want to pass up. I want to make sure that people don't miss it. And that's that from a personal performance, or a firm performance standpoint, next year will be better than last year. And that's separate than what the marketplace might bring us. I think that's really, really smart thinking. DAVID: I want to clarify having, in that broader context, that yeah, I absolutely believe that too. Every one of my clients is going to be running their business better in 2019 than they were in 2018. But what will the marketplace bring them? And I think that's just brilliant the way you just separated those two things. BLAIR: So I've spent a lot of time contemplating the question of, is there such thing as free will? Do we human beings have free will? Then one day I realized, you know what, it's kind of a stupid question. Because the answer is it doesn't matter. You should live your life like you have free will and you have total control. And I feel the same way about business. BLAIR: You should operate your business like you have complete control over what happens. Because I think in those moments when we feel helpless and out of control; and if we have a tendency to blame the market, really most of us we're running businesses that can survive a downturn in the market. If we're making correct and courageous decisions and preparing ourselves appropriately, it really doesn't matter what happens in the market. BLAIR: Now there are some exceptions to that. Maybe we'll get into that. Because some vertically specialized firms in particular are more susceptible to an economic downturn. Is that right? DAVID: Right. For sure. I think of this as ... so you, the people listening to this, are the captain of the ship. You're standing on the deck, and you can't control the winds that are going to come your way, but how far out should you look so that you can take corrective action if you see an iceberg coming. That's kind of your job as the captain. You can't just rail at the winds, assuming that you're going to change them. But you can get your crew ready. You can think about the decisions you need to make, as far in advance as possible. Think about the culture of the crew and all of those things. DAVID: So it's a unique balance that nobody else at the firm has to think like you do with a finger firmly on the immediate pulse, but also looking far ahead, and making those smart decisions that way. BLAIR: Okay. Let's begin by talking about those things that our listeners can do to prepare before a downturn even hits. So if you suspect, or if you're worried about the economic conditions in front of you, wherever you are in time, what are some of the things that you should do to prepare yourself? DAVID: Well, one of the things that you might do is think about, rather than building a much more expansive, slash expensive, amount of money going to people, you could give somebody a one time bonus, instead of building that amount into their usual salary. Because it's very difficult to take money away from somebody, so that would be one thing that you could do. I don't mean a Christmas bonus. I just mean, instead of an annual bonus, maybe you'd give them just a one time bonus, rather than raising their compensation. That'd be one thing to think about. DAVID: Obviously if you've been doing the opposite for a long time that's going to raise a few eyebrows, but it also might just be prudent thinking, and say, "Hey listen. You've kind of maxed out within the salary range that we set for your role. But you've been a fantastic employee. I don't want to build a whole lot of fixed, higher money going to salaries, but I do think you deserve something. So here it is." I think that might be the first thing you probably think about. BLAIR: I think that's a great way to phrase it. Because as you were describing it I was thinking, well how do you communicate this? So you communicate it by saying, "I want to acknowledge your good work." I guess this is my question. Would you acknowledge nervousness about the market? Because of the market et cetera, I don't want to build in higher, fixed salaries. Or would you always come back to, you've kind of maxed out in the salary band. Is it appropriate to communicate to your people, I'm doing this move because I'm concerned about the larger economic conditions? DAVID: Not unless not mentioning it would strike them as odd. So if they are feeling the same thing, because of what they're seeing in the news, and what you're talking about. And if you don't acknowledge that potential for something right around the corner then I think you're going to look kind of stupid. But if saying that feels more like an excuse to them, then I wouldn't say it. So just sort of acknowledge what is widely viewed in the marketplace. I think that's how I would view it. BLAIR: So preparation point number one is to consider bonusing people rather than building salary raises into fixed compensation. What else should people do to prepare? DAVID: I'm really just working down the income statement thinking about where most of the money goes. Right? And most of the money goes to people. Where does it go next? Well it used, and this is kind of changing a little bit, because of how expensive benefits are for people. But where it goes next is facilities. DAVID: So this is not the time to sign a 15 year lease. Right? It might be as long as you have some outs. And those outs are the ability to sublease to somebody else, or the ability to give them six or twelve months notice at any point in the lease, and walk away from it at that point. Or maybe if you're providing a personal guarantee for the entire term of the lease, that personal guarantee is capped at some certain amount. DAVID: So when you think about how you might need to adjust the size of your firm, other than people, facility is the next thing to think about. So just really careful about some of those long term decisions that you're making. BLAIR: Okay. That makes total sense. What else? DAVID: This is one I want to talk about together. And it's just this notion that lead generation, if done well, is this massive fly wheel. Where I grew up we had to supply our own electricity, and there's this diesel generator. I remember how slow that thing would start. You'd have to crank it over by hand and it would go ... little faster, faster. And then once you turned it off it would take forever to slow up. You could lose a hand if you put your hand in there too quickly. That to me is what lead generation is like. It takes so long to spin up. DAVID: So if you don't have your own lead generation plan well in place, before some sort of downturn hits, then you are screwed, my friend. Because it just takes so long. People are always asking me, after we fix positioning and lead generation at a firm, and you're doing the same kind of work as I am, well what results should I expect? How long should this take? And the answer isn't the same for everybody. But frequently it sounds something like this. "Well, if you do everything right, you should expect to land the first right fit client in about six months. And then about every three months you're going to land another one." And they look back at you thinking, that is not what I expected to here. DAVID: So you've got this downturn that hits and then you decide to get your act together. Sorry friends, it's too late. You know. What do you think about how long this kind of stuff takes to spin up? BLAIR: Well, and both of these issues, positioning, and lead gen in particular, they also affect how you see the new business position. So if you don't have the flywheel, the lead generation flywheel moving already, by creating content, building a reputation, et cetera, putting stuff out there that positions you and drives inbound inquiries. If that's not happening and then you hit an economic downturn ... and let's say you've got the new business seat is empty, and you decide oh we need new business, we have to fill it. You're going to look at the new business seat as you want to feel it with somebody who does lead generation the old fashioned way. The outreach, the cold outreach way. BLAIR: And when times are good and your lead generation flywheel, to continue the metaphor, is turning with little effort, then most small to midsize independent firms, probably don't need a business development person who is its salesperson. They need somebody who is actually good at navigating a sale to a close. BLAIR: Just very quickly, if you need your new business person to generate leads for you, rather than navigate the leads that marketing is generating for you, than you want somebody who has got a very high competitive drive. Who's rejection proof. Who goes, goes, goes. Who talks people into things. When leads are coming from marketing then you tend to think of a salesperson as somebody who is a little bit more patient and consultative, who's good at navigating. Is a little bit more discerning, so they have a lower competitive drive. And they're good at navigating opportunities through to a close. And in a lot of firms that can be the principal or another senior person. BLAIR: If your lead generation flywheel is turning you don't need that kind of old school typical new business person, who's out there smiling and dialing. DAVID: Right. BLAIR: But as soon as the downturn hurts and you realize that you haven't done the hard work on the lead generation flywheel issue, then you're going to panic, and you're going to go looking for a salesperson, lead generator, who's going to smile and dial and try to talk people into things. DAVID: I always picture those people driving a Taurus for some reason. BLAIR: Why? DAVID: I don't know. They drive 300 mile max trip and it's usually a dark colored Taurus, and they're wearing a polyester suit. Maybe I'm a little prejudiced about those sales people. BLAIR: Yeah. Maybe you are. DAVID: Yeah. Maybe. BLAIR: Okay. So we're talking about preparing for a downturn. You've talked about trying to keep your fixed comp lower by maybe bonusing people, rather than raises. You've talked about being careful about signing long term leases. You've talked about do your positioning and lead generation planning and work in advance, so that the flywheel is still spinning even in a down economic period. What else? Anything else on the preparation list? DAVID: Last thing maybe would be just to pay down as much as possible, the debt that you've already incurred from either ignoring operational issues that you should have solved in other ways, or maybe from the last downturn, or whatever. Get that off the books. Because when you are looking at reducing your monthly outlay there are some things that you simply can't touch. One of those is the debt. So if you have debt, still on the books, in a downturn, you have to cut the people side even deeper than you would have wanted to. You can't cut the facility. You can't cut the debt. So you have to cut the people side deeper. DAVID: So you really want to focus there, and in particular you want to focus on any debt that's personally guaranteed. Which for any smaller firm listening, almost all of it is. Even the credit cards. That would be like a term loan from a bank or a line of credit. Sometimes in the bigger firms, it's not. If there's a distinction there and some of the debt is personally guaranteed, and some isn't, then focus on the part that's personally guaranteed. So that if the…

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Selling in One Lesson Dec 19, 2018

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Blair describes to David how he was able to distill his Win Without Pitching approach into a simple formula: P=db/D Power = desirability / Desire Links Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics by Henry Hazlitt Economics in One Lesson Wikipedia page Henry Hazlitt Wikipedia page The Win Without Pitching Manifesto by Blair Enns Transcript DAVID C. BAKER: Blair, We are going to talk about selling in one lesson. BLAIR ENNS: I know why you're laughing. DAVID: I'm laughing because you're constantly pretending that people need to hear all kinds of lessons, but if really is selling is just in one lesson, then doesn't that sort of undermine, anyway, let's just go on. I'm sorry, I'm just trying too hard here. BLAIR: Yeah. DAVID: So selling in one lesson. But what's interesting about this is that you have a formula, and I think we probably need to put this formula in the show notes, right? Because just being able to picture this as a, so tell us the formula and then where this came from because I find it really fascinating. BLAIR: Yeah, it's a formula. It's not really made for the audio medium but what the hell. So selling in one lesson, well let me back up a little bit. So I've been doing the Win Without Pitching thing since about 2002. And since then, people have said to me, you know, like in as few words as possible, explain how you win without pitching. So it took me a long time to get it down to two steps. And so here's how you win without pitching in two steps. BLAIR: Step one, you change the power structure in the buy sell relationship, and you do that through positioning and we could talk more about that, but we'll get into that in a bit. But that's step one. You change the power dynamics or the power structure in the relationship through the positioning of the firm. By vastly reducing the number of direct competitors you have, you change the power dynamics towards you because the client's power, their power in the sale, their power to push you around, dictate price, etc, comes from the availability of substitutes. So by narrowing your focus, building deep expertise, you become this expert firm and you change the power dynamics. So that's step one, change the power dynamics in the relationship primarily through positioning. BLAIR: And then step two is to leverage that new found power that you have to change the way your services are bought and sold. And it takes a really long time to unpack that second step because it encompasses many, many things. So, for a long time I was pretty happy with my Win Without Pitching in two step description. And then about five or six years ago, I read Henry Hazlitt's book Economics in One Lesson. And this is a book that I think it was published in 1947 and sold well over a million copies, and I'd never heard of it. And somebody mentioned it and I picked it up and I thought, well, this is something else. If somebody can really pull off the promise in the title by delivering the entire kind of school of economics, I won't call it a science because I like many others don't believe it's a science, but the entire school of economics in just one lesson that will be impressive. And he did it, like to Hazlitt's credit, he was able to distill the entire field of economics down in one lesson. DAVID: And economics is not a simple field either. So pretty complex. So you took this as a challenge. Two is not enough. BLAIR: I thought, well, he can do it in one lesson, I can do, what does it mean to win without pitching or to sell creativity or to sell expertise of any kind. I'll just broaden out to selling in one lesson. And let me read you Hazlitt's lesson because early in his book he delivers the lesson and then he goes through all of these examples of how poor economic decision making or poor economic policy arises from violation of the lesson. Here's the lesson. "The art of economics consistent looking not merely at the immediate but at the longer effects of any act or policy. It consists in tracing the consequences of that policy, not merely for one group, but for all groups." BLAIR: So, what he says essentially is that any mistake in economic policy arises from the violation of one or two things. The first thing is you didn't consider all groups who would be affected by this. You only considered one group. And the second thing is, you didn't consider the long term, you only considered the short term. It's not the only book you would read in the field of economics, but it's a book that you could read and then you could measure any other economic theory or recommendation against the lesson in that book. I think that's why it's such a powerful accomplishment that Hazlitt pulled off. And I was thinking, well, is there the equivalent in selling? And I don't know if I've arrived at it, but I have a lesson that I can distill into even fewer words than Hazlitt. I can get it down to a formula. DAVID: Yeah, and I'm picturing you in this white lab coat in this big theater at Harvard, and you're writing on the whiteboard and all the students are nodding off. What happened to our regular professor? Where'd this guy come from? BLAIR: What's Matt Damon the janitor doing here? DAVID: Okay, so read the formula, and if we have anybody still listening, you need to picture this, and you might want to go to the show notes as well if you can just to see it. So, read the formula. BLAIR: Our last podcast was so good. DAVID: It was. Oh, how the mighty have fallen. BLAIR: I'm going to read it. I'm going to read it because it's on the back of the coffee cup that I'm holding up. Here's the formula, selling in one lesson. P=db/D. DAVID: So it's capital P. BLAIR: Capital P, equals lowercase db over D, capital D. DAVID: Okay. So let's break this apart. What does the P stand for? BLAIR: P stands for power. It's short form for power equals desirability over a desire. So your power in the sale is a function of having your desirability be greater than your own desire. Makes sense, right? DAVID: Yeah. So somebody needs to want you more than you want them in simple terms. BLAIR: Yeah. Drop the mic, podcast over. DAVID: Right. But now we're going to drag this out for another 20 minutes so people feel like they got their money's worth. BLAIR: Go ahead and get a coffee folks. DAVID: I mean it makes perfect sense. As I think about this too, and I'm also wanting to draw this parallel with something that you mentioned in passing, talking about Hazlitt's theory and thinking about, sort of you didn't use this phrase but unintended consequences. I was just thinking about how many times principals make short term decisions thinking that there will not be unintended consequences. DAVID: So for instance, you need a lot of work at some point and so you make all kinds of compromises not realizing that you're really throwing away the long term viability of this particular client, but the good news is that you get all kinds of opportunities to do this. And what you're talking about is taking the longterm view. But more than that, it's about the whole, maybe not, I guess power structure, is there another word besides power if somebody isn't drawn to that, maybe opportunity or choice or control, something like that? BLAIR: You've kind of put me onto this a few years ago. I think you very subtly pointed out that I use the P word a lot, power. And you've suggested that, well, there are other ways to think about power, distributed control, the ability to lead. But let me unpack the formula a little bit. DAVID: Sure. BLAIR: Your power in the sale is a function of your desirability being greater than your desire. And so power is the power to do certain things, not just when the business, I'll unpack that more fully in a minute. But it's essentially your power to win the business and other things. I talked a little bit before about who has the power. Typically the client has the power and that's a function of the availability of substitutes. But in this formula, we're just thinking about it differently. Your desirability, how badly the client needs or wants you or the engagement with you when it's higher than your own desire for the client, for the engagement with the client. When your desirability is higher than your own desire, then you have the power in the buy sell relationship. So that's in simple terms, he who wants it least has the most power in the relationship. BLAIR: And if you look at most of the problems that agencies find themselves in under the banner of new business development, most of the things that go wrong, most of the costs that get incurred, it's a function of the client didn't want it as bad as you wanted it. DAVID: You've actually talked about this inside of a micro-example way when you talked about using silence in conversations to see how long you can wait before somebody else says something, before the prospect says something. Sort of like a micro-example of how all of this happens. Are you talking about real desire? If you feel like you need to land some business, are you talking about eliminating that or actually pretending that you don't need it? BLAIR: That's a very good question. Yes. DAVID: Okay. You didn't set me up with that. On my own, I came up with that question. Let the audience know for sure. BLAIR: You read that just as I wrote it. DAVID: Yeah. Right. BLAIR: So, you could extrapolate that formula to mean that, okay, therefore, we must seek to maximize our desirability and minimize our desire. Now, if you did that, what would happen? If we sought to minimize our own desire, A, we would lose the motivation to go get the business to begin with, B, we would communicate to the client that we're arrogant, aloof or uninterested. So, I'm not suggesting that we take that formula to the maximum and seek to minimize our desire. We do want to maximize our desirability. And I'll come back and talk about how we do both of those things. Maximize our desirability and not minimize our desire, but just make sure that the expression of our desire, and that's the answer to your question I think is lower than what we discern our desirability to mean. BLAIR: Are we just convoluting things? Let's unpack power then we'll go through desirability and desire. DAVID: All right. BLAIR: So P=db/D. Your power in the sale is a function of your desirability being greater than your desire. And when I talk about P or power, I'm talking about the power not just to win the business, but to win the business with key variables in place. Number one, the right type of business. You and I have worked with so many firms who are pretty good at closing new business and then you look at the business that they want and you think what is this? What is this dog's breakfast stuff? Things that you've done for all kinds of different organizations. When a firm has a positioning challenge and they look at everything they do now and everybody they do it for it, they think, well, I don't know where to begin. And you don't know where to begin, first of all, you shouldn't necessarily look at your current or your past client base. But when you do look at your current client base, all you're seeing is the history of everybody you've ever said yes to. That's all you're seeing, right? BLAIR: So you really need to start being more discerning about the types of organizations you work with. So first of all, it's the power to win the right types of business. And the right type of business might mean at a certain fee level or budget level or even profit level. So that's the second variable of power, not just the right type of business, but at high margin. We all agree that high profit margins are better than low profit margins, right? DAVID: Yeah. Unless you're in the southern hemisphere and then it's flipped. But yes. BLAIR: Shout out to all our Australian friends. So the power to win the right type of business at high margin. The third variable is at low cost of sale. Now, just like you and I and everybody listening will agree that higher profit margin is better than low, we all agree that lower cost is better than high cost. But it's not just for the obvious reasons that we want to keep our costs low. The reason you want the power to win the business at low cost of sale is the cost of sale that you incur to close the business is an indication of how much power you actually have in the sale. Therefore, how likely you are to win. So, if you're going through the sale and even in the early days of the sale, the client is forcing you to incur all of these costs like travel to see them or do some sort of research or other things, that's an indication that you're not likely to win the business because you're not seen as meaningfully different. BLAIR: So, we want to be in the power to win the right types of business at high margin, at low cost of sale, and the last variable under the subject of power is well positioned to have the greatest impact. And what I mean by positioned to have the greatest impact is with you positioned as the expert practitioner in the sale and you have enough power that the client is letting you lead. I think everybody would agree that for you to do your best work for your clients, you need the client to allow you to lead the engagement. One of the phrases that I probably say most often over the last few years is this, the sale is the sample. If you are not allowed to lead in the sale, then you are not likely to be allowed to lead in the engagement. BLAIR: That's one of the reasons why I like measuring how much power you have in the sale is so vitally important because if you're not able to amass some of that power and I sound like a dictator, but if you're not able to get some sort of indication from the client that they see you as the meaningful expert and they're allowing you some sense of control, they're allowing you a leadership position in the relationship, then you're not likely to win the business. And if you do win the business, you will not be positioned to have your greatest impact because for you to do the best work, you need to be able to lead. If you're not leading in the sale, they're not going to let you switch hats. You can't be a good soldier in the sale responding to RFPs, saying yes, leaning on service and enthusiasm. That's what I consider to be a good soldier. Somebody who follows orders well. And then once you win the business, take your soldier hat off and put on your general hat and then start to take control of the relationship. BLAIR: The dynamics of the relationship are established in the sale. So, you need the power to win the right types of business at high margin and high margin is important because profit margin just goes down over time. So it's important to have high margin at the beginning. Low cost of sale, low cost of sale is important because it's an indicator of how likely you are to win the business, and with you positioned to have the greatest impact. By that I mean with you in the expert practitioner seat rather than the vendor seat, where the client is saying, okay, you're hired, what do we do now, let's do it your way. Rather than you're hired, here's how this is going to work, Mr vendor. DAVID: Yeah. In a minute, I want to ask you to talk me through how we kind of keep our expression of D low and still be true to ourselves and not abuse the prospect/client and so on. But, I just have to kind of interrupt a…

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The Risk Episode Dec 05, 2018

Show notes

After touching on the topic of risk in many other episodes of this podcast, David and Blair finally take a full episode to discuss at length the role of risk in entrepreneurship. LINKS "Confessions of a Recovering Consultant" by Blair Enns Hyman P. Minsky Archive Twitter exchange with Jonathan Stark on risk Strategic Coach program with Dan Sullivan "A Mission With No Exit" by Blair Enns Peter Drucker TRANSCRIPT BLAIR ENNS: David, what's the riskiest thing you've ever done? DAVID BAKER: I've always wanted to have a really long pregnant pause right after you start something, because you're always telling me I can regain the power with silence. The biggest risk I've taken was probably telling my wife about the risks I was going to take. BLAIR: Yeah, right. Wow. Hands up, everybody. DAVID: She's only told me there was one thing I could not do and it's so illogical. She says I cannot jump out of an airplane. She doesn't terrify flying, or race, or whatever, but I can't jump out, which seems so illogical. So, as soon as I get some, you know what, I'm going to jump out of an airplane. BLAIR: You've got some high risk hobbies. I'm not sure that you indulge in all of them, but tell us a little bit about your high risk hobbies. List them off, because it's a little bit incredible. Here's the consultant, somebody who types for a living. DAVID: Oh, that is dismissive, types for a living. BLAIR: Well, I refer to myself that way too. DAVID: Yeah. BLAIR: Like I'm a typist, right? I have friends who have calluses, like they're real men. You and I, we type and talk on the phone. DAVID: Okay. So, I taught motorcycle racing. I fly airplanes and helicopters. I travel to very dangerous parts of the country. BLAIR: Yeah. DAVID: I love the shooting sports, not shooting at each other. I'm not so much into those, and I don't hunt, but I like shooting sports. And I do a podcast with you, that's pretty up there too. What are yours? BLAIR: Yeah, right. Okay. I knew I was going to open with this question. For those of you listening, if anybody is listening, this is the risk episode, where we're going to talk about various types of risk, but to answer your question. When I knew I was going to pose this question to you, I started thinking oh, what's the most riskiest thing I've ever done? Other than some things that were driven by kind of alcohol and youth that were just outright stupid when I put my life or the lives of others in danger, other than that, I can't ... The riskiest things I've done in business have been investing in the business. By that I mean spending money, seeing something as an investment but knowing in the short-term, the expense is potentially debilitating to the business. DAVID: Right. BLAIR: But then trusting that it's going to pay off in revenue down the road. DAVID: Oh. The biggest risk you took that I can remember was when you totally changed your business model to a training model from a consulting model. That was a huge risk, to me at least it felt, maybe it didn't feel that way to you as much as it did to me. I was looking, from the outside, in marvel really. I was thinking, "Wow, that is a big risk." BLAIR: You were thinking, "Wow, that is a stupid move." I remember you telling me like a year later, "You know you could still go back to being a consultant," and I couldn't because I wrote that 3,000 word blog post called "Confessions of a Recovering Consultant." DAVID: Right. BLAIR: The reason I did it is I put it out there so that I would not ... That was my version of burning the ships so that I would not go back. DAVID: Right. BLAIR: And here we are. DAVID: But you do take some pretty significant physical risks. They may not seem like it to you because of where you live, but you hike in pretty crazy places and you poke bears, maybe not literally but close to it. BLAIR: I once said to my son, who was 15 at the time, I said, "You know, you're one of the few people in the world who has put your hand into a grizzly bear's mouth," and he responded promptly by saying, "I'm one of the few people in the world who has stuck a thermometer up a grizzly bear's butt." DAVID: Except he didn't use that word, but yes we gathered. BLAIR: He did. DAVID: He did? BLAIR: Okay. Enough about us. So, I sent you a text saying, "Hey, we should do a whole show on risk," because probably like one in three or four episodes, we keep coming back to the subject of risk, like how much risk that the principals of creative firms take. So, where do you want to start here? Do you want to start with your Minsky quote? DAVID: You know, I never used to pay any attention to economists, until you kept quoting different economists to me. So, as I was thinking about risk last night, watching a very boring TV show, I found this quote that just struck me. It's by Hyman Minsky, and it says this. He said, "Stability is destabilizing." And then there was an article on the Wall Street Journal talking about that concept and he also said, "That's because, in other words, stability is destabilizing because long periods of calm induce behavior and innovation that make the next downturn more violent" I was thinking about times in history where all the nobles were safe in the castles and the rest of the people are dismissed, and all of a sudden, they revolt against everybody. You think about all of these cycles that have happened over time, and the apparent stability that just slowly, slowly was like boiling a frog in water, people don't even notice, and all of a sudden it just breaks out. Or you think about some of the terrible diseases that have wiped out millions of people, or you think about some of the financial crises that almost all of us now are not too young to remember, like the Housing Crisis and so on, and yet we think that somehow this isn't going to happen. Then other times, we think it's going to happen. The more I thought about risk, the more confused I got really because I think of myself as quite a risk taker, but I also wonder if I really am. BLAIR: Isn't that interesting? Why do you doubt that? DAVID: Well, because I have one of those personalities that thinks really carefully about the implications of something, and then I just do it. So, I have what's called the DC conflict in a personality, so I tend to overthink things a lot and I'm a bit of a control freak. BLAIR: Yeah. DAVID: Then I think well, after I thought through this this much, it doesn't feel like that much of a risk. That's why it doesn't feel like I'm as much a risk taker I think as maybe other people who've seen my behavior might think that I am, because it's just no, I'm going to do this. But also, you and I have had really interesting conversations usually after a Manhattan or whatever we happen to be drinking. BLAIR: It's a Negroni this year. Let's just be clear, this is the year of the Negroni. DAVID: The year of the Negroni, that's right, yeah. But I have run my business and my life in a way that I'm going to try to make principle decisions and that means that I'm not going to stop short of those because of fear. So, I am willing to picture myself homeless, that is, without a business, without any significant level of asset, and I will still be making decisions based on principle. DAVID: That just seems like such a logical position for me to have, and so in that sense, it doesn't feel all that risky to me because what's the worst that can happen? Oh, homelessness, oh, I'm okay with that. That's why risk is a confusing concept to me. BLAIR: I think that some listening to this might think, oh that's a bit of an exaggeration, but like somebody who knows you and has had many conversations with you, in which you have brought up that scenario, you have very vividly painted this scenario of you being homeless, you usually had a dog. DAVID: Right. BLAIR: You've lived in this future state where you've imagined it quite a bit, and so you've tried it on and thought, "Yeah, I'm okay with that, as long as I can live with myself and the decisions that I've made." DAVID: Right. I believe that I am a few stupid mistakes, let's say I'm struggling with some emotional or mental issue and I make a bad decision, and then it's compounded by another one out of 10, so two decisions. BLAIR: Yeah. DAVID: Do you think you are a couple of decisions away from a very altered lifestyle? BLAIR: Wow, you know, you're probably asking me at exactly, I won't get into the details, but we're considering a big move in the business, financial move. So, I have thought okay, if this goes wrong, I'm really vulnerable. If this goes wrong and something else goes wrong, I might be starting over. But like you, being bankrupt and starting over doesn't worry me. It worries me because it would terrify my wife and my obligation to my marital partner. My kids will be fine. I'm okay with starting over. When you get these compounded variables, it's like okay, I'm going to take a big risk. DAVID: Yeah. BLAIR: And you take a big risk and it doesn't work out. Usually, we're not betting the entire firm or our entire lifestyle on it. But if something else happens at the same time, then possibly we're wiped out. That's how populations go extinct, this combination of a steady pressure and then an incident. I forget, there's a name for it, it will come to me in a second. So, the steady pressure might be economic decline. So, we're in a period of recession and then something goes wrong, so when you get those two variables together, that's when everybody is really vulnerable. BLAIR: I was really interested in this topic because a friend of mine, Jonathan Stark, on Twitter he's a developer and teaches developers about value-based pricing, and he was tweeting about an episode of one of his podcasts recently, and I haven't listened to it yet. But he was ... just the subject of risk, I forget what his question was, but I tweeted that ... and I was really thinking through this as I was forming the tweet that's, "I've come to the conclusion that the state of entrepreneurship is that you are all in all the time. You're always making ... You always have a bet on the line." BLAIR: His reply was, "Yeah, but you're not always betting the business. It's a series of small bets." I tweeted back, "Yeah, I agree with that," but I don't fully agree with that. I want to come back to that Hyman Minsky quote in a minute, but I think there's something about the state of entrepreneurship where you are always walking some sort of line and when I read Minsky's quote, let's just reread it again. BLAIR: So, "Stability is destabilizing, that's because long periods of calm induce behavior and innovation that make the next downturn more violent." I read that quote, I think of our listeners, our clients, and the ones who are like they get comfortable. They build a comfortable business. They're not constantly reassessing their business model. Then along comes change and they're just caught flatfooted. It's like your friend who says, "Yeah, my wife left me and I ..." DAVID: It was a surprise. BLAIR: We didn't even have any trouble. We never argued, and you think you idiot. A married person needs to be just slightly paranoid about the state of their marriage, the way an entrepreneur needs to be slightly paranoid about the state of the market. Something could come along, the karate instructor or whoever it is. DAVID: I just love how you just lay your whole life out in front of thousands of people. BLAIR: Well, I've learned my wife doesn't listen to this podcast, so I'm okay. DAVID: Oh, that's given you a lot of freedom, yeah. BLAIR: When you read the Minsky quote, were you thinking about yourself or were you thinking about those clients that you've had who it's like good stable business, and they're playing golf or they're so comfortable, they don't change anything, and all of a sudden, the condition are slowly, slowly changing like the boiling frog. BLAIR: And then bang, they wake up one day and everything is different and they kind of blame the market or they don't understand what's happened to them. What's happened to them is they got comfortable. They weren't sufficiently paranoid to the point that they weren't constantly reinventing things, constantly taking risk. That's what I see in that quote. What do you see? DAVID: I see the same thing, and your description of these entrepreneurs, these principals that are listening is exactly right. They wake up in the morning and if they're not worried, they're worried. They're worried about nothing to worry about. They're always paranoid about something, even if they have to make up something that they're paranoid about. They envision that maybe an employee is plotting with a client to take the business, or they read something that isn't even there in a comment that a client made about oh, their client is going to leave. Or they read something in the news about how this entire industry is changing. So, yeah, that's exactly right, but I feel conflicted because on the one hand, I look at firms who just toil under the radar, they're not firms that anybody is trying to emulate. They're not winning all kinds of awards. They're not the cool places that all the young folks want to go work at. They just do good solid work. They've got solid financial fundamentals as well. They've got decent principles about how to manage people, and year after year, they make money. Then you have the other ones who are innovating at the frontline and creating new service offerings and saying, "Hey, you know what? Nobody is going to be developing websites in three years. So, in one year, I'm going to stop doing that and reinvent myself." What's the better model, because I just don't see too many firms who have much of a balance between those two things. It seems like it's one or the other, and I want ... Maybe this is my personality coming through here, but I want a little bit more balance and I hate the fact that they're constantly paranoid, but I love the fact that they're constantly paranoid. Does that make sense even? BLAIR: So, you're saying at one end of the spectrum, there's an unhealthy paranoia. DAVID: Right. BLAIR: Right, just because you're paranoid doesn't mean they're not out to get you. DAVID: Right. BLAIR: At the other end of the spectrum, there's this complacency. DAVID: Right. BLAIR: And you're saying you would like to see more firms in the middle that have where the principal has a healthy level of paranoia. Is that what you're saying? DAVID: Yes, I am. I wish there was some way to figure out where principals were on that spectrum. Here's an example, this may not be the answer, but it illustrates what I'm thinking of. Maybe you need to be making your employees a little bit nervous most of the time, but not flat terrifying them, right? BLAIR: I agree with that completely. I really identify with that. DAVID: Okay. BLAIR: Yeah. DAVID: Or another would be you need to run a culture where people really want to stay and work for you, but some of them should still leave for the right reason. We don't want to read too much into people, or read the wrong things…

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Open Book Management Nov 21, 2018

Show notes

Blair gets David to admit that he was kind of wrong about open book management being just a fad when he originally wrote about it almost two decades ago, and David offers ways that it can actually benefit both employees and clients when used appropriately. Links Financial Management of a Marketing Firm by David C. Baker TRANSCRIPT BLAIR ENNS: David, today we're going to talk about open book management. How does that sound to you? DAVID C. BAKER: Sounds like you think you're in charge. Why don't you say, "Can we talk about that?" BLAIR: Well, let me assert control. David, would it be okay with you if we talked about open book management? DAVID: Great idea. I like that idea. Let's do that. BLAIR: Okay, fantastic. I just happen to have an article here that you wrote. I've actually just pulled it out of your book, Financial Management of a Marketing Firm. We don't talk about that. We should do some podcasts on that book, because that's a book that every principal of a creative firm should have on their desk or their bookshelf. And the reason I had it out is, I was just on a call with the owner of a small creative firm who wants to raise his level of business acumen, and we don't have the training program that he's looking for. Ours is too specific to business development. So I said, "You need to buy this book." And then, as I was leafing through the book, I saw you had the stuff on open book management. We'd already agreed that we were going to talk about open book management. But I want to read something from this that's in the book. BLAIR: It says, "OBM, open book management, is clearly a fad. That doesn't make it wrong, just suspect!" Exclamation mark. "Open space layouts are also a fad, and time will tell how they catch on. Though there's already strong anecdotal evidence, if that's possible, that people jumped on the bandwagon and only later asked where it was headed." DAVID: So you want me to pull stuff out of here to embarrass you, as well? Or not? BLAIR: "In my opinion, open book management is a fad that will not catch on with the masses." When did you write this? DAVID: Last month. No, the first time I took a stab at writing about open book management was in 2000, so you gotta give me a little bit of slack. I was kind of wrong about that. I'm still going to be right about open plan offices, but it's going to take another decade for the world to figure out that I'm right about that. BLAIR: Really? DAVID: Yeah. BLAIR: Yeah, you think we're going to go back or away from open plan offices? DAVID: You know, one of the key components was that the principal or leader or whatever should be out with all the rest of the folks, and that blew up in everybody's faces, so we've already walked away from one of the key tenets of it, and we've also walked away from other things like, now we have places for people to go off and work if they want to, and we're not making everybody sit in what looks like a call center and be all disturbed by everybody's nonsense. So, yeah, I do think it's going to be another ten years, but we'll figure that out, too. BLAIR: Okay. DAVID: But I was wrong on this one, for sure. BLAIR: Well, let's just pick up from there. What did you think was going to happen, and what's the state of the nation right now when it comes to open book management? DAVID: Well, people are more open to it for sure, and one of the things that occurred to me as I was looking back over my first foray into this is that I wrote it at a particular time in history, so this is right during a difficult economic environment, and that's typically when principals move towards more open book environment. BLAIR: Yeah, "look, I'm not making any money." DAVID: Yeah, right, so quit your whining. It's like, I'm not making any money, why do you keep asking me for more money? That's very common, like people go to open book management when things aren't going all that well, and then they're not quite as enthused about it when things are going great. But, we've matured in so many ways around that, and it think that the current approach to open book management is really good. I'm very much in favor of it, to a certain degree. DAVID: I asked a bunch of principals not too long ago, just a couple months ago, about their perspective on open book management, and you and I talked about this poll. It's really, what did you find interesting about that poll? Tell people about the results of it first. BLAIR: Yeah, so the Twitter poll that you did. You said, "As the principal of a marketing firm, my perspective on open book management is: A, everything is fair game; B, all is open but salaries; C, we share the big picture; D, financials are not shared. And the number one response, 38% people said, everything is fair game. DAVID: Yeah. BLAIR: And then 24% was the next, B, all is open but salaries. So 62% of the people you polled are in favor of open book management at one level or another. DAVID: Right, that surprised me. It surprised you, as well, I think, right? BLAIR: Yeah. I mean, I was shocked at 38% said everything is fair game, because the distinction really is pointed out in the next response, which is all is open but salaries. So people are saying, yeah, what the principal earns, what the highest earners earn, what the lowest, everything, shared, or who gets bonuses on what, commissions, etc. DAVID: Right. And I came across something just last week that I found even more interesting than that, and it kind of pegged those results into a better, more I guess, an anchored context. And this was something that Katherine Vasile had done on CNN.com, and she discovered that the big difference in how we approach open book management is a generational one. So, 30% of workers between 18 and 36 have shared what they make with a colleague. So a third of younger workers tell their colleagues what they make. Compare that with older people, like you, not me, but older people, only 8% of those people share what they make. And then flip that around to what do they share about what they make to family members, and 60% of millennials will tell a family member, whereas only 48% of older folks. So there's something about, maybe it's transparency. I'm not sure I completely understand that, but that's the difference. It seems like it's a little bit generational. DAVID: And since these younger folks are running firms, they're taking their personal perspective to how they want to run the firm. I think it's great. I think it's fantastic. BLAIR: I probably should have done this at the beginning, is the one interviewing you. We should probably define open book management. Do you want to back up and do that? DAVID: Sure. So, it's being more transparent about what is happening in the business, and if we back this train up 20 years, it was pretty common to find agencies who didn't even show employees ... they didn't know what the hourly rate was, really wild, bizarre, and they never got to see the proposals that clients were accepting, which I also found incredibly bizarre. And then, so , what the hourly rate is might be the first step. Next would be seeing proposals, what clients are paying for what they're getting. A deeper step might be, what are the top-line numbers. What are our top-line financials. Not the net, not all of our expenses, but what, like, we're a $4 million firm or something like that. DAVID: Next step down would be looking at more detail in the income statement. So, you subtract all the expenses, what's the net. And then the deepest you could go would probably be sharing what everybody else is making individually. I would stop short of that for a couple of reasons, but that's the progression for open book management. So it's not like you're either open book management or you aren't, it's more a matter of degree, probably. BLAIR: So is it all financial when we're talking about open book, or are we talking about The Books, the accounting books? DAVID: Generally it is, yes. There are some other things that people aren't nervous at all about sharing, like the purpose of the firm, the future of the firm, what the principal's timeline is, what we're thinking about in terms of maybe opening another office, maybe changing our perspective about certain service offerings. I don't see anybody ever thinking about pulling back from that. Universally, people are open about that. So yeah, it really does come down tot he financial side. And when you think about the classic term, open book management, that's always around financial stuff. BLAIR: So, it seems, looking at this article from 17 years ago now ... Wow, I can't believe we've been doing this this long ... to where you are now, you just said you think this is great, the openness, the trend towards openness, so clearly it's not a fad. It's stuck around. It seems to be gaining some traction. You're pointing out that it seems to be a cultural thing, as the younger people live in a more open and transparent society where everything is out there on social media, etc., there's less inclination to hide things. So, your assessment is this is a good thing and we should all be embracing it. Is that correct? DAVID: It is. Up to the salary side. Maybe that'll change too. I don't have a history of predicting this very reliably, so I'm hesitant to do it again. Maybe that'll change, but I do think that we tend to judge people too quickly based on how much money they make. So we tend to assign a human value that's tied to what they make, and I think that's a massive mistake. Because it really is more about, it's really a positioning question, like how easily replaceable is somebody's labor, and it has nothing to do with how valuable they are as a person, and we can't separate those two things in our minds. So I don't think sharing salaries is good. I think sharing the whole bucket of salaries, like this is what everybody makes together, and that should be less than 45% of AGI, that's fine. But I do think it's really good if we stop at that particular point. DAVID: I wish that our transparency just extended to actually with our clients, as well. I would welcome a little bit more transparency about the financials of agencies, so that clients could actually see them too. BLAIR: Well, that's interesting. DAVID: And clients are demanding it, right? You've seen some requests for that. Some of that is just intrusive, asking a lot of those stupid questions. But I think clients do have a right to know whether your agency is financially viable. They don't have a right to know what your people make and all those other intrusive questions. They're asking because they can, as you're famous for saying, but that doesn't mean it's right. Bu I am in favor of more transparency around financials. BLAIR: So, let's come back to clients for a minute. I just want to go back to the idea of sharing salaries, what people on the team make. When I think back to some of the stories around professional sports ... as a Canadian, I'm going to use NHL hockey as an example. And for many years, quite famously, the salaries of players were kept artificially low by the fact that it was either a written agreement or it was some sort of "gentleman's understanding," in quotes, that players wouldn't share with each other what each other was making. And Gordie Howe was this player who was kind of famously responsible for ... He was privately told he was the highest-paid player in the league, and there's a culture in the league of players not talking to each other about what each other was making. And the NHL ownership was famous for being successful on that level. And then at some point, somebody pointed out to Gordie Howe, made this comment in the room, "No, I'm the highest-paid player in the league," and some junior guy said, "No, no, he makes more than you, he makes more than you, he makes ..." BLAIR: And that was the beginning of kind of a slow move towards like full disclosure, and as everybody became aware of what everybody else made, then the salaries just started to go up and up and up. So that's what happens in professional sports, and I can imagine that in the average firm, if, especially as you get larger firms, and I've worked in some large firms where it's a very kind of competitive culture, like not to an unhealthy degree, but when you get into a firm of hundreds of people, you look at some of your colleagues, and you see them as direct competitors for the job that's the next level up. And I cam think of a couple places where I worked where that was rife. And again, not necessarily a bad thing, if you're a competitive person, but just the salaries, I can imagine, in a firm like that, large firm, multiple competing for the next promotion, everybody's measuring themselves against each other. That would have to drive salaries way up, would it not? DAVID: It would, right. And that's why I think it's healthy to publish a salary range, and maybe not publish it on your website, but talk about it when you're hiring somebody, so that somebody knows that you are going to move around within this salary range, and that won't change unless you take on additional responsibility, or the firm grows, in which case, that range for that particular role might rise a little bit, otherwise you're going to end up overpaying people. DAVID: One of the things I've noticed is that the people that tend to get overpaid or paid too much are the ones that have been with you for a long time, or the ones who know what other people are making. So you give a bump in pay to somebody, the only other person who knows about that, besides the person, is the CFO. And so, as all of these little raises are going out, the CFO or the bookkeeper, the accountant, full charge bookkeeper, whoever that happens to be at your firm, knows about this, and you feel duty bound to sort of send them some bumps along the way. Those are the two people that tend to get overpaid. DAVID: But there's a dynamic that's changing out there. LinkedIn did a fascinating study, and this certainly applies to agencies as well. People don't make more money by just staying at one place longer. They make more money by changing jobs, right? And so they pick up that bump in pay at the intersection, when they cross the boundary and go to work for another firm. And so you don't have quite that pressure of paying people a lot, because they stay for a long time. DAVID: The other things that's interesting to me, and there's a pretty strong argument that the unequal pay between male and female has come about largely because of the secrecy around what people make. And so, if I think of one particular factor that might tip this in favor of more transparency, it might be this notion, not notion, it's true, it's real, that females are not getting paid as well as males are for the same work. So that might be enough to tip the balance towards more transparency, so that we can erase some of that wrong in the marketplace. BLAIR: Are you aware of any information studies that have done, either of yourself or anybody else, that shows the benefits, either financial or in any other form, of moving to open book management? DAVID: Yes, there is an organization, the organization that basically founded the whole ESOP movement, which stands for Employee Stock Ownership Plan. I think it was 40…

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Alternative Forms of Reassurance Nov 07, 2018

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Blair and David analyze and then look beyond the requests for reassurance potential clients make during the late stage of a sale to address their underlying motivations. LINKS "Transtheoretical Model" (Prochaska & DiClemente, 1983; Prochaska, DiClemente, & Norcross, 1992) TRANSCRIPT DAVID C. BAKER: Blair, today I want to ask you about something that I've heard you talk about for many years and it's this notion of alternative forms of reassurance. BLAIR ENNS: Yeah. DAVID: We used to do this event together and we did it for like 10 years running. BLAIR: You mean that one where I carried the both of us. DAVID: Yeah. That's the one, right. Yeah. Yeah, that's definitely the one. I remember listening particularly attentively to this one section that you used to talk about because it was a new concept to me, but I was also really fascinated by it and I thought, mainly I thought the title was just perfect and you called it something like the alternative forms of reassurance and as I recall at a certain point in the sales cycle when an agency is in the process of landing a new client, that prospective client still wants a little bit more information and they might ask for something and this was a way as I recall, where you could kind of redirect the question and provide alternative means of reassurance. You remember those days? BLAIR: Yeah, I remember those days fondly and the way you described it, I think of a judo move. We're talking about late in the sale and I guess I'll back up in a minute and explain why reassurance is important late and it's not important at all early, but we're talking about late in the sale when your job as a salesperson is to reassure this nervous late stage client and they ask you for things. I was counseled to look beyond the request, the specific request and look at the motivation for the request and sometimes the request is the negotiation, the request is to cut price. Maybe you're just negotiating, but maybe there's something else going on here or maybe they're asking for a money back guarantee or maybe they're asking for references or maybe they're asking to do things a little bit differently. DAVID: Right. BLAIR: In a lot of those situations, you have to think about what is the client buying from you. Anytime they hire your firm, they're buying a path to their desired future state, and so when you put forward a proposal in front of them with a price attached and they look at that price, you are essentially pricing their desired future state discounted for uncertainty. In every price, there is an uncertainty discount that's built in or there's some math around an uncertainty discount that the client is doing. Looking beyond the motivation for the request late in the buying cycle, again, it might be to cut price, it might be to offer references or it might be to do the engagement differently. It's not universal, but many times they see a lot of risk in the engagement and they're simply trying to mitigate that risk. They're trying to lower that uncertainty. BLAIR: So if the engagement fails because of what's known as performance risk and that is you're the provider, your questionable ability to do the job, if in the end you don't end up doing what you say you're going to or to the quality that you say you're going to and you affect the outcome, but then the client is on the hook for that and if they think there's a great chance that that's going to happen, then if it's really high, they won't hire you at all. But if it's a little bit lower than that, maybe they'll see the risk and decide, "Well, for the level of risk that I'm taking, I want a lower price." So that's just one example, asking for a lower price where the client's really just trying to mitigate their risk, factor in uncertainty or another way of putting it is they're looking to be reassured that everything's okay and those are all different kind of spins on what is essentially the same topic, a nervous late stage client wondering, "Well, what if this goes wrong?" DAVID: So if you handle this well, can you in effect eliminate that discount a bit from a pricing standpoint? If you handle that reassurance correctly, can you close that gap and leave less money on the table? Is that part of it as well? BLAIR: Oh, yeah. I couldn't sit here and say you're going to eliminate all discounts forever and still close the deal. But the vast majority of them, especially with good clients, like a value buyer who doesn't see themselves as spending on an expense, but investing in a solution or an opportunity, a value buyer who maybe starts negotiating or asking for a discount, you can almost always offer an alternative form of reassurance as long as you're able to look past the request and discern the true motivation and see what's going on underneath. If you don't mind, I wouldn't mind backing up and just talking about why reassurance is important late. DAVID: Yeah, sure. BLAIR: I'm fond of saying that selling isn't about talking people into things. My definition of selling is selling is three steps. It's helping the unaware, inspiring the interested and reassuring the intent, and this is a truncated, bastardized and otherwise manipulated version of a change management model that's called "The Transtheoretical Model" developed by Dr. James Prochaska and some of his colleagues, it often goes by TTM, so it's a model of understanding how people go about change and I would just interject here and say that I believe that buying is changing and therefore selling is change management, so that's a model. It's a way of looking at the world is thinking of buying is changing, therefore selling has change management. Okay, if you believe that, then you can go to the world and grab a number of these great change management models and there's a bunch of them out there. In the last 10 years, there's been some really interesting ones. BLAIR: You can take any of those change management models and you can apply it directly to the world of selling. This woman I worked with years ago, her name was Pauline O'Malley. She's a sales trainer in Vancouver. She dropped Prochaska's model in my lap. Now I don't teach so much to that model anymore other than the idea that you should think about the client going through this arch in the sale and they go from unaware of the fact that they have a problem to aware of the fact that they have a problem or opportunity and interested in solving it. When they're interested, they're kind of gathering information and assessing the pros and cons. Then they move to forming the intent to act. So they go from unaware to aware which we'll call interested and then intent, intent on solving their problem. BLAIR: I mentioned there's three steps, help the unaware, inspire the interested and reassure the intent. So let's just put help the unaware aside for a minute because that's really when you call somebody and say, "Hey, we're in the business of X. Can I be of assistance to you?" and they say, "I don't have any need for X." They don't have a problem. So let's put them aside. In your CRM, they would be a lead, maybe, but you wouldn't create an opportunity because there's no fit there on the subject of need. So that leaves the interested and the intent, an early stage buyer and a late stage buyer. So your job as salesperson is to inspire that early stage buyer who is interested, they're aware of the fact that they have a problem or an opportunity. They're gathering information, assessing the pros and cons and thinking about whether or not they should do something about it. BLAIR: When people are at that interested stage, they overweight in their mind the possible benefits of change. So they're quite prone to inspiration. So they're actively looking for an inspiration. They're looking for, if it's somebody buying design, they might be looking at portfolios. If they're buying advertising, they're looking at an advertising reel, they're looking at examples of best work and they're getting all emotional and inspired by it and they're trying to just move themselves to the next level where they form the intent to act. So somebody who's interested overweights the benefits of change and they underweight the costs or potential consequences of things going wrong. There's a line, when they cross the line and go from interested to intent when they decide, "Okay, I'm going to do this. I'm going to hire a firm like yours to help me achieve X." Just a few hours after they crossed that line, things shift. Now they start to underweight the benefits of change and they start to overweight in their minds all of the things that could go wrong. DAVID: Skeptical essentially. BLAIR: Yeah, skeptical, prove it to me. So your job as salesperson flips. It goes from trying to inspire somebody to trying to reassure them. If you want to create buyer's remorse or feed buyer's remorse then inspire. Try to inspire somebody- DAVID: Who's skeptical. BLAIR: Who doesn't want to be inspired. DAVID: Yeah. BLAIR: Yeah, exactly. DAVID: Yeah. BLAIR: When you're on the buying side, it feels like somebody is trying to manipulate you through emotions. DAVID: Oh, yeah. So these three stages, and I'll just say them again for folks where this language is new, help the unaware, inspire the interested and reassure the intent. These occur and this is chronological and you mentioned early on that there is a point for reassurance and then I introduced this whole idea about the way you used to talk about this of alternative forms of reassurance and then you jumped in and said, "We don't want to offer alternative forms of reassurance too early." So now you've explained why we need to wait. What are some signs that they've crossed away from interested into the intent stage so that we don't offer the wrong things at the wrong time? BLAIR: I remember working for a design firm and presenting our portfolio to a prospective client and he kept banging his hand on the desk going, "Oh, yes,. Oh, that's beautiful work. That's fantastic." He kept crossing his legs and re-crossing his legs and I thought, "Wow, this is a little bit like the fake orgasm scene in the movie When Harry Met Sally." He was getting very, well, the technical word is aroused. He was getting very excited by the work that we were showing him. The firm that I was with at the time had world class creative work and the portfolio was beautifully shot and mounted on these boards, old school, wise. Man, as a new business person, I'd walk into a meeting and I have that portfolio and I think, "Wait till they see our work." It was just a great thing to have. So this guy was reacted so viscerally to the work that we were showing. BLAIR: At some point, we progressed through the sale, that conversation, a couple of others. We uncover a specific opportunity. It's a late stage opportunity at some point and we come back to the table and I bring the president of the firm with me and we come back to present the proposal. Now, we've got all of the decision makers around the table and the president says, "Hey," and he had a habit of doing this and I think a lot of people will identify with this, he said, "Hey, before we present the proposal, there's a few new people in the room, they haven't seen our portfolio, so let me just take a few minutes and just walk through some of our portfolio." So he walked through the same portfolio, nothing. There was no emotional response whatsoever and the guy who could barely contain himself the last time he saw this work sat there stone faced and so did all of his colleagues. BLAIR: There was just absolutely nothing and I thought, "What is going on here?" I kind of put it away and it wasn't until I was taught to view things this way that I realized that we're trying to inspire somebody who is nervous. We're trying to say, "Look how great things could be." DAVID: Yeah. They felt like you were wasting their time almost, like you were manipulating them in a way, like trying to generate the same reaction they had. It's like, "I've already seen this. I've already had this reaction, get to my questions," right? That was what was happening, BLAIR: Yeah. Then your question is what are the signs that they've crossed the line? So that's one. DAVID: Right. BLAIR: Another one is the questions that they ask you late in the buying cycle when they're driven by a fear of making mistake, they're these very specific, almost unimportant questions and they're often dismissed by the firm. It's like the discovery session that you talked about, that would be the first step, "How long does that take and who needs to be involved on our end?" "It is half a day or a day and you would need to be involved and Bob over there and maybe a couple of others." That's the wrong answer to that very specific question. DAVID: What's the right answer? BLAIR: The right answer is, and this is just an example of the right answer, it's the precision with which you answer, "Discovery sessions take six hours. We do them in our office. We expect that certain key people will be present. That will be you, Bob over there and these other three people that you've identified in the sale and the outcomes look like this." So the answer to this seemingly innocuous question is an answer that shows we've done this before. We do it all the time. We have a bulletproof way of doing this. DAVID: Yeah. So that's where the reassurance comes from in this case. It's almost like what's going on in the buyer's mind at this point? Are they pretty close to buying and they're just sort of condensing themselves or are they talking to themselves? I mean, are these really important questions to them? BLAIR: I think these are vitally important questions. One of the alternative forms of reassurance is what I call process frame case studies, and we'll talk about that in a minute, but another alternative form of reassurance is offer to breakup the sale into phases. So instead of the client making like $100,000 commitment to you say, "Why don't we take it one step at a time? First step is a diagnostic and it's $15,000." Then with an out clause. So the out clause would be, "At the end of that first step, when we present our findings and recommendations, if you feel like you don't like the direction this is going, you don't like working with us, whatever it is, we can just call it quits right there." So there's a phased engagement that's reassuring to the client. Okay, I don't have the same financial commitment. The out clause, I can get out after the end of that first phase if this isn't going well. Then you could even layer in one of my favorites, which is a money back guarantee. BLAIR: So you could say at that point in the sale, when you're describing the out, you could say, "At that point, if you decide that we're not the right firm, we're not going in the right direction, or you don't like working with us for whatever reason and you don't want to proceed, then we're just going to give you your money back. Because if we failed that badly, then we owe it to you to give you your money back.…

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Seven Strategies to Grow Accounts Oct 24, 2018

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David disagrees with Blair (sort of) on his model for growing existing accounts in the post-AOR era, and then offers his list of 6 ideas on the topic. Links The Peter principle The Challenger Sale by Matthew Dixon and Brent Adamson Tony Mikes Transcript DAVID C. BAKER: Today Blair, we are coming to you live from the ReCourses Woodworking Shop, where so far I have done no woodworking, but a whole lot of podcast recording. Maybe I need to take my saws up to my office or something, but I can wander because I'm on like a corded mic and I can just look at my stuff. If you start to bore me, I just read the manuals for my saws and it's really fun. Is that okay with you? BLAIR ENNS:Yeah. I'll hear the table saw fire up in the background, right? DAVID: You know you need to start to get more interesting at that point. BLAIR: You know you're retreating further and further from civilization and identifying more and more with machinery and animals. DAVID: And the rest of the world thanks me for this. BLAIR: All right. Unabomber, what are we doing? DAVID: Today, we're talking about growing accounts. And as I was thinking about this, why are we so interested in this? I guess one alternative would be that we could just really land big accounts at the beginning but it seems like two things have changed in the world that our listeners occupy. One is that they are tending to start with relationships that begin smaller. That's one thing that I've noticed. So it makes it more critical to grow accounts. The other thing that's changed is that it's much more of a project-based world and so maybe growth isn't necessarily going to solve all of that, but we're talking about a chain of projects. So it's kind of like an AOR relationship disguised as a whole bunch of projects that follow on, which require the skills to grow an account. Why do you want to talk about this? Why is this that important? BLAIR: Yeah. And I think you're right in describing the environment. In this non-AOR environment, the emphasis is greater than it's ever been to go mine the account for the very next project because there aren't the guarantees, to the extent that there were guarantees at all in an AOR relationship. I guess in some of them, there were some form of guarantee. So you really do have to kind of eat what you kill in the modern project-based world. BLAIR: As somebody who focuses on the new business side of things, I've worked with a lot of firms where they were really good at new business and then you look at how quickly their accounts or clients move on, you think, "Man, if you would just solve that problem, you would be killing it." DAVID: Yeah. And thank goodness they were good at new business because as fast as they landed them, they left, right? BLAIR: Yeah. So you've got a list of things, pointers that we'll review on growing existing accounts. And I have one point. And I don't think you agree with my point. Is this going to be the first podcast where we disagree? DAVID: Publicly, yeah. There's been a lot of ... BLAIR: You're so polite. DAVID: Maybe I read through ... You sent me one paragraph with some ideas when I thought, "I don't know about that one." BLAIR: And a PowerPoint deck. DAVID: So this will be very interesting so you're going to talk about a concept called the account conference. Sounds very very official. And then we're going to, if you leave me any time at all. BLAIR: I'm not planning to. DAVID: Right. Then I'm going to provide just some very specific pointers, which I'm sure you'll agree with, right? DAVID: When did you come up with this idea and what was the impetus for the account conference? It sounds like this is something that's been rolling around in your brain for a while. BLAIR: Yeah. Well, I'm looking at this deck, it was from a webinar I did in February of 2014. So it's been around for almost five years. And the idea was I invented the idea of an account conference. Well actually I observed it happening in a hospital. So I was in a hospital with a family member and the surgery was about to happen. And I was watching how not just the surgeons and other doctors, but all the medical practitioners kind of handled it. They had, they called it a conference, maybe it was a patient conference. And I kind of watched from outside of the room. And I asked them questions about it later. In hospitals, you have these hierarchies, where the surgeon is at the very top and then you've got the specialists, doctor and then you've got that nurses et cetera and the other healthcare practitioners. BLAIR: So there's this hierarchy. and in any hierarchy, there's a danger that the people at the top are kind of standing on the iceberg of ignorance. So they have this sense that they know everything because they're the master in that domain. And often there's people below, who are thinking, "Well, I'm not sure that's such a good idea." So the notion of the conference in a hospital setting as I understand it, it's basically stripes down in the military parlance. Everybody takes their hats off and put some stripes down on the table so there is no status, there is no hierarchy and it's an environment where everybody is free to say what they think about the patient, about the surgery that's going to happen. And so it's been developed over many years to change that hierarchical culture in hospitals, where you're not allowed to challenge people at the top, and it takes a while to implement to get everybody to buy in. So I was really impressed with that. So the goal of that in the hospital is to reduce the likelihood of a mistake happening because people are afraid to speak up. BLAIR: And I took this notion of the patient conference, let's call it, in a hospital and I applied it to one of my clients who is having a challenge in growing an existing account. Really the initial challenge wasn't actually growing the existing account, although there were some growth challenges, it was kind of this surreptitious, if that's the right word, or indirect approach to diffuse power from power that had been consolidated among one and individual account person. Does that make sense? DAVID: Yeah. Which is a common problem and one that everybody listening would think. Yeah, I've seen this happened or maybe it's happening right now for them. BLAIR: Yeah. But let's forget about that first instance because ostensibly, the purpose was to help grow the account, enlist others to help grow the account. Now, I've since rolled that out in other firms. And here's the idea, the idea is that not every good account person is necessarily good at growing their account. So if that's the case, why don't we enlist others to help? So the way the account conference works is, I think it should be done roughly twice a year. Some people do it once a year, some people do it once a quarter, which seems a little bit too frequent for me. BLAIR: So just imagine this, twice a year, you take your entire senior account services team off-site for an account conference. And one at a time, the account lead for any given account presents an overview of their account, "Here's what we've done lately. Here's the progress we've made and here are three key issues affecting the client's business. Not necessarily affecting what we do for the client, but the big strategic issues facing the client. These are the things that as best as the account person can discern or keeping to see you up at night." DAVID: Can I just interject that you hit on something that frames all of this. This is not a self serving event, where we're looking to mine money. I mean that's going to happen naturally, if we do the right thing in the bigger picture. The bigger picture is what is happening at the client level, whether or not it involves an opportunity for us to make more money. It's about leading that account. That's really hidden in what you said. I just want to make sure people don't miss that. BLAIR: Yeah. It's about leading the account, growing the account and it's also about recognizing the fact that the person who is leading that account for the agency is actually quite close to the client and probably has some biases. And they probably have some ideas in what the client should or shouldn't do, but also a basket of ideas of why the client won't do what those in the agency think they should do. DAVID: Right. BLAIR: So in this situation, the senior account person on this account is presenting an overview of the account to the team. And then the rest of the team, they can ask some clarifying questions and once they get those answered, they brainstorm amongst themselves as the account person sits there quietly on what they think the client should be doing, and then they put together some proposals to take back to the client. And they again, with the account lead who's responsible for that account kind of watching silently, they don't really have a vote or say in this beyond asking any questions that are directed to them, the rest of the group decides on the proposal that is going to be taken forward to the client to help grow the client's business and grow the account for the agency. DAVID: So the client knows that this is happening, but is not a part of this discussion until it's distilled by the account person back to them. BLAIR: Yeah. And just think of that point, if you adopt to this account conference approach, it's actually a really interesting new business tool. When you explain late in the sale, when the client's nervous and looking to be calmed down and you're explaining your methodologies, how you work, it's really interesting at that point to the client to say, "Oh and twice a year, we have this account conference where we essentially retreat and brainstorm on your business. We're briefed by your account lead, but they don't really get a say in it. And then the rest of us, as a group, come up with proposals to help you move your business forward and then we come forward and present those proposals to you." BLAIR: Now, one of the most interesting things about putting the proposals forward to the client under this model is, it's not necessarily the account lead who does it, the group decides. The group might decide that, "Okay, the account lead is the right person to put this proposal forward." But they also might decide that for whatever reason this type of selling to and growing the account is not in this person's wheelhouse or strength so they assign somebody else to do it. DAVID: So the client knows about the cadence, obviously they may not know the first time, but they're going to know after that. What happens if the client says, "I'd like to be a part of that." What do you say? Is it important that they not be there? BLAIR: I don't think it's important that they not be there. I actually think it's an interesting idea. I haven't talked through this with any of our clients before. I actually like the idea that the client is sitting there quietly and the client too, can be asked some questions, some clarifying questions. It introduces another variable. It gets a little bit risky. It would really depend on the client, your relationship with the client. I think if you're going to adopt this approach, you should try it without the client there first. And then after you do it a couple of times, if it seems to make sense to you to involve the client, then go ahead and try it. DAVID: I want to go back to how you introduced this whole idea where it kind of spring to your mind in a healthcare setting and the motivation for it in that setting was to reduce risk. It's like less people will die if we do this. BLAIR: Yeah. DAVID: It's easy to dismiss that and say, "Well, that's an interesting model but it's really not about reducing risk." But I would say, it really is about reducing risk because the risk that were trying to mitigate here is that we quit leading. And some of my specific suggestions that we'll get to later, talk about how to make sure we don't quit leading. Because that's how you get an account in the first place and that's how you lose an account when you quit doing that. So the risk that we're mitigating is that we quit leading. DAVID: It's so interesting. One of the things that I'd love to explore, if somebody wants to do this in a really deep consistent disciplined way, would be how do we overlay this with really great techniques for brainstorming because brainstorming is really misunderstood. And there are a lot of personality profile elements that relate to brainstorming. You have people who simply don't think well on their feet, but who make consistently great contributions, but they just do it 15 minutes after everybody's moved on from that part of the conversation. To make this effective, you'd have to really understand how to effectively brainstorm, how to effectively run a meeting as well. But the main point is just that the risk we're mitigating is that we are not leading the account. I think that's such a fascinating, valuable concept. BLAIR: I think you're right and I also agree that there are elements here like a framework for brainstorming that are missing. Like this is something that I introduced about five years ago and I've come back to it from time to time, but it's not something that we kind of teach on an ongoing basis. When I have a client with an issue around account growth that comes up, I usually introduce the model to them. So I think there is an entire area or adjacent areas of exploration that would make this model better. BLAIR: I believe strongly in the model. I think one of the reasons why it's valid and we've talked about this previously, it occurred to me that the saying that I and so many other people keep repeating, that it's everybody's job to sell, just isn't true. And if we embrace the fact that it's not everybody's job to sell, that your people and in particular, your senior account people, some of them are very good at growing their accounts and some of them are very good at just kind of responding and keeping them happy. And if we embrace the idea that let's put sales responsibility or account growth responsibility into the hands of those who are good at it, this is a model that really suits that. That last part of deciding who's going to present this to the client. You can say to the account lead, "All right. Here's the proposal. Here's a little bit of coaching on delivering it. You go ahead and do it." Or you just might decide that, "Actually, you're better off and it's more appropriate for some other account person who's really good at growing their own accounts to go have that meeting with the client." So if you're the account lead in that situation, you really do have to let go of this idea of the ownership of the account. BLAIR: One of the things I was trying to do initially back in that first scenario with this model was transfer the equity in the relationship from individuals to the organizations. So when you build advocacy among your client base, typically you want multiple people in the client organization advocating for your agency. But every once in awhile, you get this concentration of power where you get either one person or multiple people on the client side only advocating for one person on the agency side. And that's a very dangerous thing…

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The Best Ways to Disrespect Account People Oct 10, 2018

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Blair remembers what it was like when he was an account person himself, and David shares five ways firms can treat their account people better. LINKS "How to Drive Your Employees Bat Sh*t Crazy" 2Bobs episode TRANSCRIPT BLAIR ENNS: David, we're talking today about how to disrespect people. This is your topic idea. DAVID C. BAKER: Yeah, I get so many requests from people that want help with this, and they naturally ask me. Right? BLAIR: Yeah. Of course they do. DAVID: "Who'd be really an expert at this? Ah, David, yeah, he could help us with this." BLAIR: Yeah. The topic is, best ways to disrespect account people. Why this topic? DAVID: I see so many firms disrespecting account people. I mean, they're obviously not doing it intentionally, but when you look at how they're treated, and how they're brought into workflow and all this stuff, it's pretty obvious that they could do things a little bit better, and so when I talk through it with them, their eyes light up, and they see, "Oh, there's another way to do this." That's the topic. I thought it might be interesting, because it just will save me time, right, in consulting, because then I won't have to answer this question every time, right? BLAIR: You just said in this podcast, "I'm just thinking." I was an account person for many years, and I was going to say, "I don't recall ever being disrespected," but it just took me about five seconds to think longer, and now these emotions have all come flooding back. There are times when, as the account person, you're on top of the world. Right? I remember some of those moments early in my career. DAVID: Just this morning, like an hour ago, I don't know, maybe it was the topic, it brought me back to this moment where I was just thinking, "I should have quit in that moment," back working for a large, multinational agency where I was disrespected. I thought, "I should have just quit right then." BLAIR: Okay. Let's get into this, so you've got a bunch of ways in which account people are disrespected. We're going to unpack these. Right? The first one on your list here is this idea of recognizing or not recognizing how difficult the role is. DAVID: Yeah. BLAIR: Hot potato. Over to you. DAVID: Imagine working for a president, don't think of a specific one, just imagine working for this anonymous president of a country, and you are the ambassador, and you are asked to represent your country, but also speak for the country where you are planted, basically. I believe strongly that the most difficult role, not the most important role, but the most difficult role in a firm is this account person, because you have one foot firmly planted on both sides of the fence. You're supposed to speak for the client, but you're also supposed to not give away the shop. I think it's so critical. It's why it's so important to find the right ones. They're just so important, and when you think about the degree, you talk a lot about this, to what degree does a creative firm lead or direct their clients, and then you go down the list? So much of it depends on how good the account people are, for sure. BLAIR: Yeah. They're at the front lines, making the strategy real or blowing up the strategy, if there is a strategy. I love that metaphor of the ambassador. You're saying something that you think is the party line, and all of a sudden, then the president says something completely different or even throws you under the bus. DAVID: Right. Right. BLAIR: So you're saying the first way to disrespect the account people is to not recognize how difficult their role is. DAVID: Right, how difficult their role ... These are the people who are better than anybody else in the world at sending a client to hell and helping them enjoy the trip, and not even realizing that they're going to hell, like pushing back, getting more money out of them, getting the information out that they've been reticent to share. It just goes on and on about how important they are. BLAIR: Yeah. Great. Okay. Next on your list is something about hovering over their shoulders. Is that what you mean by this? DAVID: Well, yeah, and I see this phrase. It just sneaks out, I guess, and there aren't any evil intentions around it, but you can see this happening in the early stages of closing a new account, where the principal, who has made some appearance, because it is important that they make some appearance. Maybe not physical, but at least be a part of that closing process, they'll reassure them on the flip side of saying, "I'm not going to be your day-to-day account person," and then the flip side of that is to reassure them that, "But if anything goes wrong, or if there's any time you need me, just let me know," almost planting the seed is just so disrespectful, I think, the idea that, "If you don't get your way, come to me. Bypass your account person and climb a step higher on that ladder." DAVID: I really, honestly, do not believe that principals, or even salespeople who aren't principals, intend to mean anything bad by that, but I think it just sets the wrong tone, and I would like to not insert or plant that seed at the very beginning of a relationship. BLAIR: The specific point of disrespect here is implying to the client, this, the principal implies to the client that, "Listen, I'm always going to be here. You're in good hands with this account person, but just in case you're not, I'm on just a phone call away." Is that what you mean by this? DAVID: Yeah, exactly. BLAIR: So you're sowing the seeds of doubt with the client, as if they need to be checked on. DAVID: Yeah. Right. BLAIR: Okay, so not recognize ways to disrespect account people, not recognize that their role is the most difficult, to imply to the client that you're always there over the account person's shoulder, just in case the account person screws up. Next, you have swooping in and out of client relationships. DAVID: Did we talk about this? I think we did, right, and we kind of had a ... We had a good time with this one about just not being involved on a daily basis, and then right before a big presentation is made to a client, you, as the principal, step in and clear the table, and rescue or save the day. It's just not respectful to the people who have been working so hard along the way. It's not to say that you don't have the right to step in. You certainly do. It's not to say that your feedback at this point isn't helpful, because it, in many cases, is quite helpful. It's just disrespecting the process. We talked about this in that episode, about "How to Drive Your Employees Bat Sh*t Crazy." It wasn't just in the context of account people, but I feel so strongly that you need to set a certain cadence, and then you need to respect people. DAVID: This shows up in big and little ways, and usually a firm has mastered this, or they have consistently not mastered it. Everybody knows whether they have or not, and I just feel like we need to be more careful about respecting the process, which means respecting the people. There is a connection between that. If we're talking about respecting the people, then we do need to respect the process that we have all agreed on as well, and stepping in at the last minute, clearing the table, and saying, "Okay, what are we doing here," and, "Are you sure that's what we should be presenting?" Meanwhile, that's what we've agreed on for six days, right, of- BLAIR: Endless nights. DAVID: Yeah. BLAIR: Yeah. Do you think there's something peculiar about creative firm principles that makes them susceptible to this, or is there something peculiar about account people that invites it? DAVID: Oh, I think it's the former, for sure, because nobody went to school to be a principal. Many of them went to school to be a creative of some type, and they moved away from that role, as they've discovered that there are other things that are more important for them to do, and they've had folks sort of back fill in behind them who are better at it, but they still long for that rush of stepping in and rescuing things. They just cannot resist it, so I definitely do not think it's the account people. Now, account people and principals both do one thing really well, and that's to fill vacuums, so if there is a lack of leadership, somebody is going to step in, so if the account person is not leading the account appropriately, then we can expect, and maybe it's a good thing, for the principal to step in, but let's fix the underlying problem, which may be the account person, but let's not just keep being disruptive at every stage. BLAIR: If the principal is a creative person, a creative personality, maybe there's also a vacuum or a void in what he or she sees as really good ideas. I'm saying this thinking of lots of scenarios I've been involved in, and I think I'm guilty of it now with my team is, they're working on something, and I come in and go, "Well, let's do it this way," kind of somewhat cognizant of how disruptive that is. DAVID: It is right, but who gets to decide what the right idea is, and should we set up a system so that we identify that it's not the right idea a little bit earlier in the process? That's sort of what I'm headed for. BLAIR: Yeah, and I think we've touched on this at least indirectly many times, this idea that creative firm principals are not all that systematic. Right? DAVID: Yeah. No kidding. There's the understatement of the month. BLAIR: Your line is, "You people like to dive off the diving board and invent the water on the way down." DAVID: Right. Yeah. BLAIR: It's like, "Ah, I'll figure it out when I get in there." It's like a surgeon, a creative surgeon. "Ah, I'll just cut you open. I'll figure it out once I get in there." The firms of our listeners don't tend to be all that organized around processes and systems to begin with, so in an environment like that, it's kind of natural for people, and the more senior people, to swoop in and out from time to time. DAVID: Yeah, and in that same surgery scenario, you would hear the principal saying, muttering under her breath, "Well, if that's not the kidney, then what was that other thing we just took out," or, "I thought everybody had two of those. I can't find the other one." BLAIR: Yeah. Exactly. I like to quote Dr. Spaceman from 30 Rock. His line is, "Well, we don't actually know where the heart is in the human body. Medicine is more of an art than a science." Okay, let's move to the next item on your list of best ways to disrespect account people. This one really strikes a chord with me. Switch them out frequently for specific clients, so first, let's just talk about that a little bit. Then we'll talk about how we might smooth that process out. DAVID: We've been talking about the account person, and principals, and the agency and so on, but if we flip this around and look at it from the client standpoint, oh, my goodness, nothing quite sets them off more than having their account contacts swapped out frequently. Sometimes, you swoop in too early, you pull the quarterback that's struggling a little bit too early, and you put somebody else in their place, which can be disrespectful. Not always, obviously. Sometimes, you're trying to listen to the client too carefully, who wants a particular style, instead of expecting your account people to be able to adapt to clients, but it's so disruptive on so many levels, like even for the agency. It's even worse for the client, I think. What came to your mind as soon as we started talking about this? BLAIR: Well, the very first piece of new business that I won early in my agency career, I was 22 years old, I was handed new business responsibility. The first piece of business I won was a professional sports team. The way I won it is, I had heard from like a printing rep or a media rep that the agency had just switched the account person on the client for the second time in six months, and I thought, "Oh, she's going to be so pissed off." I called and left a very polite voicemail message saying, "Hey, I know you've got an agency you're working with. I'm sure they're very good, but if you ever, you're interested in making a change for whatever reason, I'd be happy to have a conversation with you." 30 minutes later, my phone rang, and she said, "Yeah, your timing's kind of coincidental, because we've just lost our account person again, and I'm a little frustrated by it." BLAIR: Within a couple weeks later, we had that account, so had there not been that vulnerable moment, there's just no way we would have won that piece of business, and as somebody who's in new business, that's something I had always looked for, that vulnerability between the client and agency relationship. Also, I had been the account person a few times, not that early in my career, but later in my career, where I was dropped in later after a really good account person, or somebody the client really liked, had moved on, or, again, the biggest vulnerability is, "Okay, I'm the third account person in a short period of time," and you're fighting an uphill battle in that moment. DAVID: Right. It does seem like that is when accounts are most vulnerable. One of the ways to solve this that I've discovered by accident and then had lots of clients try is, so there are legitimate reasons why you have to switch, so like maybe your account person is leaving, under good or bad circumstances doesn't matter. "They're leaving. We need to have a new one." The best way I found to handle that is to ask the client to meet with who you are proposing as their new account person and ask them to give you feedback on that option. That, on the surface, is a scary thing to do, because what happens if the client says, "No, I don't want to work with them"? The thing is, the way this works is that you are handing power from yourself to the client, and that's enough to smooth it over. DAVID: I have never heard of a client say, "No, I do not want to work with them." What a client reacts to, more than that, is somebody being foisted on them without a choice, so if they have some option, they are generally going to warm up to the idea. If we take this even further, if you are hiring a new account person, this is somebody, a new employee for your firm, I strongly believe that you should let one of your better clients interview them for you, and they should, that account person that you may be hiring should be there on their own. You would never do that with somebody whose skills don't include that ability, but an account person should be able to step into any situation and shine, and so just giving the client some choice in the matter seems to solve most of this. BLAIR: This is one of those areas where it's so easy to be a consultant, where you can suggest something to your clients, because this idea terrifies me. DAVID: It terrifies you. It's been a long time since I've heard you be terrified. Yeah, it terrifies me a little bit, too, but every time I've tested it, it's worked well, so I'm sure at some point, now that I've said this publicly, it's not, but every time I've tested it, it'…

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The Seven Masteries of the Rainmaker Sep 26, 2018

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Blair offers seven mindsets that any seller of expertise needs to master so that they can behave like the expert in the sales cycle. Links "The Jedi Mindset" by Blair Enns McClelland's Human Motivation Theory, also known as Three Needs Theory, Acquired Needs Theory, Motivational Needs Theory, and Learned Needs Theory Transcript DAVID C. BAKER: Good morning, Blair. You are in London. I'm in Nashville. BLAIR ENNS: Yeah, it's my afternoon, and it's your seven AM. DAVID: And don't tell me you've gotten a lot more done today already, because that's just a time change thing. Has nothing to do with productivity. Today we're going to talk about the seven masteries of the rainmaker, choke, choke. BLAIR: You're choking on the word rainmaker, are you? DAVID: Well, a little bit. I'm also, it's like seven. How come it's not six or eight? Seven sounds quite biblically, almost like we need to take an offering at the end of this or something. BLAIR: Let's do that. DAVID: I'm more choking on the idea of the rainmaker. Do you hear that term much anymore? I don't really hear it. We know what it means, though. BLAIR: No, but there was a time when you heard it often. In fact, if an agency were running an ad looking for a new business person, probably a health percentage of those ads would have the title rainmaker wanted. DAVID: Yeah. BLAIR: I've never liked the term rainmaker. It's a little bit funny that an agency principal would be looking for an individual who essentially has magical powers, the ability to make it rain. DAVID: Right. It's dry. The crops are going to die. All we can do is just rely on magic. So let's call on the rainmaker. We have no idea how he ... it was always a he back in those days, but we don't know how he or she does it, but this is our last resort. BLAIR: We have no positioning. We have no leads. We have no prospects. We have no formalized new business process. You absolutely need somebody who can make it rain, yeah. So I've kind of used that term tongue in cheek, but the idea of seven masteries, it really stems from the notion of mindset. Because you can master behaviors. You can master all kinds of things. And when I originally wrote about this a few years ago, I had come home to the idea that I was teaching people sales process and people were learning, so they were onboarding and understanding what it is that they knew to do in specific situations, but yet, they still couldn't bring themselves to do it. BLAIR: So I kind of went deep into the subject and realized well, the things that I'm asking them to do, because my approach, the Win Without Pitching approach to selling to new businesses is a little bit contrary to the conventional way it's done in the creative profession. So the things that I was asking them to do were contrary to their overall general pattern of behavior. And then you ask yourself, well, what sets somebody's general pattern of behavior, and the answer is it's really the thoughts in their head, the mindset. BLAIR: So I kind of arrived at this model, this idea of the seven masteries of the rainmaker. These are the seven things that are concepts that an individual needs to master in order to put themselves in the mindset, the mindset of the expert. I sometimes refer to it as the Jedi mindset, so they master those concepts. So they're in the proper mindset. Then they can begin to behave, generally speaking, across the pattern of general behavior, they can begin to behave like the expert, and then they can start to take onboard these very specific things that we teach client does x, you do y. BLAIR: If you learn those specific points of sales process, what to do in the sale, in certain situations, but you're not already operating or behaving like the expert, then they're not going to work. So this whole idea was about getting to somebody's mindset. DAVID: Okay, so we're going to go through the seven, but before we do that, let's assume that I want to embrace this way of thinking. What specifically, almost mechanically, are you suggesting I'm going to do with these seven things? Do I just write them down, and I chant them to myself? No, you're not talking about that. It's more I analyze my behavior against this list. What am I going to do with this after we get through going through the seven? BLAIR: As I walk you through the seven, you'll think about where you are on that spectrum, and in the first mastery, just ask yourself, hey, are you mastering this now, or do you have some homework to do? And then I am going to get you to chant something funnily enough. DAVID: Good luck with that. BLAIR: After we get through four of the ... I think I said to you, this is either going to be really fun, or it's going to be a complete disaster. DAVID: Right, yeah. BLAIR: So we'll just see how it goes. As I explain the mastery, you just ask yourself, well, is this something I have mastered, or do I have some homework to do? And then once we get through four, the first four, which I consider to be the foundational masteries, then I'll actually talk about stringing them all together in a little saying or a mantra that you can say to yourself, and I don't mean to say that you're like Buddhist guru here or something. DAVID: As you laugh and talk about that, right. BLAIR: We're going to get you to say it out loud and then you'll see that when you do this properly, this becomes the conversation that you're having yourself with, and it sets you up to go into a situation where you're behaving properly. And even if you don't remember the specific things I tell you that you should be doing in the situation, it won't really matter, because you'll be thinking the right things. Therefore, your tendency will be to behave appropriately. You will behave like the expert. And then you can forget all of the nuance, and you'll still probably do pretty good. DAVID: Okay. All right. So let's dive in then. The first one is focus, right? So talk about that. BLAIR: Yeah, so mastering focus, it begins with the subject of focus. When you go in and do a total business review with a firm, I don't know this for certain, but I would expect that one of the very first things that you look at is the firm's positioning. Once you do an assessment of where the firm is and how they need to improve, I suspect that's kind of the foundation of where you start, or one of them. It certainly is in my business. DAVID: Yeah. In fact, I'm doing one today, yesterday and today. And as I was driving to where I'm talking with you now, I was just thinking, you know, I love this work. There's so much science and art around positioning, and it sets the stage for everything, right? How can you have all these other conversations without that? And that's what you mean focus, power in the sell comes from deep expertise, which comes out of that focus. DAVID: So when somebody's listening to this first one, and they're thinking, okay, do I still have homework to do, that question is is my firm focused enough to give me power or leverage in that relationship. BLAIR: Yeah, are you focused, or are you the individual benefiting from a focused firm. And the benefit of focus is when the firm narrows its focus in terms of the types of problems it solves or the types of clients it works for, usually a combination of those two, when it narrows its focus, it allows the firm to build a deeper expertise. So if you're an agency principal, and you have a dedicated new business development person, just ask yourself, are you arming this person with the benefit of focus. So we're going to build a four statement mantra. BLAIR: And the first statement is I am the expert. I am the prize. And that comes from this notion, this idea that I see myself as the expert practitioner in the relationship and not a vendor. I have some power in the relationship because of the depth of my expertise. Therefore I have a sense of being in control, but this idea that I am the prize, I am the prize to be won. I and the firm, we are the prize to be won in the relationship. And it's not the client is the prize that I am trying to win. BLAIR: So again, that's a mindset thing. Do you see yourself as this deep expert and representing a firm that has deep expertise that is desirable to the client, and do you see yourself and the firm as the prize to be won in the relationship? DAVID: That is so powerful, even though the words are so simple. It's the opposite of being a supplicant. It's not an arrogance, though. It's more of a quiet confidence that I've seen this before, and I'm eager to help, but we should talk about whether this is a right fit. I don't have to have this. I keep thinking of all these statements that emerge from what you were just talking about on the focus side. Even though we're kind of skipping, we could unpack this notion for weeks. We could talk for weeks, just about what focus means. But that's how it all starts. I love the fact that ... obviously, it has to be on this list, but I love the fact that it's also the first one. DAVID: So I am the expert. I am the prize. So that's focus. Second would be purpose. So talk about what that means, because we're still talking about very foundational things. How does purpose relate to this as a second one? BLAIR: Yeah. So after you master focus, you build deep expertise. The second, master a sense of purpose. And by purpose, I mean kind of a higher mission or calling. So most well-positioned firms can express their positioning in some fairly standard, almost formulaic language, and I don't mean to denigrate the language by calling it formulaic. I think first, you actually have to express your positioning in a formulaic language before you get creative with the language. BLAIR: So most specialized firms can say we're experts at helping this type of client solve this type of problem, or this discipline for this market. And that's just the beginning. Once you have that nailed, you want to go off in search of a higher purpose. Now, what purpose does for you in the sale is it gives you moral authority. It gives you the moral authority because you're driven, not to sell something to the person sitting across the table from you, and you're driven, not to help them sell things to their client. By tapping into purpose, you're tapping into something that's bigger than you, and even bigger than your client. And that gives you some moral authority in the sale. BLAIR: I'll give you an example in my own business. So Win Without Pitching, I can express our positioning as sales training for creative professionals. So the discipline is sales training. Creative professionals is the market. But my mission based positioning is we are on a mission to change the way creative services are bought and sold the world over. So there are different reasons. It starts to get into this Simon Sinek, tapping into your why thing. But there are certain moments when I will say that statement to myself, or if I'm being introduced to give a speech, I'll hand that language to the person who's introducing me, and that helps me get through maybe a slightly anxious moment and tap into something bigger than what I'm trying to accomplish in the moment. BLAIR: And when you're thinking bigger, when you're thinking past the transaction that's in front of you, and you're thinking past even what your client's objective is, to something even bigger than that, that steals you, gives you this moral authority, it contributes to your confidence, and it allows you to kind of ... gives you more ... I don't want to go back to the power word, but more confidence to navigate through the situation, through the sale, acting like the expert. DAVID: Yeah, and what I'm going to say next, I don't want it to take us too much off track, but I couldn't help but thinking of something as you were talking through this. Part of what we're doing at the beginning of a transaction like this or a possible transaction, or relationship, I guess would be a better way to say it, is to gather some control in that relationship, set ourselves up for that, not, though, so that we can misuse the power, but to use it for the benefit of the client, and sometimes it looks like a mistake. It looks like a power trip. It doesn't make sense sometimes from the outside. It's like if you saw somebody holding a child down, and it was through a glass window, and it looked cruel, and then the next thing you saw is that they were giving the child a shot, or they were dressing a wound or something like that. So we're doing something where we're exerting control to help the client, not to abuse the client. And we're reminding ourselves of that during this purpose discussion. DAVID: I love the example of getting up on stage, picture you've traveled a long time, you're tired, maybe something has happened that's shaking your confidence just a little bit. And you say this to yourself that I am on a mission to help. I guess that's the second phrase here that we're talking about. The first one, I am the expert, I am the prize. The second one, around purposes, I am on a mission to help. All of a sudden, it settles everything down. It reminds us why we're here and what we're trying to do. BLAIR: Yeah, well said. DAVID: So the third one is leadership. This is also a foundational statement. These first four are very foundational. So leadership is the third one. BLAIR: Yeah, let me just build where we are so far. So focus, I am the expert, I am the prize. Purpose, I am on a mission to help. And leadership, the line that goes with that is I can only do that if you let me lead. The idea of mastering leadership speaks to the notion that the sale is the sample of the engagement. So for you to do your best work in the engagement, you need to be able to lead. I use the word power, and I tend to overuse it, and as you point out, I don't mean power for the sake of power. I don't mean overusing it, but I mean, the client letting you assume the expert practitioner position and lead them through the engagement, rather than them relegating you to the vendor position and having them drag you through the engagement or dictate to you how the engagement is going to work. BLAIR: You're being hired to help solve a problem or capitalize on an opportunity. And for you to do your best work, you need to be allowed to lead in the engagement. Now, if you're not leading in the sale, then you won't be allowed to lead in the engagement, because the roles in the relationship are established well before the engagement begins. They're established in the sale. That's why you need to behave like the expert. You need to behave appropriately. BLAIR: So this third mastery of leadership is simply recognizing that for you to do your best work in the engagement, you need to be allowed to lead the client. Therefore, it's your job or a requirement that you assume the leadership position in the sale before you're hired. Again, I refer to the battle for leadership or power or control as the polite battle for control. And it should never feel to the client like you're dominating them or lording anything over them. They should feel the way it feels to you when you're hiring an expert practitioner yourself. They're calm, they're collected. They're clearly in control of where things are going or what the appropriate next steps should be. BLAIR: But they're also quite c…

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If I Were Starting Over Sep 12, 2018

Show notes

LINKS "The Great Convergence Is Upon Us" by Blair Enns "CRM: The Train Coming At You" by Blair Enns AltGroup.net website "Eight Gauges on Your Agency Dashboard" by David C. Baker The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William Thorndike "Rising From the Ashes: A New Agency Model" by Blair Enns TRANSCRIPTION DAVID C. BAKER: Blair today we're going to start over. Both you and I are going to start over. We're going to pretend to start over anyway, and the topic is If I Were Starting a Firm Now. In other words this is a firm that you and I work with, and the folks who listen to this podcast generally. If I were starting a firm like that now, what would I do differently? We're going way back in time because I ran a firm ... you worked at multiple firms, and I started and ran a firm for six years. My goodness, I would do so many things differently. If we talked about this 10 years ago, the answers would be different. If we talked about it 10 years from now, the answers would be different. But at this moment in time, what would we do differently if we were going to start a firm now? Are you up for that topic? BLAIR ENNS: I am up for it, and as you've pointed out I have never owned a firm before. I've run a small office, I've been the number two in a larger office, but I've never owned a firm. So I'll try it one, let's do this. DAVID: Okay. We're going to ping pong with some questions here, and I'm going to start by asking for your opinion on something that's really the big umbrella here. The reason I want to ask you is because you recently wrote a lot about this, and it was a provocative article the things that you talked about. I haven't talked with you to see what kind of feedback you got about it, but here is the question; what category of firm would you start? Would it be a digital firm? Or a dev shop? Or a UX shop? Or a PR firm? How would you start a firm from a category standpoint if you were starting over? BLAIR: I think the piece you're referring to is something I wrote called "The Great Convergence Is Upon Us." The convergence I was talking about is the convergence of design, which is often UX design, software engineering, and business consulting. I'm seeing most of the best lucrative, most thriving, most impactful firms that we're working with these days are in that space. I think it's really hard to think of starting a new firm today that doesn't combine those three skills, so I absolutely would combine those three skills because I think that's where the big opportunity is in the market place but that doesn't really narrow things a lot. If I look at what I know the world of selling, and also some of the world of marketing ... what I've been interested in for a bunch of years is this intersection of sales and marketing. I wrote something on this ... oh man, it's probably approaching 10 years ago now. I think it was called "CRM: The Train That's Coming At You." BLAIR: CRM as a customer relationship management software was becoming more prevalent and powerful, it's driven by the internet changing the way people buy, and the way we sell, and the way we use marketing automation. The biggest way sales and marketing has changed in the era of Google is that lead generation has moved from a sales function to a marketing function. When that happens, that changes the nature of what selling is, and it changes the nature a little bit of what marketing is. One of the implications is actually sales and marketing in your client's organizations are getting closer and closer together, and they're overlapping. That article I wrote about CRM was that the CRM application is actually the place in your client's organization ... and I know it's not an application, isn't really a place. But it's the place where sales and marketing are overlapping. BLAIR: Even pre-CRM days when I was working in the agency business, I as somebody who comes from the world of sales, I always felt like in a new business opportunity, if I could get the chief sales officers in the room as a decision maker, and I could convert him or her, if I could win him or her, I would win the account. There's just something about ... this is a long rambling answer, but there's something about where sales and marketing overlap, and the technology that's required, and the way those two different departments work together. I would focus on that space. So where sales and marketing overlap in my client's business, it would be tech heavy. A lot of that tech would be CRM. I would have this converge firm that had high level of business consulting, had technology chops like software engineering, and had really good design UX skills. I would go after sales driven organizations, and I guess the classic label would be a B2B firm. I would specialize in B2B because in a lot of B2B organizations you have this kind of handshake, or overlap in sales and marketing. Did that make sense at all? DAVID: It did. I kept thinking of things I wanted to interject, but I decided just to let you talk because it did make perfect sense. It overlaps with something that we've also seen in this industry for many years, the CMO, the person that we typically would get hired by ... you know these agencies we get hired by the CMO, was losing power for so many years and that's been reversed. About two years ago it was reversed, and really dramatically. The reason it was reversed is because the CMO took over more of the technology spend at large companies, which really dovetails with what you are talking about. The other thing that hit me too as you were talking is that so many of my clients do not understand that world, they don't even use a CRM themselves. It's not as if they need a CRM because they don't have that many clients or prospects to keep track of, but they aren't even using it enough to understand it and to speak that language. DAVID: It feels like the world around these firms that you and I talk to a lot, has changed and these firms haven't really kept up that we need some ... it'd be interesting to talk at some point about maybe the professional education, professional advancement, how do these firms learn and catch up in that space? BLAIR: Yeah. I think if your firm is positioned in any way as B2B, you have to be in the CRM space in some way because you can't be a good B2B firm without having CRM chops. You're going to be operating within your client's CRM application, everything that you do campaign-wise is going to push through that application, and there all kinds of opportunities within that space. As you've pointed out, most firms like the B2C firms if CPG is your focus, you don't need to worry about CRM. But if you're at all into B2B space you need to be using a big robust CRM package, probably sales force just because you're going to need to be able to provide that expertise at some level. You can go as deep into it as you want, but you're going to need to be able to provide that expertise at some level to your clients. DAVID: Yes absolutely. And also sales force is so easy to use, and the interface is so wonderful ... I'm just kidding in case anybody didn't capture that. BLAIR: Let me just put a shout out to ... I've been using HubSpot CRM for a project I'm involved in lately, and I've checked it out every 18 months or so, and it's always been, "Yeah, it's coming along nicely." And we're not into plugging things here, but I was so impressed with the user interface and how easy it is to use. Then I'd go back to my Salesforce instance and I think, "I like the robustness of sales force, but even the new lightning interface is not as good as HubSpot CRM." Okay that's enough plugging things. Let me ask you a question, if you were starting a firm today, size ... is there a target size you would shoot for? Is bigger better? Or would you limit the firm to a certain size? DAVID: I started as one person, just myself. The second person, we didn't have an office at the time, and he was really tall, and he kept ... whenever he stretched ... we worked in our bedroom, and we moved out of our bedroom and that's where we moved the office. Whenever he stretched he'd get his arms caught in the ceiling fan, it just brings back memories. Then we moved into an office, and eventually grew to be 16 people so still really small. I did not understand at the time the implications of size, I thought that having more people meant making more money and that's a pretty tenuous connection there. The way I would answer this question is very different now than it was then for sure too. If you want to be vertically positioned, and hold an AOR place in the client's mind, you can't reliably do that below about 40 people except for really small clients. DAVID: If I wanted that sort of a relationship I would aim to get bigger, but I also feel like now there is much less stigma around being smaller and if you are not as caught up in doing implementation, and if you're positioning is really really powerful, and it's almost all around strategy, then I probably would aim to be about six people, or I would be over 40 people. I would try not to be in that middle size, that's how I would answer that question. BLAIR: Okay. DAVID: Does that surprise you? BLAIR: The six surprises me. We've had conversations about what's the ideal size of a firm before, and I know that our friends that design business association in the UK has done a little bit of work on this ... and this data is a little bit old, but I remember being told that their research showed that the most profitable firm per capita was 11 people. DAVID: Yep. BLAIR: That fits nicely with your functional model where you say essentially there are 12 roles in the firm, and then once you get past the 12 roles now you're into middle management, right? DAVID: Mm-hmm (affirmative). And you can have very pure roles where nobody has to wear more than one hat at about 22, 23, 24 people, something like that. My own research shows that there is a deepened profitability from about 10-15 and then above that there is another corresponding increase in profitability per employee. But there's so many exceptions to that, it's really hard to say that you would necessarily avoid a particular size. But I think I would be intentionally small, six or so. Or I would be intentionally large if I were starting over. That's just me answering the question, right? BLAIR: Yeah. DAVID: And none of these are like, "This is what you should do." This is just what I would do, that's how we're answering these questions. If you were going to start a firm would you want to have done anything else first? For example, would you want to have worked on the client side first? Or would it be important for you to have worked at another agency first? Or maybe a consulting practice? I want to just get a feel for whether it would make sense if you had a real objective view of things, and you're out of grad school say, and you're faced with these options; to work for a consulting firm, a client, or another agency. Which one of those would you do before you started your firm? BLAIR: This is a real tricky one because you have to try it on for what's best for you. If I remove the question for me, if I think okay I would be ... in that converge model, I would be the consultant, but I don't have the pedigree to bid for boutique consulting firm experience, I have faith in my ability but I don't have that background so I would say somebody like me if I were thinking of a career path which ... if we could hindsight being 2020, and I was pursuing this model, I would do the MBA, and then go work in a consulting company, and then ... I think that would be the most valuable experience, would be consulting company experience. Not necessarily agency or creative firm experience, and I don't think client side experience is actually necessary. In fact a lot of people would disagree with this, but I think we in the creative profession spend too much time listening to client say what they want. I'm not saying we should ignore that completely, but if somebody is on a stage saying, "Here is what I want from you people." BLAIR: I just don't trust that that's actionable advice, to listen to what somebody says they want generally from agency partners, and then build your business around that. That's probably another podcast. But no, I think of those three options whether I had agency experience, client side experience, or consulting experience. For somebody like me, I would see myself as the head of the firm, and I think the head of the firm in this new converge model, you're probably best off with somebody coming from the consulting background. DAVID: That is exactly how I would have answered the question as well because for the same reason you gave about the client side, and because I want to build on my own after I leave the consulting firm as an employee. I want to build a consulting practice working in the areas that you mentioned in the first answer that you gave. I have noticed though that a lot of principals struggle when they have never worked for another good firm before, and the way they get around that is they hire people who have so that they can learn from them. But if the end look of your firm is more of a consulting firm than say a marketing or a design firm, then working for those would be great. I was just thinking to myself as you were answering that, there is no college degree for consulting. That's really odd, isn't it? There's so many things that people are doing, and there's no degree for it. BLAIR: Well isn't that the MBA? Isn't that one of the paths coming out of the marketing focused MBA? Or even a financed focus MBA, is to go on the consulting side? DAVID: Yeah. I mean you learn about business, but you don't learn how to do the craft. They don't teach you that in school, that's pretty interesting. BLAIR: I agree. We're talking about if I were starting over, or if I were starting a firm today, and I'll put the question to you. What you asked about prior experience, I'll ask you about preparation before the launch. Would you raise money? How would you go about getting your first clients? And how would you generate leads if you're starting from the beginning? DAVID: This assumes that I'm doing something else while I'm ramping up, and I'm ramping up probably in the evenings, or on the weekends, or something like that. I would have at least two to three months worth of my living expenses saved up, that would be the most important thing for me if I were starting over. The reason is because I think ... at least for me, that the father of compromise is really financial pressure, and so I would not want to face that pressure so I would have that saved up. The other thing is that whatever I was going to be doing ... well, obviously my positioning would be very nailed down, but whatever I was going to do for lead generation I would have that up and ready to go where all I had to do was flip a switch rather than starting to do that at the beginning. I wouldn't be sitting there with nothing to do, and smiling and dialing looking for work, I would have all of that ramped up partly because I want to be prepared, but partly because I want to test my own resolve. DAVID: How committed am I to this new venture? Am I committed enough to it to do all this…

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