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    Business

    2Bobs—with David C. Baker and Blair Enns

    Conversations on the art of creative entrepreneurship with David C. Baker and Blair Enns

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    Latest Episodes:
    The X-Factor Aug 29, 2018
    Show notes

    Blair gives David some homework to identify patterns in the principals of creative practices who are successful and have that "je ne sais quoi." LINKS 2Bobs Episode 28 - "Positioning Cheats" Start With Why by Simon Sinek "Top 10 Podcasts Agency Owners Listen To" by Daniel de la Cruz Crucial Conversations - Tools for Talking When Stakes Are High by Kerry Patterson, Joseph Grenny, Ron McMillan, and Al Switzler TRANSCRIPT DAVID C. BAKER: Blair today, we are going to catch up with the rest of the world. I can't even say that with a straight face. We're only 80 years, 90 years behind. We're going to talk about the X-Factor. Okay. And the first time that phrase was used was in 1930, and we're just now getting ready to talk about it. BLAIR ENNS: You've actually done homework. That's not fair. DAVID: Well, a little bit. BLAIR: You went and looked up the first use of the word X-Factor... But hold on - you have to explain who used it. What was the context? DAVID: Well, it was like in the urban dictionary, so it's totally unreferenced, it's just somebody's idea of when it was first used. I probably shouldn't even brought that up. But the phrase that popped up a lot when I was researching the X-Factor 'cause you really wanted to talk about this and I'm intrigued too. It's the "je ne sais quoi" which means, "I do not know more." Have you heard that phrase? BLAIR: Yeah, "je ne sais quoi." I always thought it just meant ... And I should know because I'm Canadian. It's one of our official languages. I always it meant, I don't know. So it's, I do not know more. DAVID: I do not know more, it's a French phrase "je ne sais quoi." In other words, there's this X-Factor. I don't know more. There's just something about them. There's this X-Factor about them. It was pretty interesting. We're going to talk about principals that exhibit this X-Factor. BLAIR: Principles, the people: ...P-A-L-S. DAVID: Yeah, right. BLAIR: Not ...P-L-E-S. DAVID: I never use the other word anymore 'cause I'm so used to using principals ...A-L-S. BLAIR: So principals of creative practices who are successful, who have this "je ne sais quoi," this X-Factor of success right? DAVID: Yeah. You really enjoyed saying that with such a great accent didn't you. So you gave me homework. BLAIR: Yes. DAVID: Here's what you said to me: think of one recent client - this presumes I even have clients, right? But think of one recent client who is very successful, what three things come to mind about that person? So I dutifully answered my questions here just following the script. And then you said, "Now do it for two or three more clients." And so I did that. Now what do you want me to do with this? BLAIR: I want to talk about the patterns. If you've done it for three or four clients, when you think about the attributes of that person, how common are those attributes across those three or four people? DAVID: They were just surprisingly common, and I hadn't ever really thought about it quite like this. But I almost felt like I was wasting my time as I extrapolated to others, because they all came up about the same. Maybe the order of the three things is different from principal to principle but the same ones kept coming up. Did you do the same thing? BLAIR: Yeah and I thought of a couple of people and then I just kind of thought of a group of people and made my list even a little bit longer. So I've got six things, but I would say those six things, they all roll up into one word. So if you had to take all of those different attributes that you've identified of these successful agency principals, and you had to put them all under the banner of one word, what would that one word be? DAVID: So I popped back and forth between these two. But I think the one word would be confident. BLAIR: Yeah, me too. DAVID: Really? The same word? OK. BLAIR: Yeah. So the X-Factor is confidence. But I think we'll get into this and maybe a little bit later on, we'll talk about some kind of big picture ideas around confidence and the subject of overconfidence and how important confidence is. Did you write down different manifestations of confidence or different forms of confidence? What's on your list? DAVID: The early form of confidence would be just starting the business, like, "I can do this." That's one. Another where it seems to show up a lot is just in sales or prospect conversations and I've even actually listened to them and then of course, most of the time I haven't, they're just reporting to me what the conversation was. Then that's where it probably strikes me the most is just this confidence, even when they don't have a lot of experience in the promises that they are making to a prospect. You and I have probably done this in our own practices years ago too. BLAIR: Oh yeah. DAVID: You get on the phone on the way back to the office and you're saying you will not believe what I just promised we could do? BLAIR: Yeah. DAVID: That's where it seems to show up. BLAIR: Well, I think some of the best sales people in the world you cannot tell from the way the salesperson is behaving, what their external conditions or what their financial situation is, from the way they're behaving. So a really good salesperson can be standing in front of you on the brink of bankruptcy and you can't tell because they are not transmitting panic or neediness of any kind. DAVID: Wow. So they must be good poker players I would think. BLAIR: They're confident, but they're also good actors. But isn't that the same thing? I was talking about this last week in another podcast? Yeah, I actually step out on you and do other podcasts from time to time. I was saying the phrase, 'fake it till you make it', somebody on Twitter was saying, "That's just such a horrible saying, it's such bad advice." And I don't think that's true at all. And especially when it comes to confidence. You develop confidence, I believe, in part by faking, being confident, you just pretend you're confident and then you do that long enough, often enough, lo and behold! You become confident. I think good salespeople are able to fake, fake may not be the right word but just act confident even when the circumstances are dire. DAVID: Wow! Because all of us are growing by stepping slightly over our current capabilities. And that includes sales. BLAIR: Yeah. DAVID: There's just a fine line I mean, that I guess is technically the line but if we never do that we never grow, if we do too much of it then we really are cheating our clients and I think you're going to talk a little bit later about this overconfidence thing. So back up a little bit, what got you thinking about this in the first place? What intrigues you about this concept? BLAIR: I think when you work with enough people over time you start to make some initial assessments of how likely some people are to succeed and I was thinking some people have it and some don't. And in showbiz, it's not just conference, there's this star quality that really is "je ne sais quoi." I don't know more, other than to say, it's like, they've got it, they've got the X-Factor. That's why I assume the show is called The X-Factor. And it's really hard to nail down what it is but I think in business and in running a creative firm, I think that X-Factor it really is confidence but not going too far and having unchecked overconfidence. Which is actually kind of common in creative professions for reasons we'll get into a little bit later. So I think you've probably seen those patterns too, you talk to somebody and in the very early parts of the conversation, you get a sense of how successful this person is. Is that correct? DAVID: Yes, for sure. And like you were just saying, I couldn't tell you how I'm picking it up. But I do. I don't know if you remember many years ago, probably 15 years ago, I called you up late in the day, maybe even had been in the evening. And we've referenced this in an earlier podcast. BLAIR: You were in a snowstorm. DAVID: Yeah, exactly. And it hit me for the first time. It's like, "Oh, my goodness!" What I'm in the business of doing is being a substitute for the confidence that people lack. So most of the people that wouldn't hire me have enough confidence and they figure things out. Some people that are in that category would still hire me and then others need the marketplace to replace that lack of confidence they have. So many times I go into a situation and I believe more highly in their skills than they do but it doesn't matter what I believe they just simply are not going to absorb what I believe about how good they are. It will only be the marketplace that does. I remember talking with you about that, it became such a big light in my mind. So what are the things on your list? So confidence rolls up. But can you get more specific here about what you're saying? BLAIR: Yeah. The first thing you had in your list about like their presence in a sales situation is similar to what I have. I have talking about money. And what I have seen is the successful agency principals over the years and the successful new business development folks, they can have a conversation with a client or prospect about money and the size of the number does not faze them. So they can say $10 million, they can say $10 million, just as easily as they can say, $10,000 and vice versa. The size of the number is essentially meaningless to them from an emotional or a stressor, point of view. So that's, I think, a big one and I don't actually see that strength or skill very often, but when I see it, I know this is somebody worth betting on. DAVID: They might not even have a fantastic positioning. But this cover some of that. BLAIR: Yeah, we did a really early episode on things that mask poor positioning and I think we talked about that being one, the confidence of the principal. DAVID: Yeah. BLAIR: So that's the first one. I had the ability to talk about money. And the second point I had, I wrote down the word entitlement. A sense of entitlement. I also wrote next to it and assumption of success. Entitlement can be a bad word. It can have negative connotations depending on kind of how you use it, or even just how you're thinking about it in the moment. But I actually in this context, I really like it the idea that somebody feels entitled to success and there's just no question about whether they're going to succeed in what they do. DAVID: So does this show up in bad ways as well? I know you don't mean entitlement in the sense like a political program or something like that, that you're not talking about that. BLAIR: Yeah, or a rich kid or something like that, where the world owes me with a bit of a chip on my shoulder, because I'm not getting what I feel I'm entitled to. I mean, a healthy, positive sort of entitlement, which is that, of course, I'm going to be successful. Of course, there are lots of businesses out there that would see the value in what I do. Of course, the future ahead of me is big. Of course, I'm going to take advantage of most of the opportunities that come my way, of course, everything's going to be okay. All of these things, and I think maybe without being polar opposite of that conflicting idea that's still valid, is the idea of the healthy paranoia of a principle. I don't think that's part of the X-Factor. I think that's a part of kind of general success as an entrepreneur, I think you have to have a healthy paranoia. But I think these people that really have it the X-Factor, they're not really driven by paranoia. They're not driven by fear. They're driven by almost entirely positive things. I think both of those are valid. But I'm just saying in the X-Factor, these people who have that kind of special X-Factor, there's just no doubt that they're going to succeed. DAVID: Almost unapologetically, which is not necessarily arrogant. You've talked quite a bit about the fact that one of the mental, I guess, principles of the newer entrepreneur is that it's not a zero sum game. So when there's this entitlement or this assumption, or this confidence, it's not at the cost of the client, it's not like we're taking things from the client. It's like we're both going to succeed here and I'm unapologetic for mine and unapologetic for yours between us we're going to do great things. So first one was how they talked about money, that's really interesting to me, especially the way you phrase that the other is entitlement or assumption, an unapologetic approach to this What's the next one? BLAIR: The next one is leadership. They lead their people and their clients. I don't know if they're natural leaders, it's probably fair to say that when we're talking about X-Factor, we're talking about natural leaders. I know some really strong leaders who've had to work to develop their leadership skills, whether it comes naturally or not. I saw this in a couple successful clients and then I was thinking of some other clients that I've worked with, that are still kind of successful, but struggle with this issue. You probably see this too where you're offering guidance to an agency principal and his or her response is "Yeah, I know I should do that. But I'd have a hard time selling that to my people." When I hear that I think, "who's running the show here?" DAVID: Apparently, "my people" are. BLAIR: Somebody with that X-Factor is never going to push back on a valid idea by saying, "I'm going to have a hard time selling that to my people." Unless it's something that's really ridiculous. Remember that seminar I did years ago in Bermuda in the beginning of 2009? DAVID: I do. Yeah. BLAIR: It was you and me and four other people. We drank $1500 worth of champagne, because I had to hit the food and beverage minimum. DAVID: Great food. And a lot of it. BLAIR: I had two different agency principal say to me, "I really want to go to the seminar you're doing in Bermuda, but I just laid off people and I can't justify to my people that I am going on this thing and I think that is perfectly valid. That's not what I'm talking about. I think in both those cases, and probably the other cases that just weren't stated to me, I think that's a perfectly legitimate area where you should be concerned about what your people think. But when it comes to say, the positioning of the firm or how you're going to go about selling these more strategic decisions, those people who have the X-Factor those leaders with supreme confidence, they don't stop and think, "Well, I hope my people are going to go along with me." There's the sense of, they look to me to lead it's my job to lead I'm going to lead, and even if they're unsure in the beginning, they will follow me because they trust me to lead. BLAIR: So that's one aspect of it is they lead their people, but they also do the same thing with their clients. DAVID: Yeah. Is that the same as directing their relationship? Or is that something different? I've heard you use that phrase. BLAIR: I use what I think is a healthy generalization when I say there are really only two positions you can occupy in your client relationships. You can be the vendor or…

    Full show notes at the publisher

    Starting...Existing...Thriving Aug 15, 2018
    Show notes

    Blair interviews David on what each of the three levels of success in running a creative firm looks like. Links 2Bobs Episode 39 - "Replacing Presentations With Conversations" The Win Without Pitching Manifesto, by Blair Enns The Business of Expertise: How Entrepreneurial Experts Convert Insight to Impact + Wealth, by David C. Baker Built to Sell: Creating a Business That Can Thrive Without You,by John Warrillow Pricing Creativity: A Guide to Profit Beyond the Billable Hour, by Blair Enns 2Bobs Episode 31 - "Mastering the Value Conversation" TRANSCRIPT BLAIR ENNS: David, it's been a while. DAVID C. BAKER: Has it? I haven't missed you all that much. Have you missed me? BLAIR: Since we've last recorded a podcast, I was listening to one that aired recently and it was talking about my first book is in its fourth printing. It's now going into its fifth printing and I realized that it just aired and we recorded that over a year ago. So if Marcus is digging into a backlog that far, that means we haven't been together for a while. DAVID: Yeah. And it's scary too because imagine how much our thinking has changed in a year? 'Cause you were wrong about so many things. BLAIR: That's an old joke, you need new material. DAVID: Okay, sorry. BLAIR: So since we've last recorded a podcast, I know they keep airing because we've got all this in the can, but you and I did an event in London and then we came home and then you and your wife came up to Kaslo and we celebrated. I was just looking yesterday at a photo of your wife and my wife in a bear den together on her birthday. DAVID: Right, I didn't want to go in it, it's why I took the picture. BLAIR: You're too smart. I took it from inside the bear den, you were outside. DAVID: Right. BLAIR: And then you went to Chile on vacation and then you've probably been in some other places. DAVID: Yes, I have. I'm kind of off the road right now. I head back out of the country on Friday but I've been back trying to get our 61 acre farm livable. So just a few minutes ago, if you'd seen a picture of me, I would have been covered in white from head to toe because I am still trying to figure out how to use a paint sprayer and I realized I have a lot of expertise to develop yet. BLAIR: That's why on a hike I was carrying the bear spray. Okay, so it's been a while since we talked. Today we're going to talk, I want to call it good, better, best but it's really the three levels of success in running a creative firm and I think you've broken it down into the categories of starting, existing and thriving. And you sent me an entire spreadsheet to help navigate this conversation. Things like utilization, positioning, financial, marketing, etc. All of these different things that should be true or should be happening or you should be aiming for at these three different levels of success. Do you want to just take a minute and talk about those three levels of success? Are there lines that delineate between starting and existing and existing and thriving? Well, I think there are. We'll find out I guess, right? But I tend to think in triads. And so as I'm getting a question from a client, I'll sometimes just play this mental game, are they starting out or are they existing or are they thriving? And there seem to be these three different categories. And then you can expand that and say, "Okay, what about financial performance? What about how they think about service offerings or how they think about positioning and how they think about management?" And so I think it's useful to think in these categories because it's not as if a single firm is all in the existing, the middle category. They might spread across different ones and just gives us an eye opening into what our world looks like from the outside. DAVID: I think it'll be kind of interesting to talk about. But you're probably going to let me know how interesting this is or not. If you rush me through these, that'll be a sign that it's not that interesting. BLAIR: Well, let's just see. Let's start with utilization which is the first thing on your list. DAVID: Right. 'Cause such an exciting word, right? Utilization. BLAIR: Yeah. So I'll just have a little nap here while you talk about utilization. DAVID: Like I said to you one day, I'm pre-interested. Okay, so starting would be subsidizing clients and the typical firm in a developed country is charging and getting paid for 42% of their time and they should be getting paid for 60% of their time. So most firms are in this starting category and they never really get out of it. It's more of a typical category. So there's some significant degree of underpricing and/or overservicing. And that's the first one, subsidizing clients. And then hopefully, we get to the point where we get paid for everything we're doing, that's the middle category of existing. And then thriving is package pricing where we're applying what you would call value pricing. Where there's very little corelation between what we're getting paid and the amount of time we're putting in. It's really more about outputs and accomplishments and so on. The thing that interests me about this and I'm curious to hear your thoughts on this as well, is that most firms want to skip the middle step. So they're not getting paid for all their time and they want to jump right to value pricing without going through the middle step of getting paid for all the time that they're working. And some of this is influenced by this hatred that everybody has for timekeeping, but it's also driven by this sense that people have of they're being cheated. It's like, "My clients are not paying me what I'm worth and I feel rotten about that, I feel anxious, I feel resentful and I want to jump right past that and go straight to getting paid for more than the time I'm spending." So that's the first one, utilization. BLAIR: Well, I wonder if that leap isn't because they're not really thinking about value-based pricing in terms of getting paid for the value that they create but they see it as kind of a packaged way of actually getting paid for what they do. Does that make sense? DAVID: It does. So they're using a very advanced way of sort of eliminating this subsidization without ... Yeah, it kind of does. I feel like people, they have this resentment level about not getting paid for what they're doing but they don't really know how to solve it and they jump into different plans to solve it without really understanding all of them. This is what you've spent so much of your professional life doing in the last couple of years, is helping them think through. Like we did a podcast recently about the value conversation and all of those things. And in London when you and I were talking, I was listening when you were talking about practicing the value conversation. And it was so interesting for people, the light came on on their eyes. And I don't know exactly why but I feel like they need to at least go through this second phase first because it's like learning to walk before you can run and run before you can whatever the next thing is, leap I guess. BLAIR: Yeah. And I wonder about that. I kind of think if I were giving somebody who's starting out right now some advice, my advice would be to skip over that middle section of getting paid for what you do. But if I may, I want to back up a little bit and just talk about these three categories of starting, existing and thriving and let's just put some description around them. I think we can agree that in the starting phase, essentially you have a hypothesis and your hypothesis is that you have something of value that the market values and that maybe there's a business there. So you open your doors and you're essentially exploring your hypothesis. You don't know whether you validated or not. There's all kinds of fear and there's all kinds of experimentation and there's all kinds of hard work and you're trying different things and you're seeking validation. And I would say in the existing stage, you have validation, there's a business here. You're not going to go out of business tomorrow but probably you're earning like what you would in a job, maybe a little bit more. So it's okay, I have validation from the marketplace and then the next step is essentially optimization or getting ... Another way to look at it would be the third category which is thriving. Beyond existing, beyond earning what you would in a job. And I know I'm probably jumping ahead and maybe screwing up some of your things that you want to talk about here but we all have a sense of what thriving is and we all have a sense of what starting is. Starting is you were working with a hypothesis. Existing in the middle is I validated it. There's something here, now we need to take it to the next level. And thriving is the next level. Are those good enough descriptions for the three categories we're talking about? DAVID: Yes. BLAIR: Or would you change them? DAVID: No, I think they are good enough. What's interesting to me though, is that some businesses that have been around for 10 years are still in the starting category and they don't ever get to that other one. And those are the ones where I might go in and say, "Hey, just an idea here, but have you considered that maybe you shouldn't be running a firm? You could be making a lot more money working for somebody else, you'd be working fewer hours and you'd have no financial risk." BLAIR: And you'd be sleeping better at night. DAVID: Right, exactly. All those things. Most folks just sort of look at me and grin and say, "Yeah, I know all that but I'm willing to invest that much just so that I don't have a boss." You don't automatically go from starting to existing after you cross, say a two year threshold or something like that. There is some mentality that has to change on your part. BLAIR: Yeah. Okay, so you talked about the first point of how utilization is different in these three categories of starting, existing and thriving. You go from essentially subsidizing your clients to getting paid for what you do to charging based on the value that you create or package pricing. The next thing that you want to explore under these three categories is positioning. So how does positioning change? DAVID: And this is a little bit different than we would have talked about it probably 10 years ago maybe. You and I both noticed that that's changed in the marketplace. So in the beginning, you're usually an undifferentiated firm. So there are many viable substitutes for what you do. And most firms make this transition for sure, they go into the existing category. And in this phase, and I delineate this scientifically in the book, The Business of Expertise, you need between 10 and 200 competitors and then we can talk about what that means in terms of your prospects set and so on. How many prospects you need. But most firms don't go into that third phase there where there are no competitors essentially because of some process they have or some proprietary IP or some black box. That's where you see firms thriving and they're making so much money. It's not wrong at all, it's just that they really control their marketplace. And so, most people in this category are probably in this existing, the middle phase, and very few are at the undifferentiated and very few are at the proprietary IP side. I'm not sure what that number is, I'd be interested to see what you think. I would guess that maybe 10% of firms are in that high level, less than that maybe. BLAIR: I'm going to recap what you said here. So positioning-wise, when you're starting out, you're saying the firm begins as fully undifferentiated. You're basically saying yes to everything and taking whatever you can. And then when you get to the existing phase where you kind of validated your hypothesis, you typically have 10 to 200 competitors. And then in the thriving phase or stage, you say you essentially have no direct competitors because you have proprietary intellectual property. Is that right? DAVID: Right, a black box. Something that they just simply cannot get somewhere else. And that's built on the second phase for sure. You start at the 10 to 200 competitor phase but then you figure out some magic and you bring it to the marketplace. And that's where just the light comes on and everything just falls in place for you. BLAIR: I want to suggest the slightly different way to think about this. And that is at the very beginning, you starting out, when you have one client, your firm is highly specialized. DAVID: Specialized in what? BLAIR: You're specialized in the discipline for market, you're doing x for why, you have one client. And then I'll suggest to you that your second client is a lot like your first client. And it's often because that first client maybe you took that client with you from another firm or whatever. He was attracted to you for whatever reason. Your second client is a lot like your first client so you're a highly specialized entity. And then you think, "Oh my god, I have to mitigate my risk. I don't want to put all of my eggs in one basket. I don't want to pigeonholed." And then you broaden out. DAVID: And then you mess up your positioning with all these other clients. BLAIR: Yeah. DAVID: That's interesting, I never thought about that. That is really interesting. So the secret is to never have more than one or two clients and then your ... That's Blair's advice for the day. BLAIR: Okay. Now let's move on to the category or employees. How does your employee base change as you go from starting to existing to thriving? DAVID: This one is really fun to me because I think everybody will identify with this. In the first phase, you're hiring what you can afford. It's just like, "What? I can't pay more than this and I know the kind of expertise I would like, I just cannot afford it. So the primary thing is this is what I can afford and I'm just going to get the most capable person I can with this amount of money." That's the first phase. BLAIR: Yeah. We can all identify with that. DAVID: Yeah. And none of those people are still working for you but you still remember those days. BLAIR: Yeah. DAVID: And the second phase is existing. And here there's this flip that occurs in your mind and you begin to hire for what you need even if it stretches you financially and you grow into it. So it's not what you can afford, it's what you need and you've built this new assumption on the fact that you're tired of training people, these blank slates that come to you and infusing them with everything you know. But the firm never grows beyond that because who's smarter than you is getting hired because you can't afford them. So the second phase, what do I need even if it costs more than I really I'm comfortable spending at this point? The third phase is a really fun one. And that's where you are on the lookout for amazing once in a lifetime hires. And even if you don't need that person at this point, you go ahead and snug them because you're running your firm so well that it's not going to put you under to have an extra and actually a highly paid extra person on staff. And this is that third phase where you make the once in a lifetime hire every once in a…

    Full show notes at the publisher

    Replacing Presentations With Conversations Aug 01, 2018
    Show notes

    David re-reads the 2nd chapter of Blair's first book, leading to a discussion about how sales people have to choose between either presenting to clients or being present to them. TRANSCRIPT DAVID C. BAKER: Blair, we are going to talk today about replacing presentations with conversations. BLAIR ENNS: The second proclamation. DAVID: Yeah, it's actually the second chapter in your book, which I'm holding right now in my grimy little hands. The book, it's black with red, looks like foil to make it look expensive, so you could charge an extra couple bucks for it probably. It says Win Without Pitching Manifesto, and the second chapter is about replacing presentations with conversations, but I think if you would let me, I'd like to make a public confession before we get into this. BLAIR: Sure. DAVID: Your book actually sells better than mine, and I want you to know that that pisses me off. BLAIR: I read a great quote the other day, maybe it was Gore Vidal who said, "Every time a friend succeeds, a little part of me dies." DAVID: I don't know if this was the third or fourth printing, but since we published the book, we got these three skids of your books. Not only do I hate the fact that your book has sold better than my last book, but I have to haul these skids of your book like for punishment, to remind me constantly that they're selling. BLAIR: That's what you get for moonlighting as my publisher. DAVID: Yeah, instead of focusing on what I should be doing, yeah. BLAIR: The fourth printing should arrive any day now, it's larger than all the other ones. Can I just keep bragging here? I'm surprised it's been, well I think it's somewhere around seven years, and sales just keep going up, I can't explain it. DAVID: I'm more surprised than anybody, because I've read it and I know you. The idea is replacing presentations with conversations, and actually I read through chapter two again, it was actually fun to read that part of the book again. You talk a lot about avoiding the big reveal, and the first thing I could think of was several episodes of Mad Men where they have the single pitch board on an easel in the conference room and it's covered, and when they say "big reveal", they mean big reveal, they lift this thing up and there's this tension in the room. You talk about the fact that we're addicted to that. I'm not sure that people would admit that they're addicted to that, can you talk more about that first, to start us off? BLAIR: Some people might listen to that and think, "Well, I'm not addicted to that," but I think you and I probably have different definitions of creativity. You might have kind of a broader look at what it means to be creative, and I take my cues from Mihaly Csikszentmihalyi, who wrote the book Flow, and he studies happiness and creativity. He says creativity is the ability to see, the ability to bring kind of a new perspective to a problem. It's not the ability to write or draw, he refers to that as "personal creativity". BLAIR: Creative people who can look at things differently, they just see things differently, that's kind of to me the hallmark of creativity, one of the things that goes hand in hand with being creative is the ability to think on your feet, so these two things, for reasons I don't fully understand, they're tied to each other. When somebody has this really strong ability to kind of bring a fresh perspective to a problem, they also have a really strong ability to go with the flow and deal with whatever kind of objections are thrown at them. If your strength is standing in front of a room, saying something, hearing an objection, and then having to react to it, and then kind of sell in the situation or recover from a situation, then you are going to look for as many situations like that that you can create. BLAIR: I'll give you a great example of a friend and a client from many years ago, creative director at a small design firm, and he was presenting a new identity to a consulting firm. He does the big reveal, and it's very quiet, and then he's a little bit nervous because it's so quiet, and he says, "What do you think?" One of them says, "Well interesting, I notice you've changed our name from XYZ Consulting to XYZ Consultants." It was just a mistake, an error on his part, and he responded immediately. He said, "Exactly, because consulting, that's what you do, consultants, that's who you are." They bought it, so they changed the name because he just responded in the moment. BLAIR: Creative people love being in that situation of presenting, having to deal with an objection, and then coming through it, because the euphoria is profound, it's huge. If that's who you are, if that's your strength, commanding a room, having to dance, having to respond to objections, et cetera, not knowing what's going to happen next, then you will create as many situations as possible where you get to do that, and the whole time you will tell yourself and tell others and tell me and tell you, "No no no, that's the way this business works, or that's the best way to communicate this information to the client," and it's not. It's all about you and your personal need to present as a creative person. DAVID: You would say that that's pretty widespread in the creative field, because most of the creative field has been walking down that path for many years, there's something about that personality. I think of it as diving into an empty pool and inventing water on the way down, that's how I think of it. When I think about public speaking, to me that's sort of what's happened, or when I'm doing consulting where I know that within a few hours, we're going to have to have some at least provisional answer, and we don't yet, and that's terrifying but also thrilling. There's something about the creative feel of creative entrepreneurs that's bringing that. Now, would this equally apply to presentations in a new business setting as it would to presentations as the work is unfolding? BLAIR: There are different types of presentations, and there are different times in the relationship in which we feel like it's appropriate to present. If we start with the idea that we are addicted to the presentation and the presentation does not need to exist, if you come around to my way of thinking on that, then you will look at the presenting that you do in a new business situation, and you'll realize that this is not necessary, I'm doing this for me. You really first have to come to grips and be honest with yourself about your own need to present. What I recommend is, reform yourself when it comes to your existing clients. DAVID: First. BLAIR: Yeah, first. Replace the big reveal with a series of little reveals, and then once you get your head around that, then you will be able to think about your need to present in a new business situation a little bit differently. There are all kinds of creative people outside of the creative professions, so most entrepreneurs I think fit this description of a creative person, because I think you have to be somewhat creative to be ... I test for this in the tests that we do for all of the people who enter the Win Without Pitching program, so I can get an objective measure of how creative in that sense, or how much they crave standing up in front of the room and being forced to dance. BLAIR: There's a rudimentary question that's, and I'll ask the audience right now, and I've asked this in many seminars or workshops I've led. Usually I do it after break, I come back into the room and I say, "Hey," and I'm clearly kind of roleplaying or playing a scenario, I say, "Hey, in the hallway, I just ran into the chairman of the board of your most highly coveted client. Think of the company that you've always wanted to work for. They're having a board meeting in the meeting room right next to ours, and I told them that I was spending the day with you, and they said, 'Oh great, can you send somebody in to do a 15-minute presentation on their firm? Because we're looking to hire a firm like theirs.'" BLAIR: Then I say to the audience, "You have 10 seconds to get over there and present. You have no time to prepare," you get up out of your chair and start walking, and then I say, "Okay, stop. What's your reaction? Everybody just measure what your reaction to that is, I've just told you you have no time to prepare, you have to go to a 15 minute presentation, you have to be there in 10 seconds, what's your reaction?" You look at the audience, and you can see the range of responses in their faces. Some people are grinning, these are the people, they would say, "I'll think of what I'm going to say on the way over there," and they love the stress of that moment because they have this great ability to respond, to think on their feet. BLAIR: These are the people, as you say, who love to dive off the diving board and invent water on the way down. Then you've got the kind of low autonomy people that are very systematic and process-oriented, and these people are horrified, they need vision and clarity of what's going to happen next. They need to know what their steps are, they need to be prepared, it's their worst fears to come off unprepared. They haven't even considered what they might say or the objections that they might encounter, and they need to be able to think through all of those things. BLAIR: If you're in that first category, then I can all but promise you that you have built your business around that strength of yours, and you have driven your cost of sale way up, and probably your closing ratios down. Now obviously, there's some places where it's served you well, but for the most part when it comes to getting new clients, I'll bet you it's hurt you more than it's helped you. DAVID: Do you remember years ago, when some creative firms, especially designers, would take a portfolio book, and there were pages that you'd flip? I remember reading this study, I don't remember where it was, how the pacing was so different if you controlled it as, say, the principal of the firm making this presentation, or let the client control the pace, how much faster the pace was. They were not interested in the presentation, they were much more interested in getting to their issue. I think that plays into what you're talking about, but the question specifically that's coming to my mind right now is, like so you talk a lot about how the expert needs to direct the relationship, how is the expert directing the relationship if they're not talking that much, if the client is doing most of the talking? In other words, if we're letting the client fulfill their needs here, how are we not relinquishing this need to direct the relationship? BLAIR: Well, I think you know the answer, because if you're not talking, what's left? DAVID: Listening, or asking questions. BLAIR: Yeah, if you map out the role of the two parties, buyer and seller, over the length of the sale, you will see that when it's done properly, a proper consultative sale, early in the relationship, the salesperson is talking about 25% of the time, and they're using their 25% to ask questions, and the client is taking 75% of the time, and they're using that time to give their responses. Then at the end of the sale, the close, it's reversed, the client is speaking 25% of the time, and they're asking you, the seller, the questions, and you're taking 75% of the time to respond to their questions. Nowhere in there are you standing at a PowerPoint deck in presentation mode, you're either asking questions or you're responding to the clients' questions. BLAIR: It's interesting, that portfolio book and the amount of time. I had a really interesting conversation just a week or two ago with a principal that I know well, and we were talking about capabilities presentations, and I was saying, "No, the capabilities presentation does not need to exist." We were getting into a very constructive, respectful argument or a discussion where we're each advancing our views on the subject, about capabilities presentations, he was saying, "No, it's valid, you have all this information you want to communicate about your firm." I said to him, "How long does it take you to get through your capabilities presentation?", and he kind of looked a little bit sheepish, and I said, "Is it more than five minutes?", and he kind of looked at his feet, and I said, "Is it more than 30 minutes?" He said, "Well, it's about an hour." DAVID: I'm already bored just listening to that. BLAIR: Yeah, just by answering that question, I think he got the realization that, "Okay, this is all about me," but in fairness, this person is more kind of on the low autonomy process-oriented type person who's more comfortable, and it takes more training, more practice, and never comes completely easy to him to kind of stand up and be responsive. DAVID: Right, so we're going to have different perspectives on this based on who we are as people. BLAIR: Yeah. DAVID: One of the things that you say, and as I read through this I made a note of this phrase because it really intrigued me, you said, "We cannot be transparent if we are withholding information for the presentation." First, I'm not sure I completely understand. My mind first went to, are you talking about like putting the price at the end of the presentation? I don't think you're talking about that necessarily, but what do you mean and why do you say this specifically? BLAIR: I'm talking about in your relationships with existing clients. The big buzzwords of the last, I don't know, decade or so, authenticity is one, we need to do a whole podcast on authenticity. DAVID: God, I'm so tired of that word. BLAIR: My least favorite word on the planet. DAVID: "Storytelling" is close second for me. BLAIR: People talk about authenticity, transparency, and collaboration, these are three of the big buzzwords of our time. Let's just put authenticity aside, and talk about transparency and collaboration. Firms are out there saying, "We work transparently and collaboratively with our clients." Okay, well if that's really true, transparent means the client has a window into what you're doing, what you're thinking, where the project is at any time, you're not withholding. DAVID: Like and they know that you haven't even started it, and you've had it for three weeks and it's due in three days, that's transparency. BLAIR: Yeah, and they know it, that's transparency. Collaboration is where you're working with your client, rather than going away and coming back and presenting, so transparency and collaboration. You think about it, the presentation can only exist in the absence of both, right? The need for presentation is only there if you are withholding information from the client. DAVID: Yeah, if you're delivering new information that you previously had and chose not to give them, you're saving it for the presentation, so that's what you're talking about. BLAIR: Yeah. When I was still a consultant, I had been writing about this and talking about this for years, and then one day I realized, "Oh my God, I still do this." When I'm doing a b…

    Full show notes at the publisher

    Reviewing the "Surveillance Footage" Jul 18, 2018
    Show notes

    There are seven patterns that almost all principals are guilty of. When David and Blair point them out, it leads their clients to say, "you must have hidden cameras in my office!"


    Hacking Heuristics Jul 04, 2018
    Show notes

    Blair leads a discussion on how clients tend to take mental shortcuts in making business decisions, and how we can nudge clients without manipulating them to make a decision that is in their best interest.

    Links

    Rory Sutherland

    Influence: The Psychology of Persuasion and Pre-Suasion: A Revolutionary Way to Influence and Persuade by Robert Cialdini

    Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard Thaler and Cass Sunstein

    "The Dark Arts of Leveraging Cognitive Biases" by Blair Enns

    Thinking, Fast and Slow by Daniel Kahneman

    Predictably Irrational by Dan Ariely

    Richard Feynman

    Dunning-Kruger effect

    Pricing Creativity: A Guide to Profit Beyond the Billable Hour by Blair Enns

    "Pricing Creativity" 2Bobs episode


    Collaborating with Competitors Jun 20, 2018
    Show notes

    David and Blair compare each other's competitiveness, and then offer some specific ways principals can actually collaborate with their competitors as a part of building beneficial business relationships. TRANSCRIPT BLAIR: David, today we're going to talk about how to crush your competition, is that right? DAVID: Instantly I got very excited about the concept, that's really not what we're going to talk about, but I love that idea. Oh my God, I'm just too competitive, but that's actually the opposite of what we're going to talk about I think, unless you want to switch it at the last minute. BLAIR: No, I was with a bunch of guys the other night, and had this little men's night retreat thing, and maybe more than half of them were entrepreneurs. One guy was winding down a business, and he was saying, "I'm not sure if I'm competitive enough to be in business." I didn't say anything, but I thought, I suppose that's vital for you to be competitive in your nature to succeed in business, would you agree with that? DAVID: Yes, I would, but there's something wrapped around competitiveness that is just as important to me, and that's risk-taking. BLAIR: Yeah. DAVID: It does seem like the two of those are related, that's why I quit doing a few things outside of work, because I realized I was not as competitive as some of the young fools that were willing to sacrifice their body, and I wasn't. It's not that my body is so precious, it shouldn't be sacrificed, it was more I was allergic to the pain. Yeah, there's something about competitiveness and risk-taking yeah, for sure. I'm competitive, do you think of yourself as competitive? BLAIR: I've measured my competitiveness and your competitiveness, and you're more competitive than I am. I'm as competitive as the average person, but the makeup of that competitiveness is a little bit skewed. You can break down competitiveness into different forms, so I think of myself as average competitiveness. DAVID: Okay, this is more about how do we tame or tamp down some of our competitiveness for our advantage, and for the advantage of the world really. BLAIR: You really want to talk about this idea of collaborating with your competitors, is that correct? DAVID: Right, yeah, and it's something I've learned in my own business life, but I've also tried to coach my clients to do it as well. It's been really interesting, it's a concept that strikes us like, did he really just say you should be more collaborative with your competitors, or did I mishear him? No, that's really what I mean. BLAIR: Okay, so we think of being in business just like my friend said the other night, we think of it as business is highly competitive, and we need to be cutthroat, and we need to always have an eye on our competition. We're trying to best them, I'm fond of saying that positioning is an act of relativity. You position relative to your competition, and in endeavoring to position your firm against your competition, you're trying to kill them. BLAIR: Now that's an overstatement, but that's the prevailing view, right? The competitors are there, people that ... It's your job to beat, it's your job to win against them, and you want to fly in the face of that a little bit, so where did this idea come from? DAVID: Well it's been rooted really in 20 plus years. I did something a little crazy back in the late 90s. I wanted to start an event, and that was obvious to me, I wanted to start an event. Okay, so what kind of an event would it be? Well it needs to be an event that's going to attract a lot of people. How do we do that? Well, the content has to be fantastic, it's like okay, then I just stopped in my tracks, because I'm thinking, well if the content's going to be great, then I've got to invite a lot of my competitors there. DAVID: We don't see eye to eye on everything, but I need to have them there, because they're very smart. People are going to come and want to hear from them as well, like what kind of a stupid conference would it be where I'm the only one speaking? That's not a conference, that's like your own personal platform. I was faced with a decision, do I really want to give my competitors a platform? DAVID: I was nervous about it, other people were a lot more nervous about it than I was, they thought I was crazy to be doing that. I thought, this is a worthwhile experiment, and maybe there's some value in being the person who organizes the conference, and does the programming for it. There turned out to be that value, but it was a wonderful experience. It opened up my eyes entirely to the fact that I don't have to make somebody else lose in order for me to win. DAVID: That I can let my guard down, and it actually translated into the way I run events now. People come to an event for the first time, and they're surprised that within about an hour, an hour and a half of the start of the event, people are starting to share stuff that they would not have thought they'd see themselves sharing at the beginning. They're much more transparent about it, and it's just sort of that style that I like to have, it fits with this notion of competitors. DAVID: Recently what struck me, and then I'll shut up for a minute, because I know I'm taking a long time to answer your question. I was listening to the Dan Patrick daily talk radio sports show, and he was talking about interviewing Kobe Bryant one time. They were talking about how do you get yourself up for a game that doesn't really matter? In other words, maybe you're out of the playoffs already, or you know you're going to beat this team, because they're not good. DAVID: What Kobe Bryant said, was at the end of the game, I want my competitor to question why they even got into the sports game. I want them to question why they even became a basketball player, right? I thought, well that's kind of funny, but it's really not the kind of spirit I want as a collaborator. BLAIR: Even when he's playing in a game that they're almost certain to win in, he's still thinking about crushing the spirit of his competitors. DAVID: Right, yeah, what's the point of that? BLAIR: Do you still have a page on your website that lists your competitors? DAVID: I do, right? I do. BLAIR: Am I on there? DAVID: I don't know, I know you don't want to be, so let's just say you're not. BLAIR: Yeah, I think you had me on there, and I called you out, I said, get me off that list. DAVID: Right. BLAIR: I don't know why that is, okay, so you conceived of this idea, this event, and you had a partner in this event, can we name the event? DAVID: Yeah, it's MYOB, Mind Your Own Business. BLAIR: Yeah. DAVID: The how people, were the financial partners and the marketing partners, and I did the programming. BLAIR: That's where you and I first met in 2003. I reached out to you when I started my business somewhere in 2002, and you invited me to speak at this thing. DAVID: Yeah, and look at how much good has come from that, right? BLAIR: Yeah. DAVID: You and I have become friends, we do a podcast together, we share a lot of clients. Here's the biggest thing, I learned so much by having you there. I mean the very first time I heard you speak, I learned so much. It made me such a better advisor, and the same could be said of the other folks, not everybody, but most of the other folks that I invited. It's like, oh wow, it made me a much better advisor by listening to them in that kind of a setting. BLAIR: Let's walk through how somebody can, once they get their head around this idea, how they can put it into practice. First, I can imagine what the objections are, right? When you're talking to somebody about this idea of be more open to your competitors and collaborative with them, what's the first thing that comes up objection wise? DAVID: Well it comes up a lot too, and it's like, "Oh, that's a good idea, but I can't put that on my website, because what if my competitor's see it?" It may be something like our new focus, that's usually not as big an issue, but things like client criteria, or some unique way we have of going about solving problems for clients, or a case study, or something like that. They envision these competitors in the wee hours of the morning sneaking onto their website and furiously copping things down and grabbing screenshots, and then reinventing their own firm, as if they're really doing that. DAVID: That's the objection, I don't want my competitors to see that. I don't want them to copy me. Do you hear that, or do you see it in other ways? I'm curious if it's just my clients. BLAIR: I'm not sure if I hear it a lot, but I sense it a lot, and I've experienced it myself too. My own experience has been, if you're really carving out a path of leadership in something, it means you're constantly, by the reinventing your business, or coming up with new IP, with new ideas, and by the time somebody's adopted something that you've ... Let's call it stolen, stolen something that you've put on your website and made it their own, you should be somewhere else, right? You should be off into the distance. DAVID: Right, and that's part of your practice, part of my practice, part of what we urge clients to do is to reinvent themselves frequently every couple of years maybe. While this may work beautifully for you now, it's not going to be the thing that you're doing down the road, reinventing. Let's talk about the whole positioning thing, how many competitors does Win Without Pitching have? BLAIR: It really depends on how you frame the question. If you look at sales training for creative professionals, I don't actually know of any other organization that frames their value proposition, the discipline in the market, the combination of discipline in the market that way. That would be ridiculous for me to say there's no direct competitor, so that's at the very narrowest, who else says we just do sales training for creative professionals? DAVID: Right. BLAIR: Our real competition is any new business consultant to the creative professions. DAVID: Right. BLAIR: Anybody who's selling sales training. Most sales trainers aren't specific to a market, so anybody in the sales training business, any new business consultant. DAVID: If somebody popped up, let's say you just heard through a client of yours or something, and they said, "Hey, have you seen [inaudible 00:09:14], it looks a lot like yours?" Pretend that you have this conversation with them, and you look at the website. It is the same positioning, sales training for creative professionals, or creative entrepreneurs, what would your reaction be? BLAIR: My reaction would be, I would gird myself for a fight in the most positive sort of way. I love a challenge, if somebody was using that same language, I would just steel myself and whip my team into a frenzy, and run out into the battlefield. DAVID: I'm picturing this movie scene, yelling to this guy. BLAIR: Yeah, Braveheart. DAVID: Right. BLAIR: Somebody would have to be using very specific language, very specific to me. One of the things that I've seen over the last few years, is when I started my business back in 2002, when I was a new business consultant, there were very few new business consultants. Whoever was out there, the Internet was still a relatively new thing, right? Web browsers were about seven or eight years old in 2002. BLAIR: If there was a lot of competitors out there, I wasn't aware of them, I was really aware of two or three. Nowadays there's rarely a week or a two week period that goes by where I'm not made aware of a new business consultant. I made this conscious decision a couple of years ago to just quit thinking about them as competitors, and just to think about them as my future distribution network. BLAIR: I recently put out a call on LinkedIn saying I want to forge a closer relationship with the world's best new business consultants. I know I met a lot of consultants out there who say, "I give your book, the Win Without Pitching Manifesto to all of my clients." What I said in this post on LinkedIn, I had about 30 inquiries from it, is if you're already preaching the principles, and if you're already teaching the Win Without Pitching way, and you're interested in formalizing the relationship, then reach out to me. BLAIR: I had to see somebody else doing that, and somebody else talk about the benefit of it just the way that you're doing it now. DAVID: Yeah. BLAIR: For me to just have this switch in my mind. You've been very good at this, and you've been a very good role model for me in this, in being a generous competitor, and it hasn't been in my nature. I'm the person who loves a fight, so something has shifted in me in the last couple of years, and I look around at the people I know in business, and some people that you and I both compete with. They are such open, generous, sharing people, even though we are fairly direct competitors. DAVID: Right. BLAIR: I've just decided that these are going to be my role models in that front too. Now, I'm mellowing in my old age or something, because something's definitely changed. DAVID: Yeah, it is really interesting to see. I'm doing an event shortly, and I've invited ... You'll be speaking there, it's really important to me that you speak there to address the whole sales training process. I'm just unqualified to even speak to it, but I feel like the people coming need to hear that. Then, I think four of my competitors will be there. They won't have a platform, but I will introduce them, they're coming for free. DAVID: I invited them, and I plan to put in the work. We're going to split up into groups, and we're going to try to apply these positioning principles to the individual firms. These competitors know what they're doing, and so the evil side of somebody might hear that and say, "Well, wouldn't someone just hire one of these." It's like, well that's fine, because in my mind feeling like you have all these competitors is really misunderstanding the fact that it's not just about what you do, but it's about how you do it. DAVID: I have a very specific style, and whenever I try to cross the line and be somebody that I'm not to a client, like more of a coach or something like that, I am doing a disservice to them, and I'm doing a disservice to me. I find it really wonderful to have these other folks who are very good at what they do, who have a more appropriate style for a certain client. When I think about living in a world where I couldn't recommend other options for my clients, it's a little bit sadder to me, because I do want my clients to get help, even if it's not with me. DAVID: Now what's interesting though, is we have different approaches to this when we're not as busy. BLAIR: Yeah. DAVID: We tend to be a little bit less generous when our businesses aren't run well, when we don't have a steady stream of opportunity. That's just another argument of 100 arguments to run your firm well, so that you're not paralyzed by not enough work, or thinner margins, or something like that. BLAIR: I was going to play devils advocate here a little bit, and push back and say, well it's easy for you to be magnanimous this way, you're the worldwide leade…

    Full show notes at the publisher

    Four Segments of New Business Jun 06, 2018
    Show notes

    Blair and David come up with descriptive words that help clarify each of the four parts of what David calls the "pantheon" for new business: positioning, lead generation, sales, and pricing.

    Pricing Creativity: A Guide to Profit Beyond the Billable Hour

    Mastering the Value Conversation podcast episode


    Using Assessment Instruments in Your Firm May 16, 2018
    Show notes

    David and Blair explore the big topic of personality assessment tools that can help firms "get the right people on the bus."

    Not Your Typical Personality Types →


    Thoughts on Partnership May 02, 2018
    Show notes

    Blair and David dive into a discussion on ownership structures, looking at the results of a survey that David did recently about partnerships.


    What Good Clients Are Really Looking For Apr 18, 2018
    Show notes

    Listeners on Twitter wanted to know what clients actually want from creative firms, so David makes a list based on his experience of what good clients want, while Blair's reaction is "who cares what clients want... all they wanted was a 'faster horse.'"


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