Speaker 1:
You’re listening to Rattle and Pedal, divergent thoughts on marketing and growing professional services firms. Your hosts are Jason Mlicki and Jeff McKay.

Jason Mlicki:
All right, Jeff. So last time we talked, we dug pretty deep into the risks and rewards around ESG for firms. We talked about how those are sort of… They’re tied at the hip, right? A risk has a reward with it. And where we left off was, okay, we’ve talked about what this is. We’ve talked about what it means to firms. Now how do we do this well? So if I’m a firm leader, how do I navigate through the elements of ESG and decide what I should do in my firm on both the client side and on the talent side? So start us out. I think we talked about starting with positioning, but we can start wherever you want to start. So where do you want to start, actually?

Jeff McKay:
If you’re a leader, I think you should get down on your knees and pray. Pray for guidance in the direction you should take and that you get there. We talked about the growing intensity of these and the politicalization of ES&G. And it’s hard. And you’re going to jump into this, and you are going to make mistakes. And I think the key to success here… Oh, you’re going to love this. The key to success here is prudence.

Jason Mlicki:
Oh god. Oh, god. Listeners, stop listening, please, please.

Jeff McKay:
That cardinal virtue.

Jason Mlicki:
Oh gosh. [crosstalk 00:01:48]

Jeff McKay:
Of read the situation and knowing what to do based on the facts in the ground.

Jason Mlicki:
Am I on a podcast or I am in the pew? What is going on here?

Jeff McKay:
Yes, yes. So the key is prudence. So let’s jump in. And Jason, try to keep this tight. Don’t bloviate.

Jason Mlicki:
Okay.

Jeff McKay:
So I’m going to say there are three interrelated areas that you need to think through, and these areas are… I think by the time I finish talking, I’ll know whether they’re synergistic or symbiotic, but they are interrelated for sure. At the highest level is the firm’s positioning. And then cascading out of those externally is client-focused stuff and demand gen. And then internally, although externally-focused somewhat, is the employer brand and talent acquisition.
So I think as firms wade into these waters, in terms of the firm’s overarching position, leadership teams need to make some strategic decisions about if they pursue ESG, for whatever reasons. We’ve said, and this is my opinion, yours could be different, that ESG is about permission to operate and not having a dissent decree levied against your organization either by a regulatory body or your buyers. But to the degree that you enter into ESG from a brand perspective, you need to determine whether or not that changes your overall positioning. So for an example-

Jason Mlicki:
Yeah, give us an example, because I’m struggling through. It’s like, unless you’re going into the heart of elements of this… I’ll call it a movement for simplicity. I mean saying, “We’re going to build a business around environmental compliance,” or, “We’re going to build a business around helping companies navigate through their diversity challenges.” How does it hit your positioning? Because I think about positioning as… We’ve talked about this so many times, but as markets and offerings. Who do we serve? What problems do we solve? So how does it layer up into your positioning space in your mind?

Jeff McKay:
I think it’s very straightforward. If you are honing in on one of those letters, it’s going to alter your position. So if you’re a accounting firm, a Deloitte, KPMG, E&Y, I don’t think you need to revisit your positioning statement. If you are a SaaS company, and I’ll use Sfara that we spoke about in our intellectual capital podcast on who does intellectual capital right, that specializes in environmental health and safety, they’re going all-in on ESG and have repositioned the whole company around that. They’ve maintained their value proposition of creating a safer, more productive, and sustainable world, but they had positioned around operational excellence. Now they’re going all-in on ESG, and they’ve had to modify their positioning accordingly, because they specialize in that space, and the market is really coming to them, and to not move would put them at a disadvantage. So I think, looking at your market and to what degree is it fed by this, it’s an important time to reevaluate your overall positioning.

Jason Mlicki:
Now, is it also an opportunity for maybe smaller firms or mid-sized firms to connect with buyers maybe on a more personal level or… We talked about this, I think, already, but just, you think about… Obviously you have B Corporations, so sort of purpose-driven companies that have now tried to layer something sort of on top of that, saying, “We’re working for the greater benefit of society, and here’s specifically what we’re doing.” So is it for a mid-size firm maybe a positioning opportunity to say, “Well, there’s a certain type of buyer here that we could do business with that has certain set of interests that align with our core values, and let’s try to connect with that buyer and make it germane to our positioning. So we’re an accounting firm. We work with these types of companies that are interested in these environmental or these social causes.” I mean, is that what you’re thinking or saying?

Jeff McKay:
I think that’s a valuable way of looking at it. Your example in our last conversation about Uline making some strategic choices like that. I think that’s more general. I think that’s a little bit harder to manage, but it is possible. But I think that highlights the next area of the positioning that firms might want to look at that I think is important. It may be not as strong an external focus as it is an internal focus. And that may be reexamining your values. Do the values that you currently operate under reflect the real culture of who you are or who you want to become? And do some of the drivers of ESG… Are they absent from your current values, and do they need to be incorporated? And I think firms should only do that if they actually believe and live and reward those values. Do not put them into your values because it’s the flavor of the day, the zeitgeist of the moment. Put them in there because it’s who you are and it’s easy for you to operate in that way. And those values, if they’re real, are going to cascade down into our next two areas, because they’re going to be the way your people show up.

Jason Mlicki:
Yeah. I think it’s interesting. Before we go there, we talked a little bit last time about one of the risks of not having maybe a diversity component or a social part of your businesses is groupthink, the idea that you end up with all the same people that all think the same way, that all come from the same places. And that’s like potentially running over a cliff in some ways. And I was just going to comment on, it seems to me that that starts with values, that your values may be reinforcing a certain type of talent in your organization because of the things you’ve said. “Well, we value these things.” And those things align with a certain type of person, so you end up getting the same people over and over again, which can be really good and really bad.

Jeff McKay:
Well, yes and no. I think you’re attributing a certain weight or judgment to values and the type of people that it attracts or doesn’t attract. I mean, you could easily look at something like a McKinsey, where their values probably have not changed, maybe they have, but they’ve attracted diversity of thought because now they’re hiring all these creatives, whereas the way they used to think analytical. And that to me is the real type of diversity that changes the way firms think.
So the values is really hard for me to articulate, because it’s so personal. And we’re talking about the core of firms. And our listeners know that culture is at the heart of our growth model, and culture empowers or limits the growth potential and the ways to grow. And like jujutsu, you have to work in the way of the force and the motion. So I don’t know the answer. That’s why leaders get paid the big bucks to answer that question. Is our culture helping or enabling our strategic objectives? And to what degree can we change it? And how would we change it? And does that mean changing our values? And firms should not do that lightly, and they shouldn’t just put up posters.

Jason Mlicki:
Yeah. Okay. All right, so let’s actually changed gears a little bit. So one place that firms might want to look is in their positioning. We talked about demand gen. So let’s push that down a little bit, say, okay, maybe there’s no need to do anything at a positioning level. Maybe the firm is positioned the way the firm is position, and there’s not really necessarily an impact here. But at the demand gen level, maybe there’s… As we talked about last time, there are opportunities here. So there’s opportunities for firms to step forward with better ways to solve some of the problems that are baked into the challenges that ESG is posing many, many companies. So you want to talk about that a little bit?

Jeff McKay:
I think this is probably the easier and more straightforward dimension of this, avoiding the wholesale change of positioning unless it really makes strategic impact and real change and is consistent with who the organization is. It’s much easier to move into demand gen and look at those issues that your ideal buyer and your ideal client are wrestling with and to fit ES&G issues under the broader umbrella of, as we talked about in our intellectual capital strategy podcast, into those significant major issues you want to be known for. And all of those are going to tie to some given solution. They’re coming through that issue to a solution. And to me, that’s a much cleaner, simpler way to add these to your demand gen efforts.

Jason Mlicki:
Examples? Help me think about, what are some examples of how firms might approach this? Do you create whole new issues? Or is it a lens on an issue? And I don’t have a specific of that either. Do you have any examples in mind?

Jeff McKay:
Let’s stay with the accounting framework. If they’re not going to change, how do these issues play out for their clients? I think the clear one is governance. And what are the structures in place to manage the risk around these? It’s very easy, I think, to position around the G of the ESG for accounting firms, and it aligns well with their audit practices very clearly. Now, as ESG becomes more formalized, I’m assuming, from a reporting standpoint, then they can weigh into those types of waters, because then they become part of the financial reports. The annual reports go out every year, instead of voluntary reporting on the part of these companies. So how they do that would depend on where’s the white space and where do they need permission to play, build their relevance, the things we’ve talked about on the intellectual capital strategy podcast. But to me, that’s a very simple and straightforward way to incorporate these into a firm’s intellectual capital agenda.

Jason Mlicki:
It’s interesting you go back to positioning for a second. I’m going to go backwards. But I was thinking about what you said about brand relevance, and what you just said about how for accounting firms there’s a logical extension to governance, whereas for an accounting firm it might be a little bit more difficult for the social side of things to bake into their positioning, let’s say. But then I’ll flip it around, and you talk about like… A lot of engineering firms that we’ve dealt with over the years, they have whole environmental practices. They’ve built a whole practice around environmental consulting. And so the interesting thing is, they obviously have relevance there. They have permission to play. And so you think about those firms. They may pull that up into their positioning to make those environmental practices more prominent so that they can really make those parts of the firm more visible to the market than maybe they are now.
So anyway, long-winded way of saying, I think you really struck some gold there around this notion of, when you step back and think about what type of firm you are, what types of buyers you serve, and then you look at these three simplistic letters, they’re overly simple, but where are you most relevant? And as we’ve talked about in the intellectual capital stories, it’s like… And I like to poke fun at them a lot, but I poked fun at HubSpot during the pandemic because they were publishing articles about PPP loans. I’m like, “There’s just no relevance for HubSpot to be publishing that, and no purpose for them to publish that, [inaudible 00:14:28], because I’m not going to turn to HubSpot for advice on how to submit a PPP loan.” So anyway, long-winded way of saying, I think you really hit something big with this notion of relevance and looking at, well, where are you most relevant, and where would you like to be relevant? And there’s a relationship there between not only the clients you serve, but the type of firm you have.

Jeff McKay:
That’s an excellent example. So would that be a synergy or a symbiosis?

Jason Mlicki:
I have no idea. When you said that earlier? I thought to myself, “I have no idea,” so-

Speaker 1:
You’re listening to Rattle and Pedal, divergent thoughts on growing your professional services firm. Your hosts are Jason Mlicki, principal of Rattleback, the marketing agency for professional services firms, and Jeff McKay, former CMO and founder of strategy consultancy Prudent Pedal. If you find this podcast helpful, please help us by telling a friend and rating us on iTunes. Thank you. Now back to Jason and Jeff.

Jeff McKay:
So I think the bottom line on demand gen is, this needs to cascade down from your positioning into those overarching issues that you want to be known for. You need to strategically decide if those overarching areas of value that you provide are changing. I don’t think those change, but they may. They may. And then where do these fit into those issues in order to drive revenue or build your brand relevance in those? And those are tough things to get to. They really are, because they’re political, they are very strategic, and being able to see these interdependencies and be able to see out into the future and not get caught up in a flavor of the day is hard, and making strategic choices for firms is even harder. And it’s why so many firms get these generic value propositions that mean nothing to no one. So that’s the hard work, and that’s why people hire Prudent Pedal to answer those tough questions. All right, let’s move on to the last one.

Jason Mlicki:
All right. This is your favorite topic, I think, of all the time. We’ve done many podcasts on this, because you love to talk about it. So let’s just spin you up and get you going. Employer branding. I know how much you love it, so jump right in.

Jeff McKay:
I hate employer branding. [crosstalk 00:16:57] employer branding. But it is a thing, and it’s important to people to feel good about their brand as an employer. And the thing to keep in mind here is, there’s talking about an employer brand, and there’s actually a culture that is reflected and communicated and carried out in the market. And the best firms don’t need to communicate it with marcomm or HR communications. They just live it. And the people in the market know the best firms. But there has been a drive, I would say, for a decade or more around diversity and purpose-driven firms, and employers need to be sensitive to this. And I think most are, because professional services really are great at recruiting. They know the machinations of recruiting. How they tell the story is important, but that’s going to come through individuals.
So I think, when you think about employer brand, there are three areas I think are really important for you to think through. The first one is policies. In the ES&G world, policies are a telltale sign of how serious you are about some of these areas. And we spoke… I think on our first episode, we talked about Deloitte’s new social media strategy as policy, in that it’s a firing event if you use illegal speech, “illegal speech,” in quotes, on your personal social media. They don’t define what illegal speech is, and they have ultimate power that they can fire you if they don’t like what you say on social media. Is that a proper policy? I don’t know. I understand why they did it. They want to protect their brand. But at the same time, it sounds kind of draconian and Big Brother-ish. But you need to weigh those decisions and fold them into your policies.

Jason Mlicki:
Okay. So you said there’s three. So first, you have to think about your policies. And the policies make things real, right?

Jeff McKay:
The policies give it teeth, yeah. The second one is training. To what degree do people need to be trained around these issues in support of those policies? And we’ve seen, again, getting back to some of the consumer brands and the canary in the coal mine, I would argue failed attempts, at least from a public relations standpoint, if not an actual training phenomenon, failures around this. Coca Cola was in the news about a training it gave to its employees telling them to stop being white. Be less white. And PowerPoint slides made it out onto social media, and people started boycotting Coca-Cola because of that training. And Coca-Cola really had to scurry around getting message out about what that training was. And I think they’re still feeling the effects of that.
So when you think about training, think about what’s really important and what’s not. And we’re starting to see this political football kick back and forth around critical race theory. Trump outlawed it in the government. Biden brought back. We’re starting to see parents kick back on this in their schools. You probably are not going to see employees kickback overtly on it, because nobody wants to lose their job. But know that if you’re wading into these waters around things like… And it’s not limited to critical race theory. It’s a hornet’s nest, and you have to be careful about what you choose to train on and how you choose to implement that training.
And then the third, and this will be fast, is leadership. If you’re saying you’re an employer that supports ES&G, your employees want to hear from leadership. They want to hear your points of view on big topics. And this can have you caught off guard, not knowing when to speak and when to speak. Should we speak or take a position around BLM and what happened in Minneapolis with George Floyd? Should we talk about Asians and the assault happening with them? Do we need to talk around those issues? I don’t know. That’s a decision you’re going to have to make. But know that if you wade into these waters, you have to be clear. And the thing that makes this, I think, much easier for leaders and for the employees to understand is having guidelines, when we will speak and when we won’t speak, instead of approaching it on a case-by-case basis. But know that if you change your positioning or your employer brand around these, the way leadership shows up has to be consistent with that.

Jason Mlicki:
Let’s take it to wrap. And I guess I’m going to ask a kind of a provocative question, maybe. Do you think that we’re living through pivotal moment, a time in which the role of corporations in particular in society is changing, and the expectations of how they interact is changing? Or is this just part of the evolutional cycle of the economy, that we go through these periods where something becomes more important than it used to be, and maybe it wanes in importance again? What’s your take on this? You’ve done a lot of reading, and you’ve talked to a lot of firms about how they’re wading into these elements of their strategy. What’s your take?

Jeff McKay:
Wow. What’s the meaning of life? I don’t feel like I know yet. But I do feel… I definitely have a bias towards, corporations only do things for money. And to the degree ES&G allows them to make money, they’ll do it. And to the degree it does not, they won’t do it. I think it’s that simple. And that’s all going to be consumer-driven, consumers buying products, but also consumers working in companies. I think it’s going to come to a head. I don’t know which way it’s going to fall. I really don’t know, Jason. What’s your thought?

Jason Mlicki:
Yeah. Well, I can’t remember if we covered this in this series. I heard this statement, which is that over the last… I don’t know, what is it? 40, 50 years or more, American society has definitely become more secular. And 50, 60 years ago, you probably looked to faith for purpose and work for employment. And now a younger consumer, or I should say a younger employee, maybe doesn’t have a place to look for purpose. And so all of a sudden, the companies are being asked to sort of fill that void, to fill both the void of employment and purpose, because they don’t have a home for that purpose anymore. And that’s… I can’t remember where… Did we talk about that already?

Jeff McKay:
Yeah. That’s my take on this. I think it’s important to reiterate. It’s one man’s view, but it’s kind of at the heart of marketing as well, is understanding the psychology of the buyer. And our employees are buyers, so will they buy what we’re selling from our employer brand? And will they buy our products based on how we formulate them and deliver them? That’s just the nature of marketing. And I think it’s a great way to end, because it’s about the strategic implications of what the consumer is demanding, but it’s important to understand, why are they demanding? It’s clear it’s being demanded, but who is demanding it, and why are they demanding it, and what are the strategic implications of that? And if you’re not factoring ESG into your strategic thinking at that level, you need to. And that’s the whole point of this podcast. You have to think more deeply, more broadly about the risk and rewards of ESG.
And in my preparatory work for this in interviewing some firms, there are some out there it’s not even on their radar. And if you go to other firms like McKinsey, Deloitte, BCG, it’s like all their marketing communications, all their corporate communications, all their thought leadership is around ES&G. When those big firms are doing it, it makes you go, “Hmm, what’s up with that?” Go out to those websites and you’ll see what we’re talking about. But if you go to a KPMG or a Bain or a LEK, none of this is out there on theirs, or if it is they talk about environmentalism within the context of the energy industry and that’s it. And I don’t know if they’re laggards or those are strategic decisions they’ve made. But there are strategic implications to this and the best marketers and leaders are going to be on it.

Jason Mlicki:
All right. Well, that’s a wrap. And I guess maybe my closing comment would be, I guess you influenced my way of thinking about it, because I recanted your take on it, and I think it’s a pretty good take, so I like the way you framed it, because I think it’s a really… I guess obviously it’s an astute point. And like I said, I couldn’t attribute it. I couldn’t attribute it to you, which is a good sign. I would have otherwise attributed it to the journal. So there you go.

Jeff McKay:
Thanks for letting me twist your arm and go down this path.

Jason Mlicki:
Yeah, that was interesting.

Speaker 1:
Thank you for listening to Rattle and Pedal, divergent thoughts on marketing and growing professional services firms. Find content related to this episode at rattleandpedal.com. Rattle and Pedal is also available on iTunes and Stitcher.