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:
So Jeff, you wrote a post this week asking a question basically of your readers. Are you working in a confident or an insecure firm? And that’s going to be the topic of our podcast today. Unlike usual, I’m just going to jump right to the case. I guess, before we get into it on the details of what that means talk to me, why does it matter? Why should firms even care or marketers or predecessors? Why should they even care if their firm is confident or insecure?

Jeff McKay:
They should care because confidence to me is the precursor of industry leading success. If you don’t have it, I don’t think you’re going to be a leading firm. And by confidence, I don’t mean arrogance because I think there are firms that confused the two, but if you don’t have confidence, you’ll always going to be following. And that may be fine for your firm to follow, but followers don’t attract the best talent. They don’t build the strongest brands and they’re never recognized as leaders. So, confidence is a precursor to being successful.

Jason Mlicki:
Now, what are we talking about here? Are we talking about confidence of firm leadership or are we talking about confidence of the firm, the entity that is the firm? Are they separate things or the same thing? What are we really talking about?

Jeff McKay:
I think they’re inextricably linked. You do not get a confident firm without confident leadership. I don’t think you get confident leadership without a confident firm because they’re mutually reinforcing. And we’ve talked about this a couple of episodes about the prudent pedal model for marketing and growth at the heart of it’s culture. And the culture enables empowers so much of the key activities that drive growth. Whether that’s thought leadership development or sales interactions, and a firm is always going to be limited to the height of its confidence. So, to the degree of firm can build confidence and build a more confident culture. It empowers the firm to really drive growth in these key areas because the confidence, the attitude leads to different types of behaviors and different actions, and therefore different results.

Jason Mlicki:
Okay. So, is the hypothesis or the belief system that confident firms get greater returns?

Jeff McKay:
Yes, definitely. When I was at Genworth Financial, which was a legacy GE company, we had a very specific definition for leading. And it was an objective measure, and it was where we growing faster and more profitably than our competitors. And the reason that was outlined that way is one revenue reflects the firm’s products and services and the recognized value in the market, so the demand side of the equation. And the profitability was a measure of our efficiency to produce that result. So, it was very objective that, hey, if you’re going to be a leading firm you’re growing faster and more profitably. And then in those objective numbers reflect the reality that I think manifests in a confident firm. I should say the subjective or qualitative dimensions of a confident firm.

Jason Mlicki:
Okay. I could probably argue that there could be other metrics you might want to consider beyond sales and profit, but I don’t think we have to. So, let’s go into the indicators piece of this, because in this post you actually wrote, I thought it was a really good post, by the way. You described there’s 14 indicators that you are in a confident firm, sort of behaviors. These are things that confident firms do. Your first indicator, I would argue actually, I guess you have 15 because your 15th indicators that you’re growing faster and more profitably than the rest of the market. So, that’s maybe KPI number one in your mind. And then the other 14 are more behavioral. So, there’s a lot of them. I think they’re all really, really good. There’s a lot that are really interesting though. So, I’m going to just pick a couple and I want you to talk about them. So, the first one that I really liked was the idea of sharing both good and bad client references. Talk about that for a second.

Jeff McKay:
I am definitely an outlier on this opinion because in a professional services firm or any firm for that matter, there’s an incredible amount of effort that goes into having client references. So you can put them in proposals or maybe throw a testimonial up on the website. And the mindset is we only want to show the best side of the firm. It’s kind of like when you start dating someone, you want the most positive impression that you can put out there. I just don’t think that’s the way buyers want to buy. And it’s kind of Pollyannish because most professional services firms or SAS firms sell to sophisticated buyers or somewhat sophisticated business buyers. And they buy a lot of things and they know that in complex projects, things go sideways. They always go sideways. There’s a miscommunication around expectations, a misalignment in terms of team chemistry, any number of things, right?
If you don’t have any bad client references where you went after a bad sale, as we discussed with Brian Caffarelli and can’t show that you’ve learned and improved as a result of that, I’m going to distrust you as a buyer. I want to see how your firm performs when things go bad, do you cut and run, do you nickel and dime me, do you completely rescope or do you dig deep and work together with me to solve a problem that neither one of us saw coming? And when you share bad references, it says a couple of things. One, I’m willing to be honest with you, so you build trust. And two, it says we’re not perfect, but we recognize that and we learned from it. So, it’s hard to do. I have everything on the list, that one is probably one of the most cringe inducing elements on it because people are like, man, I don’t want that out there.

Jason Mlicki:
I agree with you wholeheartedly. Are you suggesting that firms should post case studies on their websites describing their failures?

Jeff McKay:
I’m not suggesting that, but I do think in sales conversations, you say, “Hey, this one went awry because we chased the business, even though we knew it wasn’t an ideal client and it was misaligned between the value we offer and what the client value. And we learned we’re not going to do that anymore.”

Jason Mlicki:
Yeah. I think the other piece of that, that you spoke to that’s important is that any large complex sale, there are problems. There are going to be problems every time and buyers know that. So, just acknowledging that and speaking to how you work through the inevitable problems that you can’t foresee that will occur, shows that you have a level of professionalism that is strong. And you do have truly deep expertise because you know there will be problems that you can’t account for. That’s [inaudible 00:07:57] competence, I guess, in some ways too. All right. So, I have so many stories I can tell there, but I won’t. One of the other ones you listed that I liked and that I wanted to ask you about was performance measures. You indicated that confident firms, their performance measures consist of more than just revenue targets and utilization. So, what else do they measure? Talk to us about that.

Jeff McKay:
Well, this one is right up your alley I think. The confident firms are looking at important measures of longterm health. Not just utilization and revenue, but what is being contributed back into the firm to make it stronger. And one of the key elements of that is intellectual capital and the firms, leading firms think leading thoughts. And in order to develop those, you have to reward the development and you have to set an expectation that you will perform in that area. And I think McKinsey does a great job with that.

Jason Mlicki:
Time out, time out, time out, you just complimented McKinsey. I don’t think that’s ever happened in a year and a half of podcasting.

Jeff McKay:
That’s not true. I think they do some things very well.

Jason Mlicki:
[crosstalk 00:09:07] [inaudible 00:09:08] over there. Anyway, keep [crosstalk 00:09:10].

Jeff McKay:
Leadership development and not leadership development in the traditional. We’re going to hire some outside consultant and come in and teach our managers how to manage, but really aligning rising stars with important strategic initiatives and measuring their development and effectiveness around those. I mean, those are just a couple of important once. And it’s just about building the longterm health of the firm.

Jason Mlicki:
What’s fascinating about that to me, is that the particular one on your list, revenue utilization as a really hard metrics and the ones you just described are those longer term and softer. How much new thought leadership did you produce last year? Oh, you produce 30,000 words, take a job, that’s more about are you building a creative ideas? It’s interesting, we’re in the moment again, we were recording May 6th and we are, depending on where you are in the country, you are maybe at the peak of the COVID curve. Maybe you’re on the backside of the COVID curve. Maybe your economy is staggered… they’re doing a staggered reopen, but I’ve noticed in working with our clients on thought leadership, that I’m finding some clients that are finding their voice in ways I had not seen before. It’s almost like this moment of both sort of simultaneous crisis.
And also just to be honest, in some cases, lack of revenue, meaning that they’re not as utilized and as busy as they had been is bringing out clarity in them that I had not seen before. And I’ve described it as it’s really just fun to watch that they’re finding their voice. And it’s really kind of a pleasure to be on that journey with them as they’re kind of sorting through the world around us and trying to lay out a differentiated point of view for their potential clients, or their existing clients. So, this is a really interesting one. Okay. I’m going to pick on one, because I don’t know that I understand it. And so, maybe that’s how I’ll pick on it, but you say your culture is a development crucible. I don’t even know what that means. It’s such a fancy phrase. It sounds like some highfalutin common out of like some consultant in Chicago. So, What do you mean by that? For us more practical people who’ve gone in the front lines, drive revenue for our clients. And I just want to get to the heart of what you’re actually talking about here.

Jeff McKay:
Jason, the irony of that statement is magnificent being a country boy, that I am. A development crucible, I think could go two ways. Some people would think of a development crucible within a professional services firm as that upper out type of mentality, and I think that’s a component of it. But for me, the development crucible, the operative word is development. It’s not just a crucible, right? Like an investment bank where you have to work 120 hours a week or something like that, there’s a purpose behind the hard work, the effort, the challenges, whether that’s a client assignment or special projects, their design to burn off like a crucible does impurities, right? So that you get the best people that fit into your culture. And it doesn’t have to be vindictive or punitive, it’s just certain people have the medal to survive in certain situations and achieve certain goals.
And I think in the article I use the Navy SEALs as an example, I love the Navy SEALs and I love that the Navy SEALs exist. I could never be a Navy seal. I just never could. And that doesn’t mean that I lack confidence. That doesn’t mean that I don’t bring skills to the game. It just means I’m not going to flourish in a small elite unit that doesn’t mind sitting in 50 degree water for 24 hours or something, it’s just different, right? But they’re clear about who they are and what type of people really do well in their system and they bring it out of them. So, that’s what I mean.

Jason Mlicki:
Well, that was good context because I think if you read the article for listeners that take the time to read the article, I do think in that section, it comes off a little bit as sort of upper out as the only viable model for a firm to have. And I don’t think that’s what you’re saying at all. I think what you’re actually saying is there’s an uncompromising expectation of the people in the firm. And to me, I like the SEALs as an example, the Marines come to mind, just that the tagline, [inaudible 00:13:48] the proud, just the idea that, if you don’t live up to the standard that we have set here, you’re out. It’s very simple. It’s not… That standard is defined however we choose to define it. But I think that’s sort of the message that you’re saying there. And I think that’s a little broader and a little bit, maybe more human than the upper out message that has existed for so long for so many firms.
It was interesting too. McKinsey has a reputation for that, right? They hire the best to force them through when they come out the other side. But what people don’t think about, or don’t maybe realize, and I know this from having known somebody who ran their alumni program for years is that they have one of the best alumni programs in the world. So, even though you could probably be best of any company anywhere. And if you really understand that, they recognize that not everyone is going to stay here for their career and not everyone should and not everyone can. And yet they know that they’re measured by their ability to move people through the firm to other places. And there’s so many rewards for that on every level. So anyway, it’s a random comment.

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:
Well, that’s related to another item on the list and that’s the confident firms don’t see somebody leaving their firm as a personal rejection of the firm and the culture. And in some firms, and I’ve been in firms like this when somebody leaves or says they’re going to leave, their offices are locked down, they’re escorted out, their CRM password is cut off. In competent firms, don’t do that.
Sure, they have realistic risk management processes in place, but they don’t treat people that way because some people thrive in different roles. Some thrive in different cultures and individuals have different career ambitions and firms like McKinsey, as you just describe Anderson was this way, know that the people that come into those firms have been vetted and that they have great qualities, and they’re going to go on to be successful somewhere else. And that success is probably going to lead them to a senior role that makes them a buyer of the firm services. So, they don’t get their undies in a bundle when somebody leaves and they have the confidence to know that they can replace that person. And that longterm, there may be an opportunity associated with that departure.

Jason Mlicki:
That’s a good one as well. I think that we probably have time to go through one more. There’s so many on this list that are all really, really good and really interesting. And I am going to maybe just pick one out, unless there’s one that you really want to talk about. Actually, I’ll pick two out that I feel would go hand in hand that are important for firms to hear about. One is that conflict firms aren’t obsessed with what their competitors are doing or saying. And I would say it goes hand in hand with they don’t suffer from brand envy. Talk about those because I actually think those are really important ones to touch on here.

Jeff McKay:
Once again, Jason makes an astute observation. Firms that lack confidence always are focused on other firms. What are they doing that we’re not doing? And they’re always wasting their time trying to duplicate what’s already being done. And/or they’re spending their time rationalizing their reason for not doing it. And that generally happens when firms take their eye off their clients and really don’t understand their core capability and the value they provide to their ideal client. Because if you’re confident in your core capabilities, and you’re very clear about the problems you’re solving and the value you bring to a very particular type of client, you stay focused on problem solving and you just go full throttle in that direction. But when you’re obsessed with what your competitors are doing, that takes your eye off of clients and it just leads to bad things. That’s not to say that confident firms aren’t aware of what their competitors are doing. Any prudent businesses is going to be aware of what’s going on and what new competitive threats are coming in. But that just is a data point to inform the problem solving for ideal clients.
Now, the brand envy is an extension of that, but generally the envy says to the unconfident firm, “That firm is better than us and we wish we were like them.” So, one might be doing particular things, the other one is more aspirational. I want to be like that other firm, because I’m not happy with who I am. And you generally see this manifests in marketing speak or in employee recruiting speak that we are the fill in the blank of this industry. So we would say, we’re the McKinsey for the middle market, or we are the Deloitte, but we’re less expensive. Or we are the pick the premier brand in your industry and then put some qualifier that makes you less than and you know that you have brand envy.
And brand envy Jason, I think it’s important to say that you can actually see it outside of your own industry and a comparison against a peer by looking at other industries as well. And one of the most common ones in professional services, I think, and even in technology is Apple, right? We want to be more like Apple, let’s be innovative like Apple, let’s be cool like Apple. That is a telltale sign that you don’t know who you are and the value that you bring when you’re trying to be like some other leading brand.

Jason Mlicki:
Yeah. I can’t tell you how many in my years, as a recovering brand consultant, that conversation was heard. We’re kind of like the Apple of this. No, you’re really not. You’re just not sorry. I mean, you haven’t created eight new industries that changed the world. So, that might be a nice thing to strive for. But it’s funny, we had just a really random story and I’ll tell it because I think it’s really interesting. We had this client once really, really cool company. One of the most cool companies I’ve ever worked with. These guys made these sensors that were used in big R research. I’m talking like university level R&D work that’s well pre-revenue. Well before revenue ever is generated, these are sensors are using that scientific research. And these are sensors that can measure down to near zero kelvin.
Okay. So, probably like the most extreme conditions, you could try to measure something. They were producing sensors and different products that could do this. Really cool company headquartered here in Columbus. And I’ll never forget, I’m sitting here with the leadership team and we’re talking about whether or not they could claim themselves as being innovative and what made them innovative. And they would sit there and argue with me and say, “We’re not an innovative company.” And they would come all the way… all these reasons that they weren’t innovative. And I was looking at them going, this might be the most innovative company I’ve ever walked, stepped foot in my career. And yet here they were arguing that they weren’t… that they could not claim innovation as a core value of the organization. And they didn’t want to talk about it and [inaudible 00:21:53] communications. That was like, wow.
So, it’s just interesting to me because it kind of goes back to your confidence you can [inaudible 00:21:59] your firm. Super successful business, very, very confident, and so confident that quite frankly, they never really wanted to claim that they were as good as they really were, right? It was almost like this level of humility that was always there. It was just a really, really neat experience to work with them in the short time we did, because they were just such a fascinating group of people. So…

Jeff McKay:
You hit the nail on the head right there, and what a great way to bring this topic to a close. Confident firms know themselves and when they’re confident they have the wherewithal to be humble, right? They’re comfortable in their own shoes, they’re comfortable with who they are and where they’re going. And oftentimes that humility makes them harder on themselves. And it’s what drives so much of their success is, you know? Yeah, we may be good, but we’re not as good as we could be. We still have lots of learning or sure, there are other firms out there that are really doing well, but they’re comfortable enough to say, “There’s so much more yet to be done on our firm and for our clients.” It’s like the athlete, who’s just always going after that personal best performance. They just are humble enough to know that there’s more in the tank and they want to get to it. I love the way you described that firm, because that is kind of the quintessential confident humility that I think leading firms show.

Jason Mlicki:
Yeah. It was interesting too at your point as a leadership team. I mean, they would sort of point, kind of point debate all kinds of really things that other firms would just sort of take for granted. Kind of like you said, your comment about, we are a leading answer the blank. They would have debated that choice of language. If I put that in front of them extensively, which I just think is a sign of a confident firm. One that’s saying, “Wait a minute, timeout. Why are we making a claim that… but do we need to make that claim? Is that even [inaudible 00:24:06]? There was those types of discussions they would have as a leadership team. So, I want to end on a challenge and actually maybe a slight point of disagreement to set up the next episode that we should do.

Jeff McKay:
No.

Jason Mlicki:
But you said early, and I should also say to our listeners, read this post. It’s a good post. It’s a really insightful post to think about where you are on this continuum. Are you working in or leading a firm that’s insecure? Are you ultimately insecure leader because of the behaviors that you’re laying down across your organization? But anyway, you said in this phrase, something along these lines that confident firms have confident leaders, they’re inextricably linked. And in order… in confident leaders come from confident firms.
And I’m going to slightly disagree with that and say that it is incumbent upon us to talk about how firms move from being insecure to being confident. And I do believe it can be done and I do believe firms do it. And I think we need to talk about that in our next episode. How do you actually go on this journey? So, if I look at this list of indicators and I say, “Boy, I don’t have any of these.” Okay. Now what am I going to do about it? I don’t know that I have the answers, but I think that’s what we need to talk.

Jeff McKay:
Mm-hmm (affirmative). I like that. I like that, that should be a fun topic.

Jason Mlicki:
So, I don’t know [inaudible 00:25:22] we timed out, but that’s what we’ll talk about next week and great posts. Thanks for sharing it and [inaudible 00:25:27].

Jeff McKay:
Too buddy.

Jason Mlicki:
Yeah.

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.