In the second episode of a three-part series on launching and ending services in professional services firms, Jason and Jeff talk about how practice leaders can take a successful engagement and turn it into a tangible service that a firm can build at scale and get growth opportunity from.
About the Episode
In this episode, Jason and Jeff share how a firm can turn a successful client engagement into a tangible service.
This episode is part of a three-part series on launch and killing services in professional services firms. While the first episode focused on The Typical Mistakes Firms Make When Launching a New Service, this episode shares helpful insights and steps firm leaders can use to commercialize their idea and how to build at scale to get growth opportunity for their firm. The last episode covers how to kill a practice.
Resources mentioned in this episode:
Survey Said! Characteristics of Exceptional Thought Leadership Marketers
Dissecting the McKinsey Rebrand from the Outside
The Typical Mistakes Firms Make When Launching a New Service
Jason Mlicki: All right, Jeff. Last time we talked, we did a pretty systematic beatdown on how firms launch new services, or really the mistakes they make when they try to launch new services. This week, I thought we should do the opposite. We should go to the good side of the force and talk about how practice leaders should go about commercializing an idea. How do they take that successful engagement that they’ve had, or successful string of engagements they’ve had, maybe two or three, and really turn that into a tangible service that the firm can really build at scale and get growth opportunity? Because that’s really what the partner sees, is that there’s growth opportunity here from this engagement. Now let’s go find a way to get it. You game?
Jeff McKay: I’m game, and you’re so positive. It’s nice to be around positive people like you.
Jason Mlicki: Why do you say that?
Jeff McKay: Because it is. I tend towards the more realistic, as I like to call it, view, some might call it pessimistic view, so it’s always nice to be around positive people like you. I hope when we’re done with this, our listeners are positive and excited about all the new product launches they’re going to be capable of handling.
Jason Mlicki: Yeah. To your point, when I think back on the discussion we had last week, we really narrowed in on, thanks to, I guess, your jogging my memory… We really narrowed in on due diligence, really, that firms frequently just don’t do enough or don’t do the right due diligence in those early stages of, “Hey, here we had this successful engagement. Now, is this a viable service?” Is that maybe the first place to start? Just say, “Okay, let’s talk about what good due diligence looks like for a minute and then blare on from there?”
Jeff McKay: I think that could be a really good place to start. There might be one before it, and we might get to that anyway, but you have to have something to do due diligence on. There is going to be some hypothesis or former engagement that’s going to start this whole thing? There’s going to be an idea. I think one of the things that we didn’t talk about, but we talked about this in our prep, and I know you’ve written about this, I’ve written about this, but the person that’s really shaped my thinking around this is Bob Buday. It’s how firms should be using their research and intellectual capital agenda, not just for marketing content and fodder, but for actual new product development. We could probably do an entire podcast on that, but I think that’s where it starts. Where’s the idea and what’s the hypothesis about it? Then we jump into the due diligence and start looking at some of the assumptions around that hypothesis.
Jason Mlicki: The interesting thing is, I know there’s a lot of firms that don’t do research, that don’t value it or think it’s too expensive or don’t invest in it, and you make a really valid point in that… I’ve had that happen. The running joke I had at our event last year after Bob and I had done the research that culminated in the seven capabilities of exceptional thought leadership marketers that we’ve talked about in this podcast, capability seven is really all about sales accelerators, so how the firms that are really great at this do a really good job of activating their thought leadership to the sales force.
When that came out in the research, it was that R&D moment for us as well. My joke at the event, I’m up speaking at the event and when I’m covering this data I said, “Well, we’re not in the sales enablement business until right now”, because when you see that data all the sudden you go, “Wow! There’s a play of big opportunity here for us to do something, not sure what it looks like yet, but there is. I just shared that only from the sense of that’s what that should feel like for firms when they do research, when they find something they didn’t expect to find, and they say, “Wow! We never thought about it that way. We should look at doing something there for our clients.” I think that’s what we’re talking about, right?
Jeff McKay: Yup.
Jason Mlicki: Okay. That’s an interesting point. It can come out of a client engagement or it can come out of research that’s not tied to a client engagement.
Jeff McKay: Yeah, and it’s better if it comes out of both.
Jason Mlicki: Yeah.
Jeff McKay: Because it’s almost like you’ve already started proving the hypothesis, but as we talked about last podcast, don’t be overly optimistic because one client has bought it that that means there’s a market for it. That’s why it’s so important to do the due diligence and why we beat that up last time is most people say, “One client buy it and they’re all going to buy it.” A consultant say, “I know my clients better than anybody else”. The whole point is to find all of the weaknesses of the assumption, so that you can engineer them out and/or kill the product or service as it’s currently structured.
Jason Mlicki: Your point is a good one, which is that the hypothesis stage for a lot of firms, the only place the hypothesis forms is in the client engagement, and this is another case to have a formal research methodology in your firm because there are other market opportunities that you’re just not seeing from your client work that research can help you find. Then that gives you something to do due diligence on.
What’s your sense? Are there many firms or even any firms that actually have a formal due diligence process that helps them vet these types of new services that come to the table from partners? Or is it ad hoc all the time?
Jeff McKay: I think in most firms it’s ad hoc. It’s ad hoc because it’s difficult to quantify investments to a large degree on intangibles, because you’re just talking about some consultant’s time, maybe putting together a PowerPoint or something like that. When you actually start building a product, let’s say you want to convert something into software, some annuity type of solution, you’re going to start making some serious investments. The best firms have a methodology of making those investments. They establish milestones where the amount of money being invested may escalate as each milestone is passed. The more discipline firms, I think, say, “Hey! Run with this. Here’s some seed capitals and seed budget, run with it, reach this milestone, we’ll assess and then we’ll reinvest again.” I think some of that rigor that comes from the VC world makes its way into some of the better firms.
Jason Mlicki: You’ve seen some stage gate methodologies inside of firms, which should be classic VC mentality on this.
Jeff McKay: Yeah, but not all. Some people run and spend a lot of money on this, and all they have is an idea. They waste a lot of time and money. It’s not just the time and money, it’s the opportunity cost of what really could have been done with that time and money. If they had just taken a different approach, they spend all their time trying to prove that it will work instead of the harder work of demonstrating why it won’t and then engineering around that. At least that’s my experience. Somebody could argue the exact opposite, but that’s what I’ve seen.
Jason Mlicki: Yeah. It’s interesting because there’s a hypothesis that forms in the minds of the partners or whoever that there is a service opportunity here that it represents growth opportunity or revenue for us. Then from that there needs to be a due diligence process that leads to some type of stage gate methodology that says, “Okay, we’re going to make this strategic investment with this desired goal to test the market opportunity for this and then we’re going to step back from that, see what we learned, and then decide if we want to go deeper with more time and money.
It’s almost like not even until that point has passed or you’re really into launch world, where you’re messaging something, launching something, putting it on the website, taking it to clients, more than a handful, and just publicly saying, “Hey, we’re in this marketplace”, or, “We’re providing the service now.”
Jeff McKay: Yes, yup.
Jason Mlicki: My sense is that due diligence in stage gate process is where the biggest opportunity is for firms to improve. That they’re just not rigorous enough and making informed decisions a little bit at a time to see what works. Is that … would you agree with me there?
Jeff McKay: Yeah, absolutely, absolutely.
Jason Mlicki: Okay.
Jeff McKay: I think depending on the product the question is, “What are the stages, the gates and milestones that you have to address?” If you take the first one, “Hey, we had this successful engagement. We really think the market could benefit from this.” I think the first stage is, “Okay. Put it down in a PowerPoint or white paper, and go out and start selling it, hand-to-hand combat, one-on-one.” Not doing the silly stuff that we talked about last week of naming it, and trademarking it, and branding, it and all that other stuff. Go out and get a second engagement, refine it, go out and get a third engagement, refine it.
I recommend that firms just adapt the lean startup methodology in the business model canvass. That’s simple, intuitive, and you just get out of the building and go test it. You don’t even have to sell an engagement necessarily, you’re just at least out talking and refining the idea.
Jason Mlicki: Yeah, it’s funny. Years ago when we first carved out our niche, vertical niche inside of professional services, we had different service offerings that we thought would be of interest to different clients in the space. We had an outbound business development person who is now is still with us in more of an inbound capacity, I would say, for the most part. One of the things that we decided when we had him doing outreach to perspective clients was we were viewing the sales activity as market research. Really, we were trying to just test different service offerings, different combinations of what we thought the market needed and just get receptivity to it in a way. We didn’t even really necessarily care in those early stages, whether they said, “Yes, let’s talk. No, let’s not, or whatever”. We were more trying to basically collect as many no’s as we could to figure out which things that we thought were most important would be the most important to people.
It’s really interesting that you say, “Get out and sell it first”, because when you first said that my initial inclination was like, “Wait a minute. Why are we trying to sell something before we even know what it is? What are we selling? I got this box over here, it’s really great. I don’t know what they can do yet, you want to buy it?”
Jeff McKay: That, Jason, you just got to the whole point of the podcast is consultants don’t want to go out and sell something that isn’t fully baked. It goes back to the concept of or, I don’t know if I would call it concept, it’s the anxiety or fear of unknowing that plagues so many of our clients just like, “Whoa! If I don’t have a complete understanding of this and a client asked me a question I can’t answer, that’s going to make me look stupid and I’m going to lose credibility. What does that mean?” It creates inertia in them.
That’s why so many of them jump through all those other hoops of branding and marketing because it makes them feel more secure that it’s actually going to work, and it just so seldom does. But it’s … that’s one of those BS of PS attributes within professional services firms that marketers have to engineer out and give them the confidence to go out and say, “Hey! We have this idea, what do you think? What about this? What about that?” They don’t want to do that, but that’s where all the time is wasted.
Jason Mlicki: Interesting thing is that, I had a faculty member in business school that always said, in a professional services firm you needed to have a portfolio of client relationships that represented different ways of working. Among that portfolio, you always had to have a set of clients that have so much trust and faith in your firm that they give you opportunities to go well outside your comfort zone and do things that you really don’t have any business doing or have no experience doing. You’re literally selling things to them that you’ve never done, and you’re not even sure if they’re going to work, and your completely uncomfortable with that. But mutually, the client and you both agree that that’s … that we’re okay with that. That they want that, they want that cutting-edge, bleeding-edge whatever you want to call it, idea that’s unproven.
They are completely okay with being the test case for that, because they know that if it works, they’re the ones on the front edge of it all. Maybe to mitigate that, that’s one thing you can do inside your firm as you could start segmenting your clients based on those types of attributes. Is there a segment in here of people that are willing to bring us into new spaces or have actually brought us. We got clients through the year that took us into whole new areas of agency services that we never would have been able to do without them basically just saying, “Hey! We love working with you guys, could you do this? We know you’ve never done it before but we don’t care.” I think that that’s one way you might break that down, right? Are there other ways?
Jeff McKay: I call those friends of the firm. They don’t have to just be the cutting edge ones.
Jason Mlicki: There you go, branded name like every marketer. You ruin it, you ruin it. That’s a simple idea, now you’ve ruined it. Way to go.
Jeff McKay: Friends of the firm.
Jason Mlicki: Friends of the firm. Marketing ruins everything. McKay ruins everything.
Jeff McKay: But they don’t just need to be cutting edge. You have friends of the firm that aren’t cutting-edge because they’ll tell you the negative, apprehensive attributes that would keep them from doing something like that. Those insights are just as important as the cutting-edge ones. Every firm has friends of the firm where you can go in and just expose yourself, and they’re willing to share.
Jason Mlicki: Also, if you think about the notion of Crossing the Chasm, Moore’s book in the technology space, it’s almost the same thing. We have a set of early adopters, to some extent, inside your client base that are more open-ended and innovative and interested in new things, and it’s connecting with your new offerings, your new ideas with them before you go into the mass market where the dynamics entirely change. It’s almost like you’ve described, you’ve got friends of the firm in both sides of that chasm. You have early adopters that are open to new things, but then you also have friends that are in the mainstream that will help you identify all the reason things aren’t going to work, and you need to engage them at both points.
Jeff McKay: Yeah. The moral of the story is you never go wrong having a conversation with a client or prospect around that.
Jason Mlicki: If the first thing you got to do is get out and sell it, what’s the next thing? Let’s say I go out there, I’ve now sold this thing. I’ve sold it 5, 6, 8, 10 times. I refined it. I’ve tweaked it. I’ve changed the model. I’ve done the things I’ve learned along the way, what do I do next? What’s the next stage of the gate?
Jeff McKay: Yeah. I guess the next step is to scale it, because probably you’re selling out of a single office, so can you take that solution and scale it? Can you teach other people how to deliver that same service? Is that product really built around a single, big brain in your firm or a very narrow, specific skill? I think you need to be able to take the methodology or whatever it is and transfer it to others and let them run with it.
Jason Mlicki: There’s two sides to scaling. There is the operational side that you described, which is making sure that you have a methodology that can be trained into other people, maybe less expensive resources, whatever, so that you can deliver the solution at some reasonable scale. But then the other side is you have to market it now. You have to actually put it out in the marketplace. You have build a little practice around on the website, you have to develop a thought leadership agenda, you have to start doing those things that are going to create demand and interest. You probably also have to think about from a sales side who we are we selling this to. Are we selling this into our existing client base? Is this a new solution into our existing client base? Is this our same solution to a new client base?
Jeff McKay: I think you jumped ahead too quickly. Maybe that’s because you run an agency and you’re-
Jason Mlicki: Because I’m smarter than you?
Jeff McKay: No, because you’re actually in a professional services firm. I think that’s a step or two down the road. I would never want to brand and market the things the way you just described until I had at least 10 engagements, that there was a repeatable process that moves beyond the individuals. I still don’t think I would make an investment the way you described it just yet. There’s multiple reasons for that. But your thinking is the right direction, I would just go a little bit slower and make sure that it’s well-grounded. I guess you could jump in, but … because you raise a point when you say put it on the website and do all that stuff.
One of the steps is determining where does this new product or service fit into the brand architecture or the service solution structure. If it’s going to be an incredible source of growth then it merits an elevation. Where do you put it in that brand architecture or service solution structure, really is dictated by what it is and how does it relate to the other existing solutions or service lines. Is it a simple product extension? Is it something completely new and different? Is it totally different buyer? I suspect it probably won’t be a different buyer, but if it’s a totally different buyer, whether that’s a functionally different buyer or it’s a more senior buyer, that has big impact on the scalability of the marketing and the positioning of the brand. If you move too quickly with that, you can confuse your core market and your firm about what are you’re playing. I’m not saying you’re wrong, I’m just saying you’re too fast.
Jason Mlicki: It’s always good to slow down and let the market pass you by and then play catch up later, I totally agree. No, I’m just teasing. What you exploited, which is really good, is that again building out this idea of a stage gate methodology. Stage one is sell it in a one-to-one capacity, build up a base of engagements. Maybe step two is start to scale it, meaning start to figure out, get the ten engagements, start to figure out the methodology, start to train people, figure out how you’re going to actually be able to scale it, and then, until you get to then is when you start to really think about how do we market this thing now that we actually have an idea of how we would deliver it at scale, now how do we market it?
By this time good chance is Accenture’s already eating your lunch and you’re completely out of business. It’s funny, as you were talking about the whole notion of architecture and messaging, this came to me. It was the idea that I find the whole digital transformation movement that’s played out so heavily across all industry and certainly consulting firms in general, to your point being a really interesting one, because in a lot of firms I can always tell that they’re struggling with how this thing fits in, because they know it’s the biggest thing in the market right now, so they have to have a digital practice that’s all about transformation, or they’re going to be dead in the water.
Oftentimes, they already have a very robust technology practice, and so they’ve got this robust technology practice that’s been here for decades, and now they got this new digital offering and the layman looks at it and goes, “Aren’t those the same? Shouldn’t those be co-existing more?” You can see that in those instances where, to your point, in order to stay up with the market they had to go fast, but it maybe isn’t fully baked quite yet. You can see some of the exposure in the seams, I guess.
Jeff McKay: That’s a great example and an excellent insight, Jason. We talked a little bit about that when we dissected the McKinsey rebrand. Oftentimes, firms … and this is why the due diligence and the stages are so important, is that firms tend to have an inside out perspective instead of an outside in. This is why buyer’s journey and the mapping of those is so important because you need to understand how does a client perceive the issue and the solution? Who do they see is a competitive set? How do they see how they go about solving this? Where would they look for a solution like this? That’s more important than just flipping the stuff out.
The way you just described it, turning up on a website, for example. What good is it going to do on a website? Let’s say it’s buried one or two levels down in a solution architecture, nobody’s going to see it, you’re not going to be optimized for any SEO. All you could probably do is refer a client to that page, maybe if they went to your website and said, “Hey! Do you have a digital practice in this space?”, and they go down to that level. Maybe. But I think time would be so much more valuable putting together a couple of case studies from those 10 clients that you’ve already done the work for, because I think in terms of intellectual capital hierarchy, case studies are near the top because clients want to see the results and they want to see where you solve this problem with other people.
If you have a friend of the firm or the great brand and you’ve done that, a case study is the fastest and easiest way to demonstrate your capability around a product, not all the other stuff. Maybe do a webinar with the client and go through the case study, but I just think that’s more cost-effective, more controlled and probably has the highest return on investment for marketing dollar.
Jason Mlicki: All right. I learned something in this podcast. What I learned is last time we talked about this from the other side, I described a friend of mine in a venture capital firm who … his job is to sort of squelch ideas. There’s all this exuberance from the partners about making investments and his job is to tell them all the reasons his investments are going to fail. I figured out our rules in this podcast. My role is the visionary excited guy. My inclination is, and this I know is that, when a client comes to me and describes this new offering they have I often get very excited I’m like, “Yeah! This is an incredible opportunity. We absolutely … you need to go after us.”
Of course, I want to go not scale in the phrase we use today, but I want to go market it because I’m like, “This is a huge opportunity. Let’s go get it. Let’s go get this new revenue source for you.” You’re the other side of that. You’re the fun killer. You’re the guy-
Jeff McKay: Realist. Realist.
Jason Mlicki: That steps in and says, “Wait a minute, wait a minute. We got to look at all the reasons this is going to fail”, and then you tear it apart before we do anything. I say that for our listeners in that, I actually say that on purpose that I do think that those are, as you’ve said in your roles of the marketing function, that you need these people in your firm. You need these people that are … that play all these roles, that are this exuberant advocate that are always optimistic and willing to go chase these things. Yeah, we can go build this market. But then you also need the people to pull them back and say, “Timeout! Let’s double check that before we go both feet in.”
Jeff McKay: It’s just like my my marriage.
Jason Mlicki: On that note, I am going to end this podcast. If memory serves, next time we talk we are going to talk about how to kill a practice. In this series on starting things, we’re going to start talking about starting new services and killing them. That’s what we have on tap. I hope you’ll join me for that topic, and I hope our listeners will as well.
Jeff McKay: Yeah. Jason will take the lead on that one.
Jason Mlicki: Apparently not.
Jeff McKay: Yeah, the realist will.
Jason Mlicki: That’s going to be a boring one. We’re losing listeners as we speak, I better call off that.
Jeff McKay: Those listeners are going, “Oh my gosh! I have like 10 I want to kill.”
Jason Mlicki: Yeah.
Jeff McKay: All right, we’ll make this promise. We’ll give you the three steps or six steps to kill a practice. How’s that? So that it’s systematic. You promised that this was going to be systematic.
Jason Mlicki: But listen to our poor listeners. You don’t even know how many steps there are, you’re just guessing, you’re just pulling from a bag right now. They have no idea. A pragmatist with no structure, unbelievable.
Jeff McKay: I have the steps but because this is a partnership I have to compromise and squeeze in some of your stuff.
Jason Mlicki: You don’t even know what they are. You’re making it up as you go. All right, I’ll talk to you next week.
Jeff McKay: See you, buddy.
Jason Mlicki: See you.