Transcript

In this episode, Jason and Jeff interview David Ryan, founder and managing partner of Gray Matters Group, a growth consultancy in Chicago, about their approach to business development in professional services firms.

To start the episode, David introduces himself and Gray Matters Group.

“Dave Ryan, managing partner with Gray Matters Group out of Chicago. We’ve been in business for about 15 years. We’re a growth consultancy for professional services firms. I started a business back in 2002 to help focus on elevating the performance of the business development revenue generating function of a professional services firm, and in particular we’ve really focused even more deeply on how do you better leverage and activate your already client facing individuals, your billable professionals to be precipitant in the business development process.”

Jeff asks an important question: Why don’t partners know how to sell when it’s so important to what they do?

“The reality is…we’ve got a group of leaders in a lot of these professional services firms who were never asked to have to sell. They were elevated to partners because they were great technicians, they were great subject matter experts at their point in their career. But these days, with the commoditization of the professional service’s sector, people have to bring more to the table than just technical competence. They have to bring relationship building skills and revenue generating skills.”

“So we’ve got this population of partners who made partner because they were great at quality delivery. They weren’t taught a lot of the skills, the disciplines, the rigor around, how do we go to market, capture revenue, generate leads, navigate the decision making process with our clients. They assumed there’s the constituency that if I do good work I’m gonna get more work, I’m gonna get that next piece of business. And I think that’s no longer the mantra. If you do good work you’ll get a look but it doesn’t guarantee you the next piece of business.”

Jason asks another important question: Did something change—20-30 years ago did the path of partner require an ability to have relational selling skills that suddenly went away?

“I think something did change. I think it changed in two seminal moments in our economy if you think about the dot com bust in the early 2000s and you think about the great recession in 08-09. Prior to a dot com recession if you will, in professional services, you could differentiate a firm or individual from the next based on their technical competence, and in that time you didn’t have to sell a whole lot.”

“If you did good work you get more work because clients could differentiate between the players and the pretenders. Those two recessions washed all the pretenders out. Whoever is left standing is really really good in terms of technical competence. So now the opportunity for differentiation has shifted from the back end service delivery to the front end client experience, in my opinion. It’s really put a significant burden on partners and directors, but also the next generation of delivery professionals, to be more thoughtful about how they engage the market, navigate client challenges, bring more value, and in the process, differentiate themselves.”

Jeff asks what differentiates firms that do front end selling or integration better than others.

“I think the firms that really do that well is where there’s equity across those functions, where each of those pieces of the operation recognizes what their role is, but there’s an integration across service delivery, there’s integration across marketing and sales. We’re working together, we’re collaborating, we’re sharing, we’re respectful of each other’s role in the process. And if we do that really well, I like to say the whole is greater than the sum of the parts. To me that really speaks to the entities, the professional services firms that are heads and tails above the others that are working more in silos.”

Jason asks how the silos can be broken down.

“It’s not easy, it’s like you’re pushing a rope uphill, in my opinion. I think a lot of it starts with leadership who embrace the importance of this more collaborative environment and they will not stand for the attitude that is being suggested by you. If you don’t have leaders, practice leaders, firm leaders at the top, who are really carrying that flag if you will, you’re gonna be challenged to change that overall culture.”

Jeff pivots to ask about the work that Gray Matters does in sales training and why sales trainings fail or succeed in firms.

“There’s content in programming out there that’s geared exclusively to the partner, director, rainmaker type. There’s also sales training and content out there directed to the dedicated business developer. And then there’s what I would call more relationship training, lead generation content and programming for the general population, the arms and legs delivery professionals. That’s the stuff that we’re doing.”

“And I’ll be honest with you, I’m real sensitive about even using the term sales training. I like to say our program is called relationship expansion for professionals, primarily because sales just has a negative connotation to delivery folks. They’ve worked so hard to build their street cred with their clients through their technical competence, and the last thing they want is for the client to sniff out and suggest that the consultant is trying to hustle them, trying to sell something. For us, it’s more about giving these mid to upper level consultants just some basic blocking and tackling skills and behaviors to enable them to be more comfortable interacting, connecting, asking a few more questions, pick their head up, take their blinders off and pay attention to what’s happening around them.”

Jeff asks how do you know when this approach is working?

“There are some leading indicators and we benchmark our work, we’re very metrics driven. You can benchmark the skills and behaviors, and the efforts of the typical billable professional before we get involved with them. Get some that are sort of baseline. Number of new relationships at new clients or a referral source. Number of new relationships built within your firm. Relationships refreshed with past colleagues, people I went to school with, people I worked with, past clients. If you get baseline in terms of activity around those numbers and then you train these folks up, put them through a program, support them, nurture the learnings, and then ask them to assess themselves again across those same metrics.”

“We can also track against CRM. What sort of leads have been brought in from this constituency, what were brought in before there was an intervention, and what sort of leads were brought in afterward. We’re seeing a minimum of 6xRY, 10x on average, within 6 months of our programming, just from deal flow created at a discount rate, and when I say discounted, not discounted bill rate, but discounted number of opportunities, it easily pays for itself, and that’s the beauty of what we’ve done. We’ve cracked the code on how do you activate the biggest asset of a consulting firm, the billable profession.

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Transcript

Jeff McKay: Contrary to many marketers and my cohost Jason in particular, who think that marketing drives everything in a professional services firm. The truth of the matter is in a relationship-driven business, business development and sales is the heart of a professional services firm.

Jason Mlicki: Before we start and introduce our guests, let me blow that up. I’ve been thinking about this. I think we should retitle, the function of business development. We should just call it marketing support. What do you guys think?

Jeff McKay: When I was graduating from undergrad my father, who was an old salty dog business man, gave me some of the best advice from a career perspective, and that was Jeff, your first job needs to be in sales because no one will take you seriously in the business and on the sales force unless you’ve spent time on the street, and it was some of the best advice because he was absolutely right and it’s proven out in my career. That’s why today I’ve invited a good friend of mine and a very talented sales guy, business developer, and professional services expert to join us. There are lots of them out there, but what makes our guest, David Ryan, CEO of Gray Matters, so unique is his view on business development and what it takes for a firm to be successful at business development and sales. Good morning David.

David Ryan: Jeff, Jason, great to be with you, thanks for having me.

Jason Mlicki: Yeah, thanks for joining us.

Jeff McKay: For our listeners who don’t know you, why don’t you introduce yourself, tell us a little bit about the career path that brought you to Gray Matters, and the role you have, and tell us a little bit about Gray Matters.

David Ryan: Yeah guys, great to be with you, Dave Ryan, managing partner with Gray Matters Group out of Chicago. We’ve been in business for about 15 years. We’re a growth consultancy for professional services firms. When I started my career back at IBM, back in the mid 80s through the early 90s, then got into IT consulting with a firm called the Revere Group and ran that firm’s sales marketing and strategic alliances functional, also co-ran our CRM practice.

And I’ll be honest with you I kinda saw a huge difference between the IBM and that of a professional services firm and began to realize that it wasn’t just the Revere Group that struggled with some of the things I was seeing with revenue generation, but I saw that evident with many of the professional services firms I had exposure to. I started a business back in 2002 to help focus on elevating the performance of the business development revenue generating function of a professional services firm, and in particular we’ve really focused even more deeply on how do you better leverage and activate your already client facing individuals, your billable professionals to be precipitant in the business development process. They’re often times embedded out there doing good work, credible with the client, on site for extended periods of time, they’re hearing things, and they’re in a position to be a wonderful lead generator, if appropriately leveraged. That’s a lot of the work we’ve been doing.

Jeff McKay: That’s unique because I’ve been in lots of big professional services firms and firms normally have some kind sales training every couple of years, Miller-Hymen or The Challenger Sale, name your poison, there are hundreds of them out there trying to turn partners and soon to be partners into rainmakers and after about a month, maybe two, all of that training to me just seems to go out the window and there’s really no difference. So why don’t partners know how to sell when it’s so important to what they do?

David Ryan: I think it’s a great question, first of all I wouldn’t say that all partners don’t know how to sell, however I think that there’s a whole generation of partners and leaders at professional services firms who struggle with it. The reality is, that sadly is, we’ve got a group of leaders in a lot of these professional services firms who where never asked to have to sell.

They were elevated to partners because they were great technicians, they were great subject matter experts at their point in their career, but these days with the commoditization of the professional service’s sector, anybody who’s elevated from manager, senior manager, whatever that level is, just below partner, into the partner rank and file, these are people who have to bring more to the table than just technical competence.

They have to bring relationship building skills and revenue generating skills. So we’ve got this population of partners who made partner because they were great at quality delivery. They weren’t taught a lot of the skills, the disciplines, the rigor around, how do we go to market, capture revenue, generate leads, navigate the decision making process with our clients. They assumed there’s the constituency that if I do good work I’m gonna get more work, I’m gonna get that next piece of business.
And I think that’s no longer the mantra. If you do good work you’ll get a look but it doesn’t guarantee you the next piece of business. That’s my quick and dirty answer to your question, Jeff.

Jeff McKay: I thought the right brand just took care of all of that.

Jason Mlicki: Actually I have a serious question on this front.

Jeff McKay: That is a serious question.

Jason Mlicki: That wasn’t a serious question. What I’m curious about David is, did something change, did 20-30 years ago did the path of partner require an ability to have relational selling skills that suddenly went away? Did the market have this big expansionary period where you can just rise to partner as a technician without building these softer relational skills?

David Ryan: I think something did change. I think it changed in two seminal moments in our economy if you think about the dot com bust in the early 2000s and you think about the great recession in 08-09. Prior to a dot com recession if you will, in professional services, whether you’re an IT consulting firm, you were a public accounting firm audit tax, whether you were a financial risk consultants, ops consultants, strategy consultants, engineers, architects, throw some attorneys in there.

You could differentiate one firm from the next, and or one individual from the next based on technical comp. There were some real players, Jason and I think there were some pretenders out there. I think there were some people out there who hung up a shingle and said we were in the consultant business. But quite honestly we’re not very good at, not only subject matter expertise, but high quality delivery, having methodologies and competencies and industry expertise. You could differentiate a firm or individual from the next based on their technical competence, and in that time you didn’t have to sell a whole lot.

If you did good work you get more work because clients could differentiate between the players and the pretenders. The recession washed all the pretenders out, those two recessions excuse me, washed the pretenders out, they’re gone. Whoever is left standing is really really good in terms of technical competence. How do you separate one firm from the next based on technical competence? To me it’s paper thin, so now the opportunity for differentiation has shifted from the back end service delivery to the front end client experience, in my opinion.

So it’s really put a significant burden on partners and directors, but also the next generation of delivery professionals, managers, senior manager, whatever the term is, to be more thoughtful about how they engage the market, navigate client challenges, bring more value, and in the process differentiate themselves. Does that help?

Jason Mlicki: Yeah, I couldn’t agree more. One of the things that I thought was really interesting about what you said is that I actually think your business is predicated even one step further from that, it’s beyond CX in customer experience, it’s actually, it’s the sales experience as well which in it of itself is a microcosm of the overall client experience, right?

David Ryan: Totally. I would say the sales experience is one part of the client experience. There’s the delivery experience, there’s the marketing experience. All of these things have to be aligned to really shape what you’re getting at and that’s that overall client experience, and I will tell you there’s professional services firms who do that well, in a collaborative disciplined way across the different functions of their firm, and there are those entities that are very much siloed.

There’s delivery, there’s marketing, there’s sales, we’re gonna do our own thing, we’re gonna cross our fingers and hope good things happen.

Jeff McKay: What’s the difference between those cultures and those firms, I assume it’s cultural, but in your experience what differentiates those firms that do that front end selling or integration better?

David Ryan: Well Jeff I think it’s a great question. I think you really have to kinda look back at sorta the legacy culture of professional services, and that is the asset of the business are the technicians, the subject matter experts. The people who a client will buy are the consultants, the delivery professionals, so that’s the asset and so unfortunately I think it’s created over the years this kind of attitude that hey I’m delivery, I’m the asset, you sales and marketing are sort of nice to have and I guess we have to have it. Sometimes those entities are looked down upon and almost as step-children.

Jeff McKay: I can’t imagine that anybody listening to this podcast can relate to that at all.

David Ryan: Really getting back to the culture piece, I think the firms that really do that well is where there’s equity across those functions, where each of those pieces of the operation recognizes what their role is, but there’s an integration across service delivery, there’s integration across marketing and sales. We’re working together, we’re collaborating, we’re sharing, we’re respectful of each other’s role in the process. And if we do that really well, I like to say the whole is greater than the sum of the parts. To me that really speaks to the entities, the professional services firms that are heads and tails above the others that are working more in silos.

Jason Mlicki: How do you break that down? I mean I can speak from personal experience, I won’t name names here, but I’ve been in firms where the culture, from the partners and subject matter experts, is quite frankly just toxic towards the sales and marketing folks. They literally will flat out call them overhead to their face as if they’re just a drag on profitability. When you’re in that environment, that siloed environment, how do you break it down?

David Ryan: It’s not easy, it’s like you’re pushing a rope uphill, in my opinion. It’s one of the reasons, I’ll be honest with you, I’ve chosen this particular industry as our exclusive focus. I like to say it’s a target rich environment, Jason. There’s a ton of opportunity to make a difference. It doesn’t happen overnight, there’s a lot to be done, but I think a lot of it starts with leadership who embrace the importance of this more collaborative environment and they will not stand for the attitude that is being suggested by you. If you don’t have leaders, practice leaders, firm leaders at the top, who are really carrying that flag if you will, you’re gonna be challenged to change that overall culture.

I like to call ’em enlightened leaders, these are people who recognize that we cannot continue to do things the way we used to, that if we’re gonna move forward and grow and scale, we have got to it in a more collaborate way because each of us bring a various expertise to the table, and when we do that in an orchestrated way, it can be a beautiful thing.

Jeff McKay: You use a, I wanna say rowboat, but that’s not the term. It’s one of those sleek boats that you’d see on the Charles River.

Jason Mlicki: It’s a crew boat.

Jeff McKay: Yes, as a metaphor for what you’re talking about and because of the commodification of professional services and this now being a game of inches or even millimeters, it’s the organization that has all of those seats in that crew filled and not are they only rowing, but they’re rowing in perfect harmony or unison, and it’s giving them a speed, that’s where the differentiation is now.

David Ryan: Well Jeff, there’s a terrific book out there if you haven’t read it, Boys in the Boat, that speaks to exactly that, and I don’t know if it was really positioned as a business book but I think it supports exactly what you’re talking about. It’s putting the right people in the right seats, and it had everybody rowing in unison in an orchestrated fashion together. Sometimes it means moving different players into different positions in the boat, and it’s really at the end of the day, how do we optimize the performance of this team?

To me the laggards are the entities where they continue to be silos, they continue to have a lot of attitude, they continue to suggest that the be all and end all asset of the firm is the delivery side, which yes they are, but when they continue to carry that attitude forward it becomes toxic, Jason as you mentioned. It just undermines the effectiveness of the rest of the entity. But when those silos are broken down, there’s clarity of roles and responsibilities, there’s process, there’s rigor, there’s discipline, there’s accountability. Now we’re all moving to a single vision, man I’m telling you it can be a really beautiful thing.

Jeff McKay: Let’s pivot. I wanna talk a little bit about the work that Gray Matters does in sales training in particular. Like I said earlier in our conversation, I’ve been through a lot of different sales training and a lot of them have momentum, the nomenclature gets used for a month or two and then they just really disappear, and people just fade back into their day jobs. David, talk a little bit about why sales trainings fail or succeed in firms.

David Ryan: Well, I think it depends on how you’re defining sales training, I’ll be honest with you, it’s a pretty broad topic. The reality is, there’s content in programming out there that’s geared exclusively to the partner, director, rainmaker type. The senior delivery person who is solid technically but is expected to go out and drive revenue. There’s also sales training and content out there directed to the dedicated business developer, the less technical individual, but this is the person who is responsible for getting out there and kicking down some doors, generating leads into net new clients, etc.

And then there’s what I would call more relationship training, lead generation content and programming for the general population, the arms and legs delivery professionals. That’s the stuff that we’re doing. There’s a ton of content out there for rainmakers, senior partner types, and dedicated sellers. Personally I believe a lot of that content is a little transactional, it feels transactional, but it is definitely rooted in the selling vernacular, how do we negotiate close, qualify, questioning and answering sills, navigating the decision making process. And there’s some wonderful providers out there for that.

That’s not what Gray Matters does. We gear our content and programming to the other, what I would say 90 percent of the technical staff, subject matter expert individuals who are already client facing, they’re already working on projects, often times embedded at clients, but for sure interacting regularly with their clients. That’s the group, call ’em upper-middle level delivery professionals and on down. That’s the group that we’re targeting. And I’ll be honest with you, I’m real sensitive about even using the term sales training. I like to use our program is called relationship expansion for professionals, primarily because sales just has a negative connotation to delivery folks.

Those are folks who get really spooked by that term because they’ve worked so hard to build their street cred with their clients through their technical competence, and the last thing they want is for the client to sniff out and suggest that the consultant is trying to hustle ’em, trying to sell something. For us, it’s more about giving these mid to upper level consultants just some basic blocking and tackling skills and behaviors to enable them to be more comfortable interacting, connecting, asking a few more questions, pick their head up, take their blinders off and pay attention to what’s happening around them.

The reality is that there are other issues and needs that those clients that they’re already serving, are wrestling with, that that consultant’s firm is in a position to service and convert it into revenue. That is lead generation, that is a scalable revenue model. Our philosophy for that group is, let’s not use the word sales, this is not sales training per se, it’s relationship training. And oh by the way, get them to execute on the fundamentals really well, and let’s not overwhelm an already overwhelmed group of individuals with a bunch of sales schtick.

Keep it simple, keep it real, give ’em a process, and just get ’em more comfortable of getting in the game, and when they do that I promise you, these individuals are gonna stumble across deal flow that otherwise would of been left on the table.

Jeff McKay: How do you know when this approach is working? How would an organization begin to see the impact of having all these subject matter experts out there doing what you’re proposing in their existing clients?

David Ryan: That’s a great question. I think there’s some leading indicators and we benchmark our work, we’re very metrics driven. I service professional services firms and those firms are being asked to justify themselves every day with their clients, so I in turn as a vendor to a professional service firm, am being asked to justify my work, and it’s really important for us to be able to show that we’ve moved the needle, so I really think that you can kind of benchmark the skills and behaviors, and the efforts of the typical billable professional before we get involved with them.

For example, let’s assess the number of new relationships you’ve created at current clients in the last 90 days, 6 months. Get some that are sort of baseline. Number of new relationships at new clients or a referral source. How about number of new relationships built within your firm, because if we’re asking these people to cross sell and help be lead generators for the greater good of the firm, we wanna make sure that they are understanding the other capabilities of their firm, but also have relationships with other people in other practices so they can tee those folks up.

So other relationships internally within your own firm, and another leading indicator is maybe relationships refresh with past colleagues, people I went to school with, people I worked with, past clients. If you get baseline in terms of activity around those numbers and then you train these folks up, put ’em through a program, support them, nurture the learnings, and then ask them to assess themselves again across those same metrics, 3 months, 6 months later, we can compare sort of a before versus after and you’re gonna see activity, to me, leading indicator activity of more relationships, more conversations in the process deal flow.

Now we can also track against CRM. What sort of leads have been brought in from this constituency, what were brought in before there was an intervention, and what sort of leads were brought in afterward. Now you have to kind of assess those leads and say, well would some of those leads have been generated through our traditional selling channels, and usually I say yeah probably and I’ll discount the deal flow if you will. But even the deal flow at a discounted rate that we’re creating through our work, easily pays for the intervention of me coming on board.

We’re seeing a minimum of 6xRY, 10x on average, within 6 months of our programming, just from deal flow created at a discount rate, and when I say discounted, not discounted bill rate, but discounted number of opportunities, it easily pays for itself, and that’s the beauty of what we’ve done, we’ve cracked the code on how do you activate the biggest asset of a consulting firm, the billable profession.

Jason Mlicki: And really when you say that 6xRY, 10xRY, whatever it is, that what you’re applying towards that is enhancing their relational skills, helping them look beyond the project, helping them build relationships inside their client organizations, build relationships within the firm itself so that they understand the entirety of the practice better. Is there anything else that you’re putting resources against in this type of model?

David Ryan: I think you hit on it. I’ll be honest with you Jason, the work that we do, not only drives revenue and lead generation, but these people are more effective in service delivery. You think about the importance of navigating relationships and having good high quality relationships with your client and the proverbial hiccup of a project comes about. What did it feel like for a delivery professional or a project team to navigate that hiccup in the project when you had a good solid set of relationships that widen deep at a particular client.

And then you think about that same proverbial hiccup when you don’t have a good relationship, you’re only leaning on one or two key individuals at that client. What did navigating that hiccup feel like? I really believe this manifests itself beyond just deal flow and revenue. It’s service delivery and it’s the other piece that marketing loves and that’s client loyalty, it’s stickiness.

How do we embed ourselves? How do we set the hook more deeply with our clients, and continue to differentiate and separate ourselves? I’m not sure if I answered your question Jason but, these are some of the other benefits of the work we do.

Jason Mlicki: It was fabulous and I’ll even add a metric that I think you might wanna add if you haven’t thought about it, but as Jeff full on knows, I’ve worked with consultants, both on the sales side and a number of different areas of our agency, and I remember years after having worked with this one consultant who had done a lot of great work for us and really improved our approach to the marketplace and our approach to selling in general, our business development in general.

He sends out a survey asking for feedback on where the biggest value creation was from his work, and one of the line items he had in that survey was confidence, that was it. For me that was actually the number one thing that he created inside of me and inside of the business. I would argue that there’s just a confidence factor that you’re probably bringing to this billable professionals that is qualitative metric but it leads to everything else.

David Ryan: It’s funny you should say Jason because that’s when I would lay out the goals for our programming there’s nothing up there that says turn me into a sales guy. It’s expand their comfort zone around building relationships, and to do that you have to be confident. This is getting you, raising the bar in terms of your ability to engage and interact confidently, so I would totally agree.

I think another metric and impact of what we do is retention. Especially in a tight job market like right now where you wanna make sure that you’re holding tight to your high quality service delivery professionals. When my clients begin to invest in their consultants, beyond technical competence, around this thing called relationship expansion, around skills that go beyond just my service delivery capability. The consultants take notice, they appreciate that, especially the younger millennials and such. They wanna know that their firm is really supporting them and helping to elevate their skills across the board.

Jason Mlicki: Jeff, I don’t know about you but I can’t think of a better place to stop.

Jeff McKay: I agree with you. I would just like to say this: When I first saw David’s work as a CMO and saw that 10x number it caught my eye, and it’s really important because firms value revenue. But what really sold me on David’s work is this idea that it’s getting so hard to separate high performing firms and differentiate them. That it is those firms that have that culture that is focused on an integrated client experience that feeds, not only client retention but employee retention, and makes the firm stronger overall, and by extension, the reputation, and the brand of the firm.

And, if you’re a CMO and you can’t behind that, you might need to find a new job because that’s what it’s all about. David, thank you for joining us, we’re gonna have to have you back cause I feel like we just scratched the service on that.

Jason Mlicki: I was just thinking the same thing. Thank you David for joining us, it was really insightful and I really enjoyed it a lot.

David Ryan: Well, delighted to be part of this and I’m happy to continue the discussion as you probably have gathered, I’ve got a pretty strong opinion about this. Having done it now for 15 years and coming out of my IBM experience and working in professional services for a big chunk of my career, I think a lot of what we’re doing is playing out quite nicely, as I said it’s a target rich environment and we’re having a lot of fun doing it, so thanks for having me guys.

Jason Mlicki: Thanks David.