David offers to help Blair remember all the times he's been wrong over the past couple decades. Then Blair says he'll be happy to reveal all of the places he's wrong now but doesn't even know it yet.
DAVID C. BAKER: Blair, today we are going to do sort of a different ... This is going to be a break from the normal today. We're going to call it "mea culpa" which is Latin for where we screwed up, right? I think it means something like that.
BLAIR ENNS: Hold on. You said "mea coolpa" like there was an extra vowel in there. I always thought it was "mea cuhlpa." I just emailed you two days ago and asked you to translate something into Latin and you completely ... Boy did you beat Google Translate by a million miles when it came to your Latin translation. So mea culpa-
DAVID: I'm not taking Latin lessons from you. Just trust me on that.
BLAIR: So it's culpa?
DAVID: It's culpa, right.
DAVID: Mea culpa. When we first talked about doing this topic, I was thinking that we'd go through yours first and then we'd go through mine, and then it hit me. It's like, we'll probably never get to mine because you have so many of them and actually I put a list together. You struggle with remembering all the places you've been wrong. I can help you with that. I used to-
BLAIR: Well why don't we just do your list of my errors? Why don't you take my inventory on this podcast and we'll see if we're still friends afterwards?
DAVID: Actually you know, we've shared a bunch of clients-
DAVID: And sometimes your name will come up and I'll usually jokingly ... I always say the same thing. It's like, "Well, I really like Blair's work and it's really impacted me-"
BLAIR: It's just Blair himself.
DAVID: No, it's just there's six things he's wrong about, and I always say that. I just say, "There's six things," and sometimes people will ask me to explain them and I never have a list of six. I just always say there's six.
BLAIR: This is good to know. I need to be prepared to retaliate.
DAVID: Yeah, so be rethinking your notes here. So the idea is over the last each of us a couple of decades, we've been dispensing advice whether people wanted it or not, and the idea is that there are times when we've been wrong and we know we've been wrong, and so we've each come up with a list of those places where we know we've been wrong. I'll tell you though, before we get into the list and you start us off with one, but before we do that you know what really hit me thinking about this is, where are the areas that I'm wrong now but I don't even know it?
BLAIR: Oh yeah. Do you want me to tell you?
DAVID: Do you have a specific idea?
BLAIR: No, I don't.
DAVID: So tell me where you've significantly changed your mind. You start us off with something that you used to believe strongly and shout from the rooftops and now you're issuing these editorial retractions about. Number one.
BLAIR: I think some of my best blog posts have been when I publicly confessed to being wrong for many years and having taken a lot of people's money to give them the wrong advice. I don't know why I take some sort of perverse pleasure in that. Okay, I've got a list of just seven or eight here, but I think the biggest one is it's everybody's job to sell.
DAVID: You used to say that.
BLAIR: I used to say that. Everybody says it. We may have talked about this on another podcast. I won't belabor it, but I used to think of course it's everybody's job to sell, and then I realized one day. I just asked the question, well what if that wasn't true? And when you start thinking about the question and the answer to that question, if it wasn't true all these wonderful things would happen. You would free people up. People would be happier. People who see themselves as craftspeople who are told and even believe that part of being a craftsman is you have to stand up and sell. It's everybody's job to sell.
Once you liberate people from that, everybody's happier. You can put people in roles where they do what they love to do. So that's probably the top of my list in terms of when it hit me, I realized this is just such a massive mistake I and so many other people have made over many years. Undoing it and just thinking about that issue differently has just been revelatory to me.
DAVID: That comes up in my work with clients when they ask me ... It always comes up in the same way. It's like, "How do we design a commission system for everybody?"
BLAIR: Oh, yeah.
DAVID: Or like, "Should we just thank them, or do we give them a $500 gift certificate?" Whatever it is. That's how it always comes up. Okay, so that's the first one.
BLAIR: We should do a podcast on that at some point on compensation and specifically commissions, who gets commissions, et cetera, et cetera. So let's just park that one.
DAVID: Oh yeah. We should. Okay.
BLAIR: So that's my first one. What about you? What's first on your list?
DAVID: The first one, and this is clearly the biggest one and it's particularly embarrassing because I have said it with such gusto so many times, and that's that when a prospective client wants to use you and they want to start out small and you really want to get into a situation quite deeply at the very outset, what you should do, and this is what I would tell clients is, "You should just wait until they're really ready to use you. Don't start out small. Don't start out with a lower price, because everything you do that first time will set the tone and you'll waste that opportunity rather than just waiting to make the best use of the opportunity down the road."
And about two years ago I came to the realization that that is a theoretical construct that makes perfect sense but it's not the way the world works in that clients consistently want to try you on a smaller basis. Especially the large clients. And you must be ready to not only do something smaller than you would normally like to do. It may not have to be at a reduced price. I don't believe that. But it probably needs to be something smaller and it probably needs to be on a quicker turnaround basis than you would normally provide or be comfortable providing. That's one of the biggest places where I've been wrong.
BLAIR: Okay, I want to pick that apart a little bit if that's all right.
DAVID: Yeah, sure.
BLAIR: If there's room in this podcast to do that, because I see both sides of the argument. I actually think the truth is in the middle somewhere, because the theoretical argument I'm sure that you've made over the years is no, if you take this small, tactical project at a ... Well, let's forget about price. If you take the small tactical project, then you're seen as the tactical shop and you're showing the client that you're willing to skip over the strategy work to get to the tactical execution work and therefore you're poorly positioned. You're seen as this ... The idea that everybody thinks or I was taught. Let's get a foot in the door, get a project, and then leverage that into the account and I say the same things. It doesn't really work that way. What you do is you set yourself up as the project shop. So you're saying you've given that advice over the years but now you see that that's not true. It's an ideal, a theoretical construct, but it isn't really true.
What I would suggest to you is that the truth somewhere in the middle is ... I have this list of mental models that works for me and the number one mental model at the top of my list is something that I got from our mutual friend, Mark O'Brien and it's this idea of the third way. In life we think we're given so many binary decisions, either-or decisions, and the truth is often the best answer to the question or the best path forward is a third way that you haven't considered.
So what I would suggest is when somebody comes to you as a client comes to you and wants to start small, the language that I have my clients use is, "Listen, we're not really in the project business. We're in the business of larger ..." I'm generalizing the language here. "We're in the business of larger engagements with companies that spend between X and Y with us." So let's say X is $100,000 and Y is $1 million, or just over the threshold of $100,000. "You're looking at a project that might be, just off the top of my head, it sounds like it's in the $15,000 range. We're not really in the $15,000 project business. Now, we are interested in the $15,000 project business if we both agree that this is a test of the fit. A test of whether or not it makes sense for us to work together. And then if we both pass the test, we do this project for you, we both agree that there's a good fit here, then our expectation is that there would be more work that meets our minimum threshold of engagement."
DAVID: Yeah, and I agree with that completely because I never think you should take a small project for a client that couldn't turn into a great client. It's more really about, is it okay to take those small projects from the big clients? And I think I've just been very black and white about that as opposed to like Mark's idea about the third way, which really strikes me as great. It's a logical ... My approach to life doesn't allow too much compromise, and it's a character flaw. It's a character flaw in me, and I think that that third way, the idea is great and the way you're suggesting it makes perfect sense to me.
BLAIR: So I think the mistake is not just this basic tenet of mine of say what you're thinking. So if you're thinking, "Okay, well I didn't really want the project. I wanted a deeper relationship." Just say that. Say, "We're not really in the project business. We're in the business of longer relationships. But, I understand it might make sense to test the fit with a project. I'd prefer a strategic one but if it's got to be a tactical one let's do the tactical one. Let's just both agree that after this we'll sit down. We'll see if there's a fit. If there's a fit, you understand we're looking for more work that meets this threshold." And I think every large client who wants to test you out with a project that way would be open and honest and would be willing to proceed on that basis and I think that's a win-win.
DAVID: Okay. What's your next mistake?
BLAIR: I just wrote this down. I don't know if it's the next one and I haven't thought too deeply about the specifics of it, but I wrote down large firms need to specialize. So for beating the specialization drum around positioning for years, the truth is the larger the firm the less ... It's not the less need for specialization. It's the less likely that you're able to arrive at a specialization that's meaningful. As somebody who works primarily ... Well, works now exclusively with independent firms, every once in a while a really large firm would come along and I'd offer the same advice. Well, you need to specialize.
At some point you look, you've got multiple practice areas. You might have multiple offices. You've got multinational clients. But the way I typically look at specialization and I think you probably do too is, discipline from market. What do you do and who do you do it for? So the idea that a large firm needs to narrow it's focus like a small firm, I saw that as a mistake a few years ago. They do need to set themselves apart. In truth the positioning of a large firm is their size, is their breadth, is their ability to work with large clients often over a diverse geographic basis.
DAVID: Right, especially a network firm.
BLAIR: Yeah, so that is essentially their positioning and eliminates a lot of their competition, except for the other large firms like theirs. And then there is a need for large firms, and very few firms, almost none of them do this well so maybe it's just another theoretical idea that just impossible to pull off, but in theory they should work to specialize or to differentiate from their direct competitors through their perspective, their overarching viewpoint on how this, it might be advertising, should be done. So it's a point of view that translates into intellectual capital which gets turned into intellectual property, et cetera, et cetera so that's how I think large firms need to attempt to differentiate themselves from each other, but the idea that they should actually specialize and narrow their focus once they get to a certain size, no that's been bad advice.
DAVID: What I tell people is the boundary for me is somewhere between 45 and 65 people. Above that boundary your specialization is automatically defined for you and it's that you're big enough to be a one stop, full service shop to some degree. Having said that, the category experience question which is how big firms define specialization will always be there, so it's just a matter of rethinking specialization but that's a good one for sure. In fact, I imagine don't some of your clients that you're working with that don't fall above that, they'll kind of throw the bigger firms in your face and say, "Well they're not." Not understanding that they really are but it's not stated in the same way. They're big enough to be full service. You aren't. The smaller you are the more important specialization is.
BLAIR: Or famous enough, in the design world. They're famous enough to be seen as the rockstar designers and therefore don't appear to be specialized but they've reached that threshold that I think we've talked about before where people want to work with them. Okay, what's next on your list of areas where you've been wrong?
DAVID: This one, I'm moving away from positioning which has been fun to talk about honestly. It takes me back to our New Business Summit days where we did that for 10 years. Wasn't that fun?
BLAIR: Mm-hmm (affirmative).
DAVID: Oh my goodness. Yeah, just tag teaming from the front, and we had so many great firms go through that. I really miss that. Anyway, this is about entrepreneurship and it's this notion that if someone is working for you, so you're the principal and you have a key employee. If somebody is working for you then they are not entrepreneurial or they wouldn't be working for you. And the idea was that you wouldn't necessarily look for a partner from within your ranks or you wouldn't look for somebody within your ranks to actually take over the firm, to buy the firm from you, and so on. So I was just automatically excluding an employee from entrepreneurship, and it's just wrong. It's just flat wrong.
For one thing, every entrepreneur worked for somebody else at some point in their life, even if they were just flipping burgers somewhere on the corner. But also, the world has changed that way in that people are starting entrepreneurial pursuits later in their lives and so the fact that somebody doesn't own a firm until they're 40, that didn't used to happen in the past too much but it definitely happens now and it happens regularly and with great success, so I was definitely wrong there. I do not automatically rule somebody out as an entrepreneur if they are working for somebody else.
BLAIR: You've had jobs, right? You weren't always an entrepreneur?
DAVID: I've worked for somebody else. Oh yeah, for sure. In fact three union jobs.
BLAIR: Oh really?
DAVID: Yeah. What does that mean, right?
BLAIR: You were probably the shop steward very quickly, weren't you?
DAVID: Whacking people over the head for working too hard.
BLAIR: Weren't you mayor of the small town you lived in at some point?
DAVID: There was no mayor but there was a town council, and then the town council of five selected one of the five to be the town president, so I was that, yeah.
BLAIR: Was this the imaginary town of Bakerville?
DAVID: No. Listen, I don't want to hear that from you. You're always talking about Blairtopia, so at least I was a real mayor of a real town and you're just in your own mind.
BLAIR: I am emperor of a fictitious world.
DAVID: No, this was Winona Lake, Indiana. It was a very small town and did not get reelected for very obvious reasons.
DAVID: All right, so what's the next one on your list?
BLAIR: This is probably the biggest recent one. Ah maybe it's five, six years old. The solution is more information.
DAVID: Oh shoot, I have that one on mine too.
BLAIR: Do you?
DAVID: Yeah. Yeah, like 100 page reports I would write for people that were just a total waste of everybody's time. Go ahead. This is yours.
BLAIR: I wasn't thinking of it in that context but one of the things I like to say when it comes to presenting diagnostic findings to a client, there's an inverse correlation between the value of your thinking and the amount of paper it takes you to communicate it. So think about that. If you've got something valuable that you've uncovered about the client's situation and you want to share that with the client, we tend to build these big massive PowerPoint decks or write these long reports and we write these long reports because we've charged a lot of money and we want to make it look like we've done a lot of work and that we want to support our brilliant thinking. But really if you just stand up in the front of the room and say, "Okay, here's this one thing we found," and if you found one thing in the diagnostic work that you did for your client that they didn't see that changes everything, then why write the big report?
But that's not the context I was talking about. I was talking about in my own training and previously consulting business where I thought it's everybody's job to sell. Everybody can be taught to sell. They just need more training. And then one day, and I've spoken about this many times in many different scenarios. I was finishing a sales training seminar in Sydney, Australia and taking questions at the end of the day and there was a question from a young lady who said, "Okay, all of this is great. All of the stuff that you trained us on today is great. My question is, how do I grow the spine ..." She used another word of the male anatomy ... "To be able to do this?"
And everybody laughed and I forget the answer that I gave, but I realized that's the question. That's the question, and I would see if somebody's struggling with sales, well they just need more information on what to do. The model that I've been working with for a few years now based on that realization ... I spent two years thinking about it and then working on a different way to approach things, is it's mindset first.
So I see these three layers. The foundational layer is mindset. It really begins with the conversations that you have with yourself. What are the thoughts in your head about your own value, about your right to be in the room giving advice to that person or standing in front of them as somebody who might sell advice to them or ideas? So just about the role you're playing. Are you there to talk somebody into something or are you there to facilitate a journey leading that person to a better version of themselves and their business to a better version of that business? It really starts with the thoughts that are in your head, so we start there.
Then mindset leads to a pattern of general behavior where I like to point out the spectrum of vendor on one end and expert practitioner on the other end. You want to be behaving like the expert practitioner, so mindset leads to a proper pattern of general overall behavior, and then on top of that you overlay some specific training. Information on okay, in this situation, client does X. You do Y. And more information and more training on what to do in specific situations that is not built on a pattern of expert behavior, that is not built on a foundation of appropriate mindset is useless.
DAVID: So have you oriented your training programs around that concept starting with mindset?
BLAIR: Yeah, and we just agreed today ... We're doing our annual summit for our clients in the program in a few months from now. We just agreed today on the theme. It's on Jedi Mindset. If the Disney lawyers are listening, it's called something else.
DAVID: Medi Mindset.
BLAIR: Yeah, Medi Jindset. Yeah, it's really foundational to what we do and how we teach and we have a little Jedi mantra that we have people repeat before certain situations to basically get them into the head space. So yeah, the solution is not more information, and maybe you want to add to this but the last point I'll make on it is, you look at people talking about politics today and you look at people getting into arguments, and they're making the mistake of talking to their opponent or their friend who's got an opposing viewpoint and they think of their friend, "Oh, no no. You don't understand. You don't have enough information." But all the studies show that the more information people get just helps them to cement their position, even if it's a contrary position. It's just confirmation bias at work. The problem isn't in that context lack of information. It's really just worldview and people mistaking worldview as fact.
DAVID: Yeah. Like the antismoking campaigns. Like, when will we learn? Or the antidrug campaigns. This is your brain on drugs. When are we going to learn that that stuff is not effective in the traditional way we've always assumed? And I've felt that way about my consulting as well. Feeling like oh, what they really need from me is information, and my goodness. I can give them that in spades and then I would look back on an engagement, and I didn't have much impact at all. Rather than just prioritizing a few things and then shaping the advice in a way that they could actually implement it, which meant that each time it had to be different. It had to be different based on who those people were, who my clients were.
BLAIR: Yeah, maybe 50% of your value is in here what to do. Here's what you should do or might do. And 50% of it is in saying, "You can do it."
DAVID: Yeah. Right, exactly. "You can do it," or, "Just ignore this other stuff."
BLAIR: Okay. What's next on your list?
DAVID: For me this one still really hurts to say, and I've been saying it for a few years because it's been so obvious to me, and that's this notion that great positioning yields success in the marketplace. I just have seen so many times when that's not the case where in partnership with a client we've fashioned a really great positioning and they aren't making any more money as a result of it. Or we had tried to fashion a great positioning and for some reason we can't land on it or can't agree on it or whatever it is, can't implement it, and still the firm thrives from all kinds of standpoints. It's a great culture. They do great work for clients. They're making good money, and in spite of a really lame positioning and I used to trumpet this from the rooftops basically, because back in that day all of us consulting were really fighting an uphill battle trying to get people to believe that, and I know that I personally overstated this in many, many cases. Not trying to scare people, but more I think just laying some absolutes down to get them to take it seriously, and it was just wrong. I now think positioning is even more important than I ever have, but for different reasons. It's not about success so much as I used to think it was.
BLAIR: Very quickly, what are the reasons then?
DAVID: Well, it's really about feeling satisfied about the impact that you're having on a client. I call it the getting to know, but know is spelled K-N-O-W. Just the satisfaction that comes from knowing a field and sensing that competence when you're speaking with a prospect and they think you have a camera in their office, or making a presentation in some setting, a boardroom or at a conference or something like that, and just falling in love with competence. To me that's become a more worthwhile reason to be an expert because for one thing a lot of experts are not driven by monetary success, so it seems a little silly to dangle that as the primary carrot in front of people. It's more really about the rewards that come from competence and really helping people, so that's where I've been wrong for sure.
DAVID: All right, what's another on your list?
BLAIR: In the area of price negotiation there's a long held tenet that he who speaks first loses, and I've repeated that many, many times and assumed it to be true and in fact it's not true. All of the prevailing science in the field of behavioral economics says that it's not true. There's a principle called anchoring, or the full name is anchoring and adjusting. It's related to another principle called priming. You think of the priming effect or priming a pump. The truth is that if you're in a price negotiation and you're waiting for somebody else to say the price, the seller's going to start with a higher price. The buyer's going to start with a lower price. Whoever leads with their price is more likely on average to get something closer to their price, so it's a combination of a few different heuristics and cognitive biases that are going on here.
DAVID: Don't you hate to have to go back and redo seven of your training videos?
BLAIR: Oh yeah, and now I just thought of another area where I'm wrong and I didn't write it down. No, I realized I was wrong in this before I started shooting any training videos three or four years ago thank God, but there are many videos that we're still using that have some points that need to be corrected and a lot of theories around pricing in general have caused me to revisit some of my thoughts on selling.
The field of pricing is interesting and value pricing in particular because you can't really be good at pricing without being good at selling and probably negotiating too, so those three things, selling, pricing, and negotiating work hand in hand. There's more science around pricing than there is around negotiating or selling I would suggest. I might be wrong, but I suspect that's true. And so once you look into the data on pricing you realize how it impacts selling, and it's pointed out a few areas where I've been wrong on the selling front, and failing to lead with a large price, that's a big mistake.
So what you want to do in a price negotiation is you want to be the person who puts the price on the table first, and there are various techniques that you can use to foreshadow even larger prices. Just drop large numbers. How you frame the investment. How the client might choose to compare the investment versus other things. If you can frame that that's helpful, but the bottom line is he who speaks first when it comes to pricing is far more likely to win, not he who speaks first loses.
DAVID: Wow, wow. Do we have time for any more? Should we each end with one where we're a little suspicious that something's going to give but we're not sure what it is yet?
BLAIR: Oh, yeah. That's great. Okay, hit me.
DAVID: Okay, so I have this feeling that there are a lot of things I don't know about remote workforces, and I've said the same thing for many, many years that I don't think it's a good idea except in a few rare circumstances but I just have this feeling that ... I don't have a feeling I'm wrong. I have a feeling I don't really understand it yet, and it feels like the marketplace itself hasn't figured that out and where we end up on this 10 years from now could look very different from where we are now. You have big corporations that are totally against it, big corporations that are really embracing it. I've been against it largely except in a few cases, and I don't know if I'm right on that front so I have my antennas up. I'm trying to listen and learn about that one.
BLAIR: Interesting. Yeah, I'm not sure I have strong opinions on that either. It'll be interesting to see where it shapes out if it shapes out at all. I'll remember to check in with you on that.
DAVID: Well you've got several people that are remote so you better listen to that, right?
DAVID: They're listening to this podcast right now with their hands on their chair like, "Well I hope he comes to this conclusion."
BLAIR: My own personal experience in the incarnation of this business has been nothing short of fantastic. I have zero complaints about it, other than I do feel like I do want more face time with those that are remote.
DAVID: Right. And then one thing that's different with your folks is that they personally, individually have this history of working remotely successfully, so I think that's part of what's made it work for you. All right, so where do you have your antennas up?
BLAIR: I think you might have planted this seed with me on this last one, and it's the idea of writing for personas. Did that come from you?
DAVID: Yeah, it was and I'm writing an article on that right now.
BLAIR: So can I just say I've stolen your idea here but I think you mentioned it to me in passing a while ago and I've thought about it. I thought yeah, I've kind of repeated that advice a little bit over the years but I've never believed it. I think you should write to an audience of one. This advice would be to most independent, small to medium size firms or businesses of any kind. Once businesses get larger and your customer base gets a lot larger, the idea of personas might start to make more sense but I think for most of the businesses and most of the people listening to this podcast, I think the idea of writing for personas unnecessarily broadens out your market and it waters down your message.
I always say the target is smaller than the market. The target is that at which you aim, and the market is that which you'd be happy to hit. It's like if you play golf, and I don't know if this metaphor works, but you aim for the flag and you're happy to hit the green. So you have a very narrow target so you're imagining one person when you write, and generally speaking that person is usually the same, not always, but the idea that you write for this group and then this group, I don't think that's wise advice.
DAVID: I think you'll find this article I'm writing interesting. There are some real math issues around it too so it should be fun. So this is good. We need to redo this maybe every six months and then come up with a new list of 10 each. I'm kidding.
BLAIR: We can retract all of the mistakes that we just made in this one, right?
BLAIR: Perfect. Okay. Well talk to you then.
DAVID: Good. Thank you, Blair.
BLAIR: Thanks David.