Models Everywhere

Blair and David go into detail about what a model is for a creative firm and how they can be useful in closing new business and improving profitability.

Transcript

Blair Enns: David, you're interviewing me. This is my topic.

David C. Baker: Why are you talking first then?

Blair: Because I want to give you a plug.

David: Oh, okay. Go ahead, please.

Blair: MYOB.

David: Mind your own business.

Blair: Yes. You and I met, I think it was 2002 or 2003. You invited me to speak at MYOB in Cabo San Lucas, Mexico. You invited me because, I've never told you this, but I angled really hard to get you to invite me.

David: Oh.

Blair: I reached out, introduced myself, did enough to impress you. You, a few months later invited me to speak at MYOB. Then you wanted some speaking references, so I faked some speaking references because I hadn't spoken to anybody yet. I was brand new in my business. I did two talks and they were horrible. They were just God-awful.

David: They were provocative.

Blair: Yes. You invited me back a couple of years later, and I think I was a better speaker by then. Anyway, the reason I'm reliving the past is, you have resurrected this famous conference, MYOB.

David: I am so excited. Cabo was the second time we held at Mexico. The first time I was in a snarky mood and I'm going through customs, leaving Mexico. The guy said, "What were you doing in Mexico?" I said, "Mind your own business."

[laughter]

He wasn't amused. [laughs] The whole point in starting the conference many years ago was to create a conference that didn't deal at all with a craft, but just about how to run your business well. I did it with a partner, the people at HOW Design. Then 10 years ago it stopped, I thought, "Oh, I really want to start this again. Aren't we all dying to get together?" This is in Atlanta, October 24 to 26.

Blair: This is 2022.

David: '22. In case people show up in Atlanta a year from now.

[laughter]

We have a super generous refund policy because of all of the uncertainty in the air. Up until two weeks ahead of it, you get a 100% refund, after that, you get 100% credit for a future event.

Blair: Wow.

David: I think we have 40% sold and it's still two-plus months away. We're going to cap it at 150 principals, amazing speakers. You are not one of them.

Blair: I was waiting for my invite.

David: I looked at your travel schedule and it says, "All right, let's do a conference when he can't speak." No. Shannon will be there in your stead. I really am sorry you're not going to be there. That would be so much fun.

Blair: I'm sorry, I won't be there either.

David: Shannon's going to be there, your managing director, which I'm excited about. We've got five keynotes, nine breakouts, just a fantastic lineup. Thanks for bringing that up.

Blair: I'll be working on my sun tan in Santorini and then speaking in Athens. Other than that, I'd love to be at your little conference.

David: You weren't a very good speaker that first time. I want to pick up on that theme, which you freely offered, but you are a better speaker than I am now. In those 20 years, and how fate brought us together, that was just great. I look back very fondly on that.

Blair: Shannon is so excited, and as we get closer to the event, and I hear from people who are going, my regret for not being able to attend is just increasing. Please do this again, so I can attend and redeem my 2003 performance.

David: Okay. [laughs]

Blair: You're interviewing me, right?

David: Now it's my turn. I'm going to talk for a minute. This is your topic. This could be one of my favorite episodes.

Blair: Oh, no pressure.

David: I just love this topic. It's about using models in your practice, your consulting, or your design, even in UX. There's lots of folks listening who could apply this and others who think they can't, but I think everybody could listen to this and learn something from it. Just give us the overview of the whole model's topic first.

Blair: What is a model? A model is a view of how the world works. It's a view of the world. It's a way of organizing and making sense of the things that you experience. At some levels, it can be a belief of philosophy or a scientific viewpoint, but it's all about a representation of the world as you see it.

They come in different forms. You think of a physical model like a scale, architectural model. Then there are visual models where you take concepts and you visualize them in the scientific world. Richard Feynman's Feynman diagrams, he's diagramming how subatomic particles move in quantum fields. We made those famous. That might be a bit too obscure for some people, but then you have Mendeleev's periodic table of elements. That's a model for organizing all of the molecules in the universe.

Then we have what's known as mental models. I think Charlie Munger and then Shane Parrish more recently has really made this idea of individuals having toolboxes of mental models popular. Mental models are just these different ways of looking at things, thinking about things. There's a quote I love and it opens my next book, which isn't out yet because it's still not finished yet, but the quote is from a professor of statistics named George Box, and it's, "All models are wrong, but some are useful."

That is such a profound statement to me. A model being a representation of the world, it's how we organize what we're experiencing. They're all wrong, the map is not the territory, but the power of a model is not in its veracity, it's in its usefulness. That's something I want to dive into here.

David: I come across this frequently, but it's more of an advanced topic because when I'm working with the firm, you do the same thing around determining a tighter positioning or a business strategy. You're not the only person that does this. In fact, that's pretty dangerous. You really want to find competitors. Now though, instead of trying to differentiate yourself from the other 55,000 competitors, maybe you've got it down to 10 or 20 or something. How do you set yourself apart within that group? This is where the model can be so useful because you are focused on the same thing that these other 19 firms are, but your approach is very unique.

I was working with a firm that was modeled around behavioral change. One of the things I love to do with all of my clients at some point is say, "Are you in front of a computer?" If you're a listener right now, this might be a great chance for you to do this. Type in "theory of change" or "model of change", either one. Then in the tab, click Images, and you'll see tons of models, and all of a sudden, you'll know what we're talking about. It's just a regular way to make sense of problem-solving.

I've got four different models in my business and it takes me about five years to come up with one, but it just revolutionizes how I think and how I can explain to people what they do. That's why I'm so excited about this topic, just how relevant it is.

Blair: Yes. There's a lot to unpack in what you just said. You think a firm is positioned, and usually, when they're properly positioned, they're positioned around a combination of a discipline and market. Here's what we do and here's who we do it for. Then after that, I think about point of view and we've talked about point of view or perspective or ideology before. "Here's what we believe about how this discipline for market should be done."

Out of a point of view should fall a way of working, which is a model. It's often a proprietary model, and I'll make the distinction here between proprietary models, the model that you develop that neatly organizes, contains, and communicates your beliefs on how this discipline for market should be done. The distinction between that proprietary model that you've developed versus other models in your model toolbox, we can talk about both. Charlie Munger said there are about 90 mental models that you should have in your toolbox. You hear that and you go, "What?"

David: Yes. I can't identify one.

Blair: First you say, what's a mental model? Their frameworks for decision-making. I think the first one he says is probabilistic thinking. You need to have a basic understanding of statistics and probability, and you need to think in terms of probability, and Annie Duke's book, Thinking in Bets is a great book for doing that. It actually simplifies this probabilistic thinking into just making simple bets, but then there are all kinds of other personal models.

At this stage in my life, I'm aware of the idea of mental models. There are these models that I keep adding to my toolbox. Some, I think I add to my toolbox, but never use. There are ones that I use all the time, like Occam's razor. I'm going to oversimplify, but it's the idea that the simplest solution is probably the most appropriate. You're thinking about courses of action. Well, the simple one is probably the most appropriate. It's actually a little bit more nuanced than that, but that's the everyday interpretation of it. Then there's Hanlon's razor, which is don't ascribe to malice what can easily be explained by incompetence.

David: Yes.

Blair: You find yourself getting upset at people, thinking their motivations are impure or malicious, and sometimes they just don't know any better. Those are just two models, first principles, thinking Elon Musk has made that famous. Let's go back up to what are the underlying facts or laws that are supporting all of these downstream assumptions.

There are dozens and dozens of these mental models. The more that we can understand and draw on these models, the better our thinking, our judgment, and decision-making, and our ability to make predictions increases. That's one part of the model world. Beyond the proprietary models that you've developed for your business, do you ever think about the models that you lean on most frequently?

David: Yes, I do. I don't know if they're models, but this is a statement that's similar to the ones you made just a second ago that I use when I am trying to understand myself or understand somebody else, I'll say most anger is really hurt. That's not really a model, but it's a way to simplify and look deeper at something.

Probably the most exciting example for me is when I'm working with a client and they're talking to me about how they go about solving challenges for clients, and I spot a model that they haven't seen yet. They can expand it-- I remember I was on a hike with you somewhere. I can't remember where, maybe it was on one of our trips to Bermuda or the Turks and Caicos, I don't remember. I asked you where you came up with some of your thinking and you told me the transtheoretical model-- I forget exactly what it was.

Blair: Model of change.

David: Model of change, where you started to think in different categories. Then I went and looked that up and I said, "Oh, I see." You haven't borrowed it entirely, but you've used it as a starting place and made it your own. I just find that stuff really interesting, and I find it so unique in terms of positioning and effectiveness, and training. It just goes on and on, but I would bet that 90% of the people listening here have never thought of how they work through the lens of a model.

I'm hoping that that's the big takeaway people have is you probably have the start of a model that you just use instinctively. If you could start treating it a little bit more seriously and replicating it and drawing it and naming it and so on, all of a sudden you're going to have something that's really useful.

Blair: Yes. Let's talk about how it's useful, then we can come back to models. Models help you understand, organize, and communicate your perceptions of the world like your sense of what you're experiencing. They help you understand, they help you organize, and they help you communicate. When I say, and somebody said this to me years ago, I've talked about it multiple times in this podcast, buying is changing. Therefore selling is change management.

Selling is a model for change management. Now I can study any model of change, including the transtheoretical model or all kinds of others, and I can import that thinking because some science has been done here, granted social science, but still, science has been done here. If I really believe this, I can transport a lot of that science over to selling. I've done a lot of that over the years, particularly with the transtheoretical model. It's just been so powerful, it's made me smarter. It's helped me organize my thinking, and it helps me communicate to our clients what it is that they need to do.

You said you didn't know if the one thing that you cited was a model or not. I'm willing to include philosophies, rules, laws, heuristics, et cetera, all into the model toolbox, these simple things that help you better understand, organize, and communicate what you're experiencing. I think all of these things are valid.

David: The model that you and I see, we don't need to go into this deeply, but the model that we typically see that firms talk about on their website, that's a very, very loose interpretation of a model. We're really talking about going a little bit deeper here in a way that doesn't just talk about the phases of how the work unfolds. When people talk about their model, often, it's really just a description of the phases, but not how each phase is conducted. Can you talk for a minute about good models and bad models and maybe the difference? Is a bad model just something that hasn't been fully fleshed out and will become a good model, or is a bad model just a bad model?

Blair: We intuitively understand the importance of models. The idea that if we've done this long enough, whatever this is, we've developed beliefs around it, then we've codified how we bring those beliefs to bear in the discipline that we do for the market that we serve. We all intuitively understand that. At some point, if you're really good and seasoned at what you do, you should have a model for how you do it.

We all understand intuitively that the models are powerful and one of the reasons they're powerful, it allows us to communicate to clients in the sale that, "Hey, we've done this before. We know what we're doing. We've codified things." We intuit that models are powerful, and very often young firms early in their life cycle, the owners or key personnel will develop models because they intuit that they're powerful, and usually, those first models are horrible.

You and I joked in the spoof podcast episode, we did again, people, it was a spoof, Secrets Behind the Killer Proposal, we joked about the fact that most firms have a four-step model, each of those steps start with the same letter. The letter is usually D. It's a joke, but I've seen it dozens of times, and it's usually "Define, design, deliver--" we should have done it differently the first time or some variation of that. There's some sort of define, design, deliver, et cetera. It's an attempt at a model, but it's usually a bad model.

The difference between a bad model and a good model is this. A good model takes something that is very complex and it simplifies it. It allows you to talk about a complex topic in a simple way and then when the client peers into the model, "Oh, that's interesting. Yes. I get that." They see well-organized complexity, so well organized it can only be organized by somebody who has truly mapped the territory, who has been there, done this, seen the pitfalls, really understands this deeply, and they were able to organize this world. That is a good model. It takes a complex subject and it organizes, it makes it simple, but when you peer in, you see well-organized complexity.

A bad model is the inverse of that. A bad model takes a simple topic, and it overcomplicates it. When you see firms, and I'm sure you see this a lot, David, a generalist firm takes something really simple and try to make it complicated. It just jumps out at you. It's trying to make the simple look complex. A good model should make the complex look simple. Again, when you peer in, you can see well-organized complexity that can only be organized by somebody who has truly been there and mapped the territory.

Blair: The other thing that a model does is on the flip side of it, and it's just as exciting to me, is that it enables you to hire people who are smart enough. They may not be super smart, but they're smart enough. They fit the culture. They love what you're doing. You give them a model, and they can become more effective more quickly, and you don't need to have brilliant people who are just using their intuition to come to the right choices. You're using more ordinary people, and they're a lot easier to find, and you don't have to overpay them as well, and gives them confidence out of the gate because of the model that you're using.

I want to touch on something you just said because I'd never really thought of it before. A great model is something that doesn't overcomplicate things. It's also something if you're explaining your model to a client, they could understand it well enough to use it even without you. A model isn't something that makes you more important forever in that you have the key to the black box. It makes you more useful now and in the future because you are helping them understand the process too. It's not designed to, I guess, hide the innards of the problem-solving, it's designed really to help everybody see this more clearly, including the client, including your team.

David: Yes. It's not a black box where the components are a mystery and are shielded from you. Having the model itself, in this post I wrote on using models in your firm. I talked about the four conversations model that we use in Win Without Pitching, we've done a podcast on it, I covered in detail in my next book. In that post, I talk about what if a competitor stole the model. I explained that, well, they would be left with an empty shell.

Yes, it would be helpful. It's a helpful way to organize your thinking around seeing the sale for discreet linear conversations. That's the crux of our model, but that in and of itself, that's an organizing metric. It's a way of looking about at things. When you peer into the model and you see our curriculum, you see well-organized complexity. If you go steal a competitor's model is my point, you don't steal their knowledge. You steal the framework and I'll use the term steal loosely. You're boring the framework that they used to organize their knowledge. There are other frameworks.

Don't look at a competitor's model and think, "Oh, this is the model." Back to George Box's quote, the power of a model is in its usefulness, not in its veracity. There is no one right model out there because it's not about whether it's right or wrong. It's about whether it's useful. I'm all for borrowing models, especially models from the various branches of sciences and the other parts of life and business that are not directly related to yours. Importing foreign models into your business is, I think, a brilliant thing to do. Us using the transtheoretical or leaning on the transtheoretical model of change is a really powerful thing to do.

It's been powerful for us. If you look over at your competitor, and they borrowed a certain model from a certain branch of science, you don't go steal that model because that model isn't right. It's just useful to them. Go find your own. Develop your own. This just highlights how important it is for the leaders of a firm to have the time to put their feet up, think, notice those patterns, start to develop the models, and then work them into an interior-driven employee-side training, all that stuff.

If you're tied up every day being the creative director, or the chief software engineer, or the key account manager, you're not going to have time to think about this stuff. It's so incredibly valuable. It's part of creating future value that a principal does. That's just a side comment, but fast-forward a couple of years. Somebody takes this seriously, how many models do you see them having that are actually developed on paper? They're named, there's great illustrations, there's three or four pages to explain it, with examples. How many of those models do you think a firm might have as they take this seriously?

Blair: I think one proprietary model to cover everything is possible, depending on the nature of what the firm does. You should be leaning on multiple models. In Win Without Pitching, we leaned on buying/exchanging as a model. There are these other metaphors that you can view as models. Selling is leadership. Some people say dating is a good model for selling. I get it, but I don't find that particularly useful. I think parenting is actually a better model for selling than dating is.

David: Thank God because my dating experience leaves a bad taste in my mouth. I don't really want to go visit that again. [laughs]

Blair: Yes. Then we borrow a little bit from Robert Cialdini's work on reciprocity as it applies to referrals. I read his work and I thought, "Oh, there's some really simple but profound ideas here that directly apply to the business of soliciting referrals." I won't get into the details here. I think I covered it in the post. I don't know how many models we borrow from at Win Without Pitching. I suspect it's around a dozen. Maybe it's a couple of dozen, maybe because there's a bunch I'm not even thinking of. Is positioning a model developed by Trout and Ries in the early '80s? I don't know.

We have one overarching proprietary model, that's the four conversations. It's the thing that we use to organize everything that we teach, absolutely everything. We went and searched for that model. Now, in our business, we could have a model for selling, a model for pricing, a model for negotiating. We could have models within models, and that would make sense. Maybe if I thought more deeply about it, I would realize that we do. I don't know what the answer to that question is, David. I think you start borrowing models, start using models that exist, and over time you keep an eye on developing a proprietary model.

I think the goal in most firms is to arrive at one overarching proprietary model. I don't think that's possible in all firms, and again, one overarching model might contain other models as well.

David: Let's say they work on this, they develop them, they're really clear to the firm, how public should they be about that? I don't mean just with clients, I mean on their website for example, or in the sales process?

Blair: Yes, it's a great question. I think we touched on this briefly in the episode we did on alternative forms of reassurance where I pointed out that having a model, and then having case studies built around that model that prove that you actually work the way you claim to. They're really powerful tools of reassurance, and these tools of reassurance you'd use late in the buying cycle. They are closing tools. They're not lead generation tools, although they could be used that way, and there's a temptation to use them that way. I feel like they're the ace in your hand, and you don't want to open with the ace. You want to save it.

In a conversation somewhere between the qualifying conversation and the closing conversation, here I am referencing my own model, you want to point out, "All right. If we're going to work together, I just want to walk you through how this is going to work. This is our model for how we understand these things, and therefore, how we work. I'll explain it to you. I want you to be able to see yourself in the model." Your case study should be similar. You would say, "I'm going to show you some case studies differing by the model. We always work this way. Obviously, there's lots of nuances, lots of decisions to be made, lots of different directions, but generally speaking, we follow this model. I want you to see yourself in it."

They're better used late when the client's motivation has gone from excitement about the possibilities to fear of making a mistake. It says to the client, "Okay. They've done this before, they've organized the complexity, they have a model for doing this," et cetera. The likelihood that they will screw up is low.

David: [chuckles] Yes, even though they're a smaller firm than the big one, that would be a safer choice. We want to go with them. Where would somebody start if they are really intrigued by this but have never thought in this category before? All of a sudden, some little things are coming into their consciousness right now and they're realizing, "Oh, I didn't know I had a model, but now I realize this is how I usually start, and this is where I go next, and these are the most important questions I was going to ask." Where would somebody start if they want to take this more seriously?

Blair: You could have somebody follow you around and just codify how you do or how the firm does what it does. Then you're going to end up with a fairly descriptive model of-- it's more like a set of processes of how you do what you do. I think the place to start is to look at your beliefs, your perspective on how this discipline for market should be done; your point of view, your overarching point of view, your ideology, the thing that you think that is different about what you do different from what your competitors think.

You pointed out, David, that it's a lot of fun to work with a firm and to reach into the firm and pull up a model and say, "Hey, this thing that you did in a new business pitch or whatever, or a document did for a client, this is valuable." That thing is almost always tied to an ideology. An ideology might be a little bit strong in some cases, but a point of view on how things should be done.

These two things travel in pairs; a point of view and a model. The place you start is asking yourselves, what do you believe? What do you believe about this discipline for market the other firms who also do discipline for market don't believe? That's where I would start. You might have a different answer. Where do you think people should start?

David: I agree with what you just said. That resonates with me. I think one of the easier ways to pick up those early clues to a model is exactly what you said, having somebody follow you around because I can guarantee you that you are saying similar things and you are relying on as yet an unidentified model. You've said it so many times that it's just normal, just noise to you, but someone on the outside is going to start to see those patterns. It could be a newer employee who's needing to learn on the job, and nobody knows this except you and that employee, but they're just simply listening to your phone conversations and how you run meetings and so on.

If you think about how to apply the models to this field, first of all, I'd say it's a whole lot easier than it would be to other fields because the people listening to us are really good at listening. They're really good at listening and seeing things and they're also really good at pattern recognition. If this podcast was addressed to a different audience, I think it'd be a different conversation. I think this is just like falling off a bench for people. They just start to have somebody else listen and learn, and then I just think it needs to be written down in a really sloppy way and keep testing it until it gets refined.

I don't know where I would be without models. I just find that it's a way to carry conversations forward. If I were a practitioner again and I was for five years, if I was a practitioner in this field, I would have a perspective. I don't yet at this point because it's not that important to me, but I would have a perspective on why people buy, I'd have a perspective on how many times they need to make that purchase to make it an ongoing habit.

I would have a model that said, "These are the things I want to ignore. These are the three or four things that I want to pay attention to." Then if I started looking deeper using that framework and discovered it was bullshit, then I would just ditch it and start with a different model and see if that resonates. That's the beauty of this. You don't just discover a model, and then bam, it's there. You discover a possible model and you keep testing it and building it out. Then you pull chunks of it out here to do a different service offering in your UX work or your software engineering work. Then you put all that together, and all of a sudden, it's not that you're just skilled at what you do.

You have a model that gives your client, this is something you talked about earlier, it gives your client more confidence that when you follow this model, you're going to come up with a good solution. Everybody's a winner here. This isn't one of those things where it's a zero-sum game. Everybody is a winner if you have models. You are, your employees are, your clients are, consumers are really.

Blair: How far into your career either as an agency owner or a consultant do you think you were in years before you recognized how valuable models were?

David: Oh, it never occurred to me when I was running my own firm for five or six years, whatever that was. It was probably four years into my consulting practice where I saw the first model and really built it out. That was not the most exciting one. I think it was the third one, and I ended up spending $300,000 to research it and it's still being refined. That to me is like if the building was burning down, I would grab those models, metaphorically I'd grab those models because that's the heart of what I do.

Blair: I asked the question because I think it's one of those almost seasoned veteran topics where I wish I knew more about the power of models at the beginning of my career even though I was using models right from the beginning of Win Without Pitching, right from the very beginning, but I wish I knew more about the power of them 20 years ago than I did.

David: This is going to be fun for people to listen to this episode and then see where they take it over the next couple of years. Some people are listening and they've got this light bulb that just went off. They see the seeds of a model already there, and they're going to start paying attention a little bit differently, and start to the model out and illustrate it, use the right language, maybe even protect it from an IP standpoint. This has been great, Blair.

Blair: The younger ones, they quit listing five minutes in.

David: We're good.

[laughter]

Thank you, Blair.

Blair: All right. Thanks, David.