The Journey From Generalist to Specialist

David and Blair address a listener request to go over the challenges that principals often go through once they decide to reposition their firm.

Transcript

Blair Enns: David, today's topic was suggested by one of our listeners. Drury Bynum on LinkedIn suggested that we should do an episode on transitioning from generalist to specialist. After you reposition your firm, what aches and pains and torture do you have to go through? I think he wants some encouragement to stay on course. How do we help Dru? Do you want to begin at the point where you're considering moving from generalist to specialist and then travel through the entire arc of the journey from there?

David C. Baker: It does seem to take a long time. It's not like this is a new idea to people. It's more about, do I really want to do it? Then if I do, what's the right choice? It just seems like people chew on this idea. I like the word masticate, they masticate on this idea for 18 months. As I was thinking about putting some thoughts down around this topic, I had a little bit too much fun with it, so you're going to have to slap me around and keep me on track here today. You masticate for 18 months before you do anything.

Blair: All right. The idea you go to a seminar or you listen to a podcast or read some consultant's brilliant blog post about why you should specialize, you get this idea in your head, you even get a sense of maybe where you should go, but you almost never pull the trigger immediately, do you? The idea sits with you for a while. Then what starts to happen or what patterns do you see that caused you to actually take action on this new idea?

David: It's like that phrase you hear people throw around that "Nobody starts exercising until they've had a heart attack", that kind of thing. What are the heart attacks that make you pay more attention to what you've contemplated doing? I guess it's different for everybody, but one of the ones that I see coming up a lot, maybe it's more just recently, I don't know, but I keep hearing people talk about how tired they get of writing long proposals for a new industry or a new service offering or a new demographic. They just feel like they're not getting traction fast enough. They're having to reinvent the wheel too often, or they're just tired of not winning enough proposals.

Of course, this is something that you've spent most of your life helping people think through, but that's the one that comes up a lot. Or, "Oh goodness, we just won this. Now we need to learn about this new industry." They just long to get to a point where they get a head start each time and they're not having to start over. That seems to be what prompts them. That's the heart attack that gets them exercising. It's just the sense that they're wasting so much time getting a fresh start over and over.

Blair: Tired of reinventing the wheel when it comes to a proposal. I've probably heard that dozens of times in the last couple of decades. Then the principal thing is, "Okay, it might be time to take some steps on this positioning thing." The first thing they do is they start to hint to their staff and possibly clients, but it's really more about an internal hinting of this, isn't it?

David: Yes, right. They've been thinking about the industry up until this point and their clients and their prospects, and they realize, "Oh, I've got to do this as a team." They look behind them and say, "Is anybody going to go with me on this charge?" How are people going to feel about this? Then you start throwing the idea out to see who nods their head and says, "Yes, I feel the same thing you are. We should probably talk about this some more." Even if you don't say anything differently, you listen a little bit differently. You listen to what people are enjoying.

Now. Here's the big mistake. If you take it too far, you'll gather everybody in the conference room and you'll say, "All right, everybody pull out a slip of paper. If you could wave a magic wand, what would be the ideal kind of client work you'd like to work on?" Then you just throw open the flood gates and everybody contributes their deepest desires, which have no grounding in what the business needs or their expertise. It's usually about what to explore. That seems to be an early step.

What's my team going to think about this? It seems that notion that question comes up more for firms that are newer in their journey. Later on, it's just kind of a matter of fact, people accept that this is what great firms do, but they look around and say, "Who's going to charge with me if we decide to take this mountain?"

Blair: The reality is when you do reposition your firm, you have to accept that you are going to have a significant amount of staff turnover, often it's over 50%, not necessarily immediately, some people won't go with you. Then you'll find that once you are specialized, you focus and you build this deep expertise, you'll find that some people can't keep up. That is something that you do have to think about right away. I think the point we're talking about here is that you're floating the idea and running it past staff. I think you and I both agree, that's not necessarily a good idea.

I hear the pushback a lot. "I'm afraid of specializing because I'm afraid my staff won't like it. What do I do about that?" I almost never answer. I need to be fair to people in this situation that they find themselves in. I have this visceral reaction, I think, "Well, there are other places they could go work?" Leadership is saying, "We're going in this direction. Follow me." Having people get excited about following you. When somebody expresses to me that they're concerned that their people won't go with them, I think, "You have a bigger problem here. It's not your positioning, it's your ability to lead your own firm." That's a little bit harsh, but I don't know another way to think about it.

David: I don't either. Although I take hope in the fact that principals usually worry about this too much. It doesn't become as big an issue as they think. Somehow they manufacture this in their minds and nobody makes immediate decisions. It's something that you can plan for and build around. It is worth paying attention to. It's definitely a mistake to democratize the decision, but it's just as bad a mistake to make the decision on your own and not bring your staff along with you. They deserve the respect of playing with ideas and poking them.

Just like it took you 18 months to finally come to the decision, you would expect them to require some time to get used to a particular idea. It happens, but it's not often as critical as we think. Then you've decided, "All right, we've got the staff thing. I'm no longer worried about that," or, "I might lose 3 people out of 15, but I can live with that."

Blair: Now it's clients, isn't it?

David: Yes, right. Now it's clients. Like, "Oh, shoot. I'm pitching somebody right now that has nothing to do with the new focus I'm contemplating. What's going to happen?" What do you hear when that comes up?

Blair: More often, it's my gorilla client is not in this new area of focus, whether it's a discipline or a market. There's a concern about what will our clients, and in particular, our biggest client think? I think you and I have walked enough people through this decision that we ask, "How much time do your current clients spend on your website?" Then they say, "Well, I don't know. I'll go ask." They go ask and they come back and say, "Oh, our biggest client says he's never been to our website."

David: They only wink when I asked him that question.

Blair: I think it's important to understand that positioning is, and this is a line I stole from you years ago, positioning isn't about the work that you do, it's about the work that you'll pursue. It's about the path that you're charting forward. If you change the focus on your website and your biggest client called and said, "Hey, it looks to me like you're in an entirely different business." You would just say, "The website reflects the direction we want to grow in. It does not reflect our intent to quit serving you or quit growing in the areas that you would need us to grow in." Just calm your client down a little bit.

I think, generally speaking, your thought of the reaction that you will elicit from your current clients, it's an overstated concern.

David: Yes, I've worked with hundreds of clients. You've worked with hundreds of clients. I have never once seen a situation like this go bad because a current client was nervous about the new direction. In some cases, the firm that's making this change never tells them, and I've never heard it come up. In some cases, they do tell them, and I've never heard that conversation go bad.

I suppose there's always the first time, but it seems like we don't need to worry too much about that. This goes back to something that we've talked about quite a bit here. It's one of the mistakes that we make in positioning. You get to a certain point in this process and you have, let's say a huge blank sheet of paper on the conference table, and listed are all the clients that you've done really good work for. You enjoy the relationships in most cases and you made some good money.

At that juncture, you're trying to draw a circle that includes as many of those people as possible. This is where the rubber meets the road, so to speak. You can't draw the circle bigger just because you're afraid of what somebody will think because it usually doesn't become an issue. You've got to draw the circle tighter.

Specifically, what am I talking about here? For a usual firm with the typical makeup of clients, the circle they would draw around clients that they've done work for in the last, say, three or four years, the circle they're drawing includes about a third to a half of those. They're excluding somewhere between two thirds and a half of the work they've done in the last few years from the new focus. On the surface, that sounds like a terrifying thing to do, but in real life, it is not that terrifying. The ramifications are not that severe.

Blair: Let's speed this part up a little bit because I want to get to the transition point after you've gone public with it. We still have a big list of points you want to hit here. While you're still contemplating or in the early stages of the transition, next on this list is it occurs to you that your case studies might not be relevant, right?

David: Yes. That's because, usually, you think they need to cover current work, and they don't. Case studies can reflect the work you've done three, four years ago, and the client doesn't even have to be a current client. That's not something that I worry about. A bigger issue, which I think we do need to worry about a little bit is, "All right, is it going to be so disruptive when we change our focus to the existing clients that we need to consider a sub-brand?"

That's a fork in the road for sure where you say, "All right, there's too much at stake here, I'm going to leave the current firm like it is. I haven't been doing any marketing anyway, and so that work will keep coming in like it normally does without a whole lot of effort on my part. That will allow us to accept some stuff that isn't in our declared focus. Let's create a sub-brand, the anchor over all the work that fits the new brand, and that's where we'll put all of our focus in terms of looking for work. If something comes along that we need to accept that doesn't fit, we'll let that go to the old generalist firm." That's a big decision to make.

My perspective is a little bit contrary in there. I know some folks who feel like that's a pretty dangerous thing to do. In my experience, is not a dangerous thing to do, and it can also create a really amazing fresh signal to the marketplace that something's new happening here and it invigorates the staff as well. That's a big decision to make as well, do I change the whole thing, or do I create a sub-brand?

Blair: Yes, specialized sub-brand or even an arm's length brand that doesn't necessarily appear to be related. It creates a whole new set of work for you, but I think the understanding or the assumption underlying it is, "You probably weren't doing a whole lot of marketing work for the parent generalist brand anyway. You probably don't have a lot of recognition. You probably don't have a lot of traffic going to the website." I'm with you. I think it's a great way to test a new positioning that you're unsure of. It's a great way to hedge your bet if you're worried about that sub-brands taking a while to take off. Then you decide to build your own website. What happens then?

David: Nothing.

Blair: Yes, exactly.

David: Nothing happens.

Blair: Nothing for 6 to 18 months.

David: Yes. It's the job that keeps coming up in your weekly production meeting and everybody looks at each other is like, "We haven't." It's not that you don't know how to do website, it's you don't know what to say, or it keeps getting pushed to the backburner because there's other more important pain work to do. You finally come to your senses and decide you need to hire somebody on the outside to do it.

Let's not put too much effort into this. We talk about constraints a lot. I wish one constraint is whatever you do cannot take more than two weeks from start to finish to get your website up. I don't care if it's three pages long, as long as the messaging is precise and it says the right things and excludes other things, that's enough for me. I wish people would lower their expectations about how complicated their website needs to be.

Blair: I'm with you, put your new positioning on the website instead of under construction, although you don't see much of that anymore. A new landing page, essentially, until you build out the rest of the back end, put it out there. Ultimately, the way you get your website done, maybe not all of the firms, probably even less than half, but probably the way you should do this is to outsource it, get somebody else to do it for you. Pay money, get treated like a real client, make the project urgent and move quickly.

David: It'll cost you so much less to pay somebody else to do it.

Blair: Then your site goes live and you probably see what I see, which is you get an email in your inbox about, "Our new positioning and website..." I always think this isn't worth sending an email for.

David: No, what you do is you refer to your website when somebody wants to talk to you about working together, or people are looking back up the email chain to see where this is coming from and they learn more about you. It's not something you need to announce, just start living with it. It's not that big a deal. The world is not getting up every morning wondering which companies change their website that day. It's a big deal for you, but it shouldn't be treated as a big deal. It should be just a matter of course.

Blair: We've just talked through the arc of all of the decision making and the dragging things out and the pain you that you go through from thinking maybe it's time to specialize to actually taking action. You get to the point where you finally pay somebody else to do your website. You do the launch. You have a bit of a grand opening for the website. Nobody shows up, then it's crickets. This is inevitable. There's crickets and you start to second guess everything and then your world starts to change when the first prospect who fits your new positioning signs up. What happens from there?

David: Oh, there's this flood of relief because for the first time, now we're going all the way back to 18 months, 24 months when you first started taking this seriously, all of a sudden, all the work seems worth it because the conversation is so different with this prospect. While you're on the phone, you can point them and say, "Hey, are you in front of a browser right now? Go to this." You point them to something. You're not making up a story that fits what they want to hear. You've already said exactly what they want to hear, and it just feels so different.

I get these note all the time from people right after their first real conversation with a prospect after their new website is there. The website itself, we keep talking about that as if that's important. It's not. The website is a symbol of a new direction and a new articulation, a new point of view. It just masks all the other things that are happening, but there's just something beautiful that happens when the message resonates in a way that you've been dreaming of.

Blair: I remember one of my early clients many years ago now. These two guys were in their late 50s. They'd been in business for over 25 years. I got an email from one of them saying, "Today, for the first time in my career, I feel like the expert." They had narrowed their focus from a generalist design firm to, I forget what the specialty was, but to a specialist firm. They started putting the message out there, and he just had a conversation with somebody where the dynamics were completely different. I talked about, you can occupy the expert practitioner position in the relationship or you can occupy the vendor position in the relationship.

Here was a human being who had 25 years of experience of always operating from the vendor position, and he had just had the first conversation where the client immediately handed over the high ground to him and treated him like the expert and allowed him to navigate or lead the conversation and through the arc of the sale.

David: Once that marketplace acceptance happens, that just creates this entirely different motivation. Now, it's not just theoretical or hypothetical, now you've seen the difference it makes in your conversations with prospects and even clients to some extent. Now, you begin to feel differently about crafting a point of view. Before, you're sitting down thinking, "Is anybody reading this? Do I really know what I want to write about? How far can I push this?" Then people start responding positively to the message and you just can't wait to sit down and write some more because you're getting some response in the marketplace that validates what you thought was going to be true anyway.

That's that moment. I remember when I was sitting down to write the last book, I was originally going to write what I hope would be a textbook. It's going to be 120,000 words.

Blair: Good Lord.

David: Gosh, about, I don't know, four or five days into it. I know. That was what I was thinking. About four or five days into it, I was boring myself. It just felt so laborious, and I just stopped. I remember I put my laptop down, and I walked out on the porch, at the cabin, where you've been, and I just said, "All right, this has got to be different. This has got to be a passionate defense of expertise." That's exactly what we're describing here.

When you have the opportunity to know something that your prospective client so desperately wants from you, and they look to you for leadership, that's what this moment is. You used the word the flip, and this is a different kind of a flip here, but it's the same idea. It just changes your perspective. Now, all of a sudden, you want to tell all of your peers about your experience and encourage them to take that step of courage as well?

Blair: You've tasted expertise or, I've heard you say before, you've tasted competence. It's really about tasting this sense of feeling like your own belief that you are the expert. It's not all rainbows and unicorns, is it? There's still a lot of trouble. I think this is what Drury was alluding to because I think he's past that moment of validation, and I haven't talked to him about this, so I don't know for sure. Six months in, so you've had validation. You feel like, "Oh yes, this is going great," some other problems arise. What happens?

David: You're not sure really what you're going to do with this. I think some people too don't stick with the deep implications of it long enough. I've come across many situations where firms clearly have deep expertise. Their website represents that well. What they're writing and talking about and speaking about and being guests on podcasts, all the places where their thought leadership bubbles up, all that stuff is really good, but it's not impacting their bottom line yet. We don't want people to think that this stops with that feeling you get of tasting competence.

Ideally, you keep making yourself a little bit uncomfortable by pushing the envelope some more and remaining hungry and taking risks with clearer points of view and not working longer, but working smarter about paying attention to what will really change your client's perspectives. Then it bleeds over into so many other areas too. All of a sudden, that employee that you were pretty happy with, you realize that they haven't quite embraced this. They're not contributing to the firm's health and you start thinking differently about needing some new people. It really does change everything about your firm.

It would be interesting to see what questioning comes up from people about six months in. It seems to come up at different points for different people. Sometimes it's way before that flips, sometimes it's two years after that flip, when they look around and they say, "Oh, I feel so much more competent now, but it's not showing up in the money." I get confused about how this experience differs for people just honestly.

Blair: Yes. I think in the transition period, and the transition period is probably a couple of years, but in the first six months in particular, you're effectively running two different businesses. You're building one while letting go of the other. There's staffing implications. People who weren't maybe happy initially start to quit and they cite reasons that aren't the real reasons. Some people just clearly aren't going along in the new direction because maybe their power sources shifted or eroded.

Also, you bring bad habits with you. Now you're a specialized expert in this new area and you've got a couple of clients in this new area, but you're still locked into this pricing prison that is a jail sale of your own making, this mental idea of what people are willing to pay. When you do shift over to the specialized firm, you're being treated differently. That's an invitation to raise your prices and even start to charge differently, maybe based on value rather than based on inputs.

You have to let go of those old ways too, and it's really hard to get out of that-- I called it a jail cell. It's really hard to just suddenly shift in your own head the idea that clients will pay more, sometimes a lot more, sometimes multiples of what you've been charging before. There is this transition period. Then let's talk about, at some point you have to crack that nut. You have to get to the point where you realize you get validation from the market that you can charge more. You start to make more money, but you have another realization then too, you realize it's not just about money. What else dawns on you.

David: It's about doing better work. In fact, by better work, I mean work that's more impactful for your clients. There's all these validation points that come to you from your clients. They don't come to you from your advisors, your consultants, who can say the right things to you. It's really hard to believe those things unless the marketplace agrees with it. The marketplace decides they are more interested in working with you than in the past, and that feels fantastic.

Then to follow up on the point you just made, they don't flinch when you decide to charge more than you did before because they're in love with the expertise and they want to earn you with that pricing. Then you start to see, and this of course, doesn't come to your realization, doesn't surface until months later, you realize that you are being more insightful with your clients and discovering the truth about what they're going through and pointing to more efficient solutions to solve their marketing or their digital or whatever their problems are. Then it starts to pay off in a completely different way. It's a whole new level that you never even thought about because when people contemplate going into a more specialized position, usually what motivates that is saving time or making more money. It's not so much the altruistic, "I want to have more impact on my clients." The deep-down truth is that we should be primarily motivated by that. When you think about how or why an attorney or an engineer or a medical professional makes that decision, that is always a part of it for them. They just want to be effective on behalf of the clients they're serving, they're leading.

That should be true of our industry as well, and it's often missing, and that makes me sad. This crops up later, and it's an even deeper, more satisfying realization that all of a sudden we are really making a bigger difference on behalf of our clients. It doesn't mean that we're doing more work for them. That's not how we're being more effective because, in fact, we'll sometimes be driven to do less work for clients because, as we look at the services we're offering them, we step back, and in a moment of honesty, we say, "You know what? we're not really that good at service three and four. We're really good at one, two, and five. We need to start referring our clients to somebody else who's better at that."

This is the moment too where you look across your firm and there's less focus on growing at all costs, and there's more focus on doing great work at all costs, which sometimes means that you stagnate in a healthy way your gross position. It's an interesting phenomenon.

Blair: It is. I think there's an honest reason why creative firms aren't necessarily driven by a greater impact when they make the shift. Part of it is, I think one of the initial drivers for a broadly positioned firm is variety. Creative people crave variety. You fear, you resist narrowing your focus because you fear the boredom of narrowing your focus, but once you narrow your focus, you do indeed start to restrict the types of problems that you work on. You benefit from pattern matching as you like to say. Often for the first time in your career, you taste what it's like to have this deep expertise. Once you taste that, you don't want to go back. You wouldn't trade it again for variety.

I think this one year out is about the point where you realize you start to make money because you get validation about six months on or in the first six months. You start to do client work. You've underpriced it. At about that year mark, you start to get feedback on how effective your work has been. Clients start to share the success stories of the impact that your work has had. Then you have the realization, "I really need to charge more." I think that's about the point when you start to raise your prices.

David: It's like this tighter spiral where you realize you're having more impact that gives you greater encouragement to charge more. Then you have even more impact because they listen to you more carefully and so on. Something else happens a couple years after that, and usually, it seems like it's three to four years. It's something you never would have predicted, and that's that you change your positioning again and inevitably you will tighten it more.

When you first made the choice to land on this particular positioning, one of your chief worries was whether or not there would be enough opportunity for you. You did it and there was plenty of opportunity as you discovered to your surprise. In fact, three years after that, you realize there's even more room to tighten this up. You and I have been in contact with one of the clients that we've shared, we've worked with for many years, and it's interesting to see that he went through three phases of tightening it up at three different junctures and it's so interesting to see how that happens. The deeper you go, the more opportunity there is.

This is something that again surprises you. There's so many things along this journey that surprises you.

Blair: Then five years on, what happens? You're five years into your new positioning. Is it all rainbows and unicorns?

David: You think if you were going to be honest about a prediction, you would say, "All right. How long can I possibly do this? Let's say I'm going to write an article every two weeks or every month, when am I going to run out of things to say?" You take this wild guess and say, "All right. I think I could probably make this work for three years." Then you get to five years, a little bit to your surprise, and you look at the list of things that you'd like to explore writing an article about or something like that and you realize, "You know what? The longer I do this, the more there is to talk about. I will never run out of interesting things to write about, to develop a point of view and to stretch my reader's thinking." Then you say, "Why didn't I do this earlier again? Remind me. Why didn't I do this earlier?" Then you go to conferences and you're that annoying person that wants to give everybody advice about how they should do it right away and how easy it is because you've forgotten how hard it was.

Blair: Let me make a confession about my own business. We're recording this in February of 2020. I launched Win Without Pitching in April of 2002, so 18 years ago. I thought, I'm going to do this new business development consultant thing for a couple of years, and I thought it'll only be a couple of years because it's going to take me two years to learn everything I need to know about the space. Then after that-

David: No arrogance there, right?

Blair: Well, it's arrogance. Just stupidity I think, because I thought after that, I'll be bored. I'll go do something else. I was into it for about six months and it hit me that I will not live long enough to learn everything that I need to learn about what I do. I've said this on other podcasts before. As a creative person, you shape this business that allows you to be a generalist because it appeals to your sense of variety. You get excited about solving the problem that you haven't previously solved. Then you've got these advisers like David and Blair standing over your shoulders and saying, "You've got to pick a door and walk through it and never look back." You imagine on the other side of that door is like your death from boredom.

Then you open the door and you get in there and there's lots of metaphors and more doors, or like it's like Narnia. There's a universe on the other side of that door and you never know it. You never fully understand it until you actually walk through the door. You put your flag in the ground. You say, "We're going to focus on this. Come on, everybody, follow me." Even some of your people are going to look at it, go, "I'm not going through that door. I'm going to die of boredom on the other side of that door."

David: It's a closet. It's not a room. It's not Narnia. It's a closet.

Blair: Yes. As we all know from reading Narnia, you go into the closet and it opens up to an entirely different world. All right, this has been great. Let's just summarize some key points about the transition. I'm thinking about Drury's question in particular and not knowing the motivators behind it, but t thinking. Just accept that it's a lot of work in the early going. There's all of the torture about taking the risk about walking away from all of this stuff. It's a lot of work. You have to accept that there are staffing implications. What else do we want to hit on?

David: That it's not quite as bad as you think it might be in terms of how your current clients will react to this. It's okay to take some risks there that you probably want to save a lot of money by hiring somebody to do that.

Blair: Yes. To do the website in particular.

David: Yes, right. To help you in any way you can. There's firms that do this sort of work as well, that you may have to rewrite some case studies that you might need to think about whether you should create a sub-brand. It's a lot of fun. Think about it as solving a creative problem like you might solve one for a client and just view it as this great opportunity to stretch yourself and think about some new things.

Blair: Creative people want to solve the problem. I always say designers want to solve the problem and save the world. You get enamored with solving your client's problems, but this is the problem of your fundamental business model. As a creative person, you should get to the point where you realize there's no problem that brings to you greater amounts of fun and satisfaction than solving this problem. This is the ultimate problem that is worth solving, that will be the most rewarding to you professionally.

David: Yes, absolutely.

Blair: All right. Thanks for this, David.

David: Thank you, Blair.