Insight for Independent Consultants
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The next cohort of The Expertise Incubator begins Jan 13, 2020. If you’re curious, let me know.
I was clearly making him uncomfortable.
This was during a strategy call yesterday with someone who’d bought the top tier of The Positioning Manual, which includes a strategy call.
We were talking about this idea, which I think I’ve shown you before:
(Those triangles are hand-drawn, so they’re not the same area. But pretend like they are.)
My client is operating a business that looks like the one on the left. He wants more revenue.
He specifically mentioned wanting more revenue per client, so I explored with him the idea of the business on the right. He heard me out, and had multiple objections for why the lower volume/higher price model wouldn’t work for him.
He’s not sure there are clients out there who will pay that much. (Vilfredo Pareto disagrees, but go on…)
He’s never talked to prospects who would value a premium experience at a premium price. (I’ve never talked to a convicted murderer, but that doesn’t mean they don’t exist.)
I made my case, heard his objections, and then we moved on to the multiple ways he can optimize the kind of business he is comfortable with. The one on the left, which features more clients at a relatively lower price point.
That’s an imminently optimizable business. You can improve positioning, lead flow, increase internal efficiencies, engineer pricing to improve profitability, and numerous other optimizations.
I’m not convinced either model is inherently better.
I am convinced that if one model constantly makes you uncomfortable because it squeezes you against immovable market dynamics or hard-to-change inner mental or emotional dynamics, then it’s not a good model for you.
We can make certain business decisions far more quickly than we can cultivate the emotional resources necessary to implement those decisions.
That doesn’t mean we should avoid those decisions. But at the same time, we shouldn’t ignore the role our emotions play in turning those decisions into results.
The next cohort of The Expertise Incubator begins Jan 13, 2020. If you’re curious, let me know.
Clicks are mechanical activities; pressing REPLY to ask a question is a human act, one of vulnerability and connection.
Both can lead to sales, but I believe replies to emails I send my list indicate something important: relevance.
Y’all know I’ve given myself the rest of 2019 to get this free/paid list experiment working well, or it’s over. I’m trying a new variation.
During a few hours of pouting — feeling bad about something over the weekend — I realized that how often I email the free segment of this email list is… totally up to me. (If you need a few minutes to recover from that earthshaking revelation, I understand. 😉
I can change how frequently I email the free segment of this list any time I want. It’s merely habit and an expectation I set a few months ago — but can change any time I like — that determines the email frequency. So let’s change the frequency!
I spent a few hours yesterday writing up two emails for the free segment of this list, using an Axios-like format I thought up in the shower on Sunday morning. They will go out Tue and Fri of this week, and you’ll see this new format then.
I’m still answering questions I’ve received via my post opt-in survey, but the new format is aiming for 300 words or less of highly digestible content with clear next steps towards action.
I don’t expect it to move any needles super fast. Email marketing is a fluid medium, which I love, but I’d still expect it to take more than a week for an email list to respond to a changed approach.
Here’s my experiment “transparency report”, showing the easily measured aspect of last week’s free email performance. I’ll check in with y’all on this weekly:
There was one reply to that email, from someone asking about what wiki software I use for TEI. That was a nice interaction. Not the “OH MY GOD I HAVE TO HIRE YOU NOW TAKE MY MONEY!!!” reply that part of me wants, but still… nice.
So this brand vs. direct response marketing thread has ended up in a potentially ignomious place. There are lessons though, perhaps for you too!
Exactly when is already obscured by the mists of time, but many months ago Liston and I started talking about the difference between brand and direct response marketing on our podcast Offline.
We did that for months. I still joke with him about how long and protracted that discussion was.
And then I started writing about it on this list. That also went on for a long time.
And then at the writing retreat in early October, I spent the airplane trip there and the first two days of the retreat rewriting that sequence of emails into about ~10k words of what might become an e-book on the topic.
Or… it might not. The draft of the book is in an awkward place.
I’ve put a lot of effort into it, and the best thing might be to never publish it. What’s up with this?
It could just be imposter syndrome. I built my carer as an advisor talking about positioning and specialization, and with this brand/DR thing, I’m tackling bigger, more Seth-Godin-ey subjects. Maybe I just feel like an imposter in this new area.
It is true that I never got any audience feedback on this. No one has used my post opt-in survey to ask “Please descend at your earliest pleasure from your positioning/specialization ivory tower to talk about the difference between brand and direct response marketing! The people are hungry for your knowledge on this!!” So there’s uncertain demand for this line of thinking.
It raises the question: where is the balance between giving an audience what they already know they want vs. what they might want down the road? Or what they need now but don’t know they need?
Henry Ford’s been immortalized in many circles for saying “If I had asked people what they wanted, they would have said faster horses.” So when I justify writing about brand vs. direct response marketing using the Henry Ford doctrine, am I really innovating, or am I just giving my ego carte blanche to waste a bunch of time?
It also raises this question:What’s the difference between a headline and a supporting bullet point?
I don’t mean what’s the literal difference between those two. I mean: what kind of material is headline-worthy, and what just becomes context or a supporting point or something less prominent in my message to my audience?
If this brand vs. direct response thing is not headline-worthy, it might not be worthy of being published as a book that people pay for.
Just because something’s a bullet point doesn’t mean it’s unimportant, but I might be used to thinking of everything as headline material even when it’s not.
So again, who is the heck is this for? Maybe just me.
But here’s a link to it anyway 🙂 –> https://htmlpreview.github.io/?https://raw.githubusercontent.com/philipmorg/Marketing-For-Self-Made-Experts/master/chapters/temp-Marketing-for-self-made-experts.html
If you’ve got feedback on the draft, I’d love to hear it. Varnish not needed.
The next cohort of The Expertise Incubator begins Jan 13, 2020. If you’re curious, let me know.
There’s been some local drama in the neighboring town of Questa, NM, about 20 minutes from where I sit typing out these letters to you.
This has been brewing in the local news over the previous weeks.
A Questa school board member was sent a letter by the state Attorney General, advising him to resign his seat. Reason: he was previously convicted of conspiracy to commit arson.
Everybody makes mistakes, right?
He defiantly showed up at the next school board meeting and took his usual seat, looking a bit like “come at me, bro” in the news photo. He’s not resigning.
There’s more drama. This guy — Ellis Garcia if you want to look him up — has failed kidneys, gets dialysis 3x/week, and is waiting for a kidney transplant. He says he wants to live life to its fullest in what time he has left which, I guess, includes participating in school board meetings?!
Someone contributed to his medical expenses, but maybe also asked for him to vote a certain way on the issue of closing a tiny elementary school in the district, and so now there are allegations of bribery mixed up in this too.
Oh, and also, Ellis was charged with a sex crime a while back but the case was dismissed because the state forgot to file some paperwork at the right time.
Now the state has stepped in:
The Questa School District is now under the control of the New Mexico Public Education Department.
The department suspended the board over what they call instability in leadership, failing to comply with the Disabilities Education Act and open meetings violations. According to the letter, the district has had four interim superintendents and been under five corrective action plans in less than two and a half years.
Boy, do I remember “corrective action plans” from a year I spent working for a subcontractor to the U.S. Job Corps, a job that taught me more than any other about human nature when contextualized within corporate dysfunction.
Yesterday I was speaking with my friend Marcus Blankenship about a range of things, including change and how we make progress towards a goal.
I think we’ve all seen some (better drawn) version of the idea below:
(I think Carl Richards, for one, has published a nicer-looking rendition.)
We all want the black path. I think the blue path is often our best case scenario, and the green path the more common and likely scenario.
Change is messy. This has implications for our work with clients:
- We can monetize both 1) being the cause of change and 2) supporting the subsequent change.
- We can monetize a client who understands how likely the green path is and wants our help upgrading to the blue path.
- We should be careful about promising the black path, unless the black path represents something incredibly simple like changing a font on a website.
I often model the decision to specialize as a negotiation between three parties. This holds true within individuals, and within organizations.
You’ve got the visionary, who sees and believes in a better future as a specialized expert.
You’ve got the ego, who understands and often fights to preserve the status quo, or at least some form of safety.
And you’ve got the operations manager, who becomes very resourceful and creative when listening to the visionary, very unimaginative and procedural when listening to the ego, and very overwhelmed and unable to act when listening to both.
With this many hands tugging on the planchette, is there any wonder it draws out that squiggly green path?
This model seems applicable to any significant change, not just specialization. School board governance, marketing, and IT projects too!
The next cohort of The Expertise Incubator begins Jan 13, 2020. If you’re curious, let me know.
I’m surprised, but my email experimentation is having an effect.
The effect is small, but positive.
I’m surprised because I’d gotten kind of negative in my thinking about the free segment of my email list. It just felt so dead and unresponsive.
I’ve been experimenting with this Axios-inspired format. Most of the time I really like it, and then other times I feel like I’m just randomly sprinkling bolded words and sentences throughout the email willy nilly.
But when it works — which almost always requires that the email be less than 400 words — it works really nicely to turn the email into a more scannable, dynamic piece. Thus far, this format works most harmoniously with the Q&A emails I’ve been writing, like this one.
I’ve been emailing the free segment of my list more frequently. I emailed twice yesterday and a TEI member joked that I must have moved to from daily to hourly emailing. I was actually channeling Bob Lefsetz, and just emailing whenever I felt like it. I depend heavily on the routine of waking, feeding the cats, making coffee, and then writing and publishing my daily email, so I can’t imagine an “email whenever I feel like it” approach working for me, but it does work for others.
I rarely look at this chart, but you can see the effect of increased frequency:
Increasing frequency initially repels a certain number of subscribers and then stabilizes after you re-set expectations, which you don’t need to do actively by announcing anything to the list. You just increase frequency, lose subscribers, then things stabilize. No announcement needed.
My untested theory is that the subscribers you lose when you increase frequency are ones for whom your topic is not important or your PoV is not compelling. They are unlikely to be potential clients anyway.
There are also “email frequency fundamentalists” who just can’t tolerate daily publication, even if the topic/PoV is relevant to them. You can’t please everybody, can you? 🙂
I have friends who have set up a “why did you unsubscribe” questionnaire for unsubscribers. To me this has always signaled mild desperation and felt like a way of crowdsourcing your list philosophy to its least valuable members, but it would be a test of my theory. I’ll ask my friends and report back.
All that said, I need to be doing more to expose my expertise and PoV to more people. I would expect the negative list growth to reverse if I did that.
I’ve been consistently using the tophat CTA you see at the top of this email, along with a “Go deeper” and “Take action” heading at the bottom of the emails to the free list segment.
These all have promotional links.
Here are some recent, thus-far-typical results:
Clicks are some of the more accurate numbers that email marketing software can show you, though I’d prefer absolute numbers rather than percentages because I think of my email list as a collection of individuals I’m trying to serve, not as an abstract percentage I’m trying to optimize.
Most meaningfully, a lead for TEI has shown up. They responded to an email to the free segment of my list, and referenced the idea of becoming a visible expert.
It’s impossible to attribute this to a single email, but it’s encouraging.
Another TEI lead has also shown up via a different channel, which has got me thinking there’s a good chance of assembling a full Jan2020 cohort of TEI.
When a full cohort of your premium offering is 5 people, each person represents 20% of the whole. That makes 2 new leads in a short period of time into a significant event. And that’s encouraging when you see one of those leads coming from a segment of your email list you’d gotten bummed out about.
Email marketing is strange. The popular advice seems to be based on a different context than ours: large lists where each potential response contributes relatively little to your business goal. In that context, using shitty behavior to extract a few more percentage points of a response makes sense, I guess.
I’m almost ready to put a PoV stake in the ground:
Most marketing advice is about how to sell stuff to consumers who are spending to relieve boredom. That advice actively hurts us.
The above is phrased in an intentionally provocative, probably over-broad way.
But I do think it expresses a truth.
Happy Tuesday, y’all!
I love this little moment from Ocean’s Eleven:
It reminds me of the relationship between the popular and the important. It reminds me of focus.
• • •
A prospective client coughed up a really interesting idea on a call yesterday.
In a services firm of sufficient size, the lack of a strong market position is felt differently throughout the ranks.
The ownership and management feels it in a diffuse sort of way. In a way, they may not feel it at all. Things might be OK from their perspective.
But the sales team feels it in a more acute, tangible way. They viscerally feel the lack of power in the sale; the shaky power and value dynamics they’re dealing with.
The idea: might it be possible to sell this change upward into the organization, starting with the sales team?
My initial response: probably not. The drive to make a market position change has to come from ownership/management or it just won’t work.
My response after sleeping on it: probably not. I want it to work, but it doesn’t seem likely.
I want it to work because pain can create buying urgency for my services, especially when it’s felt by the right people. In larger organizations, those “right people” are often insulated from many forms of business pain.
In “Specializing Without Failure“, I provide a checklist of 9 things you should understand about a market before focusing on that market.
But as I coach ever more people through market research, I keep finding ways to simplify that list of 9 items into fewer:
- Who within the org buys?
- What do they buy?
- How long does it take them to buy?
- Why do they buy?
That’s the minimum viable corpus of insight we need into a market, and — if you’re entering a new market — the most convenient place to quickly get this insight is your future competitors.
• • •
On one hand, the above list really simplifies things: only try to sell services that have a known type of buyer with a history of buying similar services.
On the other hand: frustrating! There are so many places to improve things, so many places where parts of an org experience pain. Those all seem like sales opportunities.
But if the pain is divorced from the budget, the sale might not be easy. It might not be possible at all.
I really love the 2-step career master plan outlined by Tom Waits in his song, Goin’ Out West. Here’s a partial excerpt from a song that’s hard to pull a partial excerpt from because the whole thing is so amazing:
“They got some money out there
They’re givin’ it away
I’m gonna do what I want
And I’m gonna get paid
I’ll do what I want
And I’m gonna get paid
Little brown sausages
Lying in the sand
I ain’t no extra baby
I’m a leading man
Well, my parole officer
Will be proud of me
With my Olds 88
And the devil on a leash
My Olds 88
And the devil on a leash
I know karate, voodoo too
I’m gonna make myself available to you
I don’t need no make up
I got real scars
I got hair on my chest
I look goooood without a shirt”
So here’s Tom’s 2-step career plan:
Do what I want
This has pretty much been my career plan as well, and I think there’s some significance to what Tom Waits is suggesting we do and the order in which he’s suggesting it.
Doing what we want
It’s no accident the doing comes before the getting paid.
In the domains of physical/software products, higher education, and expertise-driven business — to name just three — the idea that you would invest before you earn is completely obvious. People do pre-order stuff that doesn’t exist yet (ex: Kickstarter), but the usual route to gettin’ paid is to have something of value to get paid for.
When I think about how I got into self-employment, it was through a set of circumstances in which I didn’t think I could afford to invest before gettin’ paid. Back then, I needed to have something I could sell now in order to get paid very very soon.
This led to thinking that was oriented around very short time horizons. Weeks and months, not years or decades. Yet, when you’re thinking in terms of building up career assets and valuable expertise, you must think in terms of years/decades in order to really thrive. 1 At the same time, your mortgage lender needs you to be thinking in whatever terms will keep the mortgage payments to them happening on time.
This early career short-time-horizon-thinking “wore a groove” into my brain, one that I’m working to consistently get out of. Having a long-term vision oriented around rare, valuable expertise is, I believe, the best way to build a very profitable and durable services business.
It’s also no accident that what you’re doin’ before you get paid is something you want.
When specializing, there are three basic approaches to making the decision about how exactly to specialize:
Find a head start — an advantage of some sort that you have — and focus ruthlessly on that head start.
Find something you love — a group of businesses or people or problem you love solving — and serve that group of people in an extravagantly valuable way.
Pursue an entrepreneurial thesis — an idea you have about creating value by responding to what’s changed or what’s stayed the same in a market.
If you can specialize in a way that combines #1 and #2 above, you will be unstoppable. If you pursue approach #3, then it really really helps if you are a disciplined mercenary or you can combine approaches #3 and #2.
These combinations are helpful because the love sustains your effort over the long term, and without the beating heart of love for what you’re doing, your business is less able to ride out the difficulties that lie between where you are now and your vision for future expertise. 2
To summarize: do what you want. Invest first. Pick something you care about to invest in.
For Tom Waits’ 2-step career plan to work, you have to be successful on both steps. This brings up the gettin’ paid part.
This is where ideals get constrained by economic realities. Not every thing you or I might want to do is gonna’ get us paid. Or at least not in money.
Want to become an expert in medieval folk poetry? Go for it! You will likely get paid in emotional and intellectual terms far more than you’ll get paid dollars or your local currency. Maybe this will constrain your decision about where to invest in expertise. Or maybe it won’t. Just don’t be confused about the actual economic value of your expertise in medieval folk poetry. For the most part, you don’t get to decide what the economic value is. Others do, and that can feel unfair. If money is somewhat or very important to you, get over that feeling of unfairness. It won’t help.
While there are constraints, it is also possible to invent an entrepreneurial job for yourself and find ways to get paid. This is not easy at all. But it is possible, and it’s fascinating to see folks pull this off.
I like the Corey Quinn example: www.lastweekinaws.com/services/
I’ve interviewed Corey and I can assure you, his journey to where he is today didn’t start with a job ad on Monster.com that perfectly set him up to become an AWS cost optimization consultant. He totally invented his job for himself, did the work necessary to create awareness and desire for his services, and continues to learn from the market and refine what he does in response.
If you want to get paid without figuring much at all out or inventing anything new, open a laundry dry cleaning business. There’s a really good roadmap for that kind of business, and you can succeed without the risk of having to figure much at all out.
But if you’re up for a different sort of challenge, you might enjoy exploring the interplay between doin’ what you want and gettin’ paid. That’s really fertile entrepreneurial ground.
In this fertile ground, the market has a voice, and you also have the power to alter the vocabulary3 the market uses to voice its desires and needs. If you’re not up for the work and patience required to alter the market’s vocabulary, you can at least listen intently to what it’s saying and alter what you offer in order to maximize the value you create for the market.
To summarize: every market has a spectrum running from “we already understand this, we already value this, and we regularly need this, so we represent a river of money you can drop your fishin’ line into” to “we don’t understand this at all, but if we did a few of us might occasionally pay a lot for this”. We might think of the first as the easiest place to set up business. And we’d be right, but things that are well-understood, commonly valued, and regularly bought are also things that are prime for commoditization. This is one of the paradoxes of value creation. The easiest place to get started is also the easiest place to get ended by commoditization.
So as we’re doin’ what we want and seeking to get paid, we might need to look a little further down the road, beyond that’s easy to get paid for today.
That’s our entrepreneurial challenge, isnt’ it?
This idea of loving what you do can easily slide down an unhealthy, slippery slope into workaholism or having an unbalanced life. That’s not what I’m advocating for, though I might advocate for having work that is so compelling and interesting to you that you constantly dance on the thin line between full engagement with your work and something beyond that point. Or seen differently, your work often feels like enjoyable play, and so you treat it like play. ↩
I’m using this idea of the voice or vocabulary of the market as an analogy. It’s an apt one, though, because of how the way we speak effects the way we think. new words enter the vocabulary and create new possibilities, new needs, and new desires. ↩
I can barely contain my excitement about Dan Oshinsky’s new website, which is here: inboxcollective.com Some context first, before I explain what I find so exciting about Dan’s site.
Context: Dan Oshinsky is leaving a job as Director of Newsletters at The New Yorker, and setting himself up as a consultant helping clients with… newsletters. 🙂 I find several things interesting about this:
Head start thinking
Out of the box website thinking
Head start thinking
There’s a time and a place for re-inventing ourselves and our careers. And then there’s a time and a place for identifying what your head start is (in terms of expertise, access, credibility, or all three) and building on that head start. This is doubling down on your advantage.
A job at a famous publication where you focus on a specific, important part of the publication’s operation (newsletters) is kind of a big head start. It gives you expertise, access, and credibility that could be quite valuable to a consultant. Dan O. would be leaving a big asset on the table if he focused on some wildly different form of expertise in his new consultancy. The access he has from his job might be portable, but the expertise and — to an extent — credibility is super-focused on newsletters for a big media company is not so portable.
Dan O. leveraged his job at the New Yorker by building a platform for himself while at the job. It’s impressive how quickly he pulled this off.
In January, 2019, Dan launched a “side project”, which was an email list called Not a Newsletter. Here’s the announcement he posted in Feb 2019. I don’t know anything about Dan’s subscriber numbers, but I do assume he’s doing fine in that department.
I do know that everything about how Dan ran Not a Newsletter was unique and thoughtful:
His email marketing software didn’t distribute the email content. Instead, his list was a means to notify subscribers that there was a new Google Doc where they could read the newsletter content, and link them to that Gdoc.
The newsletter published on a monthly schedule. The content was 100% worth the wait, every time.
The infrastructure around the email list was very minimal. The landing page where you sign up for the list has always been quite minimal: signup.notanewsletter.com/ The aforementioned delivery method is beautifully simple: a monthly broadcast notifying your list that there’s a new issue of the newsletter living in a Google Doc. This moves so many tedious little issues off of your “need to care about” list and onto a cloud provider’s “need to care about” list. Dan didn’t need any authority to come from the infrastructure around his email list (no testimonials on the opt-in page, for example); that authority came from his position at the New Yorker, which he leveraged very well. It makes me think of how Ben Orenstein similarly leveraged his job at Thoughtbot.
Out of the box website thinking
It’s probably not that surprising that Dan O’s website for his new consulting firm is actually:
A domain name (inboxcollective.com)
A redirect on that domain name that sends visitors to…
A Google Docs slide deck.
I find this soooooo refreshing!
It’s lean. No CMS to deal with. No website template to deal with. No elaborate information design to deal with. No obligation to build out pages on the site (ex: an about page1) just because they’re expected.
It’s gutsy, but gutsy in a way that matches the cache of Dan O’s authority and brand. In other words, it’s gutsy, but appropriately so for someone leaving a position at a famous company and setting up a consultancy where (I imagine) part of the value proposition will be challenging clients to think differently about email.
It’s on-brand. Using a Gdocs slide deck creates a sort of “family resemblance” with Dan’s Not a Newsletter publication, and reassures Dan’s prospective clients that they can expect more out-of-the-box thinking from Dan if they hire him to consult for them.
Should we all ditch our websites and redirect our domain names to a Gdocs slide deck? No.
But we all should:
Be aware of our head starts
Be thinking about how to leverage those head start(s)
Allocate our marketing resources in creative, efficient ways, ignoring convention where it serves us or sends the right signal.
Yes, sometimes an about page is hugely valuable. But other times it’s not, but how comfortable are you with shipping a website without an about page, even if it’s not pulling its weight?
If you’re not comfortable doing this, it’s because of the weight of the cultural expectations around websites. ↩
It’s becoming harder to predict what’s important — especially over the long term — and machine learning is underperforming the hype around its ability to help us in this department. So how then do we make good decisions and how do we help our clients make good decisions?
Can events be accurately described as historic at the time they are happening? Claims of this sort are in effect predictions about the evaluations of future historians; that is, that they will regard the events in question as significant. Here we provide empirical evidence in support of earlier philosophical arguments that such claims are likely to be spurious and that, conversely, many events that will one day be viewed as historic attract little attention at the time. We introduce a conceptual and methodological framework for applying machine learning prediction models to large corpora of digitized historical archives. We find that although such models can correctly identify some historically important documents, they tend to overpredict historical significance while also failing to identify many documents that will later be deemed important, where both types of error increase monotonically with the number of documents under consideration. On balance, we conclude that historical significance is extremely difficult to predict, consistent with other recent work on intrinsic limits to predictability in complex social systems However, the results also indicate the feasibility of developing ‘artificial archivists’ to identify potentially historic documents in very large digital corpora.
The current state of the art in predicting what will turn out to be important — even with the assistance of the heavily hyped category of tools know as machine learning — is pretty unimpressive. I wonder what this implies for the question of how we help clients (and ourselves) make better decisions about where to invest, how exactly to invest, and how to think about this question from a strategic viewpoint.
First, it seems we’ve always known that predicting the future is difficult. So research proving that it’s… difficult to predict the future… isn’t all that surprising, except perhaps for the finding that current machine learning (ML) models don’t help all that much.
Might this cultural understanding of the difficulty of predicting future events explain the usage of benchmarking?
A measurement of the quality of an organization’s policies, products, programs, strategies, etc., and their comparison with standard measurements, or similar measurements of its peers. The objectives of benchmarking are (1) to determine what and where improvements are called for, (2) to analyze how other organizations achieve their high performance levels, and (3) to use this information to improve performance.
Benchmarking is about figuring out what peers or competitors are doing, abstracting that into a set of measurements, and then trying to change what you/your client does to achieve similar or better results.
You’ve probably heard that saying: “you are the average of the 5 people you spend the most time with”. This is us as individuals “benchmarking” the group of the 5 people we spend the most time with and using that information to inform our own decisions, which results in us becoming more and more like that group of people.
Of course, you can only take this idea so far, but it does contain at least a kernel of truth. And it points to the limitation of benchmarking, which is more of a “let’s make things suck less” than a “let’s figure out how to be extraordinary” kind of tool. Benchmarking is focused on the near past rather than on near-future or far-future innovation. What other tools exist for improving business decision making? What tools might help us navigate at least the near future?
This will be an incomplete list. Highly incomplete, I imagine. But over time, it’ll get less incomplete. 🙂 Even in its incomplete state, it’s useful.
The first set of decision making tools you might reach for are all designed to reduce uncertainty. “Reduce uncertainty” is what seems like a very carefully-worded phrase from Douglas Hubbard.
If it was phrased as “increase certainty”, it would capture the wrong idea (complete certainty is impossible). If it was phrased as “gather more data”, it would focus on the wrong part of the process (the inputs, rather than the outcomes). So “reduce uncertainty” is exactly what we are doing when we:
Use focused, scrappy research methods to measure or understand things that could effect the decision.
Incorporate more context into our decisions. Context can be increased breadth (current context) and increased historical context.
Replace false certainty (generally stemming from cognitive biases) with evidence-based probabilistic understanding.
I can’t help but notice that — seen through the lens of human emotion — these uncertainty-reducing tools require us to be humble enough to let external facts at least co-exist with our ego and hopefully override our ego in the decision making process.
The next category of decision-making tools focus on reducing the scope of the decision. Instead of deciding everything about a large scope of variables (waterfall-style decision making), you focus on deciding just a few things about a small scope of variables. This is the familiar and (over?) hyped Lean/Agile approach.
I see Lean/Agile as a way of increasing flexibility, and moving decision-making from a purely abstract context to a more experiential/grounded context. It’s a way of acknowledging the imperfection of any decision and committing to continuous improvement, short iterations, and the flexibility that comes with humility.
I don’t think Agile/Lean are a complete decision making toolkit. In fact, they’re almost more of a cultural context within which other decision making tools can be deployed.
If you could completely control gravity in the area around you for up to 10 seconds at a time, you would pretty much never worry about falling again. In fact, you might look forward to falling, just so you could alter the rules of gravity in the second or two before you land, turning a vicious fall into a soft landing. You would be changing the context in which you fall, and making it so whatever caused you to fall has few or no negative consequences.
Big companies do this as often as they can. They attempt to control more variables in order to reduce risk or simply make it so that any decision is a good one. An alternate way to see this is externalizing the effects of a bad decision by creating a monopoly so customers bear the cost of the company’s mediocrity in decision making and execution.
We’d all be using Google Plus as our primary social network (at least for a few years while the competitive set re-organizes) if Google had been able to acquire and shut down Twitter and Facebook. G+ probably would have sucked just as bad as it ever did, but we’d have no real alternatives, so Google would have externalized the consequences of their bad social network design decisions onto customers.
Among smaller businesses, we “suspend physics” around our decisions in several ways:
Specializing, so we make the pond smaller rather than making the fish bigger. This gives us more latitude to make the occasional bad decision with fewer negative consequences. Even if they have bad breath or hired a rude front office person, you’ll go to see the specialist physician you need help from if they’re the only one in town.
Humanizing, so our relationships with our clients are multi-dimensional and therefore less fragile. Human relationships that have a money/business component as just one among several components are able to absorb more imperfect decisions than relationships that only have a money/business component.
Applied portfolio theory
Applying the idea of modern portfolio theory to decision making is another useful tool. Here, we model and implement decisions as relatively small bets within a larger portfolio that has an intentional design. We shift the focus to the portfolio’s performance, and manage the items within that portfolio as a cohesive portfolio rather than an un-connected set of projects or decisions. We incorporate an understanding of risk and our risk profile into our decision making, which means that we forsake benchmarks and best practices because those generally don’t incorporate the nuance of varying risk profiles into the decision making.
I like to apply portfolio thinking in several areas:
My choice of clients: I’ll choose to work with some clients based on the 10-years-from-now potential that I see in them, even if the compensation-right-now is not super high for me. I’m investing more in these clients than I might in others, but the decision to do so is made within the context of a larger portfolio of client investments I’m making.
Where to spend time: I see the financial performance of my business as a lagging indicator of the value of the expertise I’ve invested in creating over the preceding years. So the decision about where I spend time inquiring, learning, researching, and synthesizing what I learn now is the biggest influence2 on how much money I’ll make 3, 5, 10 or more years from now. I can treat this as a waterfall style decision, in which case I’m making one big bet on a large scope of variables, or… I can apply Lean/Agile thinking and portfolio thinking and treat this as a group of smaller bets on a smaller scope of variables.
I hope going through this list of decision making tools reassures you that predicting the future is not the only way to make better decisions. In fact, attempting to predict the future is actually a pretty shitty way to make decisions.
It’s much better to acknowledge our very limited ability to predict, and instead use the other decision making tools (reduce uncertainty, increase flexibility, suspend physics, and applied portfolio theory) to make better decisions within the context of uncertainty about the future.
I find Marginal Revolution to be one of a few really excellent filters/curators that I follow as part of exploring the “horizontal stroke” in my T-shaped expertise, and that’s why you see me frequently referencing Tyler and Alex’ work there. The authors probably lean more libertarian than I do, and so it’s really refreshing to get a regular, thoughtful deposit of that perspective. ↩
It’s not, of course, the only influence. But I do see it as the biggest one. ↩
List member Brad sent me the below, and it’s excellent and thought-provoking. It’s a page from David Maister’s book, “Managing the Professional Services Firm”.1
(Here’s the full rez PDF: pmc-dropshare.s3-us-west-1.amazonaws.com/Scan-Jun-29-2019-at-11.45-AM.pdf)
The framing of Maister’s preferred lead generation approaches is dated, because the book is not super new. I thought about “translating” his list into modern terms, but you can do that yourself pretty easily.
What’s perhaps even more interesting is to think about the underlying patterns that might be behind Maister’s groupings. Said differently: why are the 4 things that are at the top of his list… at the top of his list?
There are several lenses through which we can look at Maister’s list, and at lead generation more broadly. Briefly, they are:
Curation and access
Demonstrated expertise, and the relevance of that expertise
Looking at lead generation through these lenses frees us from being so time-bound. We can understand why Maister ranks lead gen techniques the way he does, we can understand which of the current crop of lead generation approaches2 are desirable, and we can vet any future lead gen approach that might come onto the scene riding on a golden, bejeweled chariot of hype.
You’ll notice the items at the top of Maister’s list lean towards the smaller end of the scale spectrum, although a speech at a client industry meeting could be to a group of 1,000 or more people (more likely to be numbered in the hundreds, though).
What is it about scale that matters when it comes to lead generation?
For one, larger scale makes it more risky for prospective leads to be vulnerable with you and with each other. Vulnerability isn’t required in every situation for someone to become a lead, but it can help in a lot of situations!
Smaller scale can create a sense of exclusivity; of being selected for a premium experience that not everybody gets to have. Lead generation activities that happen within this kind of exclusive, premium container are viewed differently because they take place within this container.
A message delivered to a small group of C-level folks you’ve invited to a breakfast event will be received very differently than the same message delivered to a large group of the hoi polloi. Like the real estate people say: it’s location, location, location.
The question to ask: Will the scale of this lead generation approach amplify the power of my message, argument, or the data I’m presenting?
Curation and access
Related to this idea of scale is the idea of curation and access to the curated group. Lead generation that happens within a curated container is received differently than that which happens in a container anybody can get access to, or anybody can buy access to.
Want to generate leads by posting on Reddit? Almost anybody can do that. Register an account, understand the norms around posting on Reddit, and get to it.
Want to generate leads by giving a TED talk? Almost nobody can do that. Spend a decade or more doing work that’s TED-worthy, get really good at public speaking, and maybe you’ll get invited to give a TED talk.
When you gain access to a well-curated forum to do your lead generation, we make some assumptions:
You knew somebody. If this happens enough and the quality isn’t there, we lose trust in the curator because they’re putting their buddies on stage rather than the kind of stuff we trusted them to filter for.
You know something. This is what we hope curation accomplishes: filtering for the really good stuff, so that the time, money, opportunity cost, and other things we invest in the curated forum are worth the investment.
The question to ask: Will the curation associated with this lead generation approach enhance the perception of your expertise?
There is just something about taking a social risk in order to generate leads. Something pseudo-magical, something that amplifies the power of your lead generation efforts.
Social risk is:
Sharing ideas in a setting where you can be criticized.
Opening yourself up to audience questions without knowing the questions beforehand.
Exposing your full self, rather than a filtered version of yourself. On a podcast, I am filtered down to a voice. An edited version of myself, both literally and metaphorically. On a stage at an IRL event, there’s less filtering. There’s no editing at all, and my appearance, posture, clothing, haircut, facial hair, color and appearance of my teeth, length of fingernails, ability to make and hold eye contact, physical movement, appearance of nervousness or lack thereof, tone of voice, ability to project, ability to modulate tone and volume, need for pauses, ability to be silent during those pauses or alternately fill them with nervous filler words, and just… everything about me is on display. This is more risky than just putting an edited version of my voice out into the world.
Speaking and formulating an argument on the fly, rather than working from a script.
Holding your own in a conversation with people who are “above” you on some social ladder.
You’ll notice that the methods at the top of Maister’s list embrace more social risk than the ones at the bottom of his list.
The question to ask: Is this lead generation method using social risk in a way that amplifies its power?
Demonstrated, relevant expertise
This is the flip side of the curation issue. In other words, if you can gain access to venues or events where the curation filter is expertise, then the curator has endorsed your expertise, and — to the extend that we trust the curator — we start out seeing you as an expert.
The more the curator is filtering for relevant expertise, the better. A small event (or podcast) focusing specifically on using content marketing for indie B2C fashion brands will be filtering for relevant expertise in a very different way than the folks who select the speakers for a huge, broad appeal event like Inbound or Dreamforce.
The question to ask: What is this lead generation method’s curator filtering for? Broad appeal fame? My audience size? Or my highly relevant expertise?
It’s not as obvious or easy to see, but there’s an element of generosity in Maister’s favorite lead generation approaches (the top two groups in his list).
Some of these approaches are costly. Travel and unbillable downtime are two costs asociated with IRL speaking. Bearing these costs sends the signal that you’re doing well enough to afford the costs, and if your talk gives more than it takes, then bearing these costs is an act of generosity.
Proprietary research can also be an act of generosity. It’s speculative, because you do it at your own initiative in the hopes of producing future value. When the research is oriented around client needs, it’s generous.
Consulting Takeaway: Evaluating any lead generation approach based on scale, curation/access, social risk, ability to demonstrate relevant expertise, and generosity will help you easily vet for effectiveness. In general, small scale, tightly-curated venues that prioritize relevant expertise while embracing social risk and taking a generous posture are the markers of effective lead generation.
I’ve shared this before, but it’s so good it justifies sharing again (and again, and again): davidmaister.com/articles/the-problem-of-standards/↩