Move Into Advisory Services Work

I’d like to help you learn how to generate leads for advisory services

My Indie Experts email list is a place where I do that. If the transition from getting paid for implementation to getting paid for your advice is interesting to you, please join. Two ways to get this insight:

    [PMC] The whale client optical illusion

    You know how black holes have such a strong gravitational pull that they can bend light?Sometimes I think whale clients do that too.They exert such a strong gravitational pull on you that they “bend light”, meaning you stop looking at the horizon and focus too much of your attention on them.You stop seeing the reality of what will happen when that whale client goes away, which they almost certainly will.Not if. When.It’s like they create this optical illusion where the future looks just like the present.It becomes easy to act as if this whale client will always be here, paying the bills and keeping you from having to do the hard work of business development. The investment-minded work of developing expertise that has real future value.It won’t last forever.If you’ve got a whale client currently “bending light” and focusing you too much on the present at the expense of the future, today’s a good day to commit to something better for your future.-P

    [PMC] Thanks, but I’d rather not be replaced by a piece of software

    One of my favorite writers (and future podcast guests, if I decide to persist in my outreach to him), Matt Levine, published an interesting bit recently that highlights second-order consequences of custom software.Second-order consequences are the kind of stuff specialized consultants can warn their clients about, thereby creating value for those clients.Here’s an excerpt from this piece, which is well worth a full read: https://www.bloomberg.com/opinion/articles/2018-11-21/now-you-can-foreclose-on-your-neighbor


    Dakin Campbell at Business Insider has a story about the evolution of Marquee, Goldman Sachs Group Inc.’s, basically, technology product. Goldman has long had a pretty good platform—called SecDB—for keeping track of its positions, analyzing and pricing trades, managing risks, and generally being the technological underpinning of a big trading operation. (Disclosure: I used to work there, and remain fond of SecDB.) Having this system when others didn’t was a competitive advantage, but at some point Goldman realized that having it and sharing it with customers could also be an advantage: You could sell it to them, maybe, but also if you get them locked into your ecosystem then they will be more inclined to do more trades with you.


    You’ve got this internal software tool. It’s a competitive advantage.Why not develop it a bit further and make it available to your clients to extend that competitive advantage?So far so good.


    They restructured the platform’s underlying technology into a robust library of fully documented application-programming interfaces, or APIs, and snippets of code that make it easier for developers, both internal and external, to build new products on top of Goldman’s tech. Clients can now execute trades, examine portfolios, and design bespoke products via browser, desktop application or API.


    Awesome! First-order design goals and first-order effects of those design goals are getting achieved. High-fives all around!


    But inside Goldman Sachs, the outlook was less rosy. Engineers were stretched thin. Colleagues weren’t selling it to clients as they should, worried about rushing out a half-baked product or sharing contacts with other areas of the bank, according to current and former executives. Some openly chafed against giving away the firm’s secret sauce. And most worryingly, customers weren’t embracing it to execute trades.


    Hmmm…. second-order consequences are starting to complicate things.It gets worse…


    …you can see why the sales force might be skeptical. If it gets traction, it is not just a product that the clients can use; it is also a way for the clients to interact with the bank—a way that does not involve calling up their salespeople all the time to get pricing on bonds or to buy and sell bonds, and that replaces those phone calls with API calls. If the sales force pitches this to their clients and it is bad, it weakens their relationship. If it is really good, though, it might replace that relationship entirely.


    Boom.There we have the killer second-order consequence, which shows up in the form of badly misaligned incentives.Part of the value of custom software is the software itself, but most of its value comes from how it works in the context of a human system.When you specialize vertically, you start to gain expertise in the human/business/cultural context that your custom software operates within.This expertise, as much or perhaps more than your technical skill with code, is where your value as a consultant comes from.-P

    [PMC] Swing for the fences, folks

    Sometimes I share “behind the scenes” stories and y’all seem to like that, so here’s one for you.There’s this guy, Matt Levine. He writes a column for Bloomberg. I don’t know enough about the world of finance to know if he’s famous or not, but he might be.Anyway, I love his writing, and admire his ability to produce something really good 5 days a week.I wanted to interview him for my podcast to learn a bit about how he’s gotten so good at writing, so I sent him this email:matt levine outreach email49 minutes later he replied with a polite, clear “no”.That brings the total of people who have passed on guesting on my podcast to 4.Matt is one of them, along with Jaime Meline and a few others.This is not at all me whining about things. It’s normal to succeed less than 100% of the times you try any given thing, after all.I just want y’all to know that you should “swing for the fences”. Or at least, I think you should.Here’s what I wrote Al Ries, in case that’s interesting to you, or gives you ideas about how to reach out to famous people:al ries outreachAnd here’s the interview Al very generously gave me: http://consultingpipelinepodcast.com/15Swing for them fences y’all,-P

    [PMC] Email marketing for services businesses

    Hey, quick reminder that on Dec 3 at 10am Pacific I’m hosting a webinar on email marketing for services business. I’d love for you to attend if this topic is relevant for you: https://www.crowdcast.io/e/email-marketing-for-4/registeraMy guest expert will be Val Geisler, who will be teaching you about how services businesses can use email marketing.Val’s a really wonderful teacher. She’s got a ton of relevant experience to share with you.Here’s her site if you want to check her out yourself: http://www.valgeisler.com/Anyway, if you’re available on Dec 3 at 10am Pacific, consider attending this live webinar (so you can ask questions): https://www.crowdcast.io/e/email-marketing-for-4/registerAnd if you’re not available then but are interested in the topic, register anyway so you can watch the recording later while you’re procrastinating in your favorite Slack channel or whatever: https://www.crowdcast.io/e/email-marketing-for-4/registerHope to see you there,-P

    [PMC] Evaluating the strategic value of prospective work

    Businesses are often money-making enterprises. This generally encourages a short-term orientation in our decision making.Strategy, however, is the relationship between decisions you make now and possibilities those decision bring within reach later. There is a real–but often unclear–relationship between the decisions about now and the future possibilities those now-focused decisions unlock.In other words, if you are only focused on the short term, your decisions may not be very strategic. They may not unlock the most desirable future possibilities for your business.I would like to explore this tension a bit, with a focus on the non-monetary value that some work can have for you.If your current situation is such that you truly cannot afford to think about anything other than the short term, this paper is not for you. And you have my sympathy. I spx10ent years in that very same situation.But if you are starting to think about how you might build some short-term success you’re current realizing into something more valuable over the long term, this paper is definitely for you.

    Strategic Value

    If you decide to do something because doing that thing might create value in the future or give you better options in the future, you have done two things.First, you have taken a risk. Your decision might not work out the way you thought! That future value might not materialize. Those future better options might not become available to you. Or they might! That’s the nature of risk-taking. You are less than 100% certain about the cost and benefit of doing a thing. You can’t guarantee a particular outcome. This comes with the territory of risk-taking. But smart risk-taking can be a very profitable activity, as many wealthy x10people will tell you.Second, you have made a strategic decision. You have made a specific choice to do something now because of the future benefit of that decision.When I’m working with coaching clients, I often ask them: “What is the strategic value of this opportunity?”When I ask this question, I’m asking them to focus on what this opportunity might lead to, or what future value they might create by saying “yes” to this opportunity.If the opportunity is client work that is likely to be very profitable and might lead to very desirable future opportunities or significant future value (beyond just the revenue from the engagement), then it’s an easy decision. This is a “have your cake and eat it too” opportunity. These are wonderful, but earlier in our careers, few of us get these kinds of opportunities.Instead, when you’re earlier in your career or trying to transition from implementation to advice work, you’re more often getting opportunities that are comprised in some way. They might meet short-term revenue needs but not offer any strategic value. Or they might offer strategic value but generate only very modest immediate revenue.I think you should at least consider taking that immediate revenue-strategic value tradeoff when it shows up. And if these kinds of lower revenue-higher strategic value opportunities don’t show up for you, I think you should actively cultivate them in order to move your career more assertively towards cultivating exceptionally valuable expertise.There’s an implicit point of view I’ll make explicit here: It might be just my personal experience, or it might be generally true, but if you’re just starting to move out of a generalist market position, I believe that it’s easier to get access to opportunities that are primarily strategically valuable than it is opportunities that are both lucrative and strategically valuable. Said differently, if you can delay financial gratification a bit–maybe 2 or 3 years–I think you can spend that time optimizing for the future value of your expertise at the expense of short-term revenue. I think this is an awesomely desirable tradeoff if you can afford to make it. Graduate degree students do it all the time. I hope you can, too.So let’s talk about how to evaluate the strategic value of opportunities.

    Evaluating Strategic Value

    I’m going to focus on the strategic value of client-facing opportunities. In doing this, I’m ignoring the strategic value of things like writing a book, doing research, and that kind of thing. That stuff has strategic value too, but I’m specifically focusing on the strategic value of paid client work.

    Earned credibility

    The most fundamental future benefit of strategically valuable work is the credibility it can create. The project goes well and you walk away with a logo for your website, a case study, a happy client, referrals from that client, greater expertise, and greater confidence in future sales conversations. Maybe not all those things, but the chance to acquire all those things.Those things have utility in your business development. They can unlock opportunities in the form of access to better, more desirable, or more profitable work. They can contribute to an ability to speak more authoritatively on your expertise using real-life examples.

    Earned access

    Access is my shorthand for your ability to gain access to buyers in a market. Access is not a binary thing that you do or don’t have. It’s more like a network that’s built over time and measured in terms of reach, density, and strength of connection.Strategically valuable work can pay you back in the form of greater access. This naturally raises the question: access to what or who?It could be access to a certain type of decision-maker or buyer. Maybe you’ve never worked much with large publicly-held companies, and you don’t really understand how their buying process works. A strategically valuable project could help you learn how to find and engage with decision-makers in that kind of environment.It could be access to a market. Your first project in a desirable market you’ve never worked in before could help you learn the landscape of that market. Who are the players. What are the watering holes? Which conferences are the must-attend events?Again, access is not a binary all or nothing thing. It’s the result of building multiple connections, or a network of connections. So one single strategically valuable project is unlikely to transform your access to a market or type of buyer from zero-to-amazing overnight.Even so, multiple carefully chosen strategically valuable projects can pay significant dividends in terms of both credibility and access.

    Paid learning

    As a generalist, I was constantly learning on the job. At first, this was exciting, and towards the end it was very problematic.One of the core promises of an expert’s value proposition is that they won’t be learning on the job, or if they are it’ll be clearly disclosed and handled as a R&D or a proof of concept where the risk of the unknown is acknowledged by both sides.But as a generalist becoming a self-made expert, you will still be learning on the job. And as a result, you will probably discount your fees to account for the risk inherent in this on-the-job learning.This situation should be temporary. The narrow focus you’ve willingly embraced lets you “stack” closely-related on-the-job learning quickly, which helps you move out of the learning-on-the-job mode into genuine expert mode within a year or three.It’s not that you’ll stop learning, but you’ll stop having to discount your fees because of the risk of on-the-job learning. You’ll stack experience and find other ways to learn using the downtime offered by the greater profitability that comes with higher fees and less labor-intensive work.Another form the strategic value of certain opportunities can take is on the job learning. Some examples I’ve seen in my clients:

    • A coaching client was a very good PHP developer. He’d tired of doing dev work and wanted to use what he’d learned about process, workflow, and quality to help other dev teams level up. He proposed doing this for a previous client. They balked at the price, he circled back later with some scope changes and a modestly lower price and a realization that the experience would give him credibility and on-the-job learning that he could use later down the line to justify higher prices.
    • Another coaching client helps companies gain competitive advantage from open source practices. He has experience and access to the tech world, but wants to apply his expertise to the Fortune 500 world. This will involve on-the-job learning. Not so much in his area of expertise, but in how to apply that expertise in a different business environment (tech vs. F500). He will manage the risk of this on-the-job learning with initial fee discounts, carefully managed scope, or a combination of the two. While he may leave money on the table now, with future clients he will be in a stronger position to charge super-premium fees.

    Proving a concept

    Related to on-the-job learning, you may have opportunities to prove a concept, and this can have strategic value to your business. With on-the-job learning, you are often applying existing expertise in an environment that’s new to you. When proving a concept, you are experimenting with an un-tested concept with a client. Obviously, you do this with their full knowledge and permission, and they choose to accept the risk because of the potential upside.Somebody had to be the human that got the first artificial heart tried out on them. Barney Clark was that somebody in 1982. I presume he knew the risk, and judged it better than the alternative.Proving a concept is innovation. It’s pretty well established that the cost and risk of innovation will often not turn into immediate payback. For this reason, you may have opportunities to prove a concept with a client, and you may accept a reduced fee in exchange for the risk and delayed reward this implies for your client.

    Going upmarket

    Going upmarket may mean working with a new segment of your existing market, or it may mean seeking a new but more desirable market for your services. Either way, your lack of credibility in the new, more desirable market may mean that you say yes to work under terms you would normally reject. This can be strategically valuable because you can gain credibility and access you might otherwise not.

    Sawdust

    Finally, we have the concept of “sawdust”, which I reluctantly attribute first hearing about to Gary Vaynerchuk. The idea is that your paid work may produce “by-products” that are useful in your marketing. These by-products can be thought of as the sawdust in a woodshop. A factory can convert sawdust into secondary products like medium density fiberboard.You might take on work that is not all that attractive or lucrative on its face but offers you strategically valuable sawdust you can use in your marketing or elsewhere in your business.

    Conclusion

    I’ll conclude by saying that trading short-term profitability for longer-term value creation is always a nuanced judgement call. It’s never easy to sacrifice relatively certain revenue for relatively uncertain future value. Yet, I see this tradeoff as a critical part of the self-made expert’s path. If you’re optimizing for the future value of your future expertise, I think you–like me–will choose to make these kinds of tradeoffs.You won’t have to make them forever because you’re making them in service of an asset–your future expertise–that will, as it grows, make it increasingly unnecessary to sacrifice revenue. It’s fundamentally no different than someone investing in schooling or training, with the exception that you’re doing it this way because no curriculum exists for the expertise you’re trying to create.So… you build the curriculum yourself out of strategically valuable opportunities, and you fund your own education by trading short-term revenue for long-term expertise.

    Application

    If you have any questions about applying this guidance to your business, please feel free to contact me at philip@philipmorganconsulting.com.If you’d like my direct help identifying and capitalizing on strategically valuable opportunities, my services may be a fit: https://philipmorganconsulting.com/services/

    [PMC] Is marketing automation a growth technique?

    My friend and podcast partner Liston Witherill and I were talking earlier today about marketing automation.The question arose: is marketing automation a growth technique?Is it something that will help your business grow? Is it a good tool for getting more leads, prospects, or clients in conversation with you?Of course it depends, but in general I’d say marketing automation is not the first tool you’d ap x10ply to a situation where growth is needed.It’s more of an optimization tool than a growth tool.That brings up the next question:Why not bothWhy not both?Because you have constraints, most likely.You’re probably in the situation where you need to choose between proactive lead generation and other activities, cause you don’t have time to do both right.If you’re anything like early-career me, you’ll choose to optimize a turd.Meaning, I had no unique value, point of view, or IP to offer. And therefore, I chose to set up a 20-step automated client onboarding funnel to make sure I didn’t “waste” time talking to “imperfect” prospects.What a waste.I mean, it taught me something, but what it taught me was very loosely coupled to success in my business.What I should have done is spent 30 to 60 minutes every weekday writing something about my opinions and published that something to a blog or email list.Here’s exactly what would have happened as a result of doing that:

    1. I would have written thousands of words about how important it is to use Plain English style in white papers and to write for a short attention-span audience.
    2. I would have run out of things to say about that opinion.
    3. I would have felt discouraged.
    4. Possibly… I would have wondered whether my opinion on Plain English has anything at all to do with ROI on white papers (that’s a lot of what I built for clients back then).
    5. I would have felt even more discouraged. If past-Philip was following future-Philip’s advice, he would have kept publishing every day. He would write about this doubt and discouragement. He would be 100% honest about it despite his fear that no client would want to touch him with a 10-foot pole. He would pour all that emotion into what he published. He would eventually get over the fear because even back then he had a growth mindset, and he would eventually realize that you can be growing or you can be right all the time, but you can’t be both.
    6. At some point, past-Philip would have said “I can do better”. He would have looked deeper. He would have asked: What does cause a white paper to deliver a positive ROI for a client? What prevents it from doing this? Are there any patterns or best practices that would increase the chances of it delivering good ROI?
    7. He would have written and published about this process of looking deeper into what makes white papers have good ROI.

    As a result of this, when prospects checked out my website, they would have seen the beginnings of a point of view. A reason to pay more than market rate for access to me (or a reason to avoid me, if they didn’t vibe with my PoV).In sales conversations I would have been able to talk about impact and ROI instead of trying to get a scope conversation concluded as quickly as possible so I could submit a proposal and then wait to hear back on that proposal.There’s a time and a place for optimizations.But first ask what you’re optimizing.The process for building a foundation looks a lot different than the process for building something on top of that foundation.Foundations are dirty, unsexy, and lots of hard work to build.But that doesn’t mean you can do without one.-P

    [PMC] “Revenge of the Ancilliaries”

    I’m continuing to dig into this article I shared previously, which does a lot to explain the value of vertical specialization: https://www.newyorker.com/magazine/2018/11/12/why-doctors-hate-their-computers


    Many of the angriest complaints, however, were due to problems rooted in what Sumit Rana, a senior vice-president at Epic, called “the Revenge of the Ancillaries.” In building a given function—say, an order form for a brain MRI—the design choices were more political than technical: administrative staff and doctors had different views about what should be included. The doctors were used to having all the votes. But Epic had arranged meetings to try to adjudicate these differences. Now the staff had a say (and sometimes the doctors didn’t even show), and they added questions that made their jobs easier but other jobs more time-consuming. Questions that doctors had routinely skipped now stopped them short, with “field required” alerts. A simple request might now involve filling out a detailed form that took away precious minutes of time with patients.


    As a total outsider to medicine, how would you know any of this stuff?

    According to the article, Epic handles this with an optimization phase in the project, but isn’t this stuff that someone who had done some research or has some domain experience and empathy for their end users would know or figure out ahead of time?

    Here’s another second-order consequence Atul Gawande discusses in the article:


    Sadoughi told me that she has four patient slots per hour. If she’s seeing a new patient, or doing an annual physical, she’ll use two slots. Early on, she recognized that technology could contribute to streamlining care. She joined a committee overseeing updates of a home-built electronic-medical-record system we used to rely on, helping to customize it for the needs of her fellow primary-care physicians. When she got word of the new system, she was optimistic. Not any longer. She feels that it has made things worse for her and her patients. Before, Sadoughi almost never had to bring tasks home to finish. Now she routinely spends an hour or more on the computer after her children have gone to bed.


    I’m pretty sure you can calculate the cost of these kind of consequences. The actual cost of having to bring work home is “squishy”, but the cost of burnout in a certain percentage of doctors, the cost of extended childcare, and stuff like that is less squishy and more readily estimated.

    Understanding, managing, and–possibly–minimizing second-order consequences like this is part of the value a consultant brings to an organization.

    More detail on that specific second-order consequence:


    She gave me an example. Each patient has a “problem list” with his or her active medical issues, such as difficult-to-control diabetes, early signs of dementia, a chronic heart-valve problem. The list is intended to tell clinicians at a glance what they have to consider when seeing a patient. Sadoughi used to keep the list carefully updated—deleting problems that were no longer relevant, adding details about ones that were. But now everyone across the organization can modify the list, and, she said, “it has become utterly useless.” Three people will list the same diagnosis three different ways. Or an orthopedist will list the same generic symptom for every patient (“pain in leg”), which is sufficient for billing purposes but not useful to colleagues who need to know the specific diagnosis (e.g., “osteoarthritis in the right knee”). Or someone will add “anemia” to the problem list but not have the expertise to record the relevant details; Sadoughi needs to know that it’s “anemia due to iron deficiency, last colonoscopy 2017.” The problem lists have become a hoarder’s stash.

    “They’re long, they’re deficient, they’re redundant,” she said. “Now I come to look at a patient, I pull up the problem list, and it means nothing. I have to go read through their past notes, especially if I’m doing urgent care,” where she’s usually meeting someone for the first time. And piecing together what’s important about the patient’s history is at times actually harder than when she had to leaf through a sheaf of paper records. Doctors’ handwritten notes were brief and to the point. With computers, however, the shortcut is to paste in whole blocks of information—an entire two-page imaging report, say—rather than selecting the relevant details. The next doctor must hunt through several pages to find what really matters. Multiply that by twenty-some patients a day, and you can see Sadoughi’s problem.


    One more excerpt to illustrate second-order consequences:


    As I observed more of my colleagues, I began to see the insidious ways that the software changed how people work together. They’d become more disconnected; less likely to see and help one another, and often less able to. Jessica Jacobs, a longtime office assistant in my practice—mid-forties, dedicated, with a smoker’s raspy voice—said that each new software system reduced her role and shifted more of her responsibilities onto the doctors. Previously, she sorted the patient records before clinic, drafted letters to patients, prepped routine prescriptions—all tasks that lightened the doctors’ load. None of this was possible anymore. The doctors had to do it all themselves. She called it “a ‘stay in your lane’ thing.” She couldn’t even help the doctors navigate and streamline their computer systems: office assistants have different screens and are not trained or authorized to use the ones doctors have.

    “You can’t learn more from the system,” she said. “You can’t do more. You can’t take on extra responsibilities.” Even fixing minor matters is often not in her power. She’d recently noticed, for instance, that the system had the wrong mailing address for a referring doctor. But, she told me, “all I can do is go after the help desk thirteen times.”

    Jacobs felt sad and sometimes bitter about this pattern of change: “It’s disempowering. It’s sort of like they want any cookie-cutter person to be able to walk in the door, plop down in a seat, and just do the job exactly as it is laid out.”


    That’s a lot of excerpts, I know, but really you should read the whole article!

    It’s quite good, and it illustrates how introducing complex software to a complex system produces predictable and unpredictable consequences.

    Specializing vertically can help you predict, control, and minimize consequences like this. It doesn’t immunize your projects from having undesirable second-order consequences, but it puts you and your client in a more informed, prepared position with respect to those consequences.

    And that adds value.

    -P

    [PMC] Second-order consequences

    I’m following up on this article I shared previously, which does a lot to explain the value of vertical specialization: https://www.newyorker.com/magazine/2018/11/12/why-doctors-hate-their-computersI want you to be able to follow along with this even if you haven’t read the article, so let’s start with a brief synopsis:Atul Gawande, famous for several books including The Checklist Manifesto, writes about the effect electronic medical records software like Epic has had on an important facet of medical practice: the face-to-face human interaction between practitioners and patients. He teases out first and second-order consequences–intended and unintended–of the cognitive load that systems like Epic add to both doctor-patient interactions and other aspects of practicing medicine.Let’s start with the second-order consequences, because these are the most exciting and likely to piss you off. ;-)First-order consequences are the ones you intend. The ones you’re designing for.If you’re Facebook, those consequences are “more connection” or whatever that really means. I guess “more eyeballs to show ads to”, right?Second-order consequences are the consequences of the first-order consequences.If you’re Facebook, they’re hate groups getting their message amplified, elections getting manipulated, and negative psychological effects for your most engaged users.If you’re Epic (the dominant electronic medical record software platform and the one Atul Gawande talks a fair bit about in the abovelinked article), the first-order consequences are centralized, standardized medical records.As a developer, you can help a client get the first-order consequences they want from custom software without knowing their business very much. You just need to be good at extracting the right information from them and turning that into good software. You can even charge them for this because not enough of your peers have specialized vertically and therefore your competition is just as inefficient as you are at getting up to speed on your clients’ business. Yes, I know that’s blunt, but what else can I call the cost of coming up to speed on your client’s business except inefficiency? You probably can’t be 100% to to speed on their specific business, but you sure as hell can understand the type of business they run, and that understanding can be a competitive advantage for you.Sideline: you know how popular “roadmapping” is these days? You know how one of the selling points is that you can charge for it because the discovery is valuable? That’s all fine, but what if you could look a prospect in the eyes and say something like this:I think you should talk to a few of our competitors before you decide. One of the things you’ll hear from a few of them is they want to do something called roadmapping. That’s where they’ll ask you a bunch of questions about your business and what you want to do with this software. They’ll charge you for it. We used to do that too until we worked with multiple clients a lot like you, and we’ve found that with that body of learning behind us, we can come up to speed incredibly quickly on your project. As you speak with our competitors, just know that we won’t charge you for that kind of on-the-job learning.Maybe you have it already, but if not… can you imagine having that kind of confidence in an interaction with a prospect? The kind that takes your competitor’s strength and reframes it into a weakness with a few carefully-chosen words.Anyway, back to the main point here.When you get to the second-order consequences, that’s where you as a specialized developer are in a potentially great position to advise your client on the second-order consequences of the software they want to build.They probably don’t have a clue what these consequences will be.You, on the other hand, are well-positioned to predict, understand, explain, and design around these kind of consequences.So as you think about that Atul Gawande article, notice how much of the pain the actual users of the software are feeling comes from second-order consequences.-P

    Product Positioning vs. Services Positioning

    If you’d really like to understand the idea of positioning, it’s useful to compare positioning in the world of products to positioning in the world of services.They’re both based on the same fundamental idea, which is moving into a position from which you can take advantage of some marketplace feature, need, or desire. We could shorten this to: moving into a position from which you can act on an opportunity in the market. Once you get past that similarity, though, they become different.Product positioning is based on the inherent objective observability of a product, and the ability of advertising to amplify a message about those observable features.The superior build quality of Apple’s first generation unibody aluminum MacBooks was easily observable when compared to Windows PCs of the same generation. Almost anybody paying any level of attention would notice the sturdy yet smooth movement of the hinge that supported the MacBook screen. That person could pick up the computer and try to flex or twist it and see how strong it was. They could bang on the keyboard and feel how little give there was. And side by side with a same-generation Windows PC, they would notice a distinct difference in build quality.This is what I mean when I say products have an inherent objective observability. You can see, feel, smell, taste, and measure the differences between products. This lends a sense of objectivity to how we compare products. Products also tend to have fixed, known prices, which further lends a sense of objectivity to how we compare them. “Apple is expensive, but very high quality. PCs are cheaper but lower quality.” Reasonable people can disagree on those bottom line assessments, but at least you can explain why you arrive at that conclusion. “See! When you press on the MacBook’s case it doesn’t flex at all! When you press on this PC’s case, it flexes 2 or 3 millimeters. That’s why the Apple is more expensive!”Services have no such objective observability.Because most services are custom scope, custom price, and delivered under various forms of secrecy, they lack this quality of objective observability. We try to compensate for this with case studies, testimonials, and other post hoc artifacts that come from successful engagements. This is how we try to make our services seem more objectively observable, but ultimately they are not. They’re like any human relationship: there’s the reality of the relationship, there’s what your close friends know about it, and there’s what everybody else thinks they know about it. Those are three distinctly different categories of knowledge about the actual thing.So services is positioning is actually all about developing a reputation. This makes it very close to branding in practice. Certain public figures (presidents, leaders of nations and multi-national companies, entertainers, etc.) will have a global reputation or brand. That is to say, those people will have a reputation among lots of people all over the plant. You, almost certainly, will not.Instead, your reputation will exist within the context of an industry, audience, or community, and you will be relatively unknown outside of that group. So your choice of where or by whom to be known is very consequential to your marketplace position.Remember that for both services and products, positioning is moving into a position from which you can take advantage of some marketplace feature, need, or desire.Let’s clarify some terminology using a few examples:

    • A feature of the market for Sitecore expertise is that the software itself is massively expensive and most service providers offer high ticket, long-term contracts because that matches the needs of the typical Sitecore user. The need for Sitecore expertise delivered with more flexibility is therefore underserved. More on this: http://consultingpipelinepodcast.com/083
    • A temporary feature of the market for React skills is that demand currently exceeds supply. This (temporarily) simplifies lead generation and increases the price buyers are willing to pay.
    • A temporary feature of the AWS market is the complexity of understanding and managing the AWS bill. This creates a need for specialized expertise in this area. More on this: http://consultingpipelinepodcast.com/119
    • A need of many businesses is drive down costs. Technology and custom software can address this need in an ongoing way. Shunting support delivery to self-service forums is one simple example of businesses satisfying this cost-reduction need.
    • A desire of some businesses is to innovate using software before others in the market do. Technology and custom software can address this desire.

    How might you cultivate a reputation that helps you take advantage of some marketplace feature, need, or desire?I can think of 7 ways:

    • Effectively leverage a platform
    • Start with a microscopically small group
    • Standardize/productize an offer
    • Piggyback on an audience or community
    • Find and fill an information deficit
    • Play the expertise long game
    • Identify an entrepreneurial opportunity early on and get involved while the signal/noise ratio is favorable

    These 7 approaches break break down into 2 groups: those you can do almost anytime (evergreen) and those that are dependent on external factors that have to do with luck, timing, and the lifecycle of tech (I refer to these as temporal):

    • Temporal
      • Effectively leverage a platform
      • Find and fill an information deficit
      • Identify an entrepreneurial opportunity early on and get involved while the signal/noise ratio is favorable
      • Standardize/productize an offer
    • Evergreen
      • Start with a microscopically small group
      • Piggyback on an audience or community
      • Play the expertise long game

    I’m not opposed to the temporal approaches to cultivating a reputation, but I’m more interested in the evergreen approaches because they tend to deliver better ROI when viewed across the length of a career.A bit more detail on each of those approaches to cultivating a reputation:Effectively leverage a platformThe popularity, complexity, or value of a platform can help you cultivate a reputation. Platform users are often actively searching for expertise in using or optimizing the platform, so you can place yourself in front of their search traffic, within the physical and online venues where they seek support, or on the stages where they seek leadership and inspiration.Find and fill an information deficitChange creates new needs for information, and like a hole dug in the sand some distance from the ocean will eventually fill with water, this information deficit will eventually be filled with varying forms of expertise. If the timing is good, you can fill an information deficit and thereby cultivate an expert reputation.Identify an entrepreneurial opportunity early on and get involved while the signal/noise ratio is favorableChange creates new opportunities; new needs for expertise. Before social media was a dominant force, there was no need for experts in social media addiction, experts in advertising on social platforms, or experts in social media strategy. Now there are. Change always opens up entrepreneurial opportunities, but those opportunities attract risk-takers, and so timing plays an important role in identifying and acting on these kinds of opportunities before they become saturated.Standardize/productize an offerDeveloping a specific, standardized offering that addresses a specific need can help you cultivate a reputation. The hopefully near-perfect alignment between the need/problem and your offer drives word of mouth which helps build a reputation.Now we get into the methods that are more evergreen in nature. By the way, none of these 7 approaches to cultivating a reputation are mutually exclusive. In fact, you can often “stack” several of them for better results.Start with a microscopically small groupAmong your family or friends you probably have a reputation you didn’t really work to cultivate. It just kind of happened. That’s the power of small social groups: it’s easier to meet, remember, and feel like we understand other members of a small social group. It’s also easier to intentionally cultivate a reputation within a small industry, audience, or community, even if you start out as an unknown to them. It’s simple but not necessarily easy: you start small, show up consistently, and contribute thoughtfully & generously.Piggyback on an audience or communityThis is a slightly different take on the “start microscopically small” approach. Finding an existing audience or community–so that you don’t have to build your own–accelerates your ability to cultivate a reputation. It’s not the only way, of course, but it gives you a head start.Play the expertise long gameFinally, we reach my favorite approach, which is to cultivate economically valuable expertise over 2, 5, 10, or more years. Share freely what you learn as you are cultivating this expertise, and you will develop a reputation that scales in direct proportion to the value and impact of your expertise. The long timeframe I specify mandates that you choose expertise that has a long “shelf life” and that you go very deep with this expertise in order to credibly claim world class levels of expertise. The sharing as you go creates productive discomfort and provides plenty of quality marketing fodder so you’re freed from cheap, manipulative, or less effective forms of marketing.With services, for better or for worse, time combined with disciplined focus is your best ally in cultivating the expertise that builds a reputation that positions you to take advantage of an opportunity in the marketplace. In other words:Focus + time + discipline -> expertise + sharing as you go -> reputation -> ability to take advantage of opportunity in a marketThat’s the most powerful version of positioning for a services business.There are other ways to use the positioning concept in your business, but by comparison they are superficial in their impact on your career.

    Application

    If you have any questions about applying this guidance to your business, please feel free to contact me at philip@philipmorganconsulting.com.If you’d like my direct help navigating the transition from coder to consultant, my services may be a fit: https://philipmorganconsulting.com/services/

    Evaluating the Strategic Value of Prospective Work

    Businesses are often money-making enterprises. This generally encourages a short-term orientation in our decision making.Strategy, however, is the relationship between decisions you make now and possibilities those decision bring within reach later. There is a real–but often unclear–relationship between the decisions about now and the future possibilities those now-focused decisions unlock.In other words, if you’re only focused on the short term, your decisions may not be very strategic. They may not unlock the most desirable future possibilities for your business.I’d like to explore this tension a bit, with a focus on the non-monetary value that some work can have for you.If your current situation is such that you truly cannot afford to think about anything other than the short term, this paper is not for you. And you have my sympathy. I spent years in that very same situation.But if you’re starting to think about how you might build some short-term success you’re current realizing into something more valuable over the long term, this paper is definitely for you.

    Strategic Value

    If you decide to do something because doing that thing might create value in the future or give you better options in the future, you have done two things.First, you have taken a risk. Your decision might not work out the way you thought! That future value might not materialize. Those future better options might not become available to you. Or they might! That is the nature of risk-taking. You are less than 100% certain about the cost and benefit of doing a thing. You can not guarantee a particular outcome. This comes with the territory of risk-taking. But smart risk-taking can be a very profitable activity, as many wealthy x10people will tell you.Second, you have made a strategic decision. You have made a specific choice to do something now because of the future benefit of that decision.When I’m working with coaching clients, I often ask them: “What is the strategic value of this opportunity?”When I ask this question, I’m asking them to focus on what this opportunity might lead to, or what future value they might create by saying “yes” to this opportunity.If the opportunity is client work that is likely to be very profitable and might lead to very desirable future opportunities or significant future value (beyond just the revenue from the engagement), then it’s an easy decision. This is a “have your cake and eat it too” opportunity. These are wonderful, but earlier in our careers, few of us get these kinds of opportunities.Instead, when you’re earlier in your career or trying to transition from implementation to advice work, you’re more often getting opportunities that are comprised in some way. They might meet short-term revenue needs but not offer any strategic value. Or they might offer strategic value but generate only very modest immediate revenue.I think you should at least consider taking that immediate revenue-strategic value tradeoff when it shows up. And if these kinds of lower revenue-higher strategic value opportunities don’t show up for you, I think you should actively cultivate them in order to move your career more assertively towards cultivating exceptionally valuable expertise.There’s an implicit point of view I’ll make explicit here: It might be just my personal experience, or it might be generally true, but if you’re just starting to move out of a generalist market position, I believe that it’s easier to get access to opportunities that are primarily strategically valuable than it is opportunities that are both lucrative and strategically valuable. Said differently, if you can delay financial gratification a bit–maybe 2 or 3 years–I think you can spend that time optimizing for the future value of your expertise at the expense of short-term revenue. I think this is an awesomely desirable tradeoff if you can afford to make it. Graduate degree students do it all the time. I hope you can, too.So let’s talk about how to evaluate the strategic value of opportunities.

    Evaluating Strategic Value

    I’m going to focus on the strategic value of client-facing opportunities. In doing this, I’m ignoring the strategic value of things like writing a book, doing research, and that kind of thing. That stuff has strategic value too, but I’m specifically focusing on the strategic value of paid client work.

    Earned credibility

    The most fundamental future benefit of strategically valuable work is the credibility it can create. The project goes well and you walk away with a logo for your website, a case study, a happy client, referrals from that client, greater expertise, and greater confidence in future sales conversations. Maybe not all those things, but the chance to acquire all those things.Those things have utility in your business development. They can unlock opportunities in the form of access to better, more desirable, or more profitable work. They can contribute to an ability to speak more authoritatively on your expertise using real-life examples.

    Earned access

    Access is my shorthand for your ability to gain access to buyers in a market. Access is not a binary thing that you do or don’t have. It’s more like a network that’s built over time and measured in terms of reach, density, and strength of connection.Strategically valuable work can pay you back in the form of greater access. This naturally raises the question: access to what or who?It could be access to a certain type of decision-maker or buyer. Maybe you’ve never worked much with large publicly-held companies, and you don’t really understand how their buying process works. A strategically valuable project could help you learn how to find and engage with decision-makers in that kind of environment.It could be access to a market. Your first project in a desirable market you’ve never worked in before could help you learn the landscape of that market. Who are the players. What are the watering holes? Which conferences are the must-attend events?Again, access is not a binary all or nothing thing. It’s the result of building multiple connections, or a network of connections. So one single strategically valuable project is unlikely to transform your access to a market or type of buyer from zero-to-amazing overnight.Even so, multiple carefully chosen strategically valuable projects can pay significant dividends in terms of both credibility and access.

    Paid learning

    As a generalist, I was constantly learning on the job. At first, this was exciting, and towards the end it was very problematic.One of the core promises of an expert’s value proposition is that they won’t be learning on the job, or if they are it’ll be clearly disclosed and handled as a R&D or a proof of concept where the risk of the unknown is acknowledged by both sides.But as a generalist becoming a self-made expert, you will still be learning on the job. And as a result, you will probably discount your fees to account for the risk inherent in this on-the-job learning.This situation should be temporary. The narrow focus you’ve willingly embraced lets you “stack” closely-related on-the-job learning quickly, which helps you move out of the learning-on-the-job mode into genuine expert mode within a year or three.It’s not that you’ll stop learning, but you’ll stop having to discount your fees because of the risk of on-the-job learning. You’ll stack experience and find other ways to learn using the downtime offered by the greater profitability that comes with higher fees and less labor-intensive work.Another form the strategic value of certain opportunities can take is on the job learning. Some examples I’ve seen in my clients:

    • A coaching client was a very good PHP developer. He’d tired of doing dev work and wanted to use what he’d learned about process, workflow, and quality to help other dev teams level up. He proposed doing this for a previous client. They balked at the price, he circled back later with some scope changes and a modestly lower price and a realization that the experience would give him credibility and on-the-job learning that he could use later down the line to justify higher prices.
    • Another coaching client helps companies gain competitive advantage from open source practices. He has experience and access to the tech world, but wants to apply his expertise to the Fortune 500 world. This will involve on-the-job learning. Not so much in his area of expertise, but in how to apply that expertise in a different business environment (tech vs. F500). He will manage the risk of this on-the-job learning with initial fee discounts, carefully managed scope, or a combination of the two. While he may leave money on the table now, with future clients he will be in a stronger position to charge super-premium fees.

    Proving a concept

    Related to on-the-job learning, you may have opportunities to prove a concept, and this can have strategic value to your business. With on-the-job learning, you are often applying existing expertise in an environment that’s new to you. When proving a concept, you are experimenting with an un-tested concept with a client. Obviously, you do this with their full knowledge and permission, and they choose to accept the risk because of the potential upside.Somebody had to be the human that got the first artificial heart tried out on them. Barney Clark was that somebody in 1982. I presume he knew the risk, and judged it better than the alternative.Proving a concept is innovation. It’s pretty well established that the cost and risk of innovation will often not turn into immediate payback. For this reason, you may have opportunities to prove a concept with a client, and you may accept a reduced fee in exchange for the risk and delayed reward this implies for your client.

    Going upmarket

    Going upmarket may mean working with a new segment of your existing market, or it may mean seeking a new but more desirable market for your services. Either way, your lack of credibility in the new, more desirable market may mean that you say yes to work under terms you would normally reject. This can be strategically valuable because you can gain credibility and access you might otherwise not.

    Sawdust

    Finally, we have the concept of “sawdust”, which I reluctantly attribute first hearing about to Gary Vaynerchuk. The idea is that your paid work may produce “by-products” that are useful in your marketing. These by-products can be thought of as the sawdust in a woodshop. A factory can convert sawdust into secondary products like medium density fiberboard.You might take on work that is not all that attractive or lucrative on its face but offers you strategically valuable sawdust you can use in your marketing or elsewhere in your business.

    Conclusion

    I’ll conclude by saying that trading short-term profitability for longer-term value creation is always a nuanced judgement call. It’s never easy to sacrifice relatively certain revenue for relatively uncertain future value. Yet, I see this tradeoff as a critical part of the self-made expert’s path. If you’re optimizing for the future value of your future expertise, I think you–like me–will choose to make these kinds of tradeoffs.You won’t have to make them forever because you’re making them in service of an asset–your future expertise–that will, as it grows, make it increasingly unnecessary to sacrifice revenue. It’s fundamentally no different than someone investing in schooling or training, with the exception that you’re doing it this way because no curriculum exists for the expertise you’re trying to create.So… you build the curriculum yourself out of strategically valuable opportunities, and you fund your own education by trading short-term revenue for long-term expertise.

    Application

    If you have any questions about applying this guidance to your business, please feel free to contact me at philip@philipmorganconsulting.com.If you’d like my direct help identifying and capitalizing on strategically valuable opportunities, my services may be a fit: https://philipmorganconsulting.com/services/