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The Risk Episode

31:02

Episode description

After touching on the topic of risk in many other episodes of this podcast, David and Blair finally take a full episode to discuss at length the role of risk in entrepreneurship.

 

LINKS

"Confessions of a Recovering Consultant" by Blair Enns

Hyman P. Minsky Archive

Twitter exchange with Jonathan Stark on risk

Strategic Coach program with Dan Sullivan

"A Mission With No Exit" by Blair Enns

Peter Drucker

 

TRANSCRIPT

BLAIR ENNS: David, what's the riskiest thing you've ever done?

DAVID BAKER: I've always wanted to have a really long pregnant pause right after you start something, because you're always telling me I can regain the power with silence. The biggest risk I've taken was probably telling my wife about the risks I was going to take.

BLAIR: Yeah, right. Wow. Hands up, everybody.

DAVID: She's only told me there was one thing I could not do and it's so illogical. She says I cannot jump out of an airplane. She doesn't terrify flying, or race, or whatever, but I can't jump out, which seems so illogical. So, as soon as I get some, you know what, I'm going to jump out of an airplane.

BLAIR: You've got some high risk hobbies. I'm not sure that you indulge in all of them, but tell us a little bit about your high risk hobbies. List them off, because it's a little bit incredible. Here's the consultant, somebody who types for a living.

DAVID: Oh, that is dismissive, types for a living.

BLAIR: Well, I refer to myself that way too.

DAVID: Yeah.

BLAIR: Like I'm a typist, right? I have friends who have calluses, like they're real men. You and I, we type and talk on the phone.

DAVID: Okay. So, I taught motorcycle racing. I fly airplanes and helicopters. I travel to very dangerous parts of the country.

BLAIR: Yeah.

DAVID: I love the shooting sports, not shooting at each other. I'm not so much into those, and I don't hunt, but I like shooting sports. And I do a podcast with you, that's pretty up there too. What are yours?

BLAIR: Yeah, right. Okay. I knew I was going to open with this question. For those of you listening, if anybody is listening, this is the risk episode, where we're going to talk about various types of risk, but to answer your question. When I knew I was going to pose this question to you, I started thinking oh, what's the most riskiest thing I've ever done?

Other than some things that were driven by kind of alcohol and youth that were just outright stupid when I put my life or the lives of others in danger, other than that, I can't ... The riskiest things I've done in business have been investing in the business. By that I mean spending money, seeing something as an investment but knowing in the short-term, the expense is potentially debilitating to the business.

DAVID: Right.

BLAIR: But then trusting that it's going to pay off in revenue down the road.

DAVID: Oh. The biggest risk you took that I can remember was when you totally changed your business model to a training model from a consulting model. That was a huge risk, to me at least it felt, maybe it didn't feel that way to you as much as it did to me. I was looking, from the outside, in marvel really. I was thinking, "Wow, that is a big risk."

BLAIR: You were thinking, "Wow, that is a stupid move." I remember you telling me like a year later, "You know you could still go back to being a consultant," and I couldn't because I wrote that 3,000 word blog post called "Confessions of a Recovering Consultant."

DAVID: Right.

BLAIR: The reason I did it is I put it out there so that I would not ... That was my version of burning the ships so that I would not go back.

DAVID: Right.

BLAIR: And here we are.

DAVID: But you do take some pretty significant physical risks. They may not seem like it to you because of where you live, but you hike in pretty crazy places and you poke bears, maybe not literally but close to it.

BLAIR: I once said to my son, who was 15 at the time, I said, "You know, you're one of the few people in the world who has put your hand into a grizzly bear's mouth," and he responded promptly by saying, "I'm one of the few people in the world who has stuck a thermometer up a grizzly bear's butt."

DAVID: Except he didn't use that word, but yes we gathered.

BLAIR: He did.

DAVID: He did?

BLAIR: Okay. Enough about us. So, I sent you a text saying, "Hey, we should do a whole show on risk," because probably like one in three or four episodes, we keep coming back to the subject of risk, like how much risk that the principals of creative firms take. So, where do you want to start here? Do you want to start with your Minsky quote?

DAVID: You know, I never used to pay any attention to economists, until you kept quoting different economists to me. So, as I was thinking about risk last night, watching a very boring TV show, I found this quote that just struck me. It's by Hyman Minsky, and it says this. He said, "Stability is destabilizing." And then there was an article on the Wall Street Journal talking about that concept and he also said, "That's because, in other words, stability is destabilizing because long periods of calm induce behavior and innovation that make the next downturn more violent"

I was thinking about times in history where all the nobles were safe in the castles and the rest of the people are dismissed, and all of a sudden, they revolt against everybody. You think about all of these cycles that have happened over time, and the apparent stability that just slowly, slowly was like boiling a frog in water, people don't even notice, and all of a sudden it just breaks out.

Or you think about some of the terrible diseases that have wiped out millions of people, or you think about some of the financial crises that almost all of us now are not too young to remember, like the Housing Crisis and so on, and yet we think that somehow this isn't going to happen. Then other times, we think it's going to happen. The more I thought about risk, the more confused I got really because I think of myself as quite a risk taker, but I also wonder if I really am.

BLAIR: Isn't that interesting? Why do you doubt that?

DAVID: Well, because I have one of those personalities that thinks really carefully about the implications of something, and then I just do it. So, I have what's called the DC conflict in a personality, so I tend to overthink things a lot and I'm a bit of a control freak.

BLAIR: Yeah.

DAVID: Then I think well, after I thought through this this much, it doesn't feel like that much of a risk. That's why it doesn't feel like I'm as much a risk taker I think as maybe other people who've seen my behavior might think that I am, because it's just no, I'm going to do this. But also, you and I have had really interesting conversations usually after a Manhattan or whatever we happen to be drinking.

BLAIR: It's a Negroni this year. Let's just be clear, this is the year of the Negroni.

DAVID: The year of the Negroni, that's right, yeah. But I have run my business and my life in a way that I'm going to try to make principle decisions and that means that I'm not going to stop short of those because of fear. So, I am willing to picture myself homeless, that is, without a business, without any significant level of asset, and I will still be making decisions based on principle.

DAVID: That just seems like such a logical position for me to have, and so in that sense, it doesn't feel all that risky to me because what's the worst that can happen? Oh, homelessness, oh, I'm okay with that. That's why risk is a confusing concept to me.

BLAIR: I think that some listening to this might think, oh that's a bit of an exaggeration, but like somebody who knows you and has had many conversations with you, in which you have brought up that scenario, you have very vividly painted this scenario of you being homeless, you usually had a dog.

DAVID: Right.

BLAIR: You've lived in this future state where you've imagined it quite a bit, and so you've tried it on and thought, "Yeah, I'm okay with that, as long as I can live with myself and the decisions that I've made."

DAVID: Right. I believe that I am a few stupid mistakes, let's say I'm struggling with some emotional or mental issue and I make a bad decision, and then it's compounded by another one out of 10, so two decisions.

BLAIR: Yeah.

DAVID: Do you think you are a couple of decisions away from a very altered lifestyle?

BLAIR: Wow, you know, you're probably asking me at exactly, I won't get into the details, but we're considering a big move in the business, financial move. So, I have thought okay, if this goes wrong, I'm really vulnerable. If this goes wrong and something else goes wrong, I might be starting over. But like you, being bankrupt and starting over doesn't worry me. It worries me because it would terrify my wife and my obligation to my marital partner. My kids will be fine. I'm okay with starting over. When you get these compounded variables, it's like okay, I'm going to take a big risk.

DAVID: Yeah.

BLAIR: And you take a big risk and it doesn't work out. Usually, we're not betting the entire firm or our entire lifestyle on it. But if something else happens at the same time, then possibly we're wiped out. That's how populations go extinct, this combination of a steady pressure and then an incident. I forget, there's a name for it, it will come to me in a second. So, the steady pressure might be economic decline. So, we're in a period of recession and then something goes wrong, so when you get those two variables together, that's when everybody is really vulnerable.

BLAIR: I was really interested in this topic because a friend of mine, Jonathan Stark, on Twitter he's a developer and teaches developers about value-based pricing, and he was tweeting about an episode of one of his podcasts recently, and I haven't listened to it yet. But he was ... just the subject of risk, I forget what his question was, but I tweeted that ... and I was really thinking through this as I was forming the tweet that's, "I've come to the conclusion that the state of entrepreneurship is that you are all in all the time. You're always making ... You always have a bet on the line."

BLAIR: His reply was, "Yeah, but you're not always betting the business. It's a series of small bets." I tweeted back, "Yeah, I agree with that," but I don't fully agree with that. I want to come back to that Hyman Minsky quote in a minute, but I think there's something about the state of entrepreneurship where you are always walking some sort of line and when I read Minsky's quote, let's just reread it again.

BLAIR: So, "Stability is destabilizing, that's because long periods of calm induce behavior and innovation that make the next downturn more violent." I read that quote, I think of our listeners, our clients, and the ones who are like they get comfortable. They build a comfortable business. They're not constantly reassessing their business model. Then along comes change and they're just caught flatfooted. It's like your friend who says, "Yeah, my wife left me and I ..."

DAVID: It was a surprise.

BLAIR: We didn't even have any trouble. We never argued, and you think you idiot. A married person needs to be just slightly paranoid about the state of their marriage, the way an entrepreneur needs to be slightly paranoid about the state of the market. Something could come along, the karate instructor or whoever it is.

DAVID: I just love how you just lay your whole life out in front of thousands of people.

BLAIR: Well, I've learned my wife doesn't listen to this podcast, so I'm okay.

DAVID: Oh, that's given you a lot of freedom, yeah.

BLAIR: When you read the Minsky quote, were you thinking about yourself or were you thinking about those clients that you've had who it's like good stable business, and they're playing golf or they're so comfortable, they don't change anything, and all of a sudden, the condition are slowly, slowly changing like the boiling frog.

BLAIR: And then bang, they wake up one day and everything is different and they kind of blame the market or they don't understand what's happened to them. What's happened to them is they got comfortable. They weren't sufficiently paranoid to the point that they weren't constantly reinventing things, constantly taking risk. That's what I see in that quote. What do you see?

DAVID: I see the same thing, and your description of these entrepreneurs, these principals that are listening is exactly right. They wake up in the morning and if they're not worried, they're worried. They're worried about nothing to worry about. They're always paranoid about something, even if they have to make up something that they're paranoid about.

They envision that maybe an employee is plotting with a client to take the business, or they read something that isn't even there in a comment that a client made about oh, their client is going to leave. Or they read something in the news about how this entire industry is changing.

So, yeah, that's exactly right, but I feel conflicted because on the one hand, I look at firms who just toil under the radar, they're not firms that anybody is trying to emulate. They're not winning all kinds of awards. They're not the cool places that all the young folks want to go work at. They just do good solid work. They've got solid financial fundamentals as well. They've got decent principles about how to manage people, and year after year, they make money.

Then you have the other ones who are innovating at the frontline and creating new service offerings and saying, "Hey, you know what? Nobody is going to be developing websites in three years. So, in one year, I'm going to stop doing that and reinvent myself." What's the better model, because I just don't see too many firms who have much of a balance between those two things.

It seems like it's one or the other, and I want ... Maybe this is my personality coming through here, but I want a little bit more balance and I hate the fact that they're constantly paranoid, but I love the fact that they're constantly paranoid. Does that make sense even?

BLAIR: So, you're saying at one end of the spectrum, there's an unhealthy paranoia.

DAVID: Right.

BLAIR: Right, just because you're paranoid doesn't mean they're not out to get you.

DAVID: Right.

BLAIR: At the other end of the spectrum, there's this complacency.

DAVID: Right.

BLAIR: And you're saying you would like to see more firms in the middle that have where the principal has a healthy level of paranoia. Is that what you're saying?

DAVID: Yes, I am. I wish there was some way to figure out where principals were on that spectrum. Here's an example, this may not be the answer, but it illustrates what I'm thinking of. Maybe you need to be making your employees a little bit nervous most of the time, but not flat terrifying them, right?

BLAIR: I agree with that completely. I really identify with that.

DAVID: Okay.

BLAIR: Yeah.

DAVID: Or another would be you need to run a culture where people really want to stay and work for you, but some of them should still leave for the right reason. We don't want to read too much into people, or read the wrong things into people leaving. We want them to leave for the right reasons, and so on. I'm just inventing these on the fly. I don't know exactly what the answers are here.

Then there's also this whole notion of an efficient marketplace. Here's an example of that. An efficient marketplace says that there are very few unexplored arbitrage opportunities in that a market will usually fill in those low spots on the road or knock off those high spots on the road within a couple of days. Okay, but entrepreneurs principals or folks listening, our clients, your clients, they're always seeing like oh my God, there's an unmet need that I can fill, but they don't think about those opportunities very objectively.

The same sort of objectivity they bring to solving problems for their clients, they don't bring that same level of objectivity to solving problems for themselves in terms of evaluating the soundness of an opportunity. This is why, as we were thinking about this topic, I'm thinking you know, you're always saying that the sample of the work you do for the client is the sale. You say it differently, but that's the idea.

BLAIR: The sale is the sample.

DAVID: Sale is the sample, yeah. And here, the fact that we are bouncing all over the place, this is the risk thing and we're taking a huge risk even talking about all this stuff without really knowing. We're flailing around here. We're just kind of getting inside each other's heads a little bit.

 

BLAIR: Okay, we're talking about risk. This is the risk episode. Do you remember, David, a couple of years ago I asked you to translate something into Latin for me? Do you remember what the phrase was that I said this is my personal motto?

DAVID: No, I don't. I don't remember that.

BLAIR: So, looking up on the wall, I'm still seeing your handwriting of the various ways to translate this into Latin. But it's unpredictable, but dependable. To me, just looking at this it's still tacked to my wall, I'm thinking when you were mentioning how your employees should maybe be a little bit nervous about what you're going to do next.

DAVID: Yeah.

BLAIR: I was thinking about I really enjoy in relationship with my wife, who's not only my life partner, but my business partner, I enjoy the role of disruptor. I enjoy the role of being the person who shows up and says, "Okay, we're going to take a whole bunch of risk," and then she and the other calm people around me kind of have this little meltdown and I enjoy seeing them go into meltdown mode.

BLAIR: So, it's really important for me as my personal identity, and I really wonder the people listening out there, all the entrepreneurs, I wonder if you identify with this as well, to be seen as unpredictable, but not unstable. I would like to be known as somebody not just in business, but in life who is seen as you never know what Blair is going to do next, but I know I can always depend on him.

DAVID: Yes, buttressed with the fact that you have scared them before.

BLAIR: Yes, and they have survived.

DAVID: And they've survived, and they've also seen, they followed your lead, and you led them through the Red Sea and nobody, or not too many people drowned.

BLAIR: I didn't lose many.

DAVID: You didn't lose many, right. So, the idea is that okay I've had crazy ideas in the past, some of them have not worked out, but enough of them have that we should at least have a really good discussion about this. In the end, I'm going to listen to everybody says, but I'm going to make a decision on my own kind of. Maybe not on my own, that's a little bit ... That doesn't sound good, but it's not going to be democratized.

BLAIR: Yeah, yeah, with the input of others.

DAVID: Right.

BLAIR: So, I wonder if that shouldn't be the motto of all entrepreneurs and not just me. While we're skipping across risk related topics here, another thing I really wanted to talk about is this idea of no exit. A few years ago, I had a revelation about my own business from a couple of different sources. One was the Strategic Coach program and Dan Sullivan, and another entrepreneur who had said something publicly.

I'd had this revelation and this epiphany that I was never going to sell my business and I was never going to retire. So I wrote a lengthy blog post about it called "No Exit", and I've since done a bunch of exercises around this when I'm speaking to a room full of agency principals. The first time I did this was at Revenue 2.0, that's an event you and I did together twice about alternative business models, and I do this talk that I have called The Five Constraints, but the first constraint is this idea of no exit.

So, if you're listening to this, if you're the owner of a business of any kind of, whether it's a creative marketing business or some other kind, I want you to try on this constraint. The constraint is that you can never sell your business and you can never retire, and then I'll just stop there while you think about that for a second. Then I'll ask you if that's the constraint you had to live by, what are the changes that you would make in your business right now? Make a list of the changes that need to be made in your business, and then what are the changes that need to be made in your life.

So, I give people a couple of minutes to make some notes, and then I ask the audience, "All right, what did you write down?" People say, "Well, I've got to change my role. I've got to quit sacrificing today for tomorrow. It's important that I show up to do a job that I love, so I've got to change my role. I've got to delegate. I've got to take more vacation."

DAVID: Right.

BLAIR: So many people say, "I need to start working out." I'm not exactly sure how that's connected, but it's a really interesting constraint. The real source of it, I was inspired by a couple of different people, but the real source of it is I noticed this pattern in my clients' businesses.

When the principal gets to a certain age, and the age is just a few years shy of where I am. I'm 52 at this recording, so I start to see it around 55, late 50s, so definitely in the early 60s, when somebody gets to that age, when they can tell me when they're going to retire, I know it's over. It's over because as soon as they have one eye on the exit, they quit taking risk. Have you see this too?

DAVID: I have, but I'd never seen it expressed quite like that. Immediately I say, "Oh, that's something I could study."

BLAIR: Yeah.

DAVID: Because as soon as they have a date three years, now what does their decision making look like when they know that it's only going to be three years or five years or two years or whatever it is?

BLAIR: I'll tell you this anecdotally, if somebody says they've got an eye on a retirement date that's within five years, they will not make a difficult decision around positioning.

DAVID: I was just going to ask, positioning would seem to be the likely one.

BLAIR: Yeah.

DAVID: What are some of the other topics they would avoid decisions around?

BLAIR: They won't make difficult staffing decisions. I might not be right about this, but I'll say it anyway because it never stopped me before.

DAVID: Wait, is this the same Blair? Who took your mic?

BLAIR: They kind of cede control of the culture. That's not necessarily a bad thing, but if you think about like a vibrant firm, at the helm of the firm is a truly inspired leader whose primary job is to keep an eye on the horizon and say, "We're going this way," and to make decisions about things that are going to happen in the future, spotting things in the market, spotting trends in technology, et cetera, et cetera.

So, that vision is at least five years out, and as soon as that vision gets to a five years, four years, three years, they're not really thinking about the health of the firm long-term. That has a significant impact on the culture of the firm. The energy is different. As I'm talking about this, I'm hoping that you can imagine firms or just recall firms that you've walked into where you realize, oh yeah, this is not a vibrant young place, and it's not so much to do with the chronological age of the people, although that is a factor.

But the energy of a place where the principal is thinking about retirement is completely different. As soon as the principal starts thinking about retirement, they lose, I don't know if it's moral authority, but they become less of a guiding force. So, where does the guiding force come from? Maybe it doesn't come from anywhere. Maybe there's a power battle.

DAVID: Nature fills a vacuum, right? So, if they're not leading, then somebody is going to step up. I think I can illustrate what happens along this same line. What I have seen is that you will be more tolerant of talented assholes as employees. You do that, not just because you don't want to rock the boat, but because this talented asshole is somebody that has taken something away from you and you don't want to step back in. You don't want to find somebody else to do this for you. That is making a huge ethical compromise honestly.

BLAIR: Yeah. That's part of the problem I have with it. I do see some of these compromises as ethical compromises. You avoid the big fights. You're absolutely quick taking risk in the marketplace, and that's another element of risk. My favorite Peter Drucker quote, there are so many great Peter Drucker quotes, is, "In business, all profit comes from risk," and I like to add, in life, all profit comes from risk.

So, you imagine that okay, if that's the nature of profit and risk in business, so you imagine that your client decides that they're going to go out into the marketplace and take some risk in the market as a way of earning profit. So, first of all, your client decides I'm going to take some risk, and then they hire you and in part, what they're hiring you to do is to make some of that risk go away.

In every price that you charge, put forward to your client or charge your client, there's some sort of risk level built into the price. There's just risk all around. When somebody in the middle of the equation that is the principal of the firm quits taking risk, then everything kind of doesn't grind to a halt, but everything kind of slows down, gets less interesting, less value is created.

DAVID: And clients start to run things more as well. You don't push back.

BLAIR: Yeah. There's another tough decision that you're not going to make. You're not going to push back on this client. You're thinking ah, three more years.

DAVID: Yeah.

BLAIR: Three more years.

DAVID: Don't want to upset the applecart.

BLAIR: I've some friends who are cops and once they get 20 years of service in, they always say three bad days. If I have three bad days in a row, I can just quit and I've got pension. I feel like that's what happens to agency principals when they have one eye on the exit. I just want to clarify here, I'm not saying you can never retire. I am saying you obviously want to build a business. You want to create your wealth, so at any moment you can stop, you can shut it down.

But the idea that an entrepreneur is going to, in five years from now, I'm going to keep sacrificing and then in five years or whatever the time period is, I'm going to like shut it all down or go do something else and start my new life. I think if that's what's driving you, if that's kind of your vision, maybe you've just inherited it from the previous generation where we were taught, for whatever, that that's how things are done.

We just need to unlearn this old practice of retirement. We should just get away from this practice of retirement, or you've just built your business in a way that it's just ongoing sacrifice, sacrifice, sacrifice. So, what I'm advocating is your business should serve you, right? Structure your business in a way that it serves you, in a way that you love showing up to work, and you're energized by work, and you're making good money, and you're getting all of your needs met, and you get to this place where your business is so good at serving you that the idea of retirement becomes ridiculous.

DAVID: Right. Now, if you catch this early enough, let's say ... And I get this, because I get calls from people who want me to help sell their business, and if it's early enough in the process, I can probe and say, "Oh, you know what? This isn't the problem. The problem is that you're just not as interested in it anymore, but we're catching this quick enough. You could reinvent yourself and you wouldn't want to sell your business."

Sometimes that's quite possible, right? But if you're past that tipping point, there's very little that can happen. I'm hoping that as people listen to this, they're inspired to be honest with themselves about this, and to live with some of the discomfort and the paranoia and to let that make them feel alive and to embrace the risk taking, and also to picture themselves homeless or whatever that looks like for them.

Maybe it's just not enough money for a latte tomorrow or whatever. But picture themselves and embrace that fear and then make better decisions that follow some deeply held principles that you have and not be dragged along by the marketplace. My goodness, that's what I hope people hear here.

BLAIR: Yeah, and again, back to this point I was trying to make earlier is at some point, things change, your partner, like health problems, whatever, everything changes, and you do want to be in a position where you can shut your business down or sell it if there's a willing buyer. I'm not saying you can never sell your business and you can never retire, because there are times for lots of people when it's going to make sense to do one or the other.

What I'm saying is you should operate your business with this idea that you're going to die with your boots on, so that you never quit taking risk, you never quit facing the difficult business decisions. I want to close by, I'll give you the last word here, but I want to close my part here by recalling a tweet that I saw last week on the subject. I'm not sure who it was from. I think it was a financial advisor.

He was saying the pattern in life when it comes to retirement is you've got a job, and at some point, you get to a certain age you realize, at this rate, I'm not going to have enough money to retire in the style that I want to retire. That situation, that realization forces you into entrepreneurship. So, you begin to take risk and you start a business, and then what this guy says is the inevitable is you make the money that will allow you to retire, but you're having so much fun now that you completely ...

You discard the idea of retirement and this guy is saying this is a pattern that he sees over and over again. That really resonated with me. I think there are certain jobs that you absolutely have to retire from. There are certain businesses that it might make sense to retire from. But when you're already an entrepreneur, you're already taking risk, we're not coal miners. You're not wearing out your body.

I think you structure your business today so that it remains fascinating to you and the requirement of that is that you keep taking risk. When you do that, and you don't have one eye on the horizon, you're going to focus on living a long healthy life. You're going to focus on shaping your role in your business so that it serves you, and the idea of ever retiring is going to be absurd. So, that's my last word on this. What do you want to finish on?

DAVID: I can't top that. We'll leave it at that. I think that's a very apt way to end this thing, and it's been fun to talk about this risk. There's just such a brotherhood out there, of risk takers and almost like a secret handshake, you meet somebody that you hardly know but they're an entrepreneur and you immediately know that there's something you share with them. It's this risk taking thing. All of a sudden, you understand their world, even when you don't even know it yet. It's just an amazing thing.

BLAIR: That is so profound. Like I got goosebumpy when you were talking about it, because I'm remembering there was no room I would rather be in than a room full of entrepreneurs.

DAVID: Yeah.

BLAIR: A room full of people taking risk, and then you drop the person in who's like got his eye on the retirement and it's like, yeah, you're in the wrong room, dude.

DAVID: Yeah. This has been great.

BLAIR: Yeah.

DAVID: This has been a fantastic discussion. Thank you, Blair.

BLAIR: Thanks, David. Talk to you next time.

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July 3rd, 2019

34:08

David admits to making a mistake, as Blair finishes his discussion from a couple episodes back on the eighth pricing model, which he claims “is the highest expression of entrepreneurship there is.”

 

Links

2Bobs episode …

Size Matters

June 19th, 2019

32:48

David and Blair address the obsession that many principals have with the size of firms, and the advantages of being either big or small.

Different Pricing Models

June 5th, 2019

34:48

Blair is struck by how creative businesses have trouble applying their creativity to their revenue models, so he and David discuss some of the best ways firms can get paid.

 

LINKS

Subscribed: Why the Subscription Model …

Greatness Requires Discomfort

May 22nd, 2019

28:27

David and Blair each share their own perspectives on how chasing comfort has kept them and their clients making the right decisions in both management and sales situations.

 

LINKS

2Bobs Episode 2: Say What You Think

Selling to Clients With In-house Resources

May 8th, 2019

29:34

Blair wants creative firms to quit viewing in-house resources as the enemy and demonstrates how the arrangements between the two can be mutually beneficial.

 

LINKS

2Bobs Episode 2: Say What You Think

2Bobs Episode 57: …

Things Principals Should Do More Of

April 24th, 2019

22:05

David and Blair each share a list of things that they wish agency principals would do more of to take their firms to the next level of success.

 

There Are NOT Seven Reasons Why Clients Hire You

April 10th, 2019

30:13

Blair and David work on clarifying things by coming up with only six reasons why businesses hire creative firms.

Where Do Ideas Come From?

March 27th, 2019

32:28

Blair and David share the places they find good ideas that they turn into content, the best of which end up being incorporated into their services.

 

Read the transcript ➝

It's a Small World After All

March 13th, 2019

29:49

David finds Blair's thoughts fascinating on how far agencies should service or pursue clients geographically, and whether or not the location of a …

Why Account People Should Close New Business

February 27th, 2019

23:14

David gives Blair four practical reasons for sales people to hand off new business to the account person before the deal is closed instead of after.

A Beginner's Guide to Negotiating

February 13th, 2019

35:11

David gets into Blair's head to get his 10 basic negotiating tips that he has worked with clients on over the years.

 

LINKS

“10 Negotiating Tips” (with 5 bonus tips)

“Selling in One Lesson,” 2Bobs episode 49

Buying …

Seven Positioning Mistakes to Avoid

January 30th, 2019

34:07

After having discussed positioning in multiple previous episodes, David puts together in this one episode the seven most common mistakes firms make …

Debriefing After a New Business Call

January 16th, 2019

30:29

David asks Blair about using "after action reviews" following sales calls, and the two key questions that should be asked as a part of that …

Shoot - Now What Do We Do?

January 2nd, 2019

34:10

Blair asks David to make some predictions about the new year, and then they discuss some ways that businesses can prepare for and react to (God forbid) an economic downturn.

 

TRANSCRIPT

BLAIR ENNS: David, predict the …

Selling in One Lesson

December 19th, 2018

34:55

Blair describes to David how he was able to distill his Win Without Pitching approach into a simple formula:

P=db/D

Power = desirability / Desire

 

Open Book Management

November 21st, 2018

24:04

Blair gets David to admit that he was kind of wrong about open book management being just a fad when he originally wrote about it almost two decades ago, and David offers ways that it can actually benefit both employees …

Alternative Forms of Reassurance

November 7th, 2018

29:33

Blair and David analyze and then look beyond the requests for reassurance potential clients make during the late stage of a sale to address their underlying motivations.

 

LINKS

“Transtheoretical Model” (Prochaska & …

Seven Strategies to Grow Accounts

October 24th, 2018

31:33

David disagrees with Blair (sort of) on his model for growing existing accounts in the post-AOR era, and then offers his list of 6 ideas on the topic.

 

Links

The Peter principle

The Challenger Sale by Matthew Dixon and …

The Best Ways to Disrespect Account People

October 10th, 2018

29:28

Blair remembers what it was like when he was an account person himself, and David shares five ways firms can treat their account people better.

 

LINKS

“How to Drive Your Employees Bat Sh*t Crazy” 2Bobs episode

 

The Seven Masteries of the Rainmaker

September 26th, 2018

33:01

Blair offers seven mindsets that any seller of expertise needs to master so that they can behave like the expert in the sales cycle.

 

Links

"The …

The X-Factor

August 29th, 2018

32:31

Blair gives David some homework to identify patterns in the principals of creative practices who are successful and have that "je ne sais quoi."

 

Starting...Existing...Thriving

August 15th, 2018

34:25

Blair interviews David on what each of the three levels of success in running a creative firm looks like.

 

Links

2Bobs Episode 39 - "Replacing Presentations With Conversations"

The Win Without Pitching Manifesto, by …

Replacing Presentations With Conversations

August 1st, 2018

28:43

David re-reads the 2nd chapter of Blair’s first book, leading to a discussion about how sales people have to choose between either presenting to clients or being present to them.

 

TRANSCRIPT

DAVID C. BAKER: Blair, we …

Reviewing the "Surveillance Footage"

July 18th, 2018

26:35

There are seven patterns that almost all principals are guilty of. When David and Blair point them out, it leads their clients to say, “you must have hidden cameras in my office!"

Hacking Heuristics

July 4th, 2018

40:58

 

Blair leads a discussion on how clients tend to take mental shortcuts in making business decisions, and how we can nudge clients without …

Collaborating with Competitors

June 20th, 2018

27:21

David and Blair compare each other's competitiveness, and then offer some specific ways principals can actually collaborate with their competitors as …

Four Segments of New Business

June 6th, 2018

27:31

Blair and David come up with descriptive words that help clarify each of the four parts of what David calls the "pantheon" for new business: positioning, lead generation, sales, and pricing.

Pricing Creativity: A Guide …

Using Assessment Instruments in Your Firm

May 16th, 2018

33:49

David and Blair explore the big topic of personality assessment tools that can help firms “get the right people on the bus.”

Not Your Typical …

Thoughts on Partnership

May 2nd, 2018

34:35

Blair and David dive into a discussion on ownership structures, looking at the results of a survey that David did recently about partnerships.

What Good Clients Are Really Looking For

April 18th, 2018

34:13

Listeners on Twitter wanted to know what clients actually want from creative firms, so David makes a list based on his experience of what good clients want, while Blair's reaction is "who cares what clients want... all …

Mastering the Value Conversation

April 4th, 2018

35:00

David gets Blair to expound on his statement that “the value conversation is where value pricing theory goes to die,” and how crucial that conversation is within the sales framework he lays out in his new book, "Pricing …

Defining Success for Creatives

March 21st, 2018

30:51

David and Blair take a stab at answering the complicated question of what success looks like for each of them personally, as well as what it means for their clients.

Words That Make Us Wince

March 7th, 2018

33:40

Blair and David try to wind each other up by going through a list of phrases they hear from their clients way too often.

Positioning Cheats

February 21st, 2018

31:48

David is bothered by the notion of helping people cheat, especially at positioning. So Blair discusses 10 ways firms could succeed even if they …

Words We Try to Define

February 7th, 2018

38:05

Expertise, selling, marketing, entrepreneurship, branding, positioning, and consultant. Blair and David do their best to come up with definitions for …

The Business of Expertise - Part 3, Live from London

January 24th, 2018

29:04

Blair revisits David's new book, "The Business of Expertise: How Entrepreneurial Experts Convert Insight to Impact + Wealth" in front of a live audience in London, who get to ask their own questions.

Pricing Creativity

January 10th, 2018

28:21

Blair talks about his new book, "Pricing Creativity: A Guide to Profit Beyond the Billable Hour," and the process it took to write it. David gets him …

Planning for the New Year

December 27th, 2017

32:11

David and Blair each share some goals that they have for their clients and themselves for the upcoming year, which turns into somewhat of a therapy session.

Valuing and Selling Your Firm

December 13th, 2017

34:46

Blair and David discuss why, when, and how principals sell their firms, and Blair reveals he is skeptical about selling his own firm.

The Complexities of Commission Culture

November 29th, 2017

35:41

David picks Blair's brain about new business compensation, and what principals need to consider in finding their firm's place on the spectrum between …

The Role of Profit in a Creative Enterprise

November 15th, 2017

27:57

Blair has some questions this week and David has answers. The topic is profit - what it is and the targets firms should be setting.

Mea Culpa

November 1st, 2017

31:30

David offers to help Blair remember all the times he's been wrong over the past couple decades. Then Blair says he'll be happy to reveal all of the places he's wrong now but doesn't even know it yet.

The Science Behind Structuring Roles

October 18th, 2017

33:35

David reveals some of the science behind the extensive research he has done over the past couple decades to develop a key part of his Total Business …

The Business of Expertise - Part 2

October 4th, 2017

34:56

Blair revisits David's new book, interviewing him on the two chapters that cover the important topic of positioning: "Distinguishing Between Vertical and Horizontal Expertise," and "Principles for the Less Exchangeable …

Seven Words You Can't Say in Business Development

September 20th, 2017

32:04

David and Blair discuss a list of words Blair came up with that you should avoid to keep you out of trouble and in control of the buy-sell …

Paid Time Off or Earned Time On

September 6th, 2017

26:47

Blair needs a vacation. And David is blown away by how little time principals take off.

An Introduction to Blair Enns

August 23rd, 2017

18:57

David asks Blair to describe his work and his passion for the creative entrepreneurial community, and they discuss how where he lives has such a huge impact on what he does.

How to Drive Your Employees Bat Sh*t Crazy

August 9th, 2017

28:21

The issue of how principals manage their employees continues to pop up for David year after year, and Blair is worried that he might have this problem in his own firm.

Being Like Everyone Else

July 26th, 2017

30:24

Blair restrains himself from going off on a rant about who his clients choose to learn from.

An Introduction to David C. Baker

July 12th, 2017

19:33

Blair interviews David about who he is and why people should pay attention to what he has to say - if they should at all...

The Business of Expertise - Part 1

June 14th, 2017

33:27

David Baker wrote a book! And Blair asks him about his authoring process, publishing, and the book's topic.

What Happens When You're Away

May 31st, 2017

33:53

David and Blair list good and bad things that can happen when the principal steps away from their creative firm for a period of time, which is based on David's blog post on the matter.

Why Advertising Agencies Don't Advertise

May 17th, 2017

29:48

Blair revisits the first piece of thought leadership he ever wrote, taking a look at why firms may or may not do for themselves what they do for their clients.

Thriving In the Middle of the Road

May 3rd, 2017

30:34

Blair questions David on an article he wrote about identifying the risks on either side of the road and navigating a path between both extremes.

A Sales Skeptic Interviews a Sales Expert

April 19th, 2017

34:48

Blair does his best to reform David's skepticism of sales, discussing what works well and what fails miserably in the sales process.

Five Irrational Fears

April 5th, 2017

25:34

What keeps you up at night? Blair interviews David about the five most common fears that he has seen in the consulting work he has done with over 900 …

The New Entrepreneur

March 15th, 2017

28:59

David and Blair discuss how the nature of entrepreneurship is changing and what the new entrepreneur is facing today.

Truths and Myths About Money

March 1st, 2017

30:31

Do you have trouble talking about money with clients? David makes seven common statements about money and Blair states whether they are true or false and why.

Say What You Think

February 15th, 2017

33:51

David interviews Blair about the art of effectively communicating with clients and coworkers.

How Not to Act Like an Expert

February 1st, 2017

31:10

David and Blair make a list of the common mistakes that people make in trying to portray themselves as experts.

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