As many of you know, I am an avid reader, Audible listener, researcher, and information connoisseur. On any given day, I might have 8 or 10 different books on my desk that I’m reading a chapter here and there and taking notes. One of those books is a mostly unknown book by a mostly unknown author named Blair Enns and the book is called the ‘Win Without Pitching Manifesto. I was introduced to this book and author through some designer friends and mentors who referred to this book as something of creative agency bible that they talk about in meetings and mastermind groups. They draw lessons and inspiration from this agency bible to be better businesspeople within their creative businesses. I devoured the book in one weekend and find myself referring back to it from time to time for insights into my own businesses.

The book is broken down into 12 primary chapters, with each chapter being a lesson, or maybe more of a dictate. The author is a very successful creative agency owner and he’s very clear about what he believes need to be done to be successful. The tone and tenor of his writing resonated with me immediately because it tends to be how I feel about things in business world and how I tend to coach. This is what needs to be done, this is how it needs to be done, this is why you’re not doing it and making excuses, now shut up and do it.

What I thought I’d do with this episode, and maybe some future episodes, is essentially read a chapter from the manifesto that I think applies to what I teach and what I believe you should be doing in your own business. What I’ve done is I’ve replaced anywhere in the chapter where the author refers to creative agencies, design firms, and advertising companies, with appraiser and appraisal business so that you don’t have to spend the mental calories substituting those things yourself. This first chapter that is the subject of this episode is titled, ‘We Will Specialize’. Important note, being a manifesto, every one of the chapters starts with the words ‘we will…”, as in, if you want to build a business like he’s suggesting, you will do this or suffer the consequences of commoditization, mediocrity, struggle, and possibly failure. Enjoy!

We will acknowledge that it is the availability of substitutes – the legitimate alternatives to the offerings of our firm – that allows the client to ask, and compels us to give, our thinking away for free. If we are not seen as more expert than our competition then we will be viewed as one in a sea of many, and we will have little power in our relationships with our clients and prospects. The world does not need another generalist appraisal firm. There are enough full-service appraisal firms. The world is drowning in undifferentiated businesses. What the world needs, what the better clients are willing to pay for, and what our people want to develop and deliver, is deep expertise. Expertise is the only valid basis for differentiating ourselves from the competition. Not personality. Not process. Not price. It is expertise and expertise alone that will set us apart in a meaningful way and allow us to deal with our clients and prospects from a position of power.

Power in the client-appraiser relationship usually rests with the client. His power comes from the alternatives that he sees to hiring us. When the client has few alternatives to our expertise then we can dictate pricing, we can set the terms of the engagement and we can take control in a manner that better ensures that our ideas and advice have the desired impact. When the alternatives to hiring us are many, the client will dictate price. He will set the terms of the engagement. He will determine how many of our ideas and how much of our advice we need to part with, for free, in order to decide if he will choose to work with us. It is first through positioning our firm that we begin to shift the power in the buy-sell relationship and change the way our services are bought and sold. Positioning is the foundation of business development success, and of business success. If we fail on this front, we face a long, costly uphill journey as owners of appraisal businesses.

Positioning is an exercise in relativity. Our goal when endeavoring to position ourselves against our competition is to reduce or outright eliminate them. When we drastically reduce the real alternatives to hiring our firm, we shift the power balance away from the client and toward us. This power shift allows us to affect the buying process and increase our ability to protect ourselves from having to part with our thinking for free, from having to respond to wasteful and inefficient tenders or requests for proposals (RFP, ie; bids), and to otherwise devalue our own offering or increase our cost of sale.

Positioning is strategy articulated and then proven. These components of strategy, language, and proof are laid out here as the three steps we must take to build deep expertise and meaningfully differentiate ourselves from others: We must choose a focus, then articulate that focus via a consistent claim of expertise. And finally, we must work to add the missing skills, capabilities, and processes necessary to support our new claim. What we call positioning, others more serious about the business of their craft call fundamental business strategy. The first step – focus – is to answer the strategy question of “What business are we in?” Choosing the focus for our firm remains ‘The Difficult Business Decision’. Too often, we decide to not decide and so, in our minds, leave open the possibility that we may continue to do all things for all types of clients.

In appraisal firms the world over – firms populated and run by curious problem solvers – the avoidance of The Difficult Business Decision remains the root cause of most business development problems. We can easily complete the second and third steps of positioning once we have summoned the boldness to tackle the first. For reasons hardwired into the brain of an appraiser, however, most of us fail in this vital first step. We can measure the success of our positioning by gauging our ability to command two things simultaneously: a sales advantage and a price premium.

To possess a sales advantage means that when and where we choose to compete, we win more often than not. To command a price premium means that when we win, we do so not by cutting price, but while charging more. Winning while charging more is the ultimate benefit and key indicator of effective positioning, for price elasticity is tied to the availability of substitutes. The more alternatives to our firm, the less power we have to command a premium over our competition. If we do not win while charging more then it is likely we are attempting to run a business of ideas and advice from a position of weakness; or we are trying to compete outside of our area of focus; or we have avoided The Difficult Business Decision altogether and have chosen, by not choosing at all, to run a business without a focus or a fundamental business strategy.

Beyond the combined benefits of a sales advantage and a price premium, positioning brings us control in the form of increased ability to guide the engagement. We are hired for our expertise and not our service. It is a mistake to believe that the service sector mantra of “The customer is always right” applies to us. Like any engagement of expertise, we often enter into ours with the client not truly knowing what he needs, let alone recognizing the route to a solution. For us to do our best work we need to leverage our outside perspective. We need to be allowed to lead the engagement. We need to take control. Our ability to control the engagement diminishes with time. Sometimes we lose control slowly and other times quickly, but we always lose it. It is important, therefore, that we enter the engagement with as much control as possible.

Indeed, business development can be viewed as the polite battle for control. If we do not win it here, before we are hired, there is little point in proceeding. It does not come easy to us to ask for control when we have little power in the relationship. To jockey for the power position seems at odds with our belief that we should demonstrate our enthusiasm for winning the business. We are optimistic, enthusiastic people, but it is time to admit that our enthusiasm has not always served us well. We Are the Sum of Our Choices, We are lucky to do what we love, And we deserve to be able to do it. But as business owners we need to accept that loving our craft is no substitute for making intelligent business decisions. Passion for appraising does not grant us dispensation from facing The Difficult Business Decision. Once we choose to make our passion our business, we take on responsibilities to our clients, families, and employees.

Among other things, those responsibilities include the need to generate a profit above and beyond the salaries we pay ourselves. It is from this profit that we build strength and create many forms of possibilities for ourselves, and everyone involved in our enterprise. Who among us, when faced with the question, “Would you choose to be weak or strong?” would choose to be weak? We face this choice on physical, emotional, spiritual, financial, and other fronts. We face it in our personal lives and in business. Some choose to be strong because they wish to rule others. Some choose to be strong because they wish to help others. Some choose to be strong because they’ve experienced the alternative and never want to be weak again. What we choose to do with our strength is our decision, but as business owners we have an obligation to choose and then to pursue the path we have chosen. No one consciously chooses to be weak. In business, weakness is often a symptom of not making The Difficult Business Decision.

One of the hallmarks of creativity is a fascination with the new and the different. Properly harnessed, this fascination allows us to bring fresh thinking to old problems and ensure that our offerings to our clients are always evolving. Un-harnessed, our firm-wide desire for the new and the different can lead us to avoid The Difficult Business Decision. It can serve as a rationale for not having to choose a focus, for not having to eliminate competition. We can choose to let our fascinations and passions go unbridled. We can choose to remain a “full service” firm doing all things for all people. This lack of strategy will make us relevant to everyone with valuation needs. It will indulge our desires to do something different every day, and to make every engagement different from the previous ones. When we make this choice, however, we invite all kinds of undifferentiated competition as well as some highly differentiated, specialized competition. We invite numerous alternatives to hiring our firm and we place the power squarely with the client.

In this competitive environment we will never be the expert firm, we will never command the respect or margin we want, and we will never be free of the pitch. We must recognize that as individuals we are inclined against the narrow focus that drives deep expertise, but we must also recognize that our business must have this focus if it is to prosper. We must see our protestations, rationalizations, and justifications for not facing The Difficult Business Decision for what they are: excuses. While some make business success look easy, we know that the best rewards are the ones for which we’ve worked hardest. As analytical people running businesses, the difficulty of deciding what business we are in is made harder by our inclination to preserve our options, to pursue something we’ve never done before, to reserve the right to do it differently next time.

We stand in a room full of doors. As highly curious people, we want to see what is behind every door. This is our desire as appraisers – to satisfy our curiosity and solve the problems we haven’t previously solved. On some level, however, we know that if we are to drastically reduce our competition and benefit from the resulting power shift, we must pick one door, walk through it, and never look back. Our personal desire for variety is suddenly placed at odds with the fundamental need of our business to focus. Is it possible, however, that on the other side of the door we face there is not one long gray hallway, not one empty boring room, but more doors – more choices? Is it possible that what lies on the other side of the door is not the death of our creativity, sure to be snuffed by routine and boredom, but just enough focus to harness the full potential of our talents? The answer, of course, is that it is possible, but we will never know for sure unless we walk through the door and close it behind us.

Fun and money have long been the two reasons we go to work in the morning. If we are honest with ourselves, we will admit that in the beginning it was mostly about the fun. We were doing the work we loved. Others validated our expertise by actually paying us for it. There were late nights of shared purpose with colleagues, everyone doing what needed to be done to wow the client. We were kindred spirits all with the same passion for our craft. We celebrated our wins together and commiserated over the losses together. In those early days the office was more college dorm room or rock ‘n’ roll tour bus than place of commercial enterprise. Then suddenly, it wasn’t fun anymore. Those that once inspired us became a burden. Employees became overhead. The late nights were too much. Somehow the money and the respect we hoped for never followed. The money, especially. For a long time, we were in denial about the money. We didn’t need it; we were having fun. Then, when we faced our reality and decided we did need money, we did so grudgingly. Now, we’re tired of having fun and we’re willing to admit we’re in this, at least in part, for the money.

There are greater causes by which to frame an enterprise, and there are nobler metrics by which to measure the value of effort. But we cannot escape the fact that money is both a necessity in life and the most basic scorecard of success in business. Even if it is not the validation we seek, it is the most basic of tests that we must pass: Is there a need for our efforts great enough to sustain and nurture them? The good news is that there is no fun like making money, because financial strength affords us all kinds of options in our business and personal lives. The path to financial strength begins with facing The Difficult Business Decision. There are some exceptions to the proclamation that we must specialize, but it is unlikely that we are one of them. Until we make a brave decision, success will elude us, and we will look at the market and complain about the economy or the clients, all the while knowing that it was us. The problem has always been us, and our struggle with focus. We are at the root of our free-bidding problem, and we alone have the power to free ourselves from the bidding. The client will not free us. Our trade associations can do little to help us. Our competition will not cease to give their bids away for free. The revolution we must fight is within. There is no enemy. We are victims only of a creative and analytical mind that makes choosing a focus more difficult for us than most. A lucrative future where our enterprise sustains us and nourishes our creativity is within our control. We must simply choose to take control, first by specializing and shifting the power back from the client toward us, and then we can begin to shape our future.

Until next week my friends, a safe and happy holiday season to you and yours, I’m out…

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