The Discipline of Positioning

Borrowed

"When considering new projects to undertake, it is usually more profitable for the firm to engage in one similar to that recently performed for a previous client. The knowledge, expertise, and basic approaches to the problem that have already been developed (often through a significant personal and financial investment) can be capitalized upon by bringing them to bear on a similar or related problem."

From "Managing the Professional Service Firm" by David H. Maister [Book]

h/t to Peter Kang for the excerpt inspo this week

Learned

I got a call last week from another agency asking if we'd be interested in taking on a client they were in talks with. "You were the first person I thought to call." I appreciated the gesture, but the client wasn't in our ICP, so despite the budget and how interesting the work might have been, it was an easy no.

That hasn't always been the case.

People assume that having a clear positioning makes these decisions easy. It does eliminate all sorts of potential clients. But I've found that saying no is easier said than done in practice. Maybe the brand is high profile. Maybe the budget is big. Maybe we could really use the work. The way I've come to see it, though, is that every no is a step in the direction we want to go, and every yes is an opportunity to deepen our positioning.

What's been exciting to watch is how committing to our focus has paid off. When a team works on similar challenges for similar clients, they start to pattern-match. Someone surfaces a solution for one brand, and soon it's showing up elsewhere. It's also opened our eyes to where we should invest and which services we can build to deliver real value to the clients we serve best. Focus compounds.

But there's another level to this that we started exploring last year. Saying "we work with CPG brands" isn't enough. Which types of clients do we actually serve best? For us, that means getting more specific: growth stage, total revenue, team structure, among others. Understanding that has helped us get clearer on where we can make a difference for clients, and where we're most likely to do our best work.

There have been a few leads recently that looked right on the surface but tested our commitment after learning more. One was too early for us to add real value. Another had budget constraints signaling they weren't ready to invest at the level where we do our best work. These are the deals that are easy to rationalize because the category is right. But category fit and client fit aren't the same.

Then there's risk, which is its own conversation. We're currently in talks with a brand that checks every box, but has had a thousand and one notes on every document we've sent. I had to have an honest conversation about our concerns. Sometimes the signal isn't about fit at all. It's about whether the partnership will actually work.

There's a passage in "Getting Naked" by Patrick Lencioni that captures this well. A senior partner explains why having a bad client is worse than having none: it prevents you from finding good ones, you're unlikely to get a good reference, and as he puts it, "it just makes you feel bad about coming to work. It destroys the culture."

The financial hit is real, but so is what it does to the team. And even in a profitable business, one bad fit can kill margins fast. Scope creep, misaligned expectations, hours that never get billed. It adds up.

Every yes is a signal about what we value and what we're building toward. Some of these calls are easier than others. Not all of them are obvious in the moment. The more we do this, the better we get at reading the signs early.

& Thought

Where am I rationalizing a "yes" when I know it should be a "no"?