Transcript
Brian Erickson:
Thanks for joining the Cardwell Beach Marketing Podcast. My name is Brian Erickson, Chief Strategy Officer and partner at Cardwell Beach. And over the last 18 months here, we’ve talked a lot about what marketing is going to look like in the post-pandemic new normal. And I think instead we can safely say the new normal is going to include a pandemic in the background for a while, so let’s navigate it as gracefully as we can. And to help us do that, today’s guest is Bruce Ditman, founder of professional services marketing consultancy, Chief Seconds. Prior to founding Chief Seconds, Bruce was the Chief Marketing Officer of Marcum LLP, an independent public accounting firm that assists clients with accounting and advisory services. So, Bruce, thanks so much for joining us today. I’m excited. You’re our first repeat guest on the podcast. So that’s awesome.
Bruce Ditman:
Yeah. Thanks, Brian. It’s my pleasure to be back. I really enjoyed our last conversation.
Brian Erickson:
Awesome. And today, we’re going to dig into a topic which you, I would say, are one of the authorities on, especially in the professional services space, M&A, and how that plays into your marketing. So you’ve worked for brands during a number of mergers and acquisitions transactions, and specifically on the marketing side, in addition, I’m sure, to being part of the overall executive team. So I would love to hear some of the key lessons that you’ve learned about integrating two organizations under the same marketing strategy as a whole—and that encompasses quite a lot of nuance ranging from strategy and execution to just people. So we’d love to just kind of hear what you’ve seen on that front.
Bruce Ditman:
Yeah, sure. So M&A has been a part of my life nearly my entire career in professional services and specifically in accounting. Right now, as you mentioned, we are in a time of extremely high activity when it comes to mergings, merge-ins, tuck-ins, and frankly, external investment from private equity into the accounting space and into the professional services space. I’m glad we’re having this conversation. It makes a lot of sense. During my time at Marcum, I was the marketing leader on no fewer than 15 firm mergers. Now they were of all different sizes. And that might mean that there was a $5 million firm, but it also meant that there was a $65 million firm merging into our company, which was larger. And honestly, Brian, like most things in my life, I know what I know by learning from mistakes I’ve made and kind of taking shots to the face. But I’ve for sure learned a bunch of stuff.
Now, I’m not going to speak to the accounting side or the quality control side, or even frankly, the deal-making side or the multiples on these deals. Really my expertise is in and around marketing and sales. But I can tell you that there are two important lessons that I want to pull out of my experiences in M&A. The first affects what happens before the deals made, and the second affects what happens after. So the first part, it is my belief that there is no real due diligence happening when it comes to marketing prior to an agreement, either happening in…
Brian Erickson:
That’s fun.
Bruce Ditman:
And sometimes it doesn’t matter, right. I mean, I think the extent of due diligence and marketing is happening: you and I go to dinner to talk about merging our firms. You say, “How’s your marketing?” And I say, “Great, or it sucks.” But that’s more or less the extent of it. It’s a bizarre choice, frankly, in my mind, because certainly part of the thing that got the firm that is being acquired sort of to the table was how it presents itself in the marketplace. Also, part of it is how many bodies are there that we could leverage.
And also, part of it is what are their areas of expertise or practice strength. However, the reason why we may know that is because of their activity, their marketplace activities. And I think it’s critical. It’s not a deal-breaker, but it’s critical when you’re going through a deal to understand the kind of marketing machinery that you are acquiring and how will it be able to continue to be excellent post-event, right? Post-merger. That’s number one. I think it’s something… That was my job prior to the actual date of the merger to figure all that out.
But it wasn’t part of the decision-making process early on. And I think that’s sort of like a nuance, but a place that could create a critical improvement in the process. So now, moving through the process here, I would then do an assessment and a brand audit and look at resources and look at marketing technology and practices and all of these things and figure it out. However, here’s the second truth of doing M&A and professional services and doing a marketing department to marketing department integration. The people in the firm and the department that’s being acquired aren’t doing what they’re doing because they think it doesn’t work. They’re not doing it because they think it’s silly or stupid, and they’re not doing it because they think it’s wrong. I used to tell firms, when marketers and marketing departments would merge, I would say, “Listen, I want to steal as much as possible from you, right. I know I don’t know everything. You guys are… you all are successful. Let’s leverage that success.”
But the truth is that even when you’re done doing that, you’re still going to be telling them that 75% of what they were doing and the way that they were doing it, they’re not going to be doing it that way anymore. They’re going to do it your way. That is a bitter pill to swallow. So it’s my opinion that there’s an opportunity in that integration process, in that assessment, that whether you call it an audit or an assessment or whatever, there’s an opportunity to smooth that out. And I got some thoughts about how to do it. The business case for it is that generally after a merger, the merged-in firm has a bad first year. Okay. Bad first year, sometimes bad second year. A bunch of reasons why. But in my opinion, technology is a tremendous challenge for these firms.
It’s outside of marketing, obviously. But technology and change management there is huge. Obviously, there’s going to be disruption to people’s careers, and some people will leave and some people will be uncertain, et cetera. Marketing is another place where that lands in that some people are gung ho for the change but are not sure how to proceed. Some people are holdouts who may or may not undermine the process. There’s a bunch of reasons, but it’s a tough year. That year is made all the tougher by hurt feelings and cool temps in merged-in marketers.
So what I mean is the people who stay when you merge in this marketing department, it usually takes them 12 to even 24 months to thaw out and get on board. I believe that bringing in a third party to do your marketing integration will mitigate that because the person who’s telling you that you’re not going to be doing things the way that you think is best is now also your boss. And that’s just tricky, man. So those are the two top-line items for M&A. I would say one is there should be a real due diligence process earlier in the conversations with firms when they’re looking to merge. By the way, that should include some kind of pipeline validation.
Brian Erickson:
Yeah. I mean, you’re taking a lot of their word there without auditing it, right, if you’re not doing that.
Bruce Ditman:
Right. Right. I mean, I don’t know Brian, but I don’t think other businesses people would just be like, “Oh, okay. I’m not going to validate your pipeline.” The other thing to remember is, a lot of times in firms, the smaller firm is often a firm led by a charismatic dynamic leader, right. Often their names on the firm who is more than likely the key rainmaker for that firm. And when this deal goes through, you’re about to make that person extremely flush. So you run the chance of sort of hobbling their main business developer. So all the more reason to make sure that there’s bench staff to make sure that a pipeline is real because I think that’s what happens.
These firms—and I feel terrible for them—but they have a tough first year or two, and the business isn’t coming in like it once was. It’s not a beautiful spinning top like it once was. And I think part of that is because someone who’s retiring or retired, so that’s one. And then, of course, two is, consider bringing in a third party to do the integration, whether it’s in marketing or elsewhere. I think it pays for itself because people get back up on their feet faster.
Brian Erickson:
Yeah. I mean, there’s a huge… You have all the objective factual components of a business, right. But ultimately, it’s made out of people.
Bruce Ditman:
That’s right.
Brian Erickson:
And if the people have hurt feelings, they’re not going to work. They’re not going to work well together.
Bruce Ditman:
Yeah.
Brian Erickson:
So that’s just a reality that is not so easy to face when you’re in the face of a huge transaction.
Bruce Ditman:
100%. They feel, I think, somewhat disenfranchised because it’s never more clear who actually runs a business than when it gets bought out.
Brian Erickson:
Yeah.
Bruce Ditman:
You know if you got money or not, and this isn’t just M&A stuff, but this is the truth in all business. No one does better. No one performs better when they’re scared, and people will get scared. So I think…
Brian Erickson:
Of course, because there’s consolidation that inevitably is going to happen, right. And am I part of that, or am I free and clear? And what’s my future look like?
Bruce Ditman:
Yeah. And exactly right. “I had this career now, what is this?” And so there’s a real strong business case, in my opinion, to mitigate that whenever possible.
Brian Erickson:
So you talk about due diligence, and I think auditing pipeline is a great foundational piece of due diligence, that if it’s not being done, should definitely be done. What are some other aspects in your view of components, let’s say, of an ideal due diligence process on the marketing side? What would that look like?
Bruce Ditman:
Sure. So for sure you want to assess… Well, so just to finish on the pipeline. You want to look at the pipeline, and you want to look at their process around it because there are lost and lots…
Brian Erickson:
Not just is there a pipeline, but why is there a pipeline.
Bruce Ditman:
For sure. And also who’s really doing the work. Okay. Because there are sort of hidden human costs and a lot of marketing functions. I was giving a talk yesterday about marketing technology, and many times, there’s sort of like a “pay no attention to the man behind the curtain” when it comes to technology. And I was advising people to avoid those situations. But that’s true when it comes to pipeline. If you’re going to be increasing the workload when it comes to metrics, who currently there performs those tasks? Isn’t marketing just keying in every business card after a conference? Or are the partners actually engaged in these processes? Is it one person who’s bringing in all the work for the firm, and everyone basically works for that person? These are all questions that you need to explore.
You should discuss during early due diligence and for sure master through integration because things are going to change, and everyone hates change. Other areas to look at, of course, is it a culture match? Man, I don’t totally know what that means. There are culture matches out there. We’ve all met someone that we immediately connect with, and we’re instant, fast friends. But that’s the exception, not the rule even in our personal lives, right. The truth is that most relationships are built over time. So barring that the other firm’s culture being offensive to you, the question is, is there room to grow into this? Can we positively influence the culture here? And can we take inspiration from existing culture? And then one day when three more merger integrations have happened since you merged and you realize, “Oh, I’m part of the original group now, and these are the new folks.”
I think it’s important to be frank with your set and with your partner group if you’re considering a merger. “Can we live in this environment?” And if we feel, is it hubristic for us to think that our sort of drop in the bucket is going to completely change the culture of this monolith, right, because that’s another thing that happens. Again, we’re talking about marketing. Firms are super attractive for a bunch of reasons for acquisition, and one of them is culture.
And then this place is super positive. They’re engaged in diversity inclusion. Clients love them. They’ve got all these great relationships. Awesome. Let’s bring them in. But how big a drop into how big a bucket is that? And I have a terrible analogy, but are you hugging that puppy to death? You know what I mean? How are you planning to onboard that cultural change? I think it is critical to the success that otherwise growing up with two frustrated parties, the acquirer who didn’t see any effect and the acquired, who feels like their culture has been snuffed out.
Brian Erickson:
Yeah. I mean, that’s a huge risk, right. I mean, there’s so many risks, but then that’s just one of many. So how do you find an elegant solution when you need to pick tactics and technology from one company or the other? What is the framework other than obviously having someone who can be a third party, who can kind of not have as much stake in being there after the dust settles? What’s the process that you would go through in a situation? I’m sure it’s different case by case, but high level.
Bruce Ditman:
The way that I would resolve that and have resolved that is, for example, let’s say that the acquiring firm is an aggressive entrepreneurial business case-driven marketing department. All right. A nuts and bolt shop. And the firm being acquired has a more artistic disposition in that they are more about the art of marketing than the business of public accounting. Okay. Both have pluses and minuses. I happen to believe, I think I said this in our last podcast, that you can’t make the mistake of forgetting what business you’re in. You are not in the marketing business. You are in the accounting business. In any case, there’s a lot to learn there, right. So I think what you need to do is find points of alignment on both sides, right. So let’s say that there are 10 beautiful, sophisticated marketing things going on if you can find correlative business cases for some of them.
Now you’re in a position where you’ve got common ground. “I think this is great. We are not doing this. You are doing this. It’s successful. It’s not just successful, because it’s pretty. Here’s how I’ve determined that it’s successful with a business case.” There you could find common ground. You could find a common language without conversion. Force conversion and what you get from that are holdouts, people who aren’t really with you. So I would look for commonality while respecting the ethos of each party. I think it also goes a long way to say that’s a practice. During a merger, that’s extremely important even if, afterwards, it’s going to be my way or the highway, which it shouldn’t be you, but it might be. I think you have to show some emotional intelligence in that. Honestly, that’s the number one thing. Acknowledge people’s positive qualities, frame it in a way that you are also comfortable with, and then execute on it together.
Brian Erickson:
Mm-hmm. And I guess from a brand standpoint, how did you handle that? I’m sure it was case by case like you said. Is it a nuts and bolts kind of executional…
Bruce Ditman:
Yeah.
Brian Erickson:
… business or more of an artistic approach to marketing? I would be curious about your thoughts on the brand side.
Bruce Ditman:
So that’s the toughest part, assuming you’re talking about a large firm acquiring or merging a small firm. That is honestly the toughest part because you’re not merging brands. If it was a merger of equals, that’s a different story, and that’s a very significant branding project. What you are doing is incorporating their practices, and to an extent, their brand into yours. That is confusing, by its own virtue, confusing. And as I’m sure I’ve said when we’ve spoken in the past, confusion is the enemy of good marketing. It’s a sticky one. The best way to do it, in my opinion, is to manage expectations. Okay.
You would be shocked how far along into the process on more than one occasion, I was with people who were still under the impression that their brand name was going to be present in the acquiring firm. And that even has become a temporary reality in some cases. But the truth is that that is not the point of a merger. If it was then you’d put it on the masthead. That’s sort of the toughest thing for people to give up is their brand, their brand identity. Obviously, it was very good. That’s why they got acquired.
Brian Erickson:
Especially when it can be your name, right…
Bruce Ditman:
Yeah. Oh, yeah. For sure.
Brian Erickson:
Your personal name as part of the firm brand and, “All right. Take the sign down.”
Bruce Ditman:
Yeah.
Brian Erickson:
I mean, that’s not, after 20 years, 30 years, what you’re the most excited about.
Bruce Ditman:
The good news for that person, the person with the name, is they just got a great big check.
Brian Erickson:
Yeah. They took down that sign and hung it on their new yacht. So…
Bruce Ditman:
Exactly.
Brian Erickson:
… that’s okay.
Bruce Ditman:
But the marketing department didn’t.
Brian Erickson:
Yeah.
Bruce Ditman:
And if they are true believers, that’s where it can be difficult. So how do you distill that firm’s brand to its elements without its name and attempt to incorporate that to whatever degree is appropriate? Your brand is the challenge, and sometimes the brands are different. They just are. You can’t claim to be one thing or take the position of one thing when it is demonstrably false. You’re not a local firm. You have local attention. Yes. But you’re no longer a local firm. You’re not a standalone brand. It’s real tough.
And I think, in my opinion, the best way to do it is to speak frankly around it. To be respectful of the equity in the brand, right, which is what you want to do also, and figure a way to capitalize on it as completely as possible without creating confusion and subverting your existing brand, the acquiring brand. You want to always be additive. It’s funny. I was talking to somebody about this stuff yesterday, and a lot of times, you’ll never hear a merger pitch where someone doesn’t say, “One plus one equals three.” Right. But the truth is that sometimes in mergers, one plus one equals two, and…
Brian Erickson:
Or one plus one equals 0.75. Sometimes you just…
Bruce Ditman:
Yeah.
Brian Erickson:
It’s negative.
Bruce Ditman:
For sure. No, it’s a really good point actually. Sometimes you merge in, and it’s cobbling to both parties, right. And so the one plus one equals three thing is just tricky. I think you really need to manage expectations. Here are the areas where you’re going to have tremendous benefit for joining us, which are real. Here are the areas where this is going to be a little bit difficult for you, but we are going to collaborate together to figure out the right way to do it or to figure out how to make it more palatable. People in marketing and people down the chain, finding out late in the day that the place that they really love is going to be different is destructive. It’s not productive to the process.
Brian Erickson:
Mm-hmm. In the experience that you’ve had, has there been an instance where you have a really small firm that you’re acquiring, and it just speaks to a totally different audience, and it makes sense to keep that brand distinct?
Bruce Ditman:
I have been in that situation. We have not kept that brand distinct. If your goal is to grow your firm, your goal is to grow your firm. If something is inherently different, you have an opportunity here to, like you said, create enough umbrella of firms and just own or rebrand it and build the umbrella of firms that are also branded in your name. That is not uncommon at all. But at Marcum, there was the Marcum Group, and they had other entities in there that didn’t quite fit. But see, it’s a really cool question actually because it begs the question, how much of M&A comes down to ego? If something makes money, do you care? I think that in general, especially if you’re in the same industry, forget about… if they speak to a different segment of the marketplace or geography, I think you merge them into the name.
If they do something that is completely unique, I suppose you could make an argument, but really then the firm’s just making an investment. Professional services firms are not corporations. They are closely held. Well, they are a partnership. And I think they just culturally tend towards building the overall brand versus… They’re not reporting to shareholders in the way that another corporation might be, that they don’t care where the money comes from as long as the money hits the bottom line. It’s a really good question. I don’t totally have a prepared answer for it. But I would say, when in doubt, revert to my truism of, “Confusion is the enemy of good marketing.”
Brian Erickson:
No, it’s not a simple topic either.
Bruce Ditman:
Yeah, no.
Brian Erickson:
M&A’s. Short podcast on M&A comparatively to the long series of conversations that we could have about it and many people could have about it.
Bruce Ditman:
Well, but I mean, just briefly. If part of your business model post-merger is to cross-sell, every single time you introduce this other company that doesn’t have your name on it, you’ll be spending time explaining who they are and what your relationship with them is.
Brian Erickson:
Yes. True. Very, very true. And I like the premise. You have to have kind of an operating framework.
Bruce Ditman:
Yeah.
Brian Erickson:
And I like the way you frame it with confusion is the enemy, right? So I think when you’re looking at decisions and using principles to make them, that’s a great one. You also have this framework that you look at things through in terms of the different types of strategies and cultures. You mentioned when we’re talking offline, a completed strategy versus an administrative strategy. Could you explain a little bit about the pros and cons of each of these and just kind of how you would define them?
Bruce Ditman:
Yeah. Sure. Absolutely. And I’m giving you… This is a sneak preview of what I’ll be publishing out in my Chief Seconds Corner Talk Dispatch, I guess, next Tuesday. And I’m writing it right now. But this is something that I’ve learned that… Actually I should say I observed. So I haven’t been in that many marketing departments, but I’ve seen a bunch of them, and I’ve hired out of a number of them, and they’re all kinds. But to my eye, there are two main types of marketing departmental… marketing cultures at professional service firms. The first I call an administrative marketing culture. The second I call a completist marketing culture. Each of these cultures can get stuff done, but they each face their own challenges. Start with an administrative marketing culture. The truth about professional services is that the operations forever and ever were reviewed as overhead. Both because of the laws around accounting and legal industry’s ability to advertise, marketing departments are relatively new, right. 67 years old, whatever.
But oftentimes firms promote built-in marketing departments out of their administrative team. So whether that was an administrative assistant, or an office manager, or someone else, that person got promoted to a marketing position, and the marketing department grew from there. But in many places, the attitudes around that still exist. And what I mean is they’re a fulfillment department. Marketing is there to accurately and speedily respond to requests of the practice group. Strategy happens in the practice group. Innovation happens in the practice group. Marketing needs to produce proposals, produce events, get ads to the right place at the right time, make sure that sponsorship information is correct, et cetera. And believe it or not, even though that description is simplistic, there are large departments that still operate in this environment, that culture at a firm that really at its heart marketing is an administrative function that serves the needs, or I shouldn’t say serve the needs or rather responds to the demands of, the practice group. Okay. Which let me assure you, it needs to, but that shouldn’t be… that isn’t necessarily its defining culture.
So let’s talk about the opposite culture or an opposing culture, which I call the completist marketing culture. In a completist marketing culture firm, marketing is considered by non-marketers as basically a magic trick. They either don’t know or don’t want to know how it works. There isn’t any way to tell if it’s going to work or if it did work. The one thing we need to know is that there’s new stuff out there and we need it. Okay. We need to be first. We need to have the stuff. We need to try and use the stuff, and that’s it. That’s why it’s completist. Okay. Completist is, let’s say when it comes to marketing technology. There’s a practice tool out there, a marketing tool out there, a platform of some kind. It’s amazing.
And we could talk a whole nother time about how to engage with marketing technology. But it’s amazing. It does what it says. Passes a first Bruce Ditman test of, “Should I buy this or not?” It actually works.
No one asked the second part of this test, right? Believe it or not, which is an actual question when it comes to technology, right. “Does this thing actually work?” Today, by the way, when I send a check, not tomorrow after the beta test. Not in a year when you drop the new… Today. Does it work?
But here’s the even more important part. I’ll just spill the beans now. The second part, which is, does it work for us? Completist firms don’t ask that question. They just buy the thing, and then they don’t understand why they’re not getting results. And the reason why they’re not getting results is, they bought something they can’t fully use to capitalize on their investment, to recoup their investment. I was teasing the friend and saying, “Horsepower doesn’t mean anything if you ain’t got tires.” So, if you buy a platform that is miraculous and it will deliver you 1000 qualified leads every day. Cool. Do you even have a sales team? Right.
Brian Erickson:
Yeah.
Bruce Ditman:
And so, “Well, we’ve got a couple salespeople. I think we could chase down 10 of these a day. All right. Well, how many of them are you closing? A thousand? Okay. Now you have a problem, right.” And so completist firms end up… suffer in two ways. One is that by treating marketing like it’s magic, there’s no… we’re not making business cases. That’s not good for the investor, meaning the stakeholder who’s actually the partner, nor is it good for the marketer.
Hitchens has a line about something to the effect of, “That which is asserted without facts can be refuted without them.” So it cuts both ways, right. And you don’t have a business. I think all marketers are business people. This is not arts and crafts. This is the business. While the feeling, maybe, sometimes, of having a blank check is exciting, it ain’t a career because one day it’s going to get turned around on you. So there’s that. Again, if you’re not making a business case, you can’t defend it with a business case. So what do you do about it, right? And by the way, if you’re wondering which of those two environments is more fun to work in, it’s the second one, right. It’s definitely the second one. So I think that each, just like we were talking with the mergers, each of these cultures can slowly convert for the marketers who find themselves in firms with these cultures. You can convert your leadership in by virtue of that, your firm, slowly in a reasoned way.
So if you’re in an administrative culture firm where it should be reactive, you feel that it’s reactive, perhaps it’s not receptive to new ideas and to reaching, and to getting that new platform or trying this new thing. Well, obviously, like we were saying with mergers, learn to speak their language. So if you believe that you can only do things in your department that are based on the needs of the partner group that are directly related to a specific need, let’s go and talk to the partners, identify the needs and solve their problems. That is the way you can demonstrate that. I tell you that from experience, it’s the only way to sell into new sophistication in certain environments. If you’re in a completist firm and I know this feels counterintuitive, you’re going to want to start setting expectations for products. Be the skeptic, not the cynic. But be the skeptic.
Even if it’s going to be easy, say, “I need to know how we are going to leverage this to our success so that we benefit more than we pay.” And by building, I mean, that’s… what a great position to be in. You get to build the decision-making process that you want to be a part of. So there’s opportunity for progress in both those environments. But for sure, they’re both out there, and for sure, neither of them are serving their firms. Neither of them make it easy on their marketers. And neither of them are serving their firms at the end of the day.
Brian Erickson:
So what’s the answer in that series of choices there? You’re always going to be who you’re going to be, and you work toward the middle and do the best you can.
Bruce Ditman:
I mean, maybe, maybe. I think the answer is we can only control our own behavior, right? So, the answer is for marketers to imagine… to consider themselves business people. Okay. You are a business person. If you work at an accounting firm, a law firm, that is the business you’re in. You are the marketing function of that business. Don’t get it twisted. Okay. That is a big mistake. And maybe there are people out there who have had lots of success. And that’s okay with me who never adopted that. And maybe that’ll happen again. But I can tell you that if you do what I’m saying, it will work. It will also work. And also, your world makes sense. It’s not emotional buying.
Now, let me give a word of caution before we wrap this up. There’s a trap out there, especially for completist firms. There’s a technology trap out there, and it is attribution software.
Brian Erickson:
That’s great.
Bruce Ditman:
Okay. So this is…
Brian Erickson:
It’s so true.
Bruce Ditman:
Yeah, it is.
Brian Erickson:
Yes.
Bruce Ditman:
Right. It’s an incredibly ironic…
Brian Erickson:
It is.
Bruce Ditman:
It’s perversely so. For your listeners, this is what it is. “Hey, would you like to be able to prove that all of your software or your marketing efforts has an ROI?”
Brian Erickson:
Give us some money.
Bruce Ditman:
“Buy this software.” Right. “Want to learn how to make a million dollars? Send $4 to…” It’s literally what they’re doing. And I’m sure I said this in our last podcast, but one of my foundational beliefs is you can do an ROI study on any marketing, as long as you agree on the R before you make the I. I think this is critically important, an overlooked thing. But be aware of anyone who offers you ROI without asking that question before who wasn’t at the table when you made the decision. How could you possibly attribute the $50,000 you spent on an event to any business that came out of it in a world where you know that you’re sending…. these people have been on your newsletter list for six years.
Brian Erickson:
Mm-hmm.
Bruce Ditman:
That your partners had lunch with them twice this… You know what I mean? That always tickles me, the attribution software. That is the perfect, like a Chimera of an administrative culture and a completist culture in the software universe. It does…
Brian Erickson:
That’s pretty funny.
Bruce Ditman:
… neither well, in my opinion.
Brian Erickson:
I totally agree with that.
Brian Erickson:
So, attribution software aside, which is one of the great scams of our time. I do agree. So you have a couple of different ways that you can approach marketing as a marketing department and from a strategic level, whether it be completist or administrative. When you’re going through the M&A process, shouldn’t you try to be conscious of that sort of aspect, specifically? And if so, do opposites attract, or is it oil and water?
Bruce Ditman:
Good question. This is where I learned this. By the way, I don’t think either of those names are particularly flattering. And so I just want them to be used as terms of art. These are diagnoses, not identities. And just because you feel like you’re in one doesn’t mean that you’re a piece of garbage. It’s just a tool for marketers to look around and create a framework for the environment, which they work. You need to know this stuff when you’re merging in a marketing department because this will be a major cultural shift and operational shift. If you’re a department that has never had to justify its practices, either because you have the steering wheel or because a charismatic leader has been telling you what to do. It will be a shift into a department where every single thing you need to do has to have a specific business case and, or a request for it to happen.
Again, both sides of those equations aren’t great for marketers. They’re a challenge for both. You’ve got to assess it, and you have to figure out how to navigate it, and it will be tough. The people who are in completist firms will correctly identify an administrative firm culture as not fun. Not fun, and they will probably feel somewhat handcuffed by it. And people in an administrative culture going into a completist culture will probably think that it is silly, or if not silly, frivolous in some ways. Listen, we shouldn’t judge, but we do. Again, back to what we were talking about, M&A. The way to navigate that is through empathy and language. Find a way to talk about what you want to work on in each other’s languages. If you need to find a business case or something that you feel… I tell people, “No toys, only tools.”
So if you find something that you feel is a toy, whether it’s a practice or a software or whatever, or even someone in a role, you’ve got to figure out a way to talk about it and soberly address its business value. Hopefully, it’s there. Then you can reframe it and give people the language that they need to talk about it so that it will work in the new cultural environment. And my hope is, and certainly, at Chief Seconds, our hope is that as we work with companies, we avoid both of these paradigms, and you create an environment.
Here’s how you do it. Okay. You want it to be a creative environment, but you also want it to be a business-driven environment. The way is you have creative solutions to business cases, not the other way around, right. Not business solutions for creative cases. That’s a big, no, no. And it’s out there and not the inverse. So that’s the way you’ve got to do it. It’s tough, man. It’s tough out there, but you can do it. Don’t despair. If you’re in a firm right now that’s about to go through a merger, don’t despair. Try and see things from the other firm’s perspective. Try to acquire some of their knowledge. Don’t see them as opposition and see what of their world you could fit into yours and then use it.
Brian Erickson:
I think there’s some really amazing insight there in terms of what is the role of the CMO in a greater sense in professional services. But also, on both sides of that equation, you have the acquirer and the acquiree. And don’t despair is some sage advice because it is just at the end of the day, a people thing, right. There’s a lot of logistics and a lot of moving parts. But you are the emotional leader of your department, and you have to make sure that all of those needs are met for everybody on both sides.
And I guess, just to wrap this up, how can a third party step in and help kind of play this role and play a supporting role to a CMO or to an organization that doesn’t necessarily have that CMO role in-house as you go through this process?
Bruce Ditman:
Sure. Well, I’ll tell you how we do it at Chief Seconds. You’d bring in a person like myself during the due diligence process. Okay. And you would have to find a person who could do a honest and, again, sober audit of what exists on both sides of the ledger. So we’re going to look at personnel, obviously. We’re going to look at technology. We’re going to look at practices. We’re going to look at contacts and data hygiene. And we’re going to look at pipeline, right. And there’s an honest assessment that gets reported back to the acquiring firm, or frankly, the acquirer or both. Both is probably the healthiest answer, but to an extent, depends on who brings you to the table. Then you find… One of the real challenges when firms are coming together is managing the timeline.
We talk about this all the time. I think it’s Fitzgerald that used to say, “You know how rich people go broke, slow at first and all of a sudden.” That’s how mergers are. They are slow at first and all of a sudden. And so being ready, staying on schedule, and with people through a time of tumult in their professional careers to get the deliverables in place. That means, again, data hygiene, contact management, so that you could get… getting communications ready. Working with both sides, the acquirer and the acquiree on the marketing teams so they understand. So they feel heard, represented, and understood in their needs.
Then the decision-making or rather the recommendation that would come from this third party consultant would be, say, “I’ve carefully looked at all of the tools and tactics and personnel available here. Here’s where there may or may not be redundancies. Here are a couple things that are dogs. Here are a couple things that are excellent that the acquiring firm has my recommendation to adopt. Here is an integrated org chart, and here are things to watch out for.” And you’d go.
Hopefully, both marketers on either side of this transaction would love me, and we’d stay in touch. I’d be on their Christmas list. But the truth is that some of this stuff’s going to be difficult. And it doesn’t really matter to me if they both aren’t super fans, as long as the correct solution happens. But what it does allow is the two of them to be aligned in the process. So by moving their chairs to the same side of the table and mine on the other, you create alignment, and that alignment is going to translate into money for the firm because they’re going to be able to get to work much faster.
Brian Erickson:
Mm-hmm. Yeah. And it’s interesting earlier you said how much of M&A is really about ego? Well, I think there’s a question. How much is about ego, and how much should be about ego? Those are different answers and…
Bruce Ditman:
Yeah, man, that’s a really good point.
Brian Erickson:
And you’re trying to help take ego out of it in a certain way by… that’s not your stake in this process.
Bruce Ditman:
That’s exactly right. That’s exactly right. Ego is involved in everything, but I’m trying to take the perception of ego out of it.
Brian Erickson:
Yes. There we go. We’ll never take ego out of it.
Bruce Ditman:
Right, right. Let’s simplify this process a little bit and just make it about business and reason. And hopefully, again, people can get back to work.
Brian Erickson:
Well, I think that is a nice note to end on there, and a pleasant one and a great vision to work towards. So Bruce, thank you so much for…
Bruce Ditman:
Thank you.
Brian Erickson:
… talking through this with me. We could do the ego portion of M&A for another episode. Maybe we will. This was great. Some really great insights here. I’m thrilled that you’ve gone out and founded Chief Seconds here and are helping people with this. So thank you.
Bruce Ditman:
Thanks for having me. I really appreciate it. I really enjoy talking to you. If people want to reach out to me, and I appreciate you mentioning the name of the company, it’s chiefseconds.com, and you can click through or reach me there. But I’m always around for our conversation, and thanks again.
Brian Erickson:
Awesome. Well, thank you. This is Brian Erickson with Cardwell Beach. Appreciate you all listening. And please make sure to check back the more senior marketers sharing their perspectives on what marketing is like post-Covid.
