Examining the concepts of owned ideas and recruiting help. An interview with Deborah Levine…
Building a successful consulting firm and being acquired.
An interview with Niko Canner about branding and cultivating relationships during organizational acquisition.
There are two popular roads that can be taken when building a consulting firm. The first is intense specialization; becoming the gold standard in a particular domain. The other is to have a more general focus, relying on a broad variety of topics that can be combined and recombined to solve many different problems. But what happens when the truth of your brand lies on both roads?
Niko Canner is the Founder of Incandescent, a firm which has many talents: it serves as a thought partner to leaders of large enterprises on strategy, organization and innovation; advises founders on the development of their ventures; and partners with foundations and non-profits engaged in systems change.
Prior to founding Incandescent, Niko was co-founder and Managing Partner of the consulting firm Katzenbach Partners. In our conversation, he recalls his struggles to properly but concisely describe their firm to the market, and how many potential buyers walked away without properly understanding their value. Niko also shares how the term “Breakthrough Organizational Performance” was the key that let them go to market as both specialists and generalists, and find buyers competing for their attention.
Niko shares the conversations that took place prior to that acquisition, how to find a good fit for both acquiring and acquired company, and explains the factors anyone hoping to see their firm acquired someday should be considering now.
Three Key Takeaways:
- In order to successfully market your thought leadership, you need a platform that is succinct and resonates.
- If your thought leadership brand is too general, you can get lost in the crowd. Get too specific, and you could become irrelevant to most. Find the path between!
- When looking to have your thought leadership firm acquired, you need to establish a relationship and prove that you are a good strategic fit to your buyer.
If you need a strategy to bring your thought leadership to market, Thought Leadership Leverage can assist you! Contact us for more information. In addition, we can help you implement marketing, research, and sales. Let us help you so you can devote yourself to what you do best.
Peter Winick And welcome, welcome, welcome, this is Peter Winick, I’m the founder and CEO of Thought Leadership Leverage, and you’re joining us on the podcast today, which is Leveraging Thought Leadership. I’m really excited about today’s guest and let me – normally, I skim through the bios, but I want to give you some of the depth of Niko Canner bio. So Niko is the founder of Incandescent. He founded that in 2013. His work spans the firm’s three major areas of service, serving as a thought partner to leaders of large enterprises on strategy, organization, and innovation, advising founders on the development of their ventures and partnering with foundations and non-profits engaged in systems change. Now, prior to that, Niko was the co-founder and managing partner of the consulting firm Katzenbach, which was ultimately swallowed up by Booz. So he was a senior partner at Booz. He was a member of the management committee at Bridgewater Associates. He was named one of the 10 new gurus by Fortune magazine in 2008. Remember when “guru” was a thing that we took – back then – back then, that was like a cool thing to be. And he’s been the top 25 in consulting magazine. Where else do we go? Harvard, McKinsey, blah blah blah. The usual stuff? Yeah. So another underachiever comes on the show.
Peter Winick So, Niko, welcome. We’ve been in each other’s orbits for like 15 years. And here we are.
Niko Canner It’s been a very long time.
Peter Winick A long time.
Niko Canner Really looking forward to the conversation.
Peter Winick So here’s what I was thinking about for today. So you’ve got this, this I don’t think I can’t think of too many people on the planet that have the view or the perspective that you do, relative to the connection between thought leadership and developing thought leadership or derivatives of it into consulting, and then scaling the heck out of that. That’s the technical term. So give a little bit of background on, you know, whether it’s from – Partners, Katzenbach, etc. just sort of – how that’s unfolded for you.
Niko Canner So in terms of how people do that successfully in the world, there are kind of two roads. One road is productization and intense specialization. You are trying to develop an idea that becomes the currency, the standard, in a particular domain. And somebody who I see taking that path beautifully in our mutual circle is Leo Tilman.
Peter Winick Yeah.
Niko Canner The idea is that he and General Charles Jacoby have, regarding agility, are really decisively differentiated in terms of that intersection as a field of risk management that’s become sterile. And that more dynamic organizational approach to what is it really take to be insulated against the kinds of risks that enterprises face.
Peter Winick So, stay with this idea piece for a minute, because I want to unpack that. So, a belief, a pretty popular belief, not that it’s right or wrong is, hey, if I’m a consultant, there’s lots of things I’ve got to be able to do for lots of people to serve my client strategy and implementation, et cetera. And I think what you hit on the head is the real issue. In order to listen, you could be a great consultant and support your client in lots and lots of different ways. But it’s that that distilling it down to that one idea whether it’s agility, innovation, creativity, I mean, there’s a universe of ideas. What is the one piece that you’re adding to the conversation, to the literature, to the methodologies, if you will, that’s a game changer?
Niko Canner Yeah. So I think that’s a beautiful statement of sort of the first of these two roads and say 98 percent of success in thought leadership is along that first road. And then there’s a second road, which is a more generalist positioning, which can embody thought leadership in a range of different topics that can be combined and recombined to solve a lot of different kinds of problems in the world. And for most of my career, I’ve been taking that difficult path of trying to be at least partway on the second road. And one of the things that I think I can share that maybe is of greatest interest to your audience of people who are concerned with both the craft and the business of thought leadership, is how that played out for us at Katzenbach.
Peter Winick Yeah, it would be great, And actually give that back story because I’m fluent in Katzenbach-eze, if that’s the thing. But yeah, give a little bit of the history lesson there, because it’s a phenomenal case study.
Niko Canner So three of us, John Katzenbach, Mark Feigen, and myself, founded the firm in 1998, we’d all come out of McKinsey – “Katz,” as we call him, who turns 89 today.
Peter Winick Oh yes.
Niko Canner McKinsey’s mandatory retirement age.
Peter Winick Which is obviously eighty-eight.
Niko Canner In fact, not only was he nowhere near ready to retire then, he is still not retired at eighty nine, he’s still active in the world of P.W.C two acquisitions later. And the three of us started building from the ground floor of a brownstone on Thirty Seven Street, and on upward, a firm at the intersection of organization and strategy. Which was, in some ways, a generalist firm.
Peter Winick Sure.
Niko Canner Several companies and a lot of different industries and problems that we solved for those companies
Peter Winick Sure.
Niko Canner Ended up spanning a pretty wide range.
Peter Winick But let me let me just let me just sort of throw in there: three dudes from McKinsey starting a firm. That’s not a unique story.
Niko Canner Yeah.
Peter Winick That happens almost on a monthly basis. McKinsey, Deloitte, whatever. Three bodies get together and say, Let’s throw our name or something on the door and voila, here we are. But this is a different story.
Niko Canner For and for all the firm’s success and we self-funded, completely organic, from the three of us to about one hundred and fifty people and ended up selling, We were the first acquisition of Booz & Company in 2009, after Booz & Company became independent following the Carlyle purchase of Booz out in Hamilton. And along that path, for all the success that we were having out in the market, we kept getting stuck on branding. We are finding it very difficult to describe to the market what it was that we did in a way that would be sort of concise and immediately relevant.
Peter Winick So let me again, let me pause you there, like what are the problems they solve? Why am I best qualified to solve this problem? Who are I best target avatars, etc. This, to me, is a fundamental issue that really, really smart people struggle with for a lot, for a lot of time.
Niko Canner And so we could have been your poster child around struggling. And we would fight about it internally as well. And when we finally made progress, which was probably six years into the 10 year arc of building this firm, was when we recognized why we kept getting stuck on the branding issue. Which was that there were two truths. Truth number one, which relates to your non-newsworthiness of three guys from McKinsey. That when we were entering new relationships, almost always, when we were – particularly in the largest companies as we’re building relationships with clients like a Unilever or Microsoft or a Shell. Almost always it was because they saw us as doing some very particular thing that had relevance to that that the generalist firms did not do. And we’re not focused on, and so that could be working on top leadership team effectiveness in a way. I took the substantive agenda of that team at the top versus team building in the “trust falls and ropes courses” sense. Or it could be –
Peter Winick So, you basically found openings in the things that weren’t being – needs weren’t being met at par. But you found your openings.
Niko Canner So that was the first truth.
Peter Winick Mm hmm.
Niko Canner The second truth? Was that the vast majority of the money that we made was getting inside certain large companies and then solving a wide range of problems, most of which McKinsey, BCG and others often solved.
Peter Winick Right. Now, you’re punching far above your weight, so even at 150 people, I mean, that’s, you know, Accenture has more than that in one office in Chicago.
Niko Canner Yeah, absolutely. And there are a whole bunch of things that probably shouldn’t be the topic for today about how we’re able to punch above the weight, which related more to the talent and the process. The stuckness on branding came from if we described ourselves as though we were only specialists in the things that Microsoft, Shell, and Unilever saw as, “Yah, we would never go to McKinsey for that.” We would be creating cognitive dissonance around the 100 other things that we were doing for Pfizer.
Peter Winick Right, right.
Niko Canner And described ourselves in a more generalist way, it would more accurately describe who we were to the clients that were the largest anchors. It would seem hopelessly undifferentiated when we went to the.
Peter Winick So this is the Goldilocks problem, right? It’s a total Goldilocks problem of consulting.
Niko Canner And so we – we needed to embrace both truths in order to brand ourselves well and to have a few words. In the words that we ended up choosing were “breakthrough organizational performance.” That could be used in two different ways. When we went to a new client, we used it as almost like a marker of a content area, and we would talk about the pretty, hyper specialized things. We’d be like a Leo Tillman. Saying, “Here are the things we’re thinking about that nobody else is thinking about.” And we would drive what I was gesturing at as that first road. And then when we went – when we described ourselves in the context of a larger relationship, we would use those same three words break through organizational performance as more like a modifier, a way of talking about what was differentiated about our approach to that of issues that others might also be focused upon.
Peter Winick So, our language might be different. But you and I sometimes it feels like share a brain, or it leads up to a greater brain. In my world, I call that the platform. So, Breakthrough – Breakthrough Organizational Performance. Could it be a book title yet?
Niko Canner Yeah.
Peter Winick Could be a book title. Could it be that it – wouldn’t be the name of the firm. But the solve for X is Niko or, in this case, Katzenbach & Partners at the time. They’re the X guys. What is X? I call it,, sort of solve for X. You’re the breakthrough organizational performance guys. Right? And they do that thing better than anybody. In fact, they invented that. And by the way, that could also be expanded to the generalist without disqualifying 60 percent of the market, and really narrow down to team leadership effectiveness. So there’s an aperture and aperture on that lens, which is beautiful.
Niko Canner Yeah. So we learned this slowly and painfully, in ways that maybe the Peter Winick of then and certainly the Peter Winick of now could have taught us faster and more directly. The art of what you describe as platform and in particular, how to apply that art when you have a business system that demands that you be both the specialist and the generalist.
Peter Winick If you’re enjoying this episode of Leveraging Thought Leadership, please make sure to subscribe. If you’d like to help spread the word about our podcast, please leave us a review and share it with your friends. We’re available on Apple Podcasts and on all major listening apps, as well as at Thought Leadership Leverage dot com forward slash podcasts.
Peter Winick Right? Right? No, it’s not easy to do it now. Not everybody has the specialist/generalist problem, but we all have the problem. How do I show the world that I’m so different than everybody else? Because, you know, attention spans are getting shorter and shorter and shorter and shorter, and ultimately, everything starts to sound like the voice from the teacher at the Peanuts – on the Peanuts cartoon. And you’ve got to sort of wake people up and have the courage to put a stake in the ground and say, “We do this better than anybody else. Yeah, bunch of other things we can do. But this is our jam. This is this is our flag in the ground.”
Niko Canner Yeah. And part of the challenge there is finding the right level of abstraction. Yeah, that’s right. Back when I was growing up, I used to read these fantasy novels by an author named Piers Anthony said in a world called Xanth. And in the world of Xanth, everybody had one magical power. And that magical power might be a small, arbitrary thing like you can turn things that are red into green things, or something of great generality like you can change your shape into anything. And the more general the spell, the more powerful it was.
Peter Winick Sure.
Niko Canner A challenge that thought leaders have is sort of figuring out how to describe the spell. And if you try to describe it as something that is too general. It becomes de-natured unless what you have is truly so powerful to solve a wide range of problems. Try to describe it in ways that are over specific. The relevance is too low. And finding the right sort of sweet spot in between. It will be very different for different people. But with Leo, like the example of agility, is something much more general than enterprise risk management as a technical process. But at the same time, it isn’t everything. It is a particular aspect of how the world requires organizations to perform.
Peter Winick Exactly. I want to fast forward this story a little bit to – Now, it’s several years later, and Booz comes and acquires Katzenbach and without getting into the details or the financials. What I want to talk about is, when you’re in the process of being acquired or even to be considered, certain things need to be true. Right? So, some of it is the things that could make a small boutique, i.e. 10-20 person shop successful would kill a deal, right? It’s all based on the charisma of one partner. All the deals come in because one partner has got a great read. You know, his brother-in-law is on the board of GM. Or there is no methodology, but somehow they plow through it. So give me sort of the do’s and don’ts of what to do in order to actually have a self-sustaining enterprise. Because as smart as you and your partners were, it wasn’t all based on three brains. You’ve got 150 people, it’s a big operation.
Niko Canner Yeah. So let me focus on two specific aspects of that deal that I think have more generalizability and could be useful to others.
Peter Winick Yeah, that’s –
Niko Canner One which I think a lot of thought leaders under appreciate the importance of is, there is already a relationship. So we observed Booz Allen Hamilton as client, and that meant we really knew well the leadership of what became Booz & Company and began. We didn’t actually do the transaction until almost a year later, but we began a conversation about the possibility while Booz & Company was still being formed. And I think it is important for thought leaders who are imagining an eventual transaction to begin cultivating the relationships with people who might be buyers way early, then they’re ready to do a deal. The second way,
Peter Winick Way, way, way early. Like, years early.
Niko Canner Right. Right. And the second, which I think is especially relevant to your domain, Peter, is connect to the thought leadership, which is that the transaction was deeply relevant to Booz & Company’s core idea and core story to the world. So when Booz & Company was stood up as an independent firm, they were going to the market with a description of their view on strategy, which was capabilities driven strategy.
Peter Winick That where they have their own, their own proprietary recipe on what strategy development means at Booz. And by the way, if you don’t like that, don’t work with us. But this is our way of –
Niko Canner This is our – our – our point of view, which was really powerful for a firm that had been.
Peter Winick Yeah.
Niko Canner [sic] To be a day is – much more bulkanized and there are a whole lot of difficulties in talking about strategy. It was a real accomplishment for them to be able to knit together that platform. They didn’t have the strength in certain areas of organization that that story demanded. If you enter the world, we are about capabilities driven strategy. But you’d really better be good at some things relating to, for instance, culture.
Peter Winick And you can’t run that piece in.
Niko Canner And resigned to the shaping of strategy. And that’s really what we built our firm around. So our platform, around break through organizational performance, was like one of the handful of proof points that you would want for the Booz & Company platform. And so there is this sort of immediate resonance about what we’re saying to the world. And that was important to our own people as well because we have to tell the story to these incredibly talented people to be working anywhere about – why follow us? And most of these people were –
Peter Winick So I want to just emphasize what you said, and maybe more importantly, what you didn’t say. You actually talk about the strategic intellectual property fit into their narrative, you didn’t say, well, we had 20 diamond accounts and we had this revenue multiple and they can sell more stuff into our clients like – none of that. And not like those things aren’t important. But the headline was the strategic fit, and they had an IP gap. They had an IP gap that you fit in. Then I would imagine all those other things we’re obviously going to look at from a valuation perspective. They’ll come to be, and I think most people think about it the other way.
Niko Canner Yeah. I think you’re absolutely right. Those things were second order things because you cannot succeed at the business that Booz & Company was in without being able to get new clients. But you don’t have to go buy a boutique firm to get new clients. Of course, there is some relevance that we had certain relationships that could deepen their relationships with companies serving yet. That was nice. But that wasn’t the central justification.
Peter Winick Yeah, yeah.
Niko Canner Yeah. Action in the center of the action was that there is not only IP, but also deeply embodied knowhow that was central to the story they were telling the world. And then the question we ought to answer was. “And could these things be brought together?” And there was a question of culture fit and style fit. Sure. Sure, we all knew to be there because we in fact worked on these questions with them.
And I would say, and they with you. They also got a sense, not just of your IP, but what better way for them to know you than to be a client and say, “Who do you stand for? Do you live up to your promises? You’re delivering value? What does it actually like to work with them? Would we be proud to put that in trying to put that in front of our clients?” That’s a really phenomenal way from a reciprocal standpoint to sort of date before you get married.
Niko Canner Yeah. And it created a level of trust that while we were still negotiating the final elements of the deal and an opportunity came out, that was really the kind of flagship demonstration case of what the two firms could do together, which was General Motors before it even emerged from bankruptcy. So we really need to transform our operating model and our culture. And we went together to –
Peter Winick And won the deal. Right.
Niko Canner Who at the time was the CEO of GM and said, “This work with you would be the core kind of demonstration of why our two firms are coming together.” And when he said yes, and John Katzenbach and I made it our number one priority during those incredibly demanding months. If –
Peter Winick Sure.
Niko Canner We’re finishing the deal, we’re integrating the firms to be out in the market, showing that the linkage of capability driven strategy and breakthrough organizational performance was powerful in the context of one of the central stories of business at that particular moment.
Peter Winick Yeah. And there’s an external internal piece, too, that so the external piece is, yes, that becomes an amazing case study to tell the world in the future. But there’s also an internal piece, meaning I would imagine like any other change management initiative or integration or whatever. There’s a bunch of the consultants sitting back and who’s going, maybe, you know, let me I don’t want to be the first one in the pool. I have no reason to not like them. But why do I want to risk blah blah blah? You know, with my clients? And then they see that they’re like, Holy cow, I want some of that. When can I bring that to my client? So, I just want to be mindful of the time here. This has been phenomenal. You and I can talk for hours as we talk about a little bit early, but I so much appreciate the insight and the sharing of the story and the narrative and the pros and the cons is that there’s so much richness in the sharing of that, that I appreciate.
Niko Canner That part of what such pleasure about this conversation is the way in which your work points to how these lessons from experience, which I’m sharing, you know, are just instances in some very general principles of how I thought leadership is built and brought into the world. And I feel like your way of explicating what I’ve lived really brings out how there are only a certain number of problems in thought leadership and having the concepts that you describe and the practices, are essential to not having to go through the wilderness of this for us to get – to break through organizational performance.
Peter Winick No, I think you’re 100 percent right because, you know, from my seat, I see so many amazing ideas every year. Right. And like the sad thing. So that’s an amazing thing, right? The sad thing is, so many of them never really see the light of day or reach a percentage of their potential for lots of other reasons that you would imagine. So it’s not just the strength of the idea, that’s table stakes. You have to be smart. You have to have something to say. You have to have a proven method. Of course you do, right? But once again, table stakes, if you don’t have those other things going on as well, you know you’re not going to reach the impact or the financial side that some of the work has the potential to reach. So again, thank you so much for your time, Niko, because this has been fantastic. We’ll have to do this again real soon.
Niko Canner It’s a pleasure, Peter. Thank you.
Peter Winick Thank you.
Peter Winick To learn more about Thought Leadership Leverage, please visit our web site at ThoughtLeadershipLeverage.com. To reach me directly. Feel free to email me at Peter at ThoughtLeadershipLeverage.com and please subscribe to Leveraging Thought Leadership on iTunes or your favorite podcast app to get your weekly episode automatically.