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Gear Up for Growth 
With Jean Caragher
For CPA Trendlines
In a rapidly shifting business landscape, professional services firms face increasing pressure to develop new business while maintaining client loyalty. In this Gear Up for Growth episode hosted by Jean Caragher of Capstone Marketing, guest Matt Dixon shares insights from his forthcoming book, “Activator Advantage: What Today’s Rainmakers Do Differently.” Dixon, a founding partner of DCM Insights and a renowned sales researcher, detailed how top-performing professionals distinguish themselves through proactive engagement and strategic relationship-building.
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Dixon’s research, based on a study of nearly 3,000 partners in professional services firms—including accountants, lawyers, and consultants—identifies five distinct business development profiles:
- The Expert – Reluctant sellers who rely on their thought leadership and expertise to attract clients.
- The Confidant – Traditional trusted advisors who build deep, personal client relationships and expect loyalty in return.
- The Debater – Provocative and challenging, they push clients to rethink their approach but often struggle in long-term advisory roles.
- The Realist – Pragmatic and transparent- focuses on managing client expectations but risks being perceived as too negative.
- The Activator – Proactive and well-connected, they anticipate client needs and introduce strategic insights before clients even realize they have a problem.
“The biggest chunk of accountants fall into the Confidant profile,” Dixon explains. “They believe if they do great work, clients will automatically return. But our research shows that assumption is increasingly flawed.”
While each profile has strengths, Dixon’s data indicates that Activators consistently outperform their peers in business development. Unlike Experts, who “aggressively wait for the phone to ring,” or Confidants, who safeguard relationships but resist cross-collaboration, Activators take a different approach.
“Activators don’t just collect business cards at conferences; they turn them into paying client relationships,” Dixon noted. “They proactively bring insights about opportunities to make money, save money, or mitigate risk before clients even ask. That ability to stay ahead of the RFP process is game-changing.”
Moreover, Activators actively collaborate within their firms, introducing colleagues and expanding service offerings. “The goal is to create multiple points of contact with a client so the relationship is harder to sever,” Dixon said. “If a client only likes you, that’s a risk. But if they’re working with several people in your firm, they’re far less likely to leave.”
For many accounting professionals, moving toward an Activator mindset requires a shift in thinking. Dixon points to two key barriers:
- Fear of Diluting Relationships – Confidants often hesitate to introduce colleagues, fearing they might disrupt the client relationship. However, research shows clients appreciate when firms bring holistic solutions to the table.
- Reluctance to Engage Outside Expertise – Experts tend to stick to their niche, avoiding conversations beyond their domain. “Activators listen for opportunities outside their specialty and bring in the right person at the right time,” Dixon says.
One of the biggest obstacles to developing Activators is compensation. Many firms operate on an “eat-what-you-kill” model, which discourages teamwork. Dixon highlights examples of firms that successfully adjusted their incentive structures, including Guidehouse, which compensates partners based solely on firm and practice-level EBITDA, eliminating individual origination incentives.
“You don’t want partners hoarding clients,” Dixon says. “If a client reaches out, and it’s not your expertise, you need to feel 100% comfortable passing it to the right person. The firms that reward collaboration see major revenue growth.”
To help firms assess their partners’ business development strengths, Dixon’s team developed the Activator Diagnostic, a tool that scores individuals on a 0-100 scale. Firms can use this data to focus training efforts on partners who have the potential to become stronger Activators.
“The average score across nearly 10,000 partners we’ve assessed is 44,” Dixon reveals. “But the data shows that moving from a low to a high Activator level can increase personal revenue generation by 32%.”
With client loyalty on the decline and competition increasing from alternative service providers and AI-enabled firms, the ability to proactively engage clients is more critical than ever. Dixon’s research underscores the importance of shifting from a passive, reactive approach to an active, strategic one.
“The most successful partners are those whose clients think of them even when they’re not engaged in paid work,” Dixon concludes. “When your client texts you on a Saturday for advice, that’s when you know you’ve built an enduring relationship.”
10 Key Takeaways
- Professional services partners fall into five business development profiles—Experts, Confidants, Debaters, Realists, and Activators—but only Activators consistently outperform the rest.
- Activators Succeed by:
- They proactively engage clients with valuable insights before a need arises.
- They network strategically, turning connections into paying clients.
- They collaborate within their firms, ensuring clients see the full range of services available.
- They focus on building multiple points of contact with clients, making relationships more resilient.
- Client Loyalty Is Declining. Only 50% of clients automatically return to their service provider—down from 70% just five years ago. In five years, it could drop to only 33%.
- Firms must engage clients regularly and proactively to retain business.
- Clients want advisors who bring insights instead of waiting for inquiries.
- The best professionals are “always on”—available for quick advice and top-of-mind even when not actively engaged.
- Clients expect holistic solutions—firms must introduce colleagues instead of siloing relationships.
- Adjusting compensation models to reward teamwork can drive higher revenue and client retention.
- Activators generate 32% more revenue than other profiles.
- Shifting even slightly toward an Activator approach leads to higher fees and stronger client relationships.
More About Matt Dixon
Matt Dixon is the founding partner of DCM Insights, a consulting firm that offers research-backed business development training programs for professional services firms. He is the author of three Amazon and Wall Street Journal bestsellers, The Challenger Sale, The Effortless Experience, and The Challenger Customer. His upcoming book, Activator Advantage: What Today’s Rainmakers Do Differently, is set for release on May 20, 2025.
Transcript
(Transcripts are made available as soon as possible. They are not fully edited for grammar or spelling.)
Jean: Hello, and thank you for joining “Gear Up for Growth” powered by CPA Trendlines. I’m Jean Caragher, president of Capstone Marketing and your host. Today’s guest is Matt Dixon, founding partner of DCM Insights, a consulting firm that offers research-backed business development training programs for professional services firms. He is the author of three Amazon and Wall Street Journal bestsellers, “The Challenger Sale,” “The Effortless Experience,” and “The Challenger Customer.” Matt is here today to talk about his upcoming book, “Activator Advantage, What Today’s Rainmakers Do Differently.” Matt, welcome to “Gear Up for Growth.”
Matt: Hey Jean, thank you for having me. It’s great to be here.
Jean: Well, as I said earlier, before we pressed the record button, I’m very excited to have you here today. The book, there’s so much to wrap our hands around. So, we’re going to do our best in the time we have today to give folks an overview and delve into a few of these points. So, let’s lay the groundwork. So, in your research, you’ve created what you’re calling five profiles that characterize partners of professional services firms. Can you give us a brief overview of each of those?
Matt: Sure. I’d be happy to. So, just to give a little bit of background around where these profiles come from, because here’s one thing I’ve realized is that presenting this to accountants and lawyers and consultants, these are skeptical people, and they’re data-driven people, so they want to know that this is based on science, not just our opinion. So, we collected data from close to 3,000 partners across professional services. The biggest chunks of that sample population were lawyers, accountants, consultants, and then we had smaller slivers of executive search professionals. Investment bankers as well were in the study. But the big three were law, accounting, and consulting in the study. So, these were statistically derived profiles. So, I won’t bore your listeners with how we did this, but we use a methodology called factor analysis. Basically, in late person’s terms, people are probably having flashbacks of university stats class right now. Yeah. So, you and me both. So, what it does is it basically looks at how a lot of data clumps. The variables clump together and move together in a model.
So, it helps researchers distill the overall themes or stories in the data set. And one of the big things that came out of it is, much to our surprise, that every one of these 3,000 partners could be statistically placed into a business development profile. And so now a couple of words of caution for the listeners. One is, these are not personalities. I know this is always the first question I get. I always say this when I present this material. And the first question I get is how much of your personality has to do with this. Because I think people hear the profiles and I think they immediately assume it has to do with one’s personality. So, we can talk about that. But it’s not a personality-based assessment. We looked at time spent, behaviors, techniques, tactics, how a partner uses or doesn’t use the resources of their firm, et cetera. So, these are things that all of us can learn and get better at. It’s not what you’re born with or it’s not who you are. It’s more of what you do, if that makes sense. The other thing is they’re not mutually exclusive. So, I think for listeners who are practitioners in the field, they might have a hard time actually saying, “I think I’m more like this one, but sometimes I’m more like that one.”
And that’s true for every partner. Every one of the 3,000 partners in the study majored in one of these 5. But it doesn’t mean they don’t have elements of the other four. So, that’s a good way to think of it. It’s like a college major. So, the five profiles are, one, you’ve got experts. So, experts I would describe as kind of, the reluctant business developer. So, these are folks who they love accounting or they love the law or they love doing digital transformation consulting, but they don’t like selling. It’s not why they got into their chosen profession. But I think as you and I both know, as you rise through the ranks in a firm, you go from executing the work to now having to bring in the work, in addition to executing the work and overseeing your team. But many of these folks, I think it doesn’t come naturally to them. They don’t really enjoy it. I had one lawyer tell me the other day, “Look, I didn’t go to law school to be a salesperson, but that’s basically what I got to do as a partner in my firm. It just doesn’t come naturally to me.”
But the way this translates in business development terms is that experts really try to send a signal to the market through thought leadership, speaking at conferences, being on serving on panels and industry associations, that they are one of the leading lights in a certain area. So, that could be a certain area of tax advisory work, a certain area of, you know, again, consulting or law. And they really, again, do focus on sending that signal to the market. And what they hope is that if a client has that need, they will find them and reach out to them and ask for help. And so in the words of one CEO of a big firm, we interviewed, this person said, “Most of my partners are experts.” He knew right off the bat. He said, “They like to aggressively wait for the phone to ring. That’s kind of their approach, right?” And you could tell from that description, he wasn’t a big fan of that approach and how he didn’t like it for the firm. In practical terms, I think, for experts, they end up getting swept into a lot of competitive business, a lot of RFP-driven business, because by the time the client realizes they have a need and they reach out to the expert, they probably found a few other experts as well. And now, you know, it’s kind of a competition in terms of who wins the business.
Jean: Right. But, you know, Matt, from my perspective, having been, you know, I’ve been consulting for quite a long time now, but I have worked internally in several accounting firms. You know, the experts are the folks that help the marketers with the content development to present the webinar or write the article or whatever it is. So, they play a big role in that whole business development world.
Matt: Yeah, it’s a really good point. In fact, I think one of the most important takeaways here is that the research, as we go through the other four profiles, it doesn’t suggest that expertise is unimportant. In fact, quite the opposite. The winning profile, the activator, which we’ll talk about here and you know from the name of the book, hopefully the listeners are surprised when we get to that point. But it turns out the activator actually minors in the expert profile. So, that means they have really deep expertise. But what they’re doing is different in terms of activating that expertise in the market. And I think that’s a super important point because we don’t want partners thinking like, “Oh, I guess, you know, the 10 years I spent before I made partner becoming a really deep expert in this area, I guess that was for nothing.” In fact, it’s quite the opposite. It’s just a story of, how do I activate that in the market. So, the second one…
Jean: So, as I mentioned to you, I know thousands of confidants, right? So…
Matt: Yeah, that’s right.
Jean: …I think that’s your next one coming up.
Matt: Yeah, the confidants, the next one, you’re right. And the confidant, it’s not surprising, Jean, because in fact, when I look at it, I pulled that slide up because I wanted to check before we did this recording. Confidants, actually, that is the biggest spike profile, if you will, in accounting, in particular. So, most, the majority of, sorry, majority, but the plurality, if you will, of partners falling to that profile, the confidant profile. So, who is the confidant? The confidant, I would describe as kind of an old-school trusted advisor. And what I mean by that, it’s not to denigrate the concept of being a trusted advisor, because I think that, that is still seen as kind of the gold standard in the industry. But it’s the way that these folks go about executing that model. So, what they do is they try to kind of bring together a small portfolio of very deep client relationships. They bend over backwards for those clients. They deliver great service and great work product to those clients. They’re very client-centric in kind of a classic way.
If the client asks them to jump, they ask how high, right? What they also try to do is build not just strong business relationships based on the strength of their work and the fact that they deliver that work to a high standard, but also they try to build kind of personal relationships with their clients. So, you’ll hear confidants talking about the fact that they go vacationing with their family, with the client’s family, or sometimes even that was somebody, I knew from business school. And now they are a CFO and I’m a partner in an accounting firm and they are my client, not just my friend. So, what’s interesting about these confidants is their mindset when it comes to business development is, as long as I do great work and have a really deep relationship with that client, they should just keep coming back to me automatically. Because it would be unthinkable that they would go to the competition. They would never force me to compete for the work because that would be, like, a violation of the relationship that we have.
Now, because these folks have invested so deeply in these relationships, they are very protective of them. So, inside their own firm, all firms are in professional services really focused on collaboration. How do we bring the breadth of the firm’s capabilities to our clients? And I would say confidants are kind of the anti-collaborators, meaning they really do have sharp elbows inside the firm. It’s not because… I don’t think it’s any ill intent, but I think their fear is I cannot afford. When I have so few deep client relationships and I build my own personal set of ATM machines and these clients keep coming back over and over again, I don’t want to bring a partner from another part of the firm who might come in and screw up the relationship for me. And then I’m kind of back to square one. So, that’s our confidant. Again, you find those, the biggest chunk of accountants fall into that profile. Same with lawyers actually.
Jean: Interesting. Okay. And that doesn’t surprise me because we hear all the time the level of service they bring to their clients. It’s always client first. I mean, the house could be on fire, but I’m going to take care of that client first. So, it’s interesting to me that the attorneys then are basically the same.
Matt: You know, it is. And one of the things I would say as well is as we go through these, there are good things about all of these profiles, actually. There are weaknesses as well. And I think for partners, especially if you’re listening to this and you’re thinking, “I don’t really think I’m in that activator profile. I think I’m in one of the other profiles. What does that mean for me?” Well, what it means is, keep the stuff that made you successful, be mindful of the weaknesses of that approach in the current client buying environment. And let’s try to add a bit of activator-ness to it. But I think I’ve tipped my bit enough to the activator approach. I should probably tell the listeners what that one’s all about. So, okay.
Jean: Absolutely.
Matt: So, activators are, I like to call them super connectors. So, they are really active users of platforms like LinkedIn. They are also very purposeful users of physical networking events like conferences, whether it’s a firm-sponsored event or an industry conference. You know, these are the folks, and we all know these folks, they go with a game plan to an event. They know who’s coming. They’ve set up the breakfasts and the lunches and the dinners and the coffees. And in their mind, they’re like, “I’ve got a hit list of people I want to make sure I talk to.” Now, they don’t go home and just sit with a stack of business cards on their desk collecting dust. They try to turn those business cards they’ve collected at an event or the LinkedIn connections they’ve collected online, and they try to turn them into paying client relationships. And the way that they do that is really interesting. What activators really try to focus on is proactively bringing insight around opportunities to make money, save money, mitigate risk for the client before the client has even considered that this is an opportunity or a risk that is facing their business.
And so again, they try to kind of get ahead of the RFP, if that makes sense. They try to shape the client’s understanding of a need. They’re always asking the question, “What’s the thing that I know that my clients need to know?” And they’re bringing those ideas forward. Now, what’s interesting as well is when they do that, they’re not looking to bill the client for that time. What they’re looking to do is pay it forward a bit. So, I want to show you the strength of my advisory skills. I want to show you that I’m thinking with your best interests in mind by proactively bringing these ideas. Even when you’ve not asked me to do so, I’m trying to work in your best interests and deliver value to you proactively. And it’s funny because I think many firm leaders, that makes them nervous because they say, “Well, I don’t want my partners engaging in free consulting.” But activators will tell you, “My billable work is what pays my bonus this year. It’s my unpaid work in this pay-it-forward stuff that lays the groundwork for my bonus next year.” Now, the last thing I’ll say about these activators is that unlike the confidant… So, first, unlike the expert, obviously, activators are very proactive. They’re not waiting for the phone to ring.
They’re bringing ideas to the client. The other thing is they’re different from the confidant because they’re not sharp-elbowed internally. In fact, they do the exact opposite. These are the folks seeking out opportunities to bring colleagues into the client relationship. And I think there’s lots of reasons why, but one of the most important is that activators know it’s a tough client-buying environment out there. Clients are not really as loyal as they once were. They’re forcing us to compete with all kinds of providers that the business just used to come to us automatically. And now they’re forcing us to compete for it. And so activators know that it’s in their best interest to get more points of connection between their firm and the client organization. Look, if my client likes me, that’s great, but that’s kind of easy come, easy go. If we’re supporting the client across many parts of their business, that’s a much more difficult relationship to sever. And it’s one that the client thinks twice before they go with the competitor. So, again, that’s our activator. And they’ve got two more. We’ve got debaters and realists. So, the debater is, I kind of call them the sharp-elbowed opinionated, know-it-all, maybe in the interest of time. And it’s funny because…
Jean: But we all know some of those.
Matt: So, we do know some of those. And it’s so interesting because you find these folks in professional services for sure but it will… Let me park that thought for a moment. I’ll come back to it. But what’s interesting is, I was going to say, you find more of these folks in B2B sales. And I’ll talk about why in a moment. But debaters, their go-to approach with the client is to basically tell the client they’re doing it wrong. And you see a lot of these folks in very commoditized spaces, like, not to call these services commodities, but you find them in banking where fees are pretty standard, one deal to the next. You find a lot of them in the executive search. In fact, I’ll tell you a quick story. A partner at one of the big executive search firms who does CFO placement at Fortune 500 companies told us, said, “I always go in and my go-to approach, because look, if I’m competing for a piece of CFO search work with a client, I know they’re talking to all my competitors. Like, it’s a big hire. It’s a very important hire. You want to hear what everyone has to say about this hiring decision.”
So, this person’s goal is to come in and basically tell the client they got the job spec all wrong, by just coming in and blowing it up. And I asked this partner and I said, “Well, how does that work out?” And he said, “Well, 90% of the time the client just kind of ignores me, but 10% of the time when I win, they will tell me later that I helped them think outside the box. Everyone was telling me the same thing. I helped them think differently.” And so again, you do find that these folks can be successful. But what’s so interesting to me, back to the point I made before is we did an earlier study, you mentioned at the “Challenger Sale,” where we looked at thousands of B2B salespeople. So, these are people selling products, not selling advice, like accountants and lawyers and consultants. And what’s so interesting is that this debater profile, we called it the challenger in that research. They are the winning profile in B2B sales, but it was so fascinating to us.
I’m tipping my mitt a little bit to the results, which we’ll talk about in a moment, but debaters don’t actually do very well in professional services. And what that tells us is, it’s okay to be a debater or a challenger if you’re selling a product. But if you are the product, as you are in professional services, that’s a really tough posture to have. And look, clients, they love their partners to push their thinking and push them outside their comfort zone. But they also tell us, “Sometimes, I just need the work to get done. And I don’t have time or patience for that partner who’s always telling me I’m doing it wrong. Like, I know what needs to get done, can you just execute? Now, every once in a while, I do want you to tell me when we’re about to go left, and we really should be going right, right? Like, bring those new ideas to me, but don’t do it all the time.” And again, like, you said, we know these people, but the data reveals…
Jean: Thank you.
Matt: …they don’t do particularly well in this industry.
Jean: Matt, would you also characterize the debater as being the difficult person within a partnership or firm?
Matt: You know, it’s funny because I think these individuals don’t reserve their debating for outside of the four walls of the firm. So, I think that’s where you’re pointing.
Jean: Yeah, that’s what I’m getting at.
Matt: Yeah, exactly. You know, years ago, when we wrote the “Challenger Sale” research, I remember presenting the results in again, B2B sales, challengers do very well. They’re the winning profile in that study. And I remember presenting the results. And one head of sales was very kind of upset to learn that challengers did so well. And I asked him, “Why?” And he said, “Well, I fired all those people like five years ago, because they’re a total pain to manage.” And I think debaters, it’s the same. And look, in every firm, we know these folks, right? And they don’t reserve their opinions and their sharp edge point of view for their clients. They’re always challenging leadership. They’re always challenging their colleagues. And they debate internally as well. And to be honest with you, and I think what you’re driving at is, in some firms, it’s kind of a tough cultural fit, right? And they stick out not in a really good way. So, yeah.
Jean: Right. Okay. So, the last one then is the realist.
Matt: The realist. Yep. So, the realist is… I think of the realist, you find actually the consultants actually fall mostly into the realist profile, which is interesting. The realists are kind of the truthful, transparent broker with the client. And those all sound like good things. But I think the way it comes across to a client is in a very glass-half-empty view. So, the realist is the one who predicates their sales approach by telling you the work that we’re discussing, the engagement we’re discussing is actually going to cost a lot more than you think. It’s going to take a lot longer than you think. It’s going to deliver less than you think. And you wonder, like, why do you do that? But I think this is, I think why you see so many consultants fall into this profile, because they know that clients have all been burned in the past by consultants who’ve overpromised and under-delivered. And so they try to do the exact opposite and they try to win favor with the client by being brutally honest and telling the client not just what they want to hear, but what they need to hear. And clients, when you talk to them, say, “Look, I love the honesty. It’s great. Like, I don’t want to do business with a partner or a firm that is not honest and transparent with me. But I also want people to… Like, let’s think about what’s possible to accomplish together, not just what can’t be done.” And so, you know, it does come across as a little bit deflating as a commercial approach, if you will.
Jean: Right. Well, that was a great summary. And of course, there’s a lot more to all of this. So, we’re giving you, you know, like the 30,000-foot descriptions of these profiles. And we’ve talked about, you know, many accountants falling under that confidant profile. I think the stat is 31%. And it’s the closest to the, you know, the famous trusted advisor model, you know, that’s been in the accounting profession a very long time. So, what challenges do confidants face in developing more into activators or maybe having a stronger, you know, activator part?
Matt: Yeah. You know, I think each of these profiles faces maybe a different angle in on activator. So, if we want to turn our partners into activators, I think we need to be cognizant of a few things. I think the first is that, you know, a confidant is going to approach that model differently from an expert or a debater or a realist. They’re going to have to adapt their own personal approach differently to adopt more of an activator approach. I think the other thing with partners that we’ve learned after having, we’ve trained thousands of people on this activator approach is you can’t train partners the same way you train salespeople. So, salespeople, you know, you can say, we all know, we’ve heard this before the old adage, “You know, if it’s not in Salesforce, it doesn’t exist.” Or, “You know, if you don’t follow the methodology, there’s the door, or you got to fill out these account planning templates.” Partners don’t react well to that. These are autonomous people. They are highly educated. They’re deeply skeptical. And I think when it comes to getting people to, you know, evolve their approach more towards an activator approach, you’ve got to approach it from the standpoint of, “Here are the behaviors. Here’s what the research shows. Here are some techniques you might apply, but how you apply them, that’s kind of up to you.”
And so we do see when we go out and we train partners and firms, many months later, we’ll see different flavors of activator out there. So, you got like kind of the confidant flavor of an activator and the expert flavor. And what they’re doing is what we talked about before, they’re trying to retain the goodness because look, those confidants, as you said before, really do build very deep client relationships. And that’s certainly highly valued. They really pride themselves on being client-centric and delivering great white glove service to their clients. And they deliver great work. There’s nothing wrong with any of those things. But I think for confidants, they’ve got to, there’s a couple of mindset shifts that are required. And I think one is it’s really dangerous in today’s client-buying environment to assume that great work is going to lead to the next piece of work. In fact, what we found in the HBR article, as well as in the book, we talked about some research we did with clients. And what we found is that client loyalty is kind of on a secular decline. So, you know, five years ago, clients would agree that, “Look, if a firm or partner did good work, and we had a good relationship, sure, I would go back to them for the next piece of work.” Today, it’s only about 50% of clients who would agree with that statement. And we asked clients, “You know, how do you think this will change five years from now?”
And only about a third of them said, “Yes, I will automatically go back to my partner if they keep doing good work, and if I’ve got a great relationship.” And so as the world… You know, where’s the competition coming from? I think we know it’s alternative service providers, it’s boutique and niche firms, right? Increasingly AI-enabled tech firms, right? So, there’s a lot of competition out there for our clients’ wallet and/or a wallet share. And so it’s very dangerous for that confidant to just rest on their laurels and the fact that they’ve done such great work in the past. They’ve got to be constantly proactive, continuing to build a strong foundation underpinning that client relationship. And I think one of the really important ways to do it, and this is the hardest thing, I think, for confidants to get their heads around, is this idea of collaboration with colleagues. So, you know, I think it does require a real mindset shift. And I think if we’re honest, a lot of confidants, again, they live in fear of the bad things that might happen if they bring a colleague into their client relationship. But I think the reality is that 99.999% of the time when you do that, you’re going to get a thank you from your client. And oftentimes, the client themselves doesn’t even realize your firm had this capability.
In fact, I’ll tell you, one of the biggest gripes that clients have about firms is they hate when their partners make them walk around the hallways of the firm and knit together the capabilities from that firm. They expect their partners to do it for them. You know, bring a holistic solution to me. If we’re executing on a transaction, for instance, or we’re starting to expand internationally, I want you to leverage all of the capabilities of your firm. It’s not just that I welcome it, I expect it for you to bring all the capabilities together. And you can still be the quarterback but don’t just keep our relationship siloed to just your specific area of expertise. And the last thing I’ll tell you about the confidant, I think, you know, the confidant, as I said before, tends to sort of forward a small group of clients. And in this world of increasing client disloyalty, I think it’s really important for those confidants to get out there and build more of a pipeline of business. Because even those longtime clients, you know, it’s less surprising today that they will inform you that you just lost to a competitor and you had no idea that there was a piece of business up for grabs, because they didn’t automatically come back to you. So, you owe it to yourself, you owe it to your firm and your colleagues to continue to invest in building a pipeline, at least as a backup plan, in case those longtime clients go elsewhere.
Jean: You know, Matt, that’s so important, because even, you know, I spent, well, it’s decades ago, but I spent a few years at BDO. And I know, and there’s more national firms these days, because of mergers and acquisitions. And also there are accounting firms located, you know, with multiple locations. But even back in the day, you know, we had some experiences where different teams of people within the same firm were bidding on the same work. So, talk about… So, that’s not only like, let’s make sure the client knows all the capabilities of our firm, but let’s make sure that we’re approaching a new business opportunity, as you say, you know, collaboratively, so that there’s one team going after that work and not multiple because that sends such a bad message to a prospect.
Matt: It really does. It makes us hard to do business with. And I think ease is one of the things that clients really prioritize. I think there’s, I should also offer this, you know, if ease is one of the really important things, like, look, don’t make it hard for me to do business with your firm. You know what we’re trying to accomplish as a client. I don’t know what you guys can do. Like, I have no idea. And by the way, as an aside, how often do we get frustrated when our client decides to go with a competitor for a specific piece of work? And you’re thinking like, “We do that work. Why didn’t you ask me?” But you never brought the breadth of your firm to bear for the client. So, the client would have no idea. And they just assumed, “I guess you guys don’t do this stuff.” Because you’ve never, you know, wanted to have that conversation with me. I think experts, just as an aside, I think also struggle with this idea of collaboration. But I think it comes from a different place. It’s not fear of what my colleagues might do to offend my client or rock the relationship in some way.
It’s more, they are very nervous about the idea of having conversations with a client that fall outside of their area of expertise. And this is a really tough one for a… Because, you know, think about it, the thing that gets you to partner is becoming a real deep expert in a specific area of accounting or law or consulting or search or what have you. And this collaboration really requires that we, you know, put aside our expertise and start listening more holistically to our clients. It doesn’t require that we become an expert in areas that we’re not experts in, but it does require that we get out there a little bit more and at least listen for those opportunities with our client and ask a few questions so that we can go back to our firm and say, “Hey, Jean is the world’s leading expert on this. I’m going to get her in front of my client because this is what I heard in my last client conversation. And it’s a great opportunity for us to start to embed a little bit more deeply.” So, again, collaboration is something as we know that firms really struggle with, but we know clients are looking for it.
The other thing clients are looking for is this, we talked about the activator’s ability to be proactive and bring new ideas. That was the number one complaint. And this surprises partners whenever I share this. The number one complaint we heard from clients about firms and the partners they work with is that, you know, I’m stealing from clients here, but they would say, “We don’t hear from them often enough.” And partners are like, “What do you mean?” Like, I don’t want to bother them. I don’t want to always be in their inbox. I don’t want to be texting them and bother, they’re busy people, right? If they need me, they know how to find me and they’ll reach out and ask for help. But clients say, “Look, I’m heads-down on my strategy, on what I’m doing in my company. You guys talk to more people like me in a week than I’m going to talk to all year. So, I don’t know what I don’t know. If you know something that I need to know, I need you to bring it to me.” And that’s part of the value proposition that we bring to our clients. It’s not just the work we do. It’s the fact that we are a window into the market for our clients.
Jean: Right. And Matt, I can validate that because in the research that Rick Tellberg and I have conducted in the past, one of the top reasons why a client would leave an accounting firm was because they were not proactive enough. So, this is…
Matt: Absolutely. Yeah.
Jean: …not just one form of research. It’s, what word am I looking for, it exists everywhere. And we just need to keep focusing on that because that also is a major way that an accountant can stand out from other partners at other firms, because the clients know, “Hey, Steve sent me another article about this topic and he did that because I’m considering buying another company,” or whatever it might be that they’re really thinking ahead and they’re not just reacting.
Matt: It’s so interesting. I’ll share with you one other point that I think really kind of dovetails with this research and with your research, which is the most important variable we found in the entire model. The thing that was on a single variable basis that was the most predictive of performance was when a partner’s response to the following statement, “My clients think of me even when we’re not engaged in paid work.” So, what does that mean? That means that our clients have an always-on relationship with us. They’re texting us on the weekends exactly what you just said, “Hey, we’re thinking about this. What do you think?” Or, “Quick thoughts on X, Y, or Z.” And the client’s not expecting to get a bill for that advice, but it is an open and very fluid exchange of value. But when you talk to clients, they say that the partners who earn their way into that inner circle are the people I can text on a Saturday and they’re going to get right back to me and say, “Yeah, here’s my thoughts and let me know how I can help.” Now, some of that might lead to paid work and some of it might not, but when your client thinks of you in that way, that’s really where… You know, that’s gold in terms of a deep and lasting client relationship.
Jean: Absolutely. Now, one of the recommendations you make to build a team of activators is to invest in incentives and rewards. And you know where I’m going with this. I’m headed towards compensation and people do the things that they’re compensated to do. So, tell us about this challenge and your thoughts of what firms can do with their compensation systems to encourage these changes that we’ve been talking about.
Matt: Yeah, it’s, you know, this is like the third rail question and it always comes up. And, you know, it’s funny because…
Jean: Of course.
Matt: …when I present at partner retreats, there’s always somebody who I’m sure lost a bet to their colleagues, but gets up in front of the whole firm and asks like, “Hey, so one of the things I’d like to ask is… Like, we’ve got a very much an eat-what-you-kill kind of compensation structure. It’s very focused on the individual generation and origination and delivery and all this stuff, but you’re telling us to collaborate, but our comp plan doesn’t really line up with that. So, what’s your advice? And there’s a couple of things I would offer. I think the first one is, it’s, I would not recommend that firms try to solve the collaboration problem simply by compensating people. So, there’s usually something more at work here. If your partners don’t see value in engaging as a team to engage in the client as one firm, there’s something else going on here that compensation by itself probably won’t solve. That doesn’t mean to ignore compensation. However, I think the most important thing is that when firm leaders are up there saying, “Hey, we need to collaborate, bring your colleagues and make introductions. Let’s go as a team to our client.”
Your comp system has to reinforce that and it has to line up with that because if it doesn’t, you end up with that question that I get asked all the time, which is there’s a disconnect in what there is, what I call a say, do gap. The firm is saying one thing, but it’s doing something else. And I think this extends to not just monetary rewards, but also non-monetary recognition and reward. So, think about moments like when we elect new partners or when we lateral partners into our firm. If we’re celebrating people who are coming in and they have a reputation as being very sharp-elbowed and so on and so forth. Or we’re heaping praise on people who left bodies in their wake as they went to win a piece of client work, like, what message is that sending especially to our younger associates who are looking around and they pick up on these things and they pick up very clearly on what is going to help them get ahead in the firm? And so we’ve got to be really cognizant of that. Now in the book, we’ve got a couple of great firm examples. One is from the Consultancy Guidehouse. A fascinating story of a firm that really operates with teamwork and collaboration at its core.
They have no individual incentives. So, it’s fascinating. It’s a very atypical model. Every partner in their firm is compensated on a combination of firm-level EBITDA and practice-level EBITDA. And so what they want to avoid, and again, I don’t tell this story nearly as well as Scott McIntyre, Guidehouse’s CEO, tells it. I tried to do my best in the book, but it’s just an awesome story. But what Scott was trying to do was avoid the situation in which a client… And look, I mean, every firm and partner has been guilty of this in the past. You get an inbound from a client and it’s not exactly your area of expertise, but because of the incentive system, you don’t want to just pass it to somebody else. So, you basically, fake it. And I think what Scott has said is the half-life on faking it is very short in the client’s eyes. And so we wanted to create a system where there was no negative impact on you as a partner. You have every incentive in the world to get that inbound interest from the client over to the person at Guidehouse who is best positioned to deliver world-class value. And so we needed to remove compensation as a barrier to making what’s right for the client happen on their side.
There’s another great case from Russell Reynolds, the Executive Search Firm, not quite as extreme as Guidehouse in terms of no individual incentives, but it’s probably more realistic for a lot of firms. They just adjusted the percentages of their compensation model to more heavily weight things like collaboration, mentorship, coaching, etc., things that were important to them as a firm to win in the market. And so I would steer listeners to the book and check those two case studies out. But again, I think for all of us, it’s a little bit of a double-edged sword, right? Don’t assume comp is going to change behavior by itself, but at the same time, if you’re up there on stage at the partner retreat telling everyone to go collaborate in your compensation model is an eat-what-you-kill individual incentives kind of model, just be careful because there are a lot of people whose eyes will roll and will say, “Really?” Because you’re not putting money where your mouth is, so…
Jean: Right. Yada, yada, yada, right?
Matt: Exactly.
Jean: We’ll just have to sit through this again and then it’ll pass and we’ll go back to how we do business every other day, right? It’s…
Matt: It’s like a fat, right? Yeah.
Jean: And that takes strong leadership also…
Matt: It does. Yeah.
Jean: …to make those changes within a firm.
Matt: For sure.
Jean: Because it can’t be something that you’re just saying. It has to be something that you are representing or mentoring your people or what other cliche can I think of? You’re walking the walk with this collaboration.
Matt: Yeah. And the last thing I’ll say, Jean, on the incentives and compensation point is, there’s a lot of research out there, not my research, but we do talk about this stuff in the book from, I think it was Edward D.C, this was popularized in Dan Pink’s book, “Drive.” And the idea is that when it comes to complex work, so if we think about professional services is complex work, right? Whether, no matter what discipline, architecture, engineering, advertising, law, accounting, consulting, these are complex jobs. When it comes to motivating behavior and driving behavior in simple routine work, like if we had somebody working on a factory floor and we’re trying to get them to pull a lever or push a button more times per hour, you can pay people to do that kind of stuff. But if you’re trying to motivate performance in a complex work environment, like professional services, compensation itself is not the answer.
It’s actually what gets people out of bed in the morning, and Dan Pink talks about this in his book, is a sense of autonomy, mastery, and shared purpose with my colleagues. And those are really the things that get people jazzed and get people excited about being there and performing at the very highest levels and being really engaged in what they’re doing and the value they’re delivering to clients. But you got to make sure your comp plan reinforces those things and it’s not at odds with those things. Again, it doesn’t mean it’s unimportant, but people don’t deliver better accounting work simply because you pay them to deliver better accounting work. They do it because they want to demonstrate their expertise with a client. They want to deliver value. They want to do it as a team with their partners in their firm delivering value to that client organization. So, there are more powerful motivators at work than just pay.
Jean: Okay. So, I’ve got a couple of more questions. And I could be on with you for like a couple more hours. So, how can firms identify potential activators and help them build those skills? And as a follow-up, is that easier or more difficult for smaller firms to do?
Matt: Oh, great. That’s a great question. So, I would say, so there’s kind of an easy way and a little bit more technical way, but also pretty easy. So, the easy way, I find it’s actually so interesting the number of firm leaders I talk to who can immediately put their partners into the files. Like, what I would say is they’re pretty close to right. It doesn’t require heavy-duty science, but to the extent, because we are data-driven people in professional services, that firms are looking for more of a data-driven approach to measure activator-ness. We have an activator diagnostic. If any listeners are interested in learning more, just hit me up on LinkedIn. I’d be happy to tell you more about it. The survey we used to do the original research was, like, an hour-long survey, testing 180 different variables.
Jean: Oh boy.
Matt: You don’t want to go through that. It was a big time commitment. And as a business where, as you know, time is money. The activator diagnostic is kind of the short 10 to 12-minute version of that. So, we kind of boiled it down to the most important stuff. And what’s cool about it is at the end of that diagnostic, it gives you an activator score on a 0 to 100 scale. And so with firms that we work with, what they will do, they might have hundreds or even thousands of partners, and they’re trying to understand, “Where do we go and train people to be activators first?” Because we’re not going to train hundreds or thousands of partners all at once. And so we use the activator diagnostic to pinpoint those people who are already pretty strong on these things, those people who have moderate level capability, and then those people who are really on the low end, right? And that way you can be much more strategic and thoughtful in terms of aligning your training and making that investment pay off. So, again, reach out to me if you’d like to learn more about that.
The other thing I’ll tell you, for small firms, I think, what most firms find, and again, this is back to the point I made before, every partner has some level of activator in them already. It might be a low level, but it’s not 0 in almost any case that we saw across 3,000 partners. And we continue to run this diagnostic. I don’t think we’ve ever found a partner who gets a 0 on a scale of 1 to 100. We do have some that are in the single digits. We also have some that are in the upper 90s, but most of them kind of fall in the middle. I think the average score across, it’s got to be close to 10,000 partners now who have taken this, is I think about 44 on a 0 to 100 scale. But what that tells you on average, people have some of it, but they got a lot more work to do and a lot of ground to make up. Now, what’s so interesting about the activator approach is when we look at performance, it was the only profile that had a positive statistical correlation with performance. The other ones actually were negatively correlated with performance, which is interesting. And you might ask like, “Well, so you’re saying these people are choosing a path that is going to lead to selling less business?”
And nobody does that knowingly. People assume it’s going to lead to good things. But in fact, the data suggests on a predictive basis, it’s actually going to lead to you selling less business than you otherwise could. Activators, if you went from not very good to very good on the activator scale, you could increase your own personal revenue generation by up to 32%, which is a really big number. But the important point to remember is the line, is kind of goes straight up into the right. There is no flat spot. So, in other words, there’s no point at which you get to a diminishing marginal return on becoming an activator. So, if you’re a weak activator, well, there’s a lot of ground you can make up. And there’s a lot of goodness that comes from getting a little bit better. If you’re a moderate activator, there’s still benefit. And if you’re at the very, very high end, there’s still benefit for you. So, I think for every firm, and especially small firms, you might have just a handful of partners. It might be the owners who are also selling the business to clients and delivering the work. You should just measure the level of activator-ness.
And don’t focus on going from 0 to 100, but rather maybe improving by 10%, 20%, because that can really yield real benefit. And we’ve seen that with the firms that have been out on this journey since the beginning when this research came out about 18 months ago. And I’m just thinking of one law firm we work with. They went back and measured the performance of their initial cohort that went through their activator training. And it was a law firm. And they are selling, I think I can get these numbers right, it’s 40% more work and 20% higher fees on average. So, now again, these people were not… I wouldn’t say they’re now hardcore activators, but they’ve all improved in some key dimensions. And importantly, they’ve done it in their own way. So, they were introduced to these concepts. And you find across this initial cohort of 16 or 18 partners, some variation. And that variation is actually important as well as part of the story is we got to make it our own, otherwise, we’re not going to do it, especially for vessel services.
Jean: Right. And accounts love numbers. So, when they hear percentages like that, I mean, that opens their eyes, right? That gets some attention, right? Okay. So, my last question is a bonus question. You and your family live in the Washington, D.C. area.
Matt: We do. Yep.
Jean: What is your favorite thing to do there?
Matt: Oh, my goodness. These days to leave Washington, D.C. we’re having fun. COVID was really tough because there’s so much to see and do downtown in D.C. I mean, amazing museums and restaurants and just it’s a really cool city. We live just outside in Montgomery County, Maryland, and we’re just like a half mile north of the D.C. line. But it’s pretty exciting now to take the metro back downtown and see the city coming back to life again. And, you know, so I just honestly, I love going down. I love when I have client meetings downtown. I love taking the metro and listen to a podcast and then getting in there and, you know, walking around town, going to grab lunch and maybe, you know, the things you see just as you’re walking down the street in D.C. are just pretty amazing. But we do also try to get out of town because it’s not the best place to be in the summertime. It’s a little hot here. So, yeah. So, we spent…
Jean: Yeah, I get it.
Matt: …a fair amount of time out on the Delaware Shore, actually, yeah, which is kind of where D.C. people go when they want to escape the heat in the summer.
Jean: Right. Oh, that sounds wonderful. Well, I’ve been speaking with Matt Dixon, founding partner of DCM Insights and author of “Activator Advantage.” Thank you, Matt, for your insights. We’re excited to see more when the book is published. And that’s…
Matt: Thanks, Jean.
Jean: …sitting right, is it April?
Matt: So, the book, the official release date is May 20th, is when it hits bookshelves. So, you’ve got a little bit of a wait to go. But there’s a lot of a lot of fun activity happening as we’re gearing up for the launch. So…
Jean: Absolutely. Wonderful. We wish you every success with that.
Matt: Thanks, Jean.
Jean: And thank you for tuning in to “Gear Up for Growth.” Be sure to check us out next time when we focus on another topic crucial for accounting firms aiming for smart growth in today’s competitive landscape. I’ll see you then.