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Service Differentiation and Intellectual Property with Sean Flaherty of ITX

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When we think of software products, we often consider them as tools that increase productivity and performance. While that's not an entirely wrong assessment, Sean Flaherty of ITX shows us how his company's service differentiation of building software products creates experiences and build relationships among users.

Sean’s background in software development has led him to develop products that customers trust and can advocate for. More and more each day, we see the words “user experience” popping up and greatly impacting the way users interact with technology. Sean uses his expertise to fulfill these needs of users, and he shares his methodology on how he does it.

In this episode, we’ll be talking about:

  1. The ‘momentum framework’ ITX uses to build trust between the user and the product

  2. How focusing on profits can hurt your business, and what you should focus on instead

  3. What the ‘loyalty ladder’ is, and how you can implement it into your sales process

Customers are after software products that build trust among their users, and the momentum framework allows Sean and the ITX team to create software products that connect users to the product. A relationship forms over time, creating advocates of the product.

Rather than focus on profits, Sean brings up the importance of solving problems for other people. It’s estimated that over 96% of humans have an intrinsic motivation to create solutions that help others, not focus solely on profits. The potential positive impact the business and team leaves on others is far more profitable and motivating than any dollar sign.

This shift in focus from profit to people lays the framework for what Sean calls the ‘loyalty ladder.’ Trust, loyalty, and advocacy are the steps you need to get the customer to climb in order to become loyal advocates of your product.

Mentioned in this episode:

Mindset by Carol Dweck
The Goal by Eliyahu Goldratt
Drive by Daniel Pink
Why We Do What We Do by Ed Deci
Sean Flaherty on Medium.com

For more information on remote selling and a complete list of links mentioned in this podcast, visit this remote selling article on our website.


Service Differentiation and Intellectual Property with Sean Flaherty of ITX:

Full Transcript

Liston Witherill:
Welcome to Modern Sales, a podcast for entrepreneurs, business owners and salespeople looking to have more and better conversations with your perfect clients. You’ll get a healthy scoop of psychology, behavioral economics, and sales studies to help you create win-win relationships. I’m your host Liston Witherill, and I’m pleased to welcome you to Modern Sales.

Liston Witherill:
On today’s episode, I am very excited to bring you a conversation with someone who I’ve known for many months, we’ve traded emails, we’ve met in real life even though I have a remote business, he happened to be in Portland, Oregon, and we sat down for a cup of coffee and immediately hit it off. I find him absolutely fascinating. I love the business that he’s built. So today I’m bringing you an interview with Sean Flaherty of ITX. And ITX is a software development firm. But what they’re selling isn’t really software, what they’re selling actually is selling software that people can’t live without. Now that’s a big shift. And Sean and I are going to talk a lot about why that’s the case. Sean has been huge on building intellectual property, building process, building workshops that lead his clients from absolute stranger or prospect depending on how you think of it and where they are exactly in the process to people who understand exactly how it does things, why that’s the case and why it is the right approach if they buy into Sean’s worldview.

Liston Witherill:
And that, of course, is a really, really, really important part of having a proprietary way of doing things, of having intellectual property and process is you need to make an argument for why this is a better way to do it. Sometimes it can be counterintuitive. Often, the stickier your intellectual property is, it is somewhat counterintuitive, and you’re going to hear Sean talk all about that. Now I’m going to tell you a little bit about Sean. He started building software products. As a kid, he had an 8-bit Commodore VIC-20. I don’t even exactly know what that is. But it sounds pretty rudimentary. I don’t think he was coding on IBM cards or anything like that. But he’s been doing this for a really long time. He also studied aviation electronics and worked on Tomcats in the Navy. But most of his experience, as he says, has come from working in the trenches with his amazing clients and the inspiring software products that his company builds with his clients.

Liston Witherill:
One of the key things that Sean does is he runs innovation workshops for his clients, and he speaks regularly on a topic that he calls Poll, how create software that people can’t live without. What you’re going to find out about Sean in this interview, and I just want you to put this in your head and think about it as we’re talking, is the amount of leadership and the amount of courage and empathy that he has to show in order to promote his way of doing things through the process. It’s not so easy when your clients come to you and say they want one thing to actually tell them, no, that’s not the right thing. Here’s a better way to think about it. Here’s why we think about it in this different way. And that’s what Shawn does with his clients. And so I’m really excited to bring you this episode. And now here’s my interview with Sean Flaherty. Hey, Sean, how are you today?

Sean Flaherty:
Hey, Liston, I’m well, how are you?

Liston Witherill:
I’m doing really well. And I’m excited to have you here because you have a company with lots of different employees, lots of people, lots of places. But it seems like what you’re selling isn’t exactly software. It seems like what you’re selling is software people can’t live without. And that’s something that you talk a lot about. How did you make that shift?

Sean Flaherty:
Wow, that’s a great question. I think the shift happened organically before we realized it. Many, many years ago. It’s hard to differentiate yourself. This space is unique in that there’s two threads in a shed on every corner and every city in America selling websites, right? So how do you set yourself apart. And then on the other side of the market, you’ve got companies like Deloitte or Accenture that are competitors that do these things called digital transformation for companies, right? So there’s a lot of competition in the space. How do you set yourself apart? And we figured out we used to do everything, if our clients money was green, and there is IT somewhat related to the task at hand, we were doing it. We were pulling cables and building computers in the beginning of the Internets.

Sean Flaherty:
And over time, we just figured out where can we add the most value, and who are we really, and we are a bunch of technologists that solve challenging problems for our clients so they can move, touch and inspire the world. And overtime that’s evolved. And we figured out where we add the most value is in products that actually move the needle on human experience. And we became a software product company and not a website company that just does brochure websites but not a digital transformation company that’s going to revolutionize your entire customer experience. We’re in the middle. And we’re very clear about who we are and what we do. We build software products that create competitive advantages for our clients. Does it make sense?

Liston Witherill:
It does and I’m wondering was that, you guys sit down and have a board meeting and you make the decision, hey, we need to stop saying we build websites? Or was it sort of a testing and kind of an iterative process where you go out and you try new messaging and you say, hey, that landed that didn’t land? What was that process actually like? And how long did it take you guys to make that shift?

Sean Flaherty:
You asked when too and I didn’t really fully answer that. And I don’t really know when. I can’t point to a specific time and date in place, because you’re absolutely right. It’s been iterative. We have made those changes one word at a time in terms of how we use them, how we define them, and how we deploy them at ITX. So it’s been a transformation, we’re not done transforming, or we’re never going to be done. We’re going to continue to evolve as the market evolves and as the world changes. We’re living, in my opinion, in an exciting time where it’s possible to do that, it’s possible. It’s so easy to change who you are if you just have the will to continuously grow and to continuously evolve and to continuously improve, we call it continuous innovation here at ITX and we live it. So we don’t just say it, we live it. And I think you’ve stumbled on with your questions here a very clear example of how we live it. Today we’re a product company, we build software products, we build experiences through technology. Tomorrow that might change.

Liston Witherill:
Now, one thing you do is you go out and you give talks a lot. You and I have talked a lot about that offline before we’ve recorded in over many, many conversations. And one of the kind of cornerstone pieces of your talks as I understand it is something that you call the momentum framework. What is that? And why is it so important?

Sean Flaherty:
Well, think about this, in the software product development space you have customers, our customers, right clients, stakeholders, whatever you want to call them, they come to us with a bag of money. And it’s a mysterious bag of money because they won’t tell us how much money is in that bag. They have a budget but they don’t want to tell us what it is. And they say I need these features. I need feature A, feature B, feature C. How much is it going to cost me for you to build software that has these features? How much is it going to cost me and when can I have it? And often that comes in the form of an RFP. And some of these projects can be very big, right? You think about it, we got a bunch of very high, very intellectual, high paid people that it takes to build a really good software product, designers, artists, engineers, software architects, quality people. And these are people that are very highly trained, have a lot of experience. It takes a lot of energy to build a great software product.

Sean Flaherty:
So the project sizes can become very big. And when my customers come to us with this mysterious bag of money and they say, I need these features, I have to train them, I have to stop them in their tracks and say, that’s not really what you want. You don’t just want those features. And software isn’t like every other engineering discipline on the planet. It’s very, very different. It’s not like building a building, or building a piece of machinery where you have to engineer all the different pieces and parts that go into it ahead of time. You have to know exactly what’s going to go in so you can come up with your building materials and tell somebody how long it’s going to take to build it. Software is very different. We can build a minimum viable product, we can build a piece of it and deploy it and get you some value very early, and then iterate over time and add to it and learn from your customers and grow the product with your customers, and with the relationships that you’re building through the software over time.

Sean Flaherty:
And that takes a lot of energy to do that well. So going back to my initial analogy there, you got a stakeholder with a mysterious bag of money asking a bunch of people to build software. It’s not really the software that they want, the outcome they’re actually after is not a set of features. The outcome they’re actually after is users of the software that are moved, that are touched, that are inspired. What they really want is software products that create advocates, and loyalty, and trust and all these sort of ethereal things that they don’t know how to describe. So the momentum framework gives us all a language because it’s a tool set and a set of language to describe what we’re really after here, that we’re really trying to build software that’s going to create these experiences and create these relationships with our firms.

Sean Flaherty:
And the momentum framework, it has dissected all of that and it talks about all the different things that are required. It requires inputs like people, requires outputs and outcomes that result in users that are moved, touched and inspired. They trust you. They’re loyal to the product. And they become advocates. Complicated answer to a simple question, maybe.

Liston Witherill:
No, it’s not complicated at all. I guess I’m wondering, you have your momentum framework, so does that become a critical part of your sales process? I’m assuming from the very first time you’re talking to someone, that’s something that comes up. And then even after you’ve been working with a client who maybe wants you to bolt on a few features, does that come up again? And kind of take me into one of those conversations, how does that go?

Sean Flaherty:
Well, let me ask you this Liston, my turn around on you.

Liston Witherill:
Anything.

Sean Flaherty:
Do you want a website? Or do you want an engagement platform that’s going to create trust, loyalty and advocacy for your customers and prospects?

Liston Witherill:
The latter for sure.

Sean Flaherty:
The latter, right? And we all know that intuitively, but we don’t have the language to describe it. So we go out and we say, hey, I need a website. And I needed to have these features, like a blog, and a signup sheet so people can sign up for my newsletter, right? But what we really after, like I said, is a platform, it’s an engagement platform. And if you are a firm that has the will and the intent and the money, of course, to invest in engagement platform, then you should be investing in an engagement platform. And it means that you’re not going to build a website that’s got a sign up sheet for your newsletter, you’re going to build an engagement platform is going to say something like this, “Hey, sign up for our newsletter, and we promise we’re going to deliver the best possible content in our space on the second Tuesday of every month.” Right?

Sean Flaherty:
Think about how that made you feel. It’s a very different thing. And to do that well, you need a combination of artists that are going to get into the head of your consumer to really understand what problems you’re solving for them, not just the problems that they came here to solve today, the immediate needs they’re there to have solved, but also how are you going to build a relationship with that consumer? How are you going to move them up Maslow’s hierarchy of needs, and solve other underlying needs that they have in your community in your space in a powerful way? So that’s exactly what you just said. That’s my sales process. So I have to turn that conversation, a question that the customer has around and help them understand what problems they’re really solving and how we’re going to build a relationship with their consumer at the end of the day.

Sean Flaherty:
And that’s just talking about the website. Now obviously, ITX builds much more complicated products than just engagement platforms. We also build intranets and portals and really complicated software tools that are used by very large companies on production floors, and financial planning portals and payroll software. We do all kinds of software products. That’s what we do.

Liston Witherill:
In terms of the momentum framework, is it a conversation that you need to revisit with your clients even after they know about you, they know sort of your proprietary way of approaching software? Do you have to remind them later say, phase three, phase five even, when they continue to come back to you and ask for more? Are they always approaching it with the momentum framework or do you still have to lead them down that road once again?

Sean Flaherty:
So if we do our job right, I have a team of what we call innovation leads, it’s a new role in the world. They’re called innovation leads, and their job is to manage the momentum framework to keep the vision for the product strong, to keep the team motivated, to keep the roadmap healthy and growing for the product, because we have this belief that the minute you stop investing in the future of your software product is the minute it starts to retreat and die. So how do you build a really healthy backlog for the product? How do you make sure you have the right capabilities on your team to manage the roadmap and to keep the product moving forward?

Sean Flaherty:
So it’s something that we call, like I said, we call it continuous innovation. And we set our contracts up to make sure that the products are set up for a long-term success, which means we never stop thinking about momentum. And it’s not a process that you go through once. It’s not like a brainwashing exercise that you just do one time, it’s something that you have to think about and invest in on a regular basis.

Liston Witherill:
And so is it fair to say that additional work, follow on work and long term-client engagements are all built right into the framework?

Sean Flaherty:
In an ideal world. Yeah. Like I said though, customers come to us with this, I call it the fixed project mindset.

Liston Witherill:
Right.

Sean Flaherty:
Not the continuous innovation mindset. Another problem in my industry, as you’re well aware, my industry has a very bad reputation. Like software development shops have a bad reputation. Everybody’s been burned at some point in their history by trying to build something custom. So I have to go in there and explain why that history came about and how Agile has contributed to fixing it, but it’s not enough. And how Scrum, if you’re familiar with Agile and Scrum, these are industry specific words in the software development space.

Liston Witherill:
Mm-hmm (affirmative). Yeah.

Sean Flaherty:
And if you’re familiar with Scrum, it’s a set of best practices and ceremonies and things that help us operate an Agile mindset better. But you can still have Agile teams that don’t produce the best possible results. There’s something missing. And what’s missing is this momentum framework. It’s a higher way of thinking, is a higher level of rigor that we bring to software project development. And that’s why we even try not to use the word project in the sales environment, right? We want to convert our customer from this project mindset, like we’re going to invest this money and be done to look, this is a software product that’s going to be a competitive advantage for you if we build it well. And you can never stop investing in it. You don’t have to continuously invest millions of dollars, but you always need to be thinking about its future and making sure that it has a future. Or like I said, it will start to retreat the minute we stop working on it.

Sean Flaherty:
So it’s a process that I have to take my customers through to understand the difference between a project and the fixed project mindset. And the continuous innovation model, which by the way I stole from Carol Dweck, she wrote a book called Mindset. She’s a Stanford PhD professional, unbelievable writer and researcher. Most of the research she’s done has been based on, it’s called the growth mindset. It’s how do you raise children? And how do you influence success? And how do you measure success? And what does success really look like for people? So that’s where that language sort of came from originally. Does it make sense?

Liston Witherill:
Yeah, it absolutely makes sense. Now, one thing you talked about related to the momentum framework is what people really want when they engage with you or any software developer, essentially is to drive customer advocacy and loyalty. One of the models that you have to think about that is called the loyalty ladder. Tell me how that relates to the momentum framework and what it is.

Sean Flaherty:
So when I described the momentum framework, it’s the first thing I described. It’s the result that every business wants. Eliyahu Goldratt wrote a book called The Goal. Have you heard of that book?

Liston Witherill:
I have not. No, that’s a new one for me.

Sean Flaherty:
I did my MBA at this William E. Simon School of Business in Rochester, New York. And that was one of the first books they made me read. The Goal. And it describes a guy that runs a plant basically and how the goal of every business is to make a profit. And he chases different people around in the business trying to figure out where the bottlenecks are. And it’s all about the bottlenecks to profit. And unfortunately, I think has been the mantra for capitalism for way too long. And there’s two big problems with using profit as like the ultimate goal of any business. The first problem with it is, it’s a lagging indicator. It tells you how well you’ve done after you’ve marketed, sold, service delivered, done all the things that you’ve had to do to run your business. Tells you how you’ve done afterwards, it’s a lagging indicator.

Sean Flaherty:
So it doesn’t give you any guidance about where you’re going. The second big problem with it is, it doesn’t get your people up in the morning. It doesn’t get anybody motivated with a spring in their step, hey, let’s go make a profit for whatever stakeholders. It just doesn’t. So using profit as like the core goal is the problem. You need it, it’s like oxygen, right? So profit to any business is like oxygen is to any living being. It doesn’t exist for very long without it, you got to earn a profit at some point. Or there’s got to be some light at the end of the tunnel where you’re going to earn a profit at some point in the future, right? Or you’re going to lose your investments, everything’s going to fall apart. So you have to measure it, you have to monitor it, you have you understand it, and you want to maximize it for your stakeholders at the end of the day.

Sean Flaherty:
But if we’re truly Playing the long game and we care deeply about the people that work for us and the customers that we’re serving, we need a broader vision, we need a vision that will get people up in the morning. And all of the social science, this can be a whole nother podcast, Liston. I got lots of content on this. All of the social science points to the fact that from self determination theory to Abraham Maslow to all the motivation science that’s out there points to this fact that most human beings, 96 plus percent of them, those that are not sociopaths and have some level of intelligence, right? Most human beings are driven by, are motivated by, solving problems for other people. If we set up our vision properly and we get everybody aligned around that vision, we’ll have a much more powerful result in our businesses and the software products that we build for them. And the loyalty ladder is a model, it’s kind of like a universal model, like everybody really wants to create an ecosystem where their customers are on this loyalty ladder. We’re earning trust, we’re earning loyalty, we’re earning advocacy.

Sean Flaherty:
So my proposed vision for any company and any software product that we build is that we start there, that we start with, we’re going to earn advocates, what does that mean? And we create the language that matters to us. These are how we’re going to solve problems for our customers so that they become advocates of the work that we’re doing, of the business that we’re building. The rest of the loyalty ladder is predicated on that, like that is the goal. We want as many people as possible to become advocates. We’ll never earn advocates, we might be able to bribe a Facebook like here and there, or bribe somebody to sign up for Uber with a $5 coupon, right? But it’s not sustainable. If we want what we want to do is we want to earn true, self determined authentic advocacy from our users. And to get there they first have to be loyal. We have to earn loyalty from the meaning we’re solving real problems for them in real time in their lives on a recurring basis. And before that occurs, we have to earn trust.

Sean Flaherty:
So that becomes the foundation for the loyalty ladder, trust, loyalty, advocacy, and you have to do it in that order. Trust is foundational. Loyalty comes next. After you’ve earned a loyal customer, you have the right to ask for advocacy and trigger it. So that’s the foundation.

Liston Witherill:
I’m curious about your views on advocacy, right? Because on the one hand you’re talking about, you want to focus on the loyalty ladder and really having a driver outside of profit for your people and for your clients. Now, in terms of your clients, though, they’re attracted to the idea of the loyalty ladder and having advocates who are going out and really increasing their word of mouth. Do you find that there’s a tension between what you’re doing and what the end customer, the customer of your client actually wants or needs?

Sean Flaherty:
The word advocacy you’ve defined in a very specific way just now.

Liston Witherill:
Mm-hmm (affirmative).

Sean Flaherty:
And I think it becomes more powerful like any word. It becomes more powerful when you take the time to define it for your business. And advocacy is not necessarily just referrals and references, it could be, it is a sign of advocacy. So the way I define it when I sit with my customers and we go through our workshops, the way we define it is that an advocate is someone who invests in the future of your business. And that could come in many different forms. It’s not necessarily just a Facebook like, or a reference. It could also be that they give you feedback, constructive feedback, negative or positive. But that means they took time out of their day to write you a diatribe that explains how they think you could build a better business, where you can do something better for them.

Sean Flaherty:
If they give you ideas on how to improve, that’s an investment that they’re making in the future of your business. If they volunteer to be a beta customer of your software product, that’s a measure of advocacy. If we’re specific about how we define advocacy and we create a measure for it, now we’ve got a KPI that we can actually set a baseline for and grow and measure against. And it’s different for every business. It’s different for every product and service. But that’s one of the things that I preach is like, let’s spend the time as business leaders to define this loyalty ladder, truly define what does advocacy mean to us in our language? What does loyalty mean to us in our language? And what does trust mean to us? And if we do it in a measurable way, we get an unbelievable result because everybody will now be aligned with those metrics. That’s the ultimate goal of our business to create advocates, right? And the profit will come. If we can do it right and we can manage the profit along the way, we’ve got a heck of a business on our hands.

Liston Witherill:
So given that you’re running a consulting company and you’re so focused on this topic of advocacy, how do you think about it for your own business? How do you think about driving advocacy? And what are the measures that you use to see if it’s-

Sean Flaherty:
Great question.

Liston Witherill:
Yeah, go ahead.

Sean Flaherty:
What I try to promote is that on every single one of the products that we build, we have an inventory of the humans that we work with inside of the companies that we work for. We have an inventory of them and we know exactly where each of them is on the loyalty ladder. And we’ve defined those behaviors. And we track what percentage of our customers trust us, are loyal to us, and have offered to be a reference or are on our list of references that we can send to our next client. And if everybody in my company is focused on that, those three key metrics, guess what happens? They come up with the micro innovations that lead to more advocacy, more loyalty, and more trust, because I’ve empowered them with that metric. Does that make sense?

Liston Witherill:
It does.

Sean Flaherty:
They’re coming up with the language to us that makes our customers feel better about the products we’re building. They make sure that our customers are experiencing a smooth journey along the way. And they’re making good choices because they know that we care. We care because we measure the things that we care about. Trust, loyalty and advocacy.

Liston Witherill:
Can you give me an example of how you would observe trust? Is that just qualitative?

Sean Flaherty:
So here’s an exercise that I do with my clients, you’re going to love this. And I do these vistage, I do these like CEO group talks too. And one of the exercises that I do is I have everyone in the room write down on a piece of paper what does trust mean to you? So I’ll ask you, Liston, what does trust mean to you? Define trust?

Liston Witherill:
I think it depends on the context a little bit. I’ve actually been thinking about this question a lot. What I would say is, trust is when you are willing to take someone’s word for it, I’m using layman’s terms here and engage with them towards an uncertain and potentially risky future.

Sean Flaherty:
Awesome. If I asked 15 CEOs, and I’ve done this a whole bunch of times, I can tell you this is what will happen. If I asked 15 CEOs to define trust, so they write it down on a piece of paper without sharing with each other and without looking over each other’s shoulders, all 15 of them will have a very different definition of the word trust, just like you did. And it’s kind of word salad. Right? And here’s the key thing, so after I do this exercise, I have them all read their definition aloud. And then at the end of that I asked them who’s wrong? Which one of those is wrong? And the answer is, none of them is wrong. They’re all right. And by the very nature of having everybody in the room define trust in a very different way but all being right, that means it’s a worthless word to us. We can’t use it to measure trust.

Sean Flaherty:
But if you look at Merriam Webster, look at the definition of trust, you’re going to get, I think 10 different results, at least five. And dictionary.com I know has 10. There’s a bunch of different definitions. Again, none of them is wrong. We all have a different understanding of what trust means. But the business cares about trust, agreed? Your business cares about trust independently of any one of us.

Liston Witherill:
Yep.

Sean Flaherty:
So we’ve got to come up with a shared definition not for us, but for the business that we can measure. The best definition I’ve seen, I think it comes from Merriam Webster. It’s one in which confidence is placed. That’s a simple clean definition. One in which confidence is placed. So if we turn that around, we can actually measure it. What does it mean that one is confident in us? What does it mean? And my answer to that question is pretty simple. It means that your customer has made their first investment in you. If they’ve made an investment in you, you know they have confidence in you. Pretty simple, right? So how do we measure that first investment? And it’s different, again, for every business, if you’re selling donuts, maybe it’s not that they actually buy the donut. But if you’re selling a building, or if you’re a construction company selling a very large multimillion, maybe multibillion dollar building, if you’re waiting for the sale to measure trust, you’re way too late.

Sean Flaherty:
So if you figure out what is that first investment that you would expect from a customer, on the path on this, what I call the journey framework, the journey framework around the loyalty ladder, trust, loyalty and advocacy. And the more clear you are about what trust means and the more measurable that definition of trust is for the business, the more valuable it becomes because you can now measure against it. So we simply come up with a definition, it’s generally something like this, the first investment that my customer makes in me in terms of time information or money for significant investment. And then I want to know what percentage of my known prospects have indicated that they trust me. Now we’re on the path.

Liston Witherill:
Can you give me an example of what that would look like for you?

Sean Flaherty:
So for me-

Liston Witherill:
For ITX. For your company. Yeah.

Sean Flaherty:
Yeah, sure. So I have different customer segments. And let’s use, I’ve got a persona, his name is Harold. He is the guy that’s responsible for software products inside of the big companies that we sell to. Okay, so Harold, for us an indication of trust, when he’s a prospect still, he’s not quite a customer yet. When he’s a prospect, when he spends an hour of time to hear my momentum framework. If I can’t get him to spend that hour of time, he doesn’t trust me yet. He needs to invest an hour in me in learning from me. So now I’ve got a body, I’ve got a population of prospects of Harold’s that I know about. And my goal is to get them to spend an hour with me or one of my innovation leads hearing about my framework. And if I can get them over that hump, guess what? My percentage of closes goes way up. But it’s trust because I’m measuring trust.

Sean Flaherty:
I’ve taught my people the definition of the word trust for the business. They’re now looking for unique ways to earn more trust, to earn more Harolds with their butts in the seat listening to our framework for at least an hour.

Liston Witherill:
I’m finding this really fascinating. So do you pig your loyalty ladder? So loyalty… What was the second one?

Sean Flaherty:
Trust, loyalty and advocacy.

Liston Witherill:
Trust, loyalty and advocacy. So do you pig that to your sales process and your sales stages as well? Is that something that you think about in terms of how you sell and how you mature your deals with clients?

Sean Flaherty:
We certainly do talk about it. We don’t have the best measurement system in place, just being completely transparent with you. But it is a part of our language. It’s a part of our lexicon. When we’re talking about prospects in the pipeline, we’re asking what stage they’re at, we definitely are using that language. And we know… There are people in my prospect pipeline that are advocates, they’re sharing my content but they don’t have the power to buy from me. But still we consider them advocates and they’re out there helping push the message, they’re basically selling for us. They’re getting us in front of the next Harold. And we treat them really, really well.

Liston Witherill:
I guess you could add me to that group. Huh.

Sean Flaherty:
Here you go, look at you man, you’re an advocate, you got me on your podcast.

Liston Witherill:
Wonderful, wonderful. So you have all of these really big ideas, I would say, and really fresh approaches, where you’re not talking about software you’re talking about how to build a better experience and how to get the outcomes that your clients want. You mentioned that you go and you speak at these vistage CEO events. What are some of the other ways that you get the word out so that you can raise awareness for your firm?

Sean Flaherty:
To be honest, Liston, you know the answer to that, that’s why you’re setting me up for this one.

Liston Witherill:
Yeah, but the listeners don’t. So that’s why I’m asking you.

Sean Flaherty:
It’s a challenge, right? This is one of my biggest challenges. We do not do the best job of marketing and sales. I’ve got an amazing team, but it’s a very crowded space. Like I said, at the very beginning of the podcast. It’s a very crowded space. We’ve found that thought leadership is the way, we’ve got to do more speaking, I’ve got to get my innovation teams on the road, getting in front of more people, doing micro events, doing more podcasting, writing more blog articles, like it’s got to get the word out, we have the right content, we have the right message. I have to figure out how to get the word out. I haven’t figured that out yet. I mean, I have a very healthy, very good business, I’m very happy with where I am. I have an amazing partnership here and we have some of the most talented software development people in the world. I’m convinced of that.

Sean Flaherty:
We have a healthy business, but it’s like anybody, you can always grow more, you can always sell more, but it’s not growth for the sake of growth, right? I want the right customers. So I got to figure out how to connect with the right Harolds, the right Harolds of the world.

Liston Witherill:
Yeah, I mean, I think the answer as similar to your momentum framework is pursuing thought leadership, the work is never done. Whatever you figure out in the next six to 12 months will need to evolve and shift and adapt to the climate. So I think that never quite ends. But you have built your business really successfully to where you are now, which you feel really, really good about even though obviously, the work is never done to figure out new things. What would you say are some of the key drivers of your consulting growth journey to get to where your business is now?

Sean Flaherty:
Are you fan of Gary Vee?

Liston Witherill:
I have a love-hate relationship. Mostly love with him.

Sean Flaherty:
Yeah. Like most of us.

Liston Witherill:
Yeah.

Sean Flaherty:
Well, I’ll use one of his lines. It’s been an overnight success, ITX, 20 years later, right? It’s elbow grease man. We just have put the energy and effort and we have spent the time. In other reference here is Malcolm Gladwell, the book Blink. Have you read that one?

Liston Witherill:
I have, yeah.

Sean Flaherty:
10000 hours man, and being in the right place at the right time. It’s a combination of those two things. We’re lucky at the end of the day, we’re very lucky. And we’re very grateful that we are here. But we also put in the 10000 hours, everybody in this company has put in their 10000 hours. It has not been an overnight success. We’ve worked really hard to get where we’re are.

Liston Witherill:
And just like the record show that in a normal work year, I’m guessing you work a lot more than 40 hours a week, but let’s say you did, it’s 2080 hours in a normal work year. So 10000 hours would take a normal 40 hour week employee five years. Now, the truth is, Sean, you’re not giving yourself enough credit for how much time you’ve actually put in because I know it’s a lot more than that.

Sean Flaherty:
It’s a great point.

Liston Witherill:
I’m also really happy to hear you say, luck is factor. And of course, luck combined with continuous drive and hard work sort of increases your likelihood of getting lucky. But I agree with you, like there are all these things that are out of our control and you hope some of them fall in the right direction. And obviously a lot of them have. So, thank you for sharing that. One thing that I saw is on medium, you’ve written about leadership, and I recently wrote an article or an email newsletter about leadership. And you sent me your leadership model that you have for yourself and you’ve put together and it’s kind of reflected in that medium article. How does talking about leadership publicly help your business if at all? What’s motivating you to do that?

Sean Flaherty:
I’ll just be completely transparent with you on that one. So I have a problem sometimes, getting people to understand the power and the importance of empathy. I wrote that article because I stumbled on a shock and awe strategy for empathy. So that article is about how to identify natural leaders, right? I tried to read it from a positive light. I did like eight iterations on it by the way. So I got lots of feedback from some really great people when I put it together. But if I draw in a way that I can put Mother Teresa and Adolf Hitler inside of the same graph, it’s like a shock and awe strategy to help people understand how important this empathy thing is, in the context of any type of leadership. And we’re trying to build software products that lead people, right? Think about it. So everything boils down to human motivation at the end of the day, how well can we motivate people to do the things that we want them to do?

Sean Flaherty:
And hopefully, we’re heading in a positive direction, right? Trust, loyalty and advocacy. There’s no way you can get advocacy without having some very positive relationship. I’m trying to figure out, like how do I shock and awe people to understand how important empathy is in this whole equation. So that’s the real purpose for that article.

Liston Witherill:
Can you share a little bit about what the response was or what ultimate purpose that would serve for you? Is it just to get people to buy into empathy?

Sean Flaherty:
Yeah, it basically is, well, okay, this is important. It’s like, wow, I better pay attention to this. Where am I? So it gets them to think, where am I on that chart?

Liston Witherill:
I think the true irony of having to write an article about the value of empathy is maybe you’re trying to talk to the people in the sociopath quadrant. I don’t know. But it’s just so funny, right? Because, clearly in order to establish any meaningful relationship in our lives we need some level of empathy. Otherwise, it’s not part of the equation. It just doesn’t work.

Sean Flaherty:
You got it, you got it. And we all realize that. But here’s the other thing, empathy is malleable. You can have more of it. You can care more, you can have more capacity for effective empathy and you can have more emotional intelligence. But if you don’t even know where you are in the context of those two things, and you don’t have a way to think about or talk about where the people around you are, then how can you really lead? And I think great leaders do both of those things inherently, like they know how to get people to care more. And they know how to influence people through emotional intelligence, right? And they naturally do this. So if the tool is intended to get people to realize we’re all leaders, we can all be leaders, and we can all grow. None of these things are fixed. We can become better leaders. We can care more, and we can influence people more. That’s the theory behind it. That’s how it’s been useful to me. Is it a perfect tool? Nope. But it’s my shock and awe strategy.

Liston Witherill:
I was really curious about it. So thank you for sharing. Now, one thing you mentioned in your response there was emotional intelligence. So I’d love for you to talk about a couple tweets that you’ve sent out. And this is the part of the show where I use what you say on the internet against you.

Sean Flaherty:
Nice.

Liston Witherill:
I’m joking.

Sean Flaherty:
I might not remember these tweets. [inaudible 00:37:54].

Liston Witherill:
Well, one of them was the VentureBeat article that you shared and the headline is, AI will surpass humans at emotional intelligence.

Sean Flaherty:
Oh, yeah.

Liston Witherill:
Tell me about that.

Sean Flaherty:
But I don’t know if it’s actually true or not. But it’s interesting, right? It’s an interesting thing to think about. It’s a thought experiment. What happens when AI is able to surpass us in terms of emotional intelligence, when they can recognize the emotions of the people on the other side of the screen, and adapt their behavior in a way to influence you more. It’s like, minority or report stuff. It’s scary stuff. And it’s just fascinating to me. So that’s something I’m following deeply.

Liston Witherill:
Yeah, it seems like we’re already pretty close to that.

Sean Flaherty:
We’re getting there.

Liston Witherill:
Right in terms of, if you just… I guess it depends on how you define emotional intelligence or influence, but it seems like, especially you talk about the loyalty ladder and I know you’ve thought and implemented some of the work of BJ Fogg but Facebook knows how to get you to spend more time on there by making you angry.

Sean Flaherty:
They do. They trigger. They’ve got, like you said, BJ Fogg, his model for triggering habits and those little micro interactions that actually influence people. It’s scary stuff. And if you’re not using it in the right way, it can be dangerous. We all know that. We know it intuitively and we see it happening in our world. And it’s sad. And we have a moral obligation to really think about the software that we’re building, and how it’s improving the world, not just how we’re manipulating. And this is the difference really, it’s a fine line. In my article I wrote about this, right? In the leadership article. There’s a fine line between inspiration and manipulation. It’s a very fine line. It’s what we’re talking about right now. Who do we want to be? And what is the software that we want to build? Are we really in this just to make money and manipulate people so we can get rich? Or we’re actually trying to better the world? And the leaders are the ones that I want to be associated with are those that are trying to improve the world through the software that we’re building?

Liston Witherill:
It’s really interesting to hear you say that because one of the messages I’ve been trying to scream from the mountaintops is, the goal of selling is not to sell it’s to give better outcomes to our clients. And sometimes the answer is to not sell them anything. And tell them why we think that, sort of flies in the face of what a lot of people think about should be the goal, because we don’t know if we can help people every time and it sounds like you’re applying the same sort of ethical question to software. So maybe you and I can have a chat about that one day. It’s a huge topic.

Sean Flaherty:
Sure.

Liston Witherill:
On a happier note, you have another tweet from Jim Rohn. And it says, successful people have libraries, the rest have big screen TVs. What’s so bad about TV?

Sean Flaherty:
Oh! That’s a tough one. I don’t have a TV in my living room. It’s a very tricky thing, right? I’ve been trying to… I have four children. And this concept of screen time, that’s a hot topic right now. And since the beginning, especially being in this space, right? I feel like most of the day my face is attached to a computer screen. It’s some dangerous stuff, like how you choose to spend your time, how you choose to form habits in your life, results in your character, and who you become and who you are. And what you choose to put into your mind is what you get out of your mind. I believe that. It’s what I teach my children. If you spend most of your time watching sports on TV, nothing against the people that love to watch sports, but if that’s how you spend all of your time, what are you learning? How are you growing? How are you putting your 10000 hours in to do whatever it is you want to do in the world to however you want to self actualize and become relevant.

Sean Flaherty:
Because we all are here, I just watched an interview by Bill Gates and Warren Buffett, you probably saw it, it’s all over the internet about time, right? Warren Buffett saying, “The only thing I can’t buy is more time.” It’s really our only asset at the end of the day. We use it, we turn it into money, we turn it into information, we can move the world with it, or we can be a producer of content or we can be a consumer of content. And yeah, that pretty much sums up how I feel about television. I think it’s a good escape if you need an escape, and you’re using it as a way… It’s not like I’m totally against it. I’ve watched the entire Stranger Things series with my little girl. But it became a thing for us, rainy days, we get lots of rainy days in Rochester where I live. So that’s one of the things we do on a rainy day, is we actually sometimes look forward to a rainy day, “Hey, let’s go. It’s raining outside, can’t go out and play. We can’t do our thing. Let’s watch an episode of Stranger Things.”

Sean Flaherty:
So I’m not saying it’s a bad thing. I’m not fully against it. We have a TV in our basement for that very reason. That’s something that we do as a family periodically. It has its place, but we need to be very careful with it. That’s my opinion.

Liston Witherill:
Yep. The one thing that you said that really resonates with me is that you can be a content creator or a content consumer. And generally you can’t do both at the same time. And so it’s a matter of where you want to be on the spectrum. And that’s kind of how I think about that as well. So successful people have libraries. What’s one book in your library that you would recommend to people listening to this who also want to grow their firm?

Sean Flaherty:
I only get one.

Liston Witherill:
No, go wild with it man.

Sean Flaherty:
I’ve already mentioned a few.

Liston Witherill:
You’ve mentioned Mindset by Dweck and you’ve mentioned The Goal by Goldratt.

Sean Flaherty:
I have. Yeah. My personal favorite person in the world when it comes to human motivation. So to answer your question, specifically, I think all business leadership is about building more empathy and building more emotional intelligence, the ability to influence others in a positive way. And my personal hero in that space is a guy named Ed Deci. He’s the father of self determination theory and Daniel Pink. So there’s two versions of his story. Daniel Pink, sat down with him, interviewed him and wrote a book called Drive that describes his theory, in a very human way. Very consumable. That’s your thing. And then Ed himself wrote a book called, Why We Do What We Do. It’s his version of basically the same story. So I would recommend one of those two books, if not both. If I had one book to recommend to any business leader, that would be the one.

Liston Witherill:
I’ll allow you to recommend both. That’s not a problem.

Sean Flaherty:
But depends on how you want to read it. You want the consumer version, read Drive, you want to read from the horse’s mouth, read Why We Do what We Do by Ed.

Liston Witherill:
And I have read Drive and I have to say it’s Dan Pink’s best book. I’m a big fan of his work. I think it is the best book that he’s written. So great recommendation. Now, Sean, you’ve been very kind with sharing all kinds of things about your process, the intellectual property that you’ve built, the way you work with clients, how you’re building your business, and a little bit about the awesome products that you deliver to your clients. If anybody listening to this wants to learn more about you, what should they do?

Sean Flaherty:
itx.com. You want to send me an email, send it to sean@itx.com. S-E-A-N. Or you can find me online, I’m pretty easy to find, Google Sean Flahery Momentum.

Liston Witherill:
And the owner of a much coveted three letter domain. I have to say you’re a rare breed my friend.

Sean Flaherty:
My partner Ralph, is to blame for that. He was aggressive about it when it became available over a decade ago. A long time ago.

Liston Witherill:
Yeah, amazing. Awesome. Well, thank you so much for being here, Sean. I really appreciate it.

Sean Flaherty:
You got it Liston, anything for you man.

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