The McKinsey Trap

When marketing guru Seth Godin joined us on The Business of Authority, we asked him how he defines authority:

“Reputation, a variation of trust which is trust to the power of provability, meaning not only do I trust you, but I can turn to my partners, my boss, my employees and insist they trust you as well.”

He went on to say that authority is in the eye of the beholder.

Take McKinsey, arguably the most well-known, “authoritative” strategy consulting firm in the world.

McKinsey clients aren’t buying the big price-tag, they’re buying the “privilege of telling their Board what McKinsey said.”

They famously don’t do sales calls, have sky-high prices and act like divas—in effect, they’re trading in status symbols.

But that’s a trap—especially for soloists.

The other game in town is to be generous.

Which means finding ways to deliver value like in free emails, articles, videos and podcasts and then EARNING the privilege to exchange status.

You might give away your thinking in those arenas, but then charge heavily to get on a plane to deliver a speech. (Perhaps my favorite Seth tidbit: “People who have something to say don’t do speeches for $500”).

The bottom line: you don’t have to fall into the McKinsey trap but you must know your value and build your revenue model around it.