Staffing Industry Spotlight: Bryan Peña, CEO of Defiant Solutions, LLC

Francis:

Thank you so much for being on Staffing Industry Spotlight. First off, in your own words, who are you and what do you do?

Bryan Pena:

Oh my God. For those of us who are a little older, it reminds us of the David Stockdale. "Who am I? Why am I here?"

I've been in this business for 25 years. I started out as a practitioner, primarily in procurement. I deployed a number of different VMS programs across several different companies, then I was with Staffing Industry Analysts for 11 years, then I had a brief stint at MBO Partners as their chief market strategy, and then after two years I left there and for the last four years, I've been running Defiant Solutions, which is two businesses. Defiant Solutions is a consulting brand. We work with enterprise clients as well as providers of next-generation workforce solutions. We also do sponsored events, webinars, and training, as well as a couple of other stealth projects that we're not quite ready to go public with yet. But I love the industry, I love the players in the industry. I think it's a high honor to be able to, in some way, shape, or form, help people find jobs.

Francis:

That's really great. What are some examples of projects that you work on at Defiant Solutions?

Bryan Pena:

Well, everything from partnership strategy development. It's really focused on, for providers, helping grow the revenue, increasing their market position, so a lot of our work is as a fractional executive. We also do project-based work. So right now, I'm working with a couple of different companies on developing client councils and client groups. Another company I'm working with is a platform, and they are looking to build some policy documents, how you work with enterprises, strategic growth initiatives, and stuff like that. I will support enterprise clients on a project basis from time to time, but most of my business is in helping solution delivery grow revenue.

Francis:

Finding ways for your clients to grow.

Bryan Pena:

It's really kind of like a jack-of-all-trades. I look at myself as like a corporate fixer. Look across the clients we have at any given time, they all have very, very different needs and profiles, whether they're developing a partnership ecosystem, to revamping their pricing strategy, to, I don't know, general go-to-market strategy. It runs a gamut. I know it's a really frustrating answer, but oftentimes, we leverage our network as well as our past experience working across the industry as a provider, as a researcher and advisor, and as someone directly in responsible sales and marketing. All of those things give us a unique perspective on the market and specifically what it takes to be successful.

Francis:

What do you think are some of the biggest challenges for the companies you advise? Is it overcoming compliance barriers? Is it knowing who to focus on?

Bryan Pena:

That's a great question. I think the biggest challenge that a lot of the companies we work with have is really understanding and being able to articulate a unique value proposition and articulate that in such a way that the end clients actually care. It's one thing to know your value in the market, but it's another to really understand how to articulate that in a way that people can understand. Oftentimes I say that people are used to selling features and benefits as opposed to being different. And if you recognize that the market now is very, very skeptical and they're tired of hearing about features and benefits, they really want to look at points of differentiation, that really goes a long way towards helping yourself be successful. A lot of companies, I believe, don't understand the marketplace or don't understand the ecosystem. They think that because they have a solution to a problem, that the client doesn't have another solution in place.

So being able to clearly understand what the ICP is, what the ideal client profile is, and also what your unique selling proposition is, is just a huge point of what it takes to be successful. I had a conversation just today, just this morning about that very point. For the most part, a lot of staffing firms are identical, and being able to articulate the value proposition is very, very difficult. They all source from LinkedIn, they all use Bullhorn, they all have similar back office processes. So the things that differentiates to grow business is really limited. So in our industry specifically, I think those points of differentiation, I don't think you could underestimate how challenging that is and how that's a challenge that is central to overcoming revenue barriers we have.

Francis:

I can imagine clients, especially big ones, probably see so many solutions come to them that they think, "You're just like everyone else I see." I'm curious if you could, on an anonymous basis, share an example of an improved differentiation messaging?

Bryan Pena:

Let me see. I'm trying to look across the clients we've worked with in the past. Confidentiality, as you'd imagine, it's really important to me..

Bryan Pena:

A couple of platform clients have really struggled to articulate their value proposition to be successful with enterprise. One of the clients I work with was having that similar challenge. It was falling apart across multiple dimensions. So what we did is we created a bespoke offering and really created a differentiated way to pursue that business so that the value to the individual, the value to the company was much more clear. So for example, like the value of a talent platform, it's not about staffing, it's about the disintermediation of the traditional staffing layers, but also being able to clearly articulate where and which communities you're best served. So what we did is we narrowed the value proposition to focus on finance and accounting or consulting-type work and pursued that specific group within the client company, the enterprise client.

From there, that was a group that was not participating in the traditional program, so we presented it as a differentiated offering from the traditional staffing channel, particularly tailored towards that particular high-end, high-demand group. So even though they can do all this stuff, we sold the one part that they did really, really well, and that's what got them in the door. So we narrowed the value proposition from being, "We can do all of these things," to, "We can solve this specific problem," when it came to addressing consulting, or finance and accounting, or M&A-type spend, and that was the go-to-market, and that's what got us in the door. But if you were selling like a traditional marketplace play, "We can do all these different things," no one knows where to put you. So being very specific in the value proposition and tailoring it to that particular client was critical towards taking them to the next step.

Francis:

So you narrowed it down and improved the value proposition. Do you have to go through the MSP for this? Do you deal with the client directly?

Bryan Pena:

We work with the MSPs, but what I find is many, many MSPs have great strategic conversations, but things fall down at the program office level, and that to me is a question of incentives and operations. So you find that you're having a more successful audience with end clients and oftentimes going in conjunction with. So it's an and, not an or, right?

Francis:

Right. Yeah, you're involving both to ensure that the incentives are aligned.

Bryan Pena:

Yeah. You have to be able to do both.

Francis:

It sounds like since you have such a broad overview in your past of dealing with the client side for years and now being on the other side, you can find out where to actually go into these accounts.

Bryan Pena:

Yeah. I think acting as a translation layer is a huge part of the job. We get involved in the sales cycle all the time, all the time.

Bryan Pena:

I like that part. I like that part of being able to work with clients, talking directly to end users, and addressing those concerns and translating that value proposition. It's actually quite fun. I enjoy that a lot.

Francis:

One thing that's so interesting about staffing and contingent workforce is it's so fragmented.

Bryan Pena:

Yes.

Francis:

Even on the platform level, there are so many platforms: maybe they're a talent platform, maybe they're a payments platform, maybe they're a compliance platform, but even there are just so many offerings out there, especially on the pure staffing supplier side. Being able to find that niche is so difficult. If you’re just an IT staffing platform, there are 50 exactly like you.

Bryan Pena:

Exactly. That is 100% the central challenge of our time, because good, bad, or indifferent, our industry is very, very easy, the barrier to entry is really low, right? And that's what I like about what you're doing at Ascen, is that you enable that to happen, like all I would need is the wherewithal to go into my Rolodex and start making phone calls and connecting people to opportunities.

So the barrier to entry is really low. At the same time, by any estimate, there's over 10,000 staffing firms in the US, and a lot of those staffing firms are very difficult to differentiate, but also, a lot of people don't realize this, a lot of them don't really care. The vast proportion of staffing businesses are owned by smaller players, right? They like lifestyle businesses. They don't want to grow necessarily.

They get 10, 15, 20 people on assignment, they're happy, and that's where they stop. So that creates a lot of fragmentation and a lot of difficulty on the buy side to make sense of what's good, what is a good provider, and that element of differentiation is really a challenge. That part is also fascinating to me, is trying to identify points of differentiation.

Francis:

You know, what's interesting about that is sometimes when the staffing company makes it work, it can work really well, but I think a lot of staffing companies, it's just a mystery of how do you differentiate. Let's say you're a cybersecurity firm, it's like how do you get more niche than that?

Bryan Pena:

Yeah.

Francis:

What ways do you go niche? Is it your delivery model? Is it your tech? There are many different vectors.

Bryan Pena:

Well, it's a problem that's also been solved, right? The way to differentiate takes a page from platform economics, which adds value to the relationship outside of the core transaction. What does that mean? That means there are ways to differentiate by improving the client experience. That's always going to be a great way to do it. You know, better, faster, cheaper, differentiated, more targeted. But if you have a particular perspective on how you interface with the community, what value do you create outside of putting a body in a building?

Trying to focus on being a resource and creating elements of value, be it marketing collateral, be it research, being it assisting people and other elements, having a social cause. Those things are differentiated. I always have this discussion that in the old days, it was smile-and-dial. You'd be able to have this many phone calls, translate to this many meetings, and translate to this much business on the other end of it. In some ways that's currently true, but I can't think of the last time I answered the phone, and I can't think of the last time I responded to a cold email.

Even if you do those things, you can't create demand. You can't create demand out of whole cloth. People are hiring or they're not. So it's not like you're selling it to a predefined need. So the only way that you can really grow business is by market awareness, in my mind, building a market perspective so that when the need comes up, they think of you. So that means you have to be everywhere, you have to create experiential assets, you have to produce research, you have to be active in your market so that when the need comes up and when the phone call comes or they say, "Oh, I know that this company is good for cyber. I have a need."

Francis:

Right. You have to be way in advance of the actual need.

Bryan Pena:

Yes, a hundred percent.

Francis:

When you say active in the market, other than producing research, producing content, what are other ways to be active so clients know about you?

Bryan Pena:

Well, I think those are the easiest ones: hosting events, participating in other people's webinars that are complimentary to yours, writing, being evident on LinkedIn. How do you give to your community in a way that you don't get back, right? So you give to the community. Do you have a social cause that you're proud of? Do you have an active CEO that you're putting out there speaking on panels, contributing in resources? Is your website a destination resource? Really, do you have blogs that you amplify your partner's collateral, not just yours? When I go to your website for a particular need, how do you handle your candidates? How do you keep your candidates warm and facilitate their positive experience on engagement, right? So those are just some of the elements that I think are super important, and it takes a lot of giving with no direct line to return, but that's certainly important.

Francis:

That's such an important point to make. One thing that we see all the time: some of our best customers, are super active in going to conferences in their specific niche. They are really good at engaging with the buyers, they'll do webinars with the buyers, they'll produce blogs that are targeted toward the buyers, all in their specific niche. They get to know everyone in the space.

A lot of staffing firms think that you can just, like you said, smile and dial, but that's not the reality anymore.

Bryan Pena:

Yeah, yeah, you can't create demand, right? If there's no need, it doesn't matter how many phone calls you're going to make.

Then you're just selling into better, faster, or cheaper, which is really, really hard because people like to focus on the cheaper aspect of it, and that's always a challenge. How do you clearly articulate your difference in a way that doesn't diminish the value of the product and eat into your margins.

Francis:

So changing gears a little bit, you were at Staffing Industry Analysts for many years, and if I remember correctly from our previous conversations, you created or were very much involved in the creation of the Certified Contingent Workforce Professional (CCWP) course.

Bryan Pena:

Most people know me for that.

That was an idea and a PowerPoint to mine in 2010 and to the leadership when I was on the executive team at SIA. It was one of the very first things that I started, was that initiative, and I actually have that old PowerPoint. But yes, I saw the need for a qualification of standards and an increase of professionalism within our space, and out of that came the CCWP and the derivative works thereof, and I'm really, really proud of my time there and proud to be associated with that, and I'm really excited to see where they've taken it and how the program's evolved. Every time I see a notification on LinkedIn that someone passed their test, it just makes me that much more proud of the time and the team that is still carrying on the torch.

Francis:

Yeah, if you redesigned that course for today--since it’s been about 15 years since the idea was born--what would you add? Are there any topics you think should be added to that curriculum of what contingent workforce people should know about?

Bryan Pena:

I haven't seen the iteration that it currently is, so I'm speaking from the standpoint of what I remember, but I think that there's an inherent risk in a lot of the current education and collateral that is legacy in nature, right? I think that there are so many new work modes and there are so many ways that people work and also people can use human capital. And then I don't even want to get into some of the disruption that's going to happen with things like AI and the rise of RPA-based technologies. But I think that the CCWP is probably very heavily weighted towards a procurement perspective, which is just the nature of the beast. That was kind of the genesis of it, and the industry as a whole is heavily weighted towards a procurement perspective.

But I think that more inclusion and more time spent on talent orchestration and the inclusion of multiple modes of engagement, including talent platforms and other modes or another sort of things, would be important. What does that mean? That means like not just focusing on what it takes to source staffing firms or staffing through agencies, but how do you put all these disparate parts together that have an overarching talent strategy? As our industry has evolved and matured and some of the traditional meat-and-potatoes issues of governance and cost control are being addressed, it's much more of a curation of disparate talent solutions is really what I think is needed, and that's more of an HR function and perspective, and it's one that I think a lot of people are, I know I can speak from personal experience, are certainly struggling with, is being able to do that.

Francis:

Your finger is on the pulse of the industry to a high degree because you're dealing with so many different firms that are innovative and looking to market their new product. What do you think is hot right now? I mean, other than AI, obviously that's there, but some things come up all the time that we talk to, direct sourcing, there's tons of stuff on global EOR, there are tons of talent platforms, and then now there's lots of different iterations around that. What do you think are the top trends you're seeing right now that you think are going to really transform the industry in the next few years?

Bryan Pena:

Well, I think you mentioned AI, but I think I definitely want to reinforce that. I think that AI, not just as something that companies can use to make their recruiting process more efficient, but also how does that translate to the demand for the human resources and assets moving forward. So that to me is a question that I think is super fascinating that we're all going to be dealing with in the future because it translates in decreased levels of demand, decreased levels of engagement, all that sort of stuff.

That's one. I think the other sort of side of it is I think the ability to kind of consolidate all these things together, central aggregation, how do you have a front door that differentiates between agency source temp versus a direct sourcing platform versus a nearshore versus an outsource solution. So there's a defined need for a centralized perspective to do that. I had thought that that was going to be the purview of a lot of the VMS players, but I think that that's not necessarily the case. I don't know where that's going to evolve.

Francis:

Why is that? Why do you think the VMSs haven't evolved for that?

Bryan Pena:

Well, I think because it is hard enough to do some of the heavy lifting already, you know, I think being able to accommodate the increasing levels of scope and scale. And I can't say that they're not doing it, I just think that it's taking a challenge for it to really take hold, because at the end of the day, it takes a lot of fortitude to be able to commit to a strategy when it might not work right away. We talked about the MSPs a little bit, and I think the challenge with a lot of MSPs is that they'll have great strategic vision, but the program office is focused on getting the trains to run on time, and so what happens is that they don't necessarily stick with some more innovative strategies because they take time to develop. So unless the institution, the client and the MSP, highly values innovation and they're accountable for bringing innovation and recognizing that innovation sometimes comes with a little bit of hiccups and pain, they're going to struggle mightily to be able to deploy those things.

So what happens is that, again, people are selling based on features and benefits, we see a lot of RFPs that are takeaway business, and we see a lot of companies choosing to run their programs internally. So I think that it's a whole sort of like existential moment for what the future looks like for talent management because we have technology on the one hand disrupting and also the increasingly challenging expectations of the buyers also creating situations where a lot of MSP partners struggle to differentiate.

Francis:

Do you think in the future most programs will be run in-house?

Bryan Pena:

I've always felt that the value proposition of the traditional MSP is somewhat challenging in a lot of contexts, and what we see in terms of the data is that oftentimes, companies that have a stronger central function via its internally insourced, managed internally or partially internally versus one that is traditionally fully outsourced, the companies that have their own internal influence often can innovate faster, and that just makes sense because they're closer to the business, they're more accountable for that evolution. That being said, there are MSPs that do a great job managing that lifecycle.

But I do believe that if we think about the central value proposition of an MSP, I have a whole speech I give on this, the central value proposition when we rolled out MSPs back in 1998, that was when some of the first ones, was there was a tremendous amount of fragmentation, but more importantly, institutional mistrust, institutional mistrust of our staffing partners, the overly complex VMS technology, and also a complete lack of understanding of what it takes to run a contingent workforce program, and that takes us back to the CCWP, right? CCWP or sort of processes and features didn't exist back then. Now they do. So you have people who spent 20 years in a program manager role, and that expertise didn't exist at the genesis of the MSP. So some of the central levers of it are being really diminished, and unless a lot of MSPs clearly articulate what value they bring outside of the heroics of the program office, then they're going to be challenged to grow, and the choice to go internal is going to be that much stronger.

Francis:

Yeah, yeah. That's interesting to hear you say that. One of the reasons a lot of these programs are going in-house is because the knowledge is there now. Folks that have spent 20 years doing this, they think, "Why am I using an MSP? We've got all the knowledge in-house. We can do it in-house."

Bryan Pena:

Yeah. And by the way, people think I'm always down on it. I'm down on the traditional sort of value proposition, and I think that a lot of innovation is left at the door in favor of business as usual.

Francis:

Right, right.

Bryan Pena:

There's so much opportunity for the right partners and so much opportunity for MSPs to really be drivers of change, and it really boils down to institutional focus and commitment to really evangelize those work models.

I have a bunch of things that I talk about all the time. One of them is methodology fixation. Methodology fixation is a huge challenge for our industry, which is we've known agency source, we know the way the program office works, we're just going to put that solution everywhere, and we see it translating to lack of innovation and growth in some of these newer work models. I can remember, I think I talked about this earlier maybe in this conversation, I can't remember, but we've been talking about SOW management now for 10 years, 12 years, and it's still a challenge to really take off. This notion of total talent management, if I hear it one more time, I'm going to go out of my mind. It's still a great talking point, but it's very, very hard to execute. And then the face of that difficulty, they default back to managing an agency supply chain, which is something that's very difficult to differentiate.

Francis:

So ending up here, any parting advice to staffing suppliers and platforms? If you're a new platform, a new staffing company, what's the one thing that you should do or a couple things that you should think about to succeed in today's market?

Bryan Pena:

Well, I think the biggest thing is to have a very defined value proposition and perspective on the market. Focus on being a student of the industry and the market and providing value to the market independent of a direct return, which is hard for a lot of companies to do. I think also understanding the enterprise buying perspective is very, very important, and what does that mean? That means understanding where your solution fits in and choosing to be very narrow in your value proposition because it makes it that much easier for the buyer to buy, right? When I was in the seat as a buyer, I would get a hundred calls a day or a hundred calls a week or something from different providers. They all said they could do everything, but the ones who were very specific, "I solve this problem. I solve cybersecurity with onshore and nearshore resources dedicated to a particular software platform," the more specific you can be, the easier it's for me to buy you and know where to slot in. That's counterintuitive for a lot of owners.

They want to do everything. And even though you can do everything, I can't buy everything. I have a supplier for everything, but I don't have a purple squirrel supplier, but I do have a purple squirrel need.

Really taking a good hard look at your solution, understanding where you fit, and highlighting your points of differentiation, not your points of features and benefits, that's the biggest, that is 100% the existential challenge for all of them.

Francis:

Bryan, thank you so much for being on. This is a great talk.

Bryan Pena:

This is super fun, man. Thanks so much. I really appreciate it.

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