Tomicide Solutions May 2008: Five Key Client "Deliverables" In Managing Informatino Technology Engagements For Value
By Tom "Bald Dog" Varjan
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Disclaimer: On the surface it may seem that I've crossed the line and decided to poke my nose into project management. And while project management is a vital part of my work, it's from the standpoint of business development. As we know, good business development leads to projects and project management.
Many technology companies make the mistake that they deliver technical solutions as commodities. They fail to look beyond the technology part of what they deliver, and in the process, besides leaving money on the table, they create a disadvantageous ground for themselves.
These disadvantageous grounds include but are not limited to...
- Being selected through bidding wars (beauty parades)
- Being required to do extensive unpaid work to qualify for bidding
- Being beaten up on fees and prices
- Being pushed into atrocious working terms
- Being forced to work with opinion-makers not real decision-makers
Of course, many companies accept these working criteria because they believe any business is better than no business.
I'm not so sure, and they may be right.
But after two lawsuits (one won one lost) I do my best to avoid inappropriate clients. Both lawsuits were initiated by two inappropriate clients who failed to act on the advice they hired me for. That is, I delivered the required value but they failed to act on the value and turn it into results.
Now at this point some people may say that maybe it was my responsibility to implement. It can't be. It's physically impossible. Personal fitness trainers' clients understand that their trainers help them to develop a strategy to shape up, but it's the clients who have to implement. That is, it's the clients who have to go to the gym and sweat their arses off if they want to see results. No trainer can do that FOR them.
It happens only in the funny world of commerce where clients hire advisors and demand from them to turn around the business and make it profitable or else...
I've had several moron-grade prospects who have said to me...
"You're required to achieve these goals within this time frame. And don't disturb us with minutiae since we're extremely busy and have no time to help you."
This is the equivalent of telling a personal trainer...
"You're required to go to the gym three times a week and work out one hour every time, so I can lose 200 lbs by the end of the month. And don't disturb me with the boring details since I'm extremely busy and have no time to exercise myself. So, you have to do it FOR me."
And to me inappropriate client is anyone who doesn't fit into my ideal client profile or try to put me on the five disadvantageous grounds we discussed before. They are not bad people per se, but I'm not interested.
Nevertheless, even when you work with ideal clients, you still have to be...
Managing Your Engagements For Value Not Just For Tasks
And managing engagements for value requires some actions and documents that may not be part of your standard project management package.
So, first let's review how value-based project management differs from standard task-based project management. More specifically, we look at how they differ on the business development level.
But first we have to consider a concept which is called agile project management. There is some great stuff on the topic from Jim Highsmith and Gary Chin.
Using Jim's definition...
"Agility is the ability to balance flexibility and stability."
In traditional project management there is virtually no agility. The heavily structured plan must be executed to the letter regardless of newly arising situations that would warrant changes.
So, let's see what we need for agile engagement management, that is, managing engagements for delivered and received value, as opposed to for elapsed time and performed tasks.
Don't get me wrong. We have to manage the time and tasks because they are about timely implementation, thus part of the value we're delivering, but "merely" hitting a deadline on a task alone doesn't directly translate to value clients expect.
We have to relate time and tasks to business value that can be felt in the boardroom. And this is where we have to look at project management through different lenses.
By PMBOK's (Project Management -- Body of Knowledge as defined by the Project Management) definition...
"A project is a finite endeavour - having specific start and completion dates - undertaken to create a unique product or service which brings about beneficial change or added value."
Performing specific sequences of tasks within a timeframe alone is not added value. They can lead to the value or positive change clients expect.
And this is where we have to go beyond traditional task management. Your client may not understand why you build a concrete bunker for the company's server, but you know that to maintain top-notch security, which is specified in the engagement, the bunker is needed.
But in your client's perception, the security is the value he pays for not the bunker itself.
But this agile engagement management for value requires a different approach. Your team must work like a commando of non-compartmentalised cross-functional versatislists (as many years ago Buckminster Fuller coined them) as opposed to an army of compartmentalised narrow specialists.
What is the difference? To mobilise an army requires extensive planning. The first gulf war took two years of planning. In contrast, you can mobilise a commando at the drop of a hat.
Let's see what we need to have on the human side. That is what we need and what we need to avoid keeping the operation agile...
| Agile approach | Traditional approach | |
|---|---|---|
| Team's structure | Small light-on-the-feet cross-functional generalists[1] | Large, heavily-structured behemoth of specialists |
| Team member's role | Based on expertise and experience | Based on title, function and seniority |
| Responsibilities | Cross boundaries | Hard-core turf-protection |
| Decision-making | Decentralised | Centralised |
| Meetings | Frequent | Haphazard |
| Qualifications | Both agility and broad range of skills (must have) | Specialised skills (must have); Agility (nice to have) |
| Timeframes are based on | Achievements | Activities |
| Tasks are based on | Commitments | Resource availability |
| Planning | Ongoing planning throughout engagement | Huge upfront planning |
| Execution, tools and processes focus on | Flexible execution mixed with continuous adaptation to arising changes | Rigid, based on upfront planning |
| Documentation | Easy-to-comprehend short documents | Complex documents, templates and charts |
| Buyer's role | Active collaboration to keep finger on the pulse and offer industry and business specific insights (Do it WITH us) | No or little collaboration. Approving budgets and resources. (Do it FOR us) |
Adapted from Agile Project Management by Gary Chin
And in order to maintain agility in your project management and regularly communicate the value of the project to clients, we need few additional resources, both people and things.
Project Oversight By The Chief Value Officer
I had wrestled with this idea for a few years, and a few years ago Ron Baker of the Verasage Institute sorted out my thoughts and created order in my buzzing head.
So, the whole idea is that there is a CVO (Chief Value Officer) within your company, and this CVO's job is to monitor the value your company delivers to your clients and to make certain that the clients actually receive what they're being delivered.
And let's stop for a moment. Just because you deliver great value to your clients, it doesn't mean they actually receive it. It's like a FedEx package. The FedEx driver delivers the package, but if the addressee is not there to accept it, that package is of lost value until and unless it's received.
Similarly, if your clients fail to turn the value, which you've delivered, into specific quantifiable results, then the value is not recognised as having been delivered. It's like the addressee who is not there when the FedEx guy delivers the parcel.
And this requires another piece of clarification. As an outsider, you can't create results FOR your clients. Only they can do that for themselves by using the value they receive from you through your help, support and advice. We have to understand that clients need to make some major decisions to turn values into results, and only clients can make those decisions. They can ask for your advice, but it's up to them what they decide and how they use your advice. As an outsider, you're pretty powerless beyond your advice. You can't force clients to act upon your advice.
And Now We Need A Few New Documents
And we need these documents to keep track of how clients manage to continue implementation after our disengagement. We can initiate changes but after our disengagements, many clients revert back to the old habits. If you've ever watched Gordon Ramsay's Kitchen Nightmares on the Food Channel, then you've seen it all. He helps all the restaurants, but after he is gone, some of them revert back to their old habits and, in turn, go tits up.
And we have to tell prospects upfront that we will need these documents, so we can keep track of how effective and lasting our help and support were during our engagements. Clients must understand that this is our measure and this is the data we can use to improve our services.
And if they disagree or kick up a fuss, then, I suggest, you let them go.
This is why. We can collect smiley sheets from clients in the form of feedback, but the results speak louder, than emotion-filled feedback. Maybe this is why in the military officers and drill sergeants don't seek feedback from soldiers. They know how to train soldiers, and they also know that during training there are moments when soldiers would like to strangle their drill sergeants.
Military training is effective because it's not a process of pleasing soldiers. It's not about soldier satisfaction (warm and fuzzy feelings) but about soldier success (winning battles and coming home alive).
And we know that in order to make clients successful, they have to endure lots of dissatisfaction during and after engagements. Using medical language, it's nice to rejoice at the arrival of a new baby, but the mother had to go through a hell of a lot of pain to achieve that. I reckon the old saying is still true...
"No pain no gain."
These documents let both our clients and us focus on success not mere satisfaction.
1. Quarterly Implementation Update: This is a quarterly document in which your clients let you know how they are progressing on the ongoing implementation of the initiative they hired you for. This allows you to offer some additional hints and tips, and notify clients if you sense project derailment by reading these reports.
2. Quarterly Financial Reporting: This is just two basic finance documents: The balance sheet on the last day of the quarter and the quarterly profit loss statement.
3. Quarterly Next Step Document: A quarterly document to describe your next steps for the upcoming quarter. These next steps are related to the in imitative clients hired you before for.
4. Six-Monthly Executive Summary: This is two-page Word document in which clients describe what they've done to advance the initiative we worked on together.
5. Annual Update On Clients' Long-Term Success: Every initiative is in support of a long-term goal. To know the value of our contribution, we can ask clients to keep us posted on how they're moving towards their long-term goals.
Now, some people may say that no client would provide this information after the engagement. Of course, you'd let them know in advance that you would need these documents. This is why this is only fair.
You offered a money-back guarantee on your services, and these documents can help to make sure that what you started carries on. Otherwise a few years later clients may come back to you and invoke your guarantee. I made this mistake in 2001, and in 2005 the client came back and sued me.
And although he admitted that the failure was his fault, he still demanded the money back, and since it was him who initiated the lawsuit, decision was made in his favour, and I was dinged to $11,000.
And as you receive these documents and examine them, you can take the appropriate action. You can contact clients and ask them what caused this and this.
Summary
If we want one-time clients to become repeat clients, we have to show the value of our contribution. But the real value of our help and support doesn't show instantly after our engagement. It shows up over time. Requesting these documents we sort of "rub clients' noses" into the value they derived from engaging us.
Also, if we sense from these documents that something is going the wrong way, we can connect with clients and tell them about it. And the next step is up to them.
I also suggest that you create customised reporting documents that narrow the scope of reporting to the issues you covered. So, if you do IT consulting, focus on IT-related figures. If you helped the client to set up an CRM system, then your reporting documents are focused on CRM-related issues, like lead generation, lead conversion, sales, responsiveness to requests, sales staff productivity, cross departmental (between marketing and sales) collaboration, etc. Nevertheless, still get the balance sheet and the P&L.
To better differentiate yourself and raise your company's position to the level of rarefied air, it's vital that you pay attention to this differentiation stuff and the value you bring to the table. They help you to cite your fees and justify them in case someone pushes you into a corner. And this is when Ideal Clients will happily pay your fees without haggling.
Footnotes
[1] In our complexity-obsessed society, people are equally obsessed with specialisation. But, when it comes to science, like business development, is it the right way t go?
Maybe we can consider R. Buckminster Fuller's position on specialisation: "Our failures are a consequence of many factors, but possibly one of the most important is the fact that society operates on the theory that specialization is the key to success, not realizing that specialization precludes comprehensive thinking. The word generalization in literature usually means covering too much territory too thinly to be persuasive, let alone convincing. In science, however, a generalization means a principle that has been found to hold true in every special case... The principle of leverage is a scientific generalization."
In my view the secret is not specialisation but commitment.
And Niccolò Machiavelli confirms this in The Prince...
"Without doubt, ferocious and disordered men are much weaker than timid and ordered ones. For order chases fear from men and disorder lessens ferocity."
Thus paraphrasing... Without doubt, superbly skilled but undisciplined, uncommitted and unaccountable people are much weaker than less skilled but disciplined, committed and accountable ones.
"In war, discipline can do more than fury."
Thus paraphrasing... In business, disciplined implementation can do more than endless rah-rah filled planning and psyching up.
The forces of adversaries are more diminished by the loss of those who flee than of those who are killed."
Thus paraphrasing... The forces of competitors are more diminished by the loss of passion, excitement and enthusiasm of people who stay than those geniuses and top producers who leave. Continue where you've left off...
Attribution: "This article was written by Tom "Bald Dog" Varjan who helps privately held information technology companies to develop high leverage client acquisition systems and business development teams in order to sell their products and services to premium clients at premium fees and prices. Visit Tom's website at http://www.varjan.com.
