Updated: Sep 10, 2019
Consultants that overpromise and underdeliver are everywhere. Think about the economics in consulting or anyone in professional services like attorneys, software engineers, or executive coaches. If $300/hr is the going rate, you need to be creating value 3X or 4X that hourly or daily rate. Otherwise, the client will be frustrated with the lack of progress and value created after the first invoice, maybe the second if you're lucky.
Cost isn't the only factor. Martin Luther King Jr. said "you can be so heavenly bound that you're no earthly good." In business terms, you can have a pretty strategic roadmap with amazing forecasts and rosy projections. If you do not know how to execute, the balloon will pop and the crash will hurt.
Here are ways to set expectations properly with an added idea for managing expectations when changes happen... And changes happen. They are the known unknowns.
In previous episodes, we've touched on the subject of over promising and under delivering. For example, use clarifying questions to resolve vague problems. You should not assume that you have 40 hours in a week available for focused work.
We're going to talk about eliminating assumptions, healthy ratios, and total cost of ownership. We'll also offer some advice on how to reset expectations without getting fired.
1. Reduce the number of assumptions.
Assumptions are a part of life. We assume that the person driving in the car next to us is not texting, vaping, or otherwise distracted. Is this a valid assumption, based on driving conditions today? I'd say no. When I drive, I assume that the people around me are not paying attention. I adjust my driving accordingly.
In consulting, we typically operate off of contracts. Deliverables are clearly stated in the engagement letter. Assumptions are outlined and reviewed for accuracy. Here are some examples:
How long is reasonable for the client to make a decision? 48 hours? A week? Most contracts specify 48 hours to make decisions because of the number of deals that get stuck in limbo. This is especially relevant for new contracts, scope changes, or extensions. How long will you work out of contract? I've seen 3 months of work get written off as pro bono because the Partner and Client verbally agreed to keep working on a contract, only to have the contract never materialize.
What resources do you need to be successful? Are there key decisions or stakeholders who need to commit time and energy? Who will review your report or findings or other deliverables? Will the training team or another parallel team be ready to take the baton when you hand it off? At American Express, our team at Serve Online was working with Amex Technology to integrate with their Fraud Detection Engine and replace our existing engine. When we reached out to them to plan the project, they said that we should check back in 18 months. Their project request backlog was full for the next year and a half. Ouch. Confirm your needs, including business, technology, legal, HR, marketing, etc. before committing.
Have you done this before? It seems like a really dumb question, but it happens all of the time in consulting. At Deloitte, I was working for a telematics client. I received a call, asking me to work on a mobile payments project. I clearly explained that my only prior financial services experience was with an insurance company four years prior to the request. It had been a while. The partner did not care. I received a mobile payments white paper, a copy of the contract, and a ticket from Dallas to Tampa with the clear message: You are now a mobile payments expert. If you are unfamiliar with the job, the company, the industry, the leadership... any number of factors, assume that you will need at least 4 weeks to get up to speed before showing results.
2. Healthy Ratios.
I don't remember the details from school, but I remember the concept of the Golden Mean. In consulting, there are a few rations to keep in mind, get tattoos of them, and manage toward:
How much of your time is focused on maintenance versus new work or improvements? If you are always fire fighting, you can never work on fire prevention. Industry jobs can be incredibly frustrating, especially if you do the same thing day in and day out and nothing ever changes. Consultants are supposed to make things better, even for their own internal firm processes. A health ratio over a month is 60 - 40. 60% keeping the lights on, putting out fires, and operating. 40% working on improvements, innovating, or on projects to introduce new services or products.
What is the impact and value of your work? If you are an executive coach, working with a big consulting firm, teaching them effective soft skills, what is your worth? They may balk at a day of training for $2,400. You are forgetting the value that you are adding. Simply focusing on cost is a losing game. You will not win. Focus on the value that you create. $2,400 for a day of soft skill training that improves sales win percentages by 10% is a perfectly reasonable assumption. That $2,400 is a drop in the bucket. For all of your priorities, understand the value so that you can know what to prioritize first. Listen to episode 9 for more on this subject.
How may activities require people change vs. technology or process change? Spending $140K on 30 Salesforce licenses is not going to fix a bad sales team. Setting the right incentives, behaviors, and roles should be done long before you purchase software. Focus on the $50 solutions before leaping to the $5,000 solutions. For each of your responsibilities or projects, break them into people, process, and technology solutions on a simple matrix. If you don't get funding for your project, maybe you can apply a series of $5 solutions to make things better. Post it notes and a whiteboard aren't ideal, but they can be just as effective as Salesforce for a poorly disciplined sales team.
3.Total Cost of Ownership.
Consultants are notorious for estimating the cost to deliver and forgetting the cost to maintain. This isn't unique to consulting. Car manufacturers that are known for making vehicles reliable for 10 years + are rewarded. Car manufacturers whose vehicles age rapidly after the lease is up are avoided.
In addition to the cost to deliver, in terms of people, decisions, time, money, regulations, or parallel projects, estimate the total cost of ownership. How many people and resources are needed to run the product after it is live? If you are asked to manage a project, who will take over after the project is complete? Or are you perpetually assigned responsibility?
For all of your work, assume for your own purposes a warranty period. Assume that people will ask questions and need your attention, even after the job is finished. Allow for this in understanding your availability for additional work. Again, that 40 hour work week isn't really 40. 1,940 hours of work a year isn't really 1,940. The ghosts of projects past will eat up a good bit of most people's time and effort, on average.
Stuff happens. One of the biggest challenges to over promising and under delivering is that things can change rapidly. If you make a commitment and the following week, someone wins the lottery and quits, you have a significant unforeseen change, no matter how much contingency you held back. In consulting, we're often asked to not choose, but do both.
Manage your puts and takes. If you've done the legwork in advance, it's a simple exercise of balancing the ledger. Active work on the left. Requests on the right. If you've allocated your capacity with items on the left, something has to come off of your plate to accomodate a request on the right.
Let your leader choose. I assume that you've already been talking to your leader about your assignments and objectives in 2 - 4 week increments. When they want to change your priorities, have them pick what gets put into the Requests on the right. Have them make the prioritization decision for you.
The power of not yet. Reset priorities often result from people assuming that they have to have it now. They do not like hearing no. Not yet is a more palatable answer. For your Requests on the right, have a priority and an estimated effort. That way, when your leader is deciding on priority, they can already have a sense of the potential trade offs. Propose what could come off of your list of active work, but hold out the suggestion that the new request hits the top of the list of Requests for the next 2 - 4 week period.
We know that you want to impress your leader, especially on a new project or role. However, avoid the temptation to put a bad taste in their mouth but overcommitting yourself and under delivering. Build a reputation that is the groundwork for driving a career.