Art imitates life, or is it the other way around?
Consulting is a business, but it is also about life and is a form of art. Television is also business, life, and art.
Have you seen the television show Deal Or No Deal? There are 26 closed cases. Contestants choose one and must open the others one at a time in batches of 6, 5, 4, 3, 2, and finally 1. There is a tally board containing a list of the remaining amounts in play. After each batch contestants are made an offer by the elusive "Banker" and they must choose between accepting the offer or continuing the game.
The best possible outcome is to end up with two cases containing the top amounts. And the worst possible outcome is to end up with the lowest two amounts. The contestant's chances of success improve linearly with the average amount remaining in play. Period.
On a side note, the cases are opened by beautiful models. Now I don't know if you've watched the show or not but these models all have something in common. If you've seen the show, you probably know what I mean. The models all have incredible teeth.
How does this relate to consulting, Andy? Are you telling us we need to practice better dental hygiene? I'm glad you asked! Better dental hygiene is always a good idea. But that's not my point. My point is that there are times when you're faced with a similar decision as the contestants on Deal Or No Deal: Take a low-ball offer on the table or decline, holding out for your usual (or a reasonable) rate.
Tom Lambert has an excellent chapter about this in his awesome book: .
Let me share my own story. It's called "The $5,800.00 Lesson". One day I looked at my checkbook and saw a balance of $80.00. I then looked at the project whiteboard and saw nothing. I said to myself, "Self, you must've done something stupid." I was right. I needed cash, and fast. There were a couple prospects on the prospects whiteboard. One project that looked really good but was three months from starting, and another guy I'd been talking to about some programming - let's call him George. At the time, my programming rate was $70/hour. I explained this to George and he thought I'd make a fine consultant for his project, but he could only pay me half - $35 / hour.
I thought about the mortgage, the projects whiteboard, and my $80.
I wasn't completely stupid. I did recognize we were negotiating and that that was a good thing. SInce I take my quid with a side of pro quo, I countered "I'd need favorable billing terms. Net 10 days on a 15 day billing cycle." George agreed and we shook on it.
That wasn't my big mistake, although it was sizable. My big mistake was not defining a scope of work. These mistakes combined to put me in the unenviable position of being in the half-rate never-ending project (HRNEP). I could never point to anything in writing that defined what I would do or even what would define "completed" so George was free to redefine the scope of the project at will.
Did I mention George was an experienced project manager?
Yeah.
There's a difference between miscommunication and an experienced project manager taking complete and utter advantage of a young programmer / new entrpreneur (this was years ago). Although it took me considerable time to realize what was going on, I eventually figured it out.
In the end I worked on the HRNEP for three months. George became increasingly agitated with the 15-day billing cycle and the Net 10 days. At the end of the HRNEP I realized what was going on. I delivered several working versions of the project to George. In the last month I started taking notes. George didn't mind until he told me I had - once again - not built what he asked and I showed him my notes from the previous meeting, quoting him saying this was precisely what he wanted.
And George was way behind in paying me. He'd pretty much stayed behind after the first check.
George owed me $5,800.00 when he blew up after I showed him my notes. He threatened legal action - breach of verbal contract, I suppose. I realized the crappy situation I'd let myself into had an out, albeit an expensive one. I issued - and faxed - a credit to George for the $5,800.00 and wished him well in finding someone else to work on his ever-changing software project.
It went on for a week or so with email and voice mail and faxes. I knew two things: I'd probably not get sued for the money George owed me and $5,800 was a lot of money to lose, but my choice was between losing that or more.
Ugly.
And expensive.
But I learned some powerful lessons that have stuck with me to this day:
- You cannot please everyone. There are times when it's worth the gamble to try. Learning to discern these times is part of the art of consulting.
- Sometimes you have to fire your customer. There's good business and bad business. Bad business can hurt you more than good business can help because losses accumulate and gains don't ().
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- There is no clean way out. The best you can hope to do when you fire your customer is to break even and this is extremely rare. You will lose. Firing your customer must be considered, and the cost counted, before you make such a drastic move.
- It is possible to turn a losing proposition into a win, but it is much more likely you will exhaust yourself to break even.
- Most of the time it's better for everyone if you get out of the engagement as soon as you recognize it's a no-win situation.
Sometimes it's best to pass on the "Banker"'s offer and try your luck with the next batch.
:{> Andy