“We’re getting by” said the lawyer when I asked how the year is going.
“We’re doing okay” said the web designer in our conversation about second half goals
“It’s up and down” said the HR consultant before our second quarter review.
“Getting by, doing okay, up and down…”
Every company has periods like this, that’s the risk and reward of business ownership.
What made me want to write about these remarks is that this is the umpteenth time in a row these same owners/CEOs and others have told me their business is just limping along.
My first impulse is to challenge them with the question “Why is this okay with you?”
The emphasis is on the “why?”
I’ve learned from experience that a “why?” question never gets anywhere close to a meaningful answer.
What, not why
Now I ask, “What is important to you about continuing to do what you are doing?”
The “what?” question helps the CEO/Owner think in terms of concrete steps and actions.
The lawyer’s what is “I just can’t get away from hourly billing even thought it is a flawed model. I’ve never had a client come to me and ask, “what’s your fixed fee or your IMPACT based fee?” They always want to know what my hourly rate is.”
The web designer relies on several talented “gig” workers to get the work done. These workers charge by the hour, so the design firm owner feels she has to charge by the hour. Otherwise she can’t be sure she’ll make a profit.
The HR consultant worries that when he’s going into a firm facing a crisis, he can’t know for sure the scope of the work. So hourly billing is important to him because it expands to cover whatever the full scope actually is.
I understand the logic of these points of view.
But understanding the logic doesn‘t mean there aren’t other options.
Take a fresh look
What I say to these owners is “as long as you continue to make these points important you will continue to get the results you’re getting.” (Remember the definition of insanity?)
They need to wipe the slate clean and take a fresh look.
- Look at your revenue and profit goals: What amount of revenue will be better than “we’re getting by”? And how can they build profit into that revenue that compensates them for their ownership?
- You can learn to define scope as outcomes and IMPACTs, not as inputs.
If the gig workers deliver outcomes no later than a specific date, and they get paid not for time but for IMPACTs, they can be paid an IMPACT Based fee. Then the owner can offer the web design for an IMPACT Based fee.
The same is true for the HR Consultant. He could get better answers before making offers to a prospect. Give the client the opportunity to describe the issue (using the Issue Chart) and the significance of the IMPACT (Continuum of IMPACT). Then he could make three offers with fees proportional to the IMPACTs delivered.
If the client wants more, the offer and fee will be adjusted. If the HR consultant finds out more, he can offer changes with appropriate fees.
Far too many lawyers default to “we never know what we’re going to find” so we can’t offer anything for a predetermined fee.
That is hard to believe. Experienced lawyers know with about 90% certainty what is involved with various matters. They can learn to write 3 offers with proportional fees. The client gets to choose, rather than being forced to accept the lawyer’s choice. In the few instances where uncertainty is greater, the lawyer can include a provision to offer changes for additional fees.
The status quo is not inevitable
You have to choose it.
Have you made these choices?
Sticking with the familiarity of what you’re currently doing.
Avoiding the short term discomfort of making changes.
Choosing to live a life of “getting by” because you don’t think you deserve more?
Choose a better IMPACT
If you want to choose a better IMPACT for yourself and your firm, let me know.
Text CHOICE to 703-801-0345 or reply to this email.
We’ll schedule a complimentary Virtual Coffee.