©2007, 2009 Don Gray and Jerry Weinberg

Engelbert watched Pam nervously chew on her knuckle as she stood in the door of his office, answering his call. “Come in and close the door.”

He motioned her to a seat, then stood and pointed an accusing finger down at her. “We need to decide how you’re going to explain what happened with the UDCRM release”, he said. “You’ve managed to upset everyone. Sharkey told the CEO the customers are screaming because we can’t ship on time. This makes the entire development staff look bad.” He paused for emphasis. “It makes me look bad.”

Pam started to respond, but Engelbert shushed her with an open-palm gesture. “I don’t need excuses from you. Or apologies. What I need is a memo accepting full responsibility for missing the schedule.” He reached for a sheet of paper on his desk, then held it out to her. “I’ve drafted something appropriate to make it easier for you. All you have to do is sign it.”

Pam’s eyes fell to the floor, avoiding the paper. She knew she wasn’t responsible. If anyone was responsible, it was Engelbert. She tried to think of a way to refuse, but Engelbert interrupted her thoughts, thrusting the paper close to her face.

“Pam, don’t even think NOT signing this memo. If you refuse to sign, I’ll have no choice but to let you go.”

Pam struggled to keep from crying. Engelbert sat down next to her and put an avuncular hand on her back. “Don’t make me do this,” he said, his voice turning soft and empathetic. “Have you looked at the job market lately? This isn’t the boom time it used to be. There hasn’t been a decent job in the paper in months for someone with your background.”

He took a handkerchief from his pocket and dabbed at her tears. “I’ll do my best for you in the meeting,” he said gently, putting away his handkerchief and handing her his pen. “After a little time this will all blow over. They’ll probably forget about how poorly you did, and you can try again.”

The Tangled Web

It seems that the Software Engineering VP,Engelbert, has a problem. The problem started in the Liar’s Contest when he agreed to play, and thereby lost. By not planning for a disaster (No Exit) he ensured one would happen. This lead to Pam becoming the Identified Patient. The project didn’t succeed, and all Pam has to do is the sign the document accepting the responsibility (blame) for missing the schedule.

In her distraught state,Engelbert suspected that Pam wouldn’t think clearly. He helped make the experience easier by having her confession already typed and ready to sign. When Pam balked at signing he extorted her. Extortion occurs when a person obtains money, behavior, or other goods and/or services from another by wrongfully threatening or inflicting harm to this person, their reputation, or property.

We can see in the following diagram that Engelbert had at least three options available to him. He could:

• Respond negatively, looking for reasons, usually blaming someone else) for the results.
• Decide no difference exists by ignoring the results and do nothing.
• Respond constructively, learning from what happened and improving at getting the results we desire.

Of the three choices, only the bottom loop, Improve Software Development, reduces the likelihood that the next project won’t fail. Improving software development will involve training for such things as the development method (changing from waterfall to iterative) or support (version control systems, development tools) and time, making it the least likely choice in this environment. Ignoring the failure (or declaring the results a ?success?) leaves the existing system structure in place, and pretty well assures the next project will unfold like this one. Choosing to blame someone for the failure creates new and different problems.

Let the Game Begin

Blaming attempts puts the responsibility for the problem “on someone else”. If successful, the blamer becomes exonerated and the “blamee” now has to deal with being the cause of the problem. In hierarchical systems, blame (like many other activities) starts at the top, and flows down from there. Englebert may be getting heat from Sharkey and the sales organization about missing the delivery date. Englebert may be a skilled player, and is setting Pam up for the fall, being able to report, “I’ve already taken care of the problem.” Unfortunately the problem Englebert solved, him being blamed, doesn’t help solve the real problem, how to be more effective at software development and not have bad project results.

Blame affects organizations on multiple levels creating different problems.

• Employees quickly learn defensive maneuvers such as CYA. They split their time between making sure they won’t “catch the blame” and doing project work. This affects both focus (context switching between project work and dodging blame) and the time available for project work. This increases the probability the next project will fail.
• If it goes long enough, people leave. The competent employees leave first, creating a brain drain, which increases the probability the next project will fail.
• Those that remain have developed dodging skills, not development skills. Thus they’re more likely to be around longer, get promoted, and the cycle perpetuates itself.
• Attention never shifts to improving the process, so the systemic solution (improved development capabilities) never gets developed.

So blame creates problems beyond the original problem. It creates negative emotions, a talent vacuum, and a downward spiral. Talented people won’t work in a blaming organization. The amount they have to pay new employees goes up. This reduces the bottom line, which puts pressure to develop faster, but without improved skills failure actually happens faster, which increases the blame, and around the blame dynamic goes once more.

Note that all three loops in the Blaming in Action diagram are reinforcing (or positive feedback) loops. This says that once these loops start working, they will continue to grow stronger until something, somewhere else in the system collapses.

An Ounce of Prevention

The best way to deal with such a situation is to not get involved in the first place. But in the excitement of a new project, and new responsibility, it’s understandable Pam didn’t see the warning signs.

The next best advice involves noticing the signs of a failing project. You can learn a lot about a project status by checking for congruence.

• Observe what’s actually happening. Are people doing what they say they’re doing?
• Listen to the language people use. Do you hear blaming?
• Does it feel like there’s an elephant in the room that no one acknowledges?

No one can come out and actually say the project looks like it’s failing. That would set them up to be blamed.

Blaming cultures reveal themselves in a variety of ways. Attitudes such as “failure’s not an option”, or “if you can’t do it, we’ll find someone who can” give one such indication. Another tipoff is hearing phrases like ?It’s not my fault.” “She/he did it”, “You didn’t tell me”, and “I didn’t make that decision” (or their inverses). When you see an exodus of employees, it’s probably a sign the blame loop is functioning at full force.

Multi-level Blame

Blaming doesn’t start at the bottom of the company. Programmers don’t hunt for someone to blame when the a project is late. They scurry for cover. Blaming starts higher in the organization. In this case, the blame occurred at the VP level, between Sharkey and Engelbert. Blame can be thrown around like a hot potato, everyone looking for someone else to throw to.

Engelbert wasn’t able to pass the blame at his organizational level, so he passed the blame one level lower by setting Pam up to receive the blame, and extorting her. If Pam chooses to play the game, she in turn could look for a team lead to blame for the late delivery. And then the team lead could hunt for someone on his team to blame.

What’s A Girl To Do?

At this time, Pam certainly feels like a “deer in headlights.” If she doesn’t get some space to breathe, and time to think, she’ll most likely sign the paper. Pam needs to do something to break the setting. A deep relaxing breath. Shifting her position in the chair. Standing and moving. Getting some space would provide time to think and distance from the problem (as in being blamed). Get a headache. Go to the bathroom. Anything to create space and gain some time.

One thing she could do is threaten, “If you fire me, I’ll tell the whole story when I’m on my way out.” This is blackmail countering extortion. Playing this card requires being ready for “on the way out”.

Confronting Engelbert in his office probably won’t work. Counter-blaming Engelbert won’t work. He has more experience playing the game and can control the flow information to higher in the organization. He’s hoping Pam will placate and sign. Blaming and placating are two of the coping stances available to Pam.

By adding the context to the discussion, other stances become available. Pam can do this by asking “What have you seen or heard that makes you think that I’m responsible for this failed project?” This opens the possibility for a congruent conversation recognizing and balancing, self, other, and context. Pam can then act congruently. While Pam can’t make Engelbert be congruent, she can demonstrate congruent behavior and work towards the best possible outcome.

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©2008-2009, Esther Derby

As a manager, your job is to organize people and work for success. That includes work design–figuring out whether you have a group or a team, and creating an environment where people can do their best work. I don’t know about you, but work design wasn’t part of my training as a technical person. And it’s not explicitly included in many business and management programs either.

The default belief seems to be “teams and collaboration are good,”  and in a previous column, I wrote about the benefits of collaboration.  But is collaboration always possible?  Is it even the right thing to do in every situation?

In this article, I’ll show different levels of collaboration, and lay out the questions that managers need to answer to decide whether they have a group or a team.

Connection

Josh and Julie work in a tech support area. The primary responsibility of the unit is to configure, tune, and support servers.  The workflow is controlled by a ticket system where the requestor submits an order with basic requirements and most of the work is handled first-in, first out. Of course, there are exceptions, when there’s extra lead time to order a special server or establish the configuration for a new product. But those orders are the not the rule.

And though different people excel in different areas and each brings unique talents, the most server installs in their company require a core set of skills.

Josh, Julie and their co-workers have a connection: they share professional skills, hold each other in high regard, and let each other know what they are working on. Julie, Josh, and their co-workers help each other when asked, but they don’t really collaborate. The workflow in their department isn’t conducive to collaboration, nor does the work require it. They may call themselves a team, but they aren’t engaged in teamwork. And that’s just fine. There’s nothing wrong with being a workgroup if that’s what the work needs.

Cooperation

Deb and Doug run test labs for two different products within the same company. Because their respective products are on different release schedules, there are times when the equipment in each lab isn’t fully booked.  They cooperate with each other by loaning resources when its possible and makes sense to do so. Deb and Doug are working together to meet organizational goals. But they aren’t a team.

Coordination

Frank and Frannie work in a product development group. Each has responsibility for a distinct product aimed at different consumer groups. They meet on a regular basis to keep each other abreast of release schedules. They consult with each other about market trends as they prioritize features. It is necessary to coordinate, but given the product mix in their company, it’s not necessary for Frank, Frannie and the rest of the group to collaborate with each other to achieve their goals. No team here.

Conglomeration

Ellen and Eddy work on a large project-over 100 people. Their manager calls it a project team, but there are people on the “team” they wouldn’t recognize if they passed them in the hall. Their project is too big to truly be a team, though there are sub-groups within the larger project who function as collaborative teams. Groups larger than 12 or so almost always break down in to sub-groups-which may or may not be teams.

Collaboration

Abby, Alec and their four team mates work on a software development team. They have overlapping skills all of which are necessary to build the product.  They jointly commit to a goal and work very closely to deliver working software in two week iterations.  They share a goal, they are mutually accountable, and if they don’t work together, they won’t succeed-they are a team.

So, as a manager, how do you determine how to organize people to accomplish goals?

1. Consider the work goals. Are people committing to a leader to achieve individual goals, or are group members mutually committing to each other and sharing accountability?

1. Examine the skills needed to do the work. Does all of the work require the same (or similar) set of skills or does the work require broad range of skills?

1. Analyze the work. Is the work mainly projects that one person can complete from start to end-individual products? Or does the work of several people need to integrate to create a coherent whole-collective products?

If you answered ‘yes’ to the second question in each pair, the work is probably best suited for a team.

On the other hand, there’s nothing wrong with work groups that aren’t teams. If you answered ‘yes’ to the first question in each pair, the work  probably best suited for a work group.  It is important to determine which will best meet the needs of the work.

Building a team doesn’t happen by accident…. and your job as a manager will be different from the manager of a workgroup. I’ll talk more about that in a future column.

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©2009 Gerald M. Weinberg, www.geraldmweinberg.com

IT professionals must be good team players, but what does that mean?

For one thing, it means they must know how to come into a situation and quickly cooperate and gain cooperation, but cooperation takes many forms. It’s not sufficient to want to cooperate. You must also know how. This column is about the technology of cooperation.

People
Most people, when they think of cooperating, think of everybody doing the same thing?like all pulling on the same rope in a tug-of-war or rowing in the same Roman galley, perhaps chained to the oar. When you consider cooperating by sharing people’s direct labor, first try to categorize the situation into one of these two:

1. The job is well understood and easy to communicate to a newcomer.

2. The job is fuzzy, or not understood at all, or complicated.

In the first situation, as in a tug-of-war, it is relatively easy to move people about from one work group to another. The amount of productivity in this situation is roughly the sum of the individual productivities. Ten people can tug ten times as hard as one. Many managers think that adding IT professionals is just like adding bodies to a tug-of-war team.

But even a tug-of-war is not so simple, for those who are experts at it. Given roughly equal weights on both sides, the team that understands and uses technique will win every time – and can even overcome substantial weight deficits. Adding a new member to a skilled tug-of-war team will not add proportionately to their success. Indeed, unless the new member understands their technology and system of communication, the addition of another body is likely to reduce their total tugging effectiveness.

When the job is fuzzy, and ideas are needed more than simple tugging power, the addition of a new member can be helpful if the team is ready to accept new viewpoints imported by the new member. Experienced IT professionals, however, know how hard it can be to have their better ideas heard when they’ve just started a new assignment. It can be horribly difficult to integrate a new person. Time and “wasted” effort must be allowed for in such additions, especially as the job grows more complex.

Thus, if quick addition is needed, adding people willy-nilly is not the answer. This observation was the essence of Brooks’s Law – adding people late in a project makes the project take even longer. Adding them early, however, which allows time for this “wasted” effort of integrating the new people, can, in the end, make a project go faster.

Any IT professional who is thrown into a project late and expected to make things go faster needs to be aware of Brooks’s Law and needs to communicate to the management what kinds of delays are to be expected. Moreover, each of us IT professionals needs to master the arts of quickly learning what the job is about and how the existing team communicates.

Programs
When we import a program or a piece of hardware to a project, we import technology in a form that may seem more acceptable than a new team member might be. This is the dream of reusable software. But when the team members feel that their own technology is an extension of their own egos, programs may not be portable at all. Instead, they run into the “not-invented-here” brick wall.

Of course, even when a team is willing or even eager to import software or hardware, it may prove poorly designed for portability. In general, portability of complex technology doesn’t come by accident, but by design and by testing of the design. Even for well-designed technology, there is a break-in period which may or may not be shorter than the time taken to add a new member to a team. Of course, the payoff for an imported technology can be huge, but only if it’s adopted and used.

Some IT professionals come on the job with their own tools, not anticipating the amount of difficulty they will experience getting the existing team to adopt their “superior” tools. If you feel that your tools add to your value as a IT professional, you must master the art of introducing tools – especially to people who may be insulted by the very idea that you might know something better than what they already know.

Perceptions
Ideas or ways of thinking can be the most portable of all kinds of technology, as long as the ideas or perceptions are not labeled too clearly as “belonging” to someone. The rule here is perhaps the most important that a technically-oriented IT professional can learn:

There’s nothing you can’t accomplish if you aren’t concerned who gets the credit.
If a project is successful, there’s always enough credit to pass around.

Points or Perceptions
Much of what we do on a job is to win the approval of the management, or of the customer. We call this “scoring points.” Success on a job depends very much on the ability to score points, in whatever game management happens to be playing. If they are playing a good management game, then the more points you score, the better the job you must actually be doing.

But bad managers give points for the wrong things, and if you work under such a point system, you soon become a poor performer. In any case, though, in work as in life:

Points can never be passed directly from one person to another.
To pass points, you must pass people, programs, or perceptions.

In general, sharing perceptions may be the easiest way to cooperate. Moreover, if you don’t share perceptions, it may be almost impossible to cooperate. So, when you enter a new group and want to cooperate, it’s best to start by listening?and learning how other people perceive the world.

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©2004, Johanna Rothman

This article was originally published in Diamond Harvard Business Review, May 2003.

- I?m so busy, I barely have time to think. I don?t have enough money to hire on someone full time, but I?d like to get off the merry go-round.

- I wish I had more business.

- How can I take on jobs with more challenge?

- I?m lonely. I don?t want to keep working alone.

Consultants have problems like these all the time: living through the feast/famine cycle, inadequate knowledge to take on new work, and loneliness. If you?re suffering through any of these problems it?s time to consider changing how you collaborate with others.

Collaboration can take many forms:

• Refer other consultants
• Write with another consultant
• Present with another consultant
• Refer a consultant for a fee
• Work with one other consultant
• Create a consulting partnership

Review the collaboration steps and see where you can improve your collaboration to create an even more healthy consulting business.

Refer other consultants
Make a practice of referring other consultants to perform work you no longer perform. When I started my business, I taught test and development techniques to technical staff. I now focus my business on project management and people management, so I refer the testing and development work to other consultants.

Refer work you no longer perform, even if you?re desperate for money. A colleague, Fred, had this story:

“I had a slow period, and at the end of three months, I was worried about making the next mortgage payment. I took a contract to develop a system like some I?d developed as an employee. My first mistake was taking a full-time contract. Without making time to market, I couldn?t find new clients. My second mistake was taking development money instead of management consulting money. This client refused to hire me later at my management consulting rates because I?d performed development work.

What I didn?t realize was that I could have suggested a good contractor or offered to manage the project for them. If I?d done that, the client would have seen me as a management consultant. As a management consultant, they wouldn?t have expected me on site for a full workweek. I would have performed the consulting I enjoyed, not the development work I did to put food on the table. I wish I?d thought of more alternatives.

I don?t work for that company anymore, because they don?t believe I?m a management consultant. I can?t seem to break them of their initial impressions. I don?t use them as a reference. When the current management leaves, I might be able to consult to them, but for now, I cut off a client by taking work at a lower level.”

Fred violated most of Weinberg?s Laws of Marketing :

1. A consultant can exist in one of two states; State I (idle) or State B (busy).
2. The best way to get clients is to have clients.
3. Spend at least one day a week getting exposure.
4. Never let a single client have more than one-fourth of your business.

Fred had more alternatives to taking on the development work. He could have:

• Recommended a fellow consultant to the client for no money
• Suggested that he take over the project and run it for a fee
• Coached the people performing the work
• Referred the work to someone who wanted the work and received a finder?s fee

If Fred had suggested another consultant for the work, he would not have made any money just then. However, he would not have been too busy to market; he would have had time to obtain more exposure; and he would not have allowed this one client to have all of his time.

Referrals help you build your network. Clients respect you more when you define which work you will perform and which work you won?t perform. When you are helpful with clients and refer them to others, you are consulting?just not for money now. The money will come later.
Consultants give advice. Some advice we give for ?free,? such as when we speak or write publicly, or when we refer. But when you offer limited free advice, such as referring other consultants, you make life easier for your clients. They will remember and ask you to consult for money later.

Fred learned this painful lesson, and during the next slowdown, he contacted everyone in his network. He talked to some of his best clients, asking them about their business, suggesting books and papers to read. He noticed when local associations put on programs that were of interest to his best ten clients even when other consultants were speaking, and let them know about them. He became a resource, and after only two months of “free” advice, Fred landed his largest consulting engagement yet. His client said, “You know our business and our problems. We know you have our best interests at heart. We want you to help us solve these problems. With your connections, we know you?ll do a good job.”

Referrals help your clients see that you have an active and substantial network. A consultant with a large network is an asset to a client. Referrals create immediate business for others. The people to whom you refer work will remember you and refer other work to you, increasing your network and reputation.

Discretion counts when it comes to referrals: a large network by-and-of-itself isn?t always an asset ? anyone can say they have a ?large network.? What matters is knowing when and how to use it to add value to the client rather than adding value to you.

Write with another consultant
Once you?ve created your reputation, try writing with another consultant to explore a subject in different ways. Once you?ve explored the subject, you?ll know how you?d like to work with this person again.

I wrote an article with Karl Wiegers about project retrospectives . Karl and I have completely different writing styles, so it was both pleasurable and frustrating to write together. Pleasurable for seeing how the article became a combination of both of us. Frustrating because we don?t approach writing the same way.

However, the benefits of writing the article with Karl were:

1. We learned how each other writes. If we ever choose to write together again, we?ll both know to write better faster.
2. Each of us brings a different readership. By sharing my readership with Karl, and with him sharing his readership with me, we each gain an entrée to a different potential client base.
3. Each of us had specific perspectives on the topic. During the writing, we each learned from the other, to provide better retrospective services to our clients. If we ever chose to facilitate a retrospective together, we could provide a rich environment for the client.

I?ve written with other consultants. I?m in the midst of writing a book with Esther Derby about making the transition to management. Our writing collaboration has resulted in a more thorough exploration of the subject matter and in better consulting for our clients.

Present with another consultant
I enjoy speaking even more than I enjoy writing, so I?ve chosen to collaborate with Esther, Naomi Karten, and Elisabeth Hendrickson on speaking and workshops.

Collaborating with Naomi helped me bring more humor into my speaking. Naomi combines humor effectively with her message (in both the presentation and handouts), so I was able to learn how to observe her lightheartedness and adapt her style to my speaking and workshops.

When Elisabeth and I decided to collaborate on a workshop, we chose a subject (communicating with management) that we?d each written about and presented before our collaboration. Because we each had significant knowledge and experience about the topic, we were able to incorporate interactive activities in the workshop. The attendees loved the workshops.

When Esther and I developed and presented our first public “Making the Transition to Management” workshop, we learned how we each develop material and how to integrated our different speaking styles. Our attendees tell us that they appreciate our different perspectives and styles. They learn something different from each of us. Esther and I have presented many presentations and conference tutorials together. Since we trust each other and know how to work together, we?re comfortable and can be spontaneous with each other and the audience.

I learned these lessons from my collaborations with Esther, Naomi, and Elisabeth:

1. The other consultant has a valuable perspective I can choose to share with the audience. I can acknowledge it and explain when that viewpoint is useful when I?m presenting with the other consultant or at another time.
2. Presenting with others requires more presentation design, role clarification (who does what when), and practice. It?s worth it. The audience loves seeing multiple perspectives on the same topic.
3. I learned alternative techniques to explain concepts and integrate humor into my presentations. Since presentations are part performance and part education, I?m a better presenter for it.
4. Each consultant can reach more people together than they can separately. Especially if you?re considering presenting public workshops, you can more easily acquire the minimum number of participants when you speak with another consultant.
5. Working with new people keeps me fresh, and nothing works better than positive energy in front of an audience.

I learned a different lesson from presenting with another consultant, Jerry Weinberg. At the first AYE conference, my co-presenter was ill. Jerry filled in and gave me the support I needed to create an outstanding experience for the participants. Our presentation was different from the original planned presentation, and it was just as good. I gained more self-confidence from that presentation, and have since asked Jerry to review other presentation designs.

When you choose to write or present with another consultant, choose someone who complements your expertise. Discuss how you?ll develop the material and who?s responsible for what (initial editing, article submission, presentation submission, and so on). Then have fun!

Refer a consultant for a fee
There are ways to make money while you work with other consultants. One technique is to refer business to another consultant and charge a finder?s fee, a referral fee.

When you recommend people, you recommend for free. The client is free to take your advice, and the other consultant is free to reject the engagement. You have no obligation to the consultant or to the client, aside from wanting to see the client happy with your recommendation.
When you refer for a fee, you?ve defined an engagement between you, the client, and the consultant. You?re not employing the consultant, but you make money every time that consultant works for that client, depending on how you?ve arranged the agreement.

It?s possible to have a successful consulting referral business. I?m listed with a local Boston-area consulting referral group, the Consulting Exchange, www.cx.com. Geoffrey Day, the owner, does not charge the client for the referral. Instead, Geoffrey takes a percentage of the fee for the specific referral. When the initial engagement is complete, Geoffrey takes a smaller fee for ongoing business for up to three years.

Geoffrey has set up his business congruently, taking the client, the consultant, and his needs into account. His fees are fair. His fees from ongoing work from the initial engagement have an end-date. Geoff realizes that the more consultants he has in his network, the more money he can make with his referrals. If he tries to gouge his consultants, or have them work forever for a substantial fee, he will win the contract and lose the business. Geoff has chosen to make money over the long term, by developing ongoing relationships with consultants and clients, treating each fairly.

Day does something else that few do: consultants set their own rates, working directly for the client. And he works only on specific projects, making sure that the consultant retains flexibility for existing clients and that crucial marketing time. This attracts a better type consultant and eliminates many problems common with agency type referrals.

The CX and organizations like it can also help you enhance your own business. While we all have active networks, it is common to run into a situation where you don?t know the right person. Maybe you are in a new city, working in an industry where you haven?t a lot of contacts, or just not happy with your immediate network.

If you choose to set up referrals for your business, make sure you?ve considered your short-term and long-term profits. A consultant who was referred by another referral company had this experience:

“I?ve been on contract to this client for over a year. They still need me, but I?m not being paid enough. The referral company increased the rate they bill the client, but the referral company took my entire raise. I can?t keep working for these idiots. If I quit, I can?t go back and work for the client, or even talk to them for two years. Because I?ve been working full-time, I haven?t been marketing. I can?t keep working like this?it?s slavery.”

This consultant made an innocent mistake?signing up with an unethical referral company. If you choose to refer consultants and make money from their client work, here are some guidelines for success:

• Be fair to everyone. Don?t be greedy. Set up your fees so that you encourage each client and consultant to work with you over the long term.
• Charge a small enough amount that the consultant will want to continue working with the client, and not drop the client if a more lucrative engagement comes along. If you?re underpaying the consultant, they have no incentive to complete the work, especially on a long-term contract.
• Place a limit on the time a consultant can work with the client and still owe you a referral fee. You may have made the initial introduction, but after a few years, the client and consultant have maintained the business relationship without you.
• If you bill the client, pay the consultant on time even if the client hasn?t paid. If the consultant bills the client, make sure you see a copy of the invoice so you know that you?re being paid according to your agreement.
• Build this into the legal agreement: Make sure that when it?s time to change the fee, everyone has to agree to the fee change.
• Make sure a lawyer looks at the agreement and that the agreement is fair to all.

In my business, I choose not to make referrals for a fee. I leave that to the professionals whose strategic direction for their companies is referrals, like Geoffrey Day.

Work with one other consultant
Instead of referring for a fee, I prefer to either recommend other consultants to the client without charging a referral fee, or to accept the consulting engagement myself and collaborate with another consultant.
When you work with another consultant, make sure you avoid these traps:

1. Taking care of another consultant.
2. Creating a master/slave relationship with the other consultant.
3. Ignoring early signs that your styles don?t mesh.

John?s client wanted John to teach more students than John could teach in a workshop. John explained that the client could either have two workshops or one workshop with two instructors. The two-instructor workshop would cost the client a premium over the cost of two workshops. The client agreed, and John asked a colleague, Jack, to co-teach. Jack asked for half the entire workshop fee. John agreed ? a big mistake. John had completed the initial marketing and selling work?without which Jack would not have known about the project. Additionally, John provided extra services to the client (organizing the workshop, making all the handouts, and billing the client) and to Jack (initial workshop draft, already-proven exercises, billing the client and payment to Jack). By the time John was done taking care of Jack and the client, John was exhausted. John was resentful of Jack, because John had taken care of everyone except John.

Unless you and the other consultant come to the negotiation with equal investment and abilities, don?t split the fee 50-50. If you?re the consultant managing the client, the billing, and the intellectual property, you deserve more than half the fee. Don?t leave yourself out of the list of people to take care of.

On the other hand, you needn?t create a master/slave relationship with a consultant. Early in my career, I agreed to perform an assessment with another consultant as a subcontractor. The primary consultant was concerned with my work, the time it took, and the results. He was even more concerned when the client appreciated my part of the assessment more than his. I had discovered the key piece of information in one week. The primary spent four months and had not discovered the key necessary for the client?s success.

The client asked us to help implement the changes based on my report. Even though I requested a change in fee, the primary consultant was unwilling to increase my fee. The primary paid me after he was paid. Since the client paid late, I was in the position of reporting to someone who didn?t understand the problem, paid me inadequately, and paid late. I finally decided to end my relationship with the primary consultant.
Fortunately, I did not have an agreement with the primary prohibiting me from working for the client. I explained to the client that I was not continuing to work for the primary, that they could choose to hire me by myself, they chose to.

I learned these lessons from that engagement:

• Negotiate each phase of the engagement separately. It made sense to have one fee for the assessment and for me to adhere to the primary?s style of reporting. It did not make sense to continue the same fee arrangements and reporting into both the client and the primary contractor when I was working independently after the assessment.
• If one consultant is billing the client, make sure the client understands how quickly they have to pay. In addition, set expectations for subcontractor payment.
• Make sure all parties believe the arrangements are fair. The client was unhappy about having to pay money for pieces of an assessment that were not useful. The primary was unhappy because his work was seen as second-rate. I was unhappy because my fees were too low for the ongoing work and I had to wait for the primary to bill the client.
• I hadn?t recognized the early indications that the primary consultant on the assessment was a controlling personality. If I?d paid closer attention to the pre-engagement activities, I would have recognized the signs, and managed our collaboration differently.

To create a successful collaboration, discuss the fee arrangements early, and decide how you?ll leverage each other?s network.

Discuss fee arrangements early
To create a successful collaboration, discuss who is responsible for which pieces of the engagement before you start the engagement.

Weiss has a formula for revenue sharing that divides the sale, development, and the delivery of the project into thirds, and assigns relative proportions to each piece. Here?s how one consultant and I used that for one $10,000 engagement:

Person	Sale (1/3)	Development (1/3)	Delivery (1/3)	Percentage due	Fee split
Sally	100%	25%	0%	41.25%	$4125
Johanna	0%	75%	100%	57.75%	$5775

Sally made the original contact with the client and sold the engagement, so she deserves the total sale component. I developed the material, with substantial review from Sally. We decided to split the development, assigning 75% of the work to me. Then, I delivered the material to the client alone. If either of us receives follow-up work from this engagement alone, we own the follow-up work.

We could have split the money down the middle, and for this engagement, that would have been close. However, we?re business people. We don?t want to take care of each other, or take advantage of each other. We?re more likely to work together again because the relationship is built on a solid business foundation.

Leverage each person?s network
In this example, Sally?s network provided me the introduction to a new set of potential clients. My material offers Sally the chance to sell different kinds of consulting to her clients. Sally recognized I could provide a particular value to her clients, so she brought me in to perform a specific task. We both win?Sally learns how to perform another piece of the consulting, and I have access to new clients. In this case, Sally?s network is as much of an asset to me as the consulting work is to her.
When you create a congruent relationship with the client, the original consultant, and the additional consultant, everyone wins. If you ignore one piece of the relationship, it?s not sustainable, and will dissolve to everyone?s detriment.

Create a consulting partnership
If you?ve worked with a consultant on a contract or two and enjoy it, maybe it?s time to create a partnership. Avoid employing anyone who?s not a partner?non-partners are overhead that you provide for, not someone who adds value to the business. Partners bring complementary strengths and an additional client base to the business.

If you?re considering a partnership, use this checklist to make sure the partnership is appropriate:

• You trust this person with any of your clients
• You trust this person with your intellectual property
• This person has already succeeded independently performing the work they?ll do as a consultant
• If you?re already consultants, the other person has already succeeded as a consultant
• You have the same goals, including financial goals, for your business
• Together, you are worth more to a client than you are apart

The principals, Donna Johnson and Judi Brodman, formed a partnership, Logos International, about ten years ago to perform research for a government contract. Donna and Judi had each worked independently as consultants before they formed a partnership, and had worked together in limited engagements. They found that they could offer more as a partnership than each could alone. The partnership benefited them in these ways:

• They enjoyed having another person available to discuss ideas
• They could create other products based on their original work together
• They were able to bring their current clients more value
• They were able to bid on larger projects because they had more depth to their company

Donna and Judi were already successful consultants when they chose to create a legal entity to work together on projects for their clients and enjoy their partnership of equals.

I know of two other long-term successful partnerships. Both partnerships started when the people who?d performed the work inside companies chose to continue working outside their original employers.

One partnership, Process Enhancement Partners, Inc., started with two principals who had not been consultants originally, and added two more principals after a couple of years. The original principals realized that one of the two people did not have the same goals. The consultant with different goals left the partnership.

The other partnership, Process Group, periodically reviews their business ? to make sure their individual and group activities continue push their strategic goals. They considered taking on employees to grow their business, and then decided against it. Adding employees would grow the company, but would not help them meet their individual goals of being able to provide services themselves to their clients.

Each of these partnerships has people with different strengths. Each partnership developed and continues because the principals have common business goals and a common work ethic.

When you create a partnership, decide if and the conditions under which each of you can take on work alone and how you?re going to dissolve the partnership, like a prenuptial agreement. If nothing else, one of you may want to retire. If so, what does that mean to the partnership?

Summary
Collaborating with other consultants helps you increase your expertise as well as your client base. Referrals help you maintain and grow your network. Writing and speaking helps you access other potential clients, as well as increasing your expertise.

When you refer others for a fee, or work with another consultant, remember to clarify who?s responsible for what, the compensation each of you receives, and when the arrangement is complete. When you?re ready consider a partnership arrangement to continue to capitalize on what each of you can bring to the client and the business.

None of us works entirely alone. Consider which options you want when, and your collaboration will provide you and your clients excellent service.

Acknowledgements
I thank the following people for their helpful review: Geoffrey Day, Esther Derby, Elisabeth Hendrickson, Naomi Karten, Jerry Weinberg.

References

Weinberg, G. M. (1985).
The Secrets of Consulting: A Guide to Giving and Getting Advice Successfully.
New York, Dorset House.

Weiss, A. (1998).
Million Dollar Consulting: The Professional’s Guide
to Growing a Practice.
New York, McGraw Hill.

Wiegers, K. a. J. R. (2001).
Looking Back, Looking Ahead.
Software Development. Feb 2001.

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© 2003 Jim Bullock

Several cultures contain a fable about a horse, a Farmer, and a wolf. After a time both plagued by the wolf the Farmer and horse agree to work together to defeat their common foe. The horse’s speed and stamina combined with the Farmer’s weapons and cleverness win out. The horse then asks the Farmer to remove the bridle and saddle – their agreement being at an end. “The hell you say.” replies the Farmer, “Giddiyap Dobbin.” as he applies the spurs with a will.

This parable is a warning about deals that don’t work out so well. It’s charming and memorable as such parables are when they are good, but a little hard to work with in real life. Most contracts are not about donning saddles and bridles to hunt down wolves. So, I’d like to offer a checklist for the mechanics of deals that work out well:

• Chinese contracts or Avoiding the Cost of Compelling Compliance
• Symmetric, temporary controls or Avoiding the Dobbin Problem
• Atomic transactions or Avoiding the Wimpy Problem
• The never ending story or ?It’s a Relationship, Stupid?

Dobbin and the poor Farmer don’t seem very happy in the second half of their story. I think if we keep these four things in mind for the deals we make, we’ll create better deals.

Chinese contracts or Avoiding the Cost of Compelling Compliance

In The Age of Paradox, Charles Handy describes agreements he negotiated in Malaysia and China as a young man. After coming to agreement with his negotiating partner, Handy begins to complete a paper contract. From the book, Handy’s negotiating partner speaks:

?In my culture,? he went on, ?a good agreement is self enforcing because both parties go away smiling and are happy to see that the other is smiling.? . . . I had met a culture where negotiation was about finding the best way forward for both parties .

Handy calls these ?Chinese contracts? referring to the culture where he learned them. A Chinese contract is a coupling of fates together, making it better for each party that things work out well for the other. A Chinese contract is one in which outside enforcement isn?t really needed, because self-interest suffices. Enforcement is probably a good heuristic for deals, actually. If you have to think through how to enforce the deal you probably don?t want the deal. Enforcement is a lot of work, and a whole different game from simply delivering value.

One principle of economics is called “utility” ? what something is worth to me isn’t what it is worth to you. I wouldn’t pay you $ 2.50 for popcorn if the popcorn weren?t more useful to me than the money. You wouldn’t sell me the popcorn if the money weren’t more useful to you. In terms of our personal utility, we both gain from the deal. Dobbin and the Farmer were both happier sans-wolf than either was before hand, even considering lugging around an armed Farmer on Dobbin’s part, or the Farmer sitting precariously astride a running horse. Dobbin and the Farmer are a special case of a Chinese contract, where the same result satisfied them both. So why shouldn’t all contracts be Chinese contracts in Handy’s sense?

The absence of Chinese contracts leaves me confused, doubly so in a free market. My gain in utility is higher when you are in favor of the deal, too. Imagine the Farmer riding a cooperative Dobbin working toward a wolf-free life for them both. Now, imagine the Farmer on an uncooperative Dobbin who sees nothing in it for him to be lugging about this heavy, smelly, armed creature. The Farmer clearly has a better deal ? realizes more utility ? if Dobbin has reasons of his own to be wolf hunting.

I am skeptical of any “deal” that isn’t a Chinese contract. As anyone who has tried to create an idiot-proof system knows, idiots are very clever. How much more clever is someone trapped in a deal they dislike? If your partner in a deal has something worth trading for, they’re probably clever and effective too. It seems like a lot of work to force someone clever and effective to do anything. Why not apply that cleverness and energy ? theirs and yours – to think up something that’s good for both of you, like one less local wolf. If you can’t think up one thing that’s good for you both, you ought to be able to think up independent asks and offers that each have value to one of you.

As for Dobbin and the Farmer, their original deal was indeed a Chinese contract. Fulfilling it, however, changed the power relationship between them. So, perhaps a part of a deal should be how it leaves the power relationship between the partners.

Symmetric, Temporary Controls or Avoiding the Dobbin Problem

Dobbin and the Farmer have a problem because the Farmer has spurs, bridle and saddle, while Dobbin has no hold on the Farmer. When there are controls, especially asymmetric controls that persist after a deal a relationship becomes strained at best. Their first deal leaves both Dobbin and the Farmer rid of the wolf, but if it leaves the Farmer with a hold on Dobbin. Dobbin is not in such good shape.

Many years ago I stumbled on a physical analogy about relationships ? talking with my first real girlfriend, in fact. You each hold up a hand, left hand to right, palm to palm.

• Fingers extended. ?This works.?
• Bend your fingers over, so you each grasp the other?s hand. ?This doesn?t work so well.?
• Now one of you extends your fingers, while the other hangs on. ?This doesn?t work at all.?

The best deals involve both parties staying in contact voluntarily, because there’s something in it for them. That’s a Chinese contract. The best deals also involve the parties declining to apply controls, especially asymmetric controls, to each other. Short of that, however, a deal that involves controls has to release the controls when the deal is completed.

Controls are hard, and expensive, and don’t work very well. They also create resentment and distrust if abused. If the Farmer forces Dobbin into something, clearly Dobbin would rather be doing something else. Dobbin loses the difference between the utility of what he would be doing absent coercion, and the utility of what he ends up doing for the Farmer. Dobbin ends up with less stuff. If the Farmer’s controls remain in place, Dobbin can expect to end up with less stuff than he might otherwise have, again and again. I think resentment at being coerced is a survival mechanism, wired deep into us, to help us get what we need. It’s hard to live when you don’t get what you need. It’s hard to get what you need when someone forces you into choices against what’s best for you. The Dobbins who learn to avoid Farmers with spurs get more of what they want, and likely live longer and better. Poor Dobbin, certainly, but also poor Farmer. He’d better never let go of that bridle.

The problem is that the Farmer wants more things from Dobbin, and sees controls as a way to get them. How much better if the Farmer were to offer Dobbin something of use for his further trouble? Maybe the Farmer could retain Dobbin’s help in return for board or better hay. If Dobbin continues to have his speed and stamina to offer, how much better to have those applied willingly to the Farmer’s next problem, vs. fighting Dobbin’s gifts to get a field plowed. Controls make sense only when we believe our own offer isn’t worth much or our partner so weak that forcing them is easy. That seems like a losing proposition both ways.

Where did the Farmer’s confidence go, in his own ability to make Dobbin a worthy next offer? How sad for the Farmer to admit that he has nothing better than coercion to offer a horse. Of course maybe he does, but forgot because the saddle and bridle seem direct and near to hand. It is wise, I think, to construct deals so that neither party is left with controls on the other because controls are so tempting.

This is neither theory nor philosophy, but pragmatic reality. For example, asymmetric controls are often part of IT outsourcing deals or technology purchases ? it’s called ?lock in.? Large-scale outsourcing deals are seldom repeated, in part because of resentment, I think. As for technology lock-in, the world is full of people with an ABM ? anything but Microsoft ? bias. In both cases, the vendor has the check and can do what they like, while the customer must stick with the software or service or incur a massive cost of conversion or change. In either case the resentment of being forced masks any real benefits the deal might have provided the customer.

Often, vendors deliberately create a lock-in, hoping the customer won’t notice until it is too late. This is ultimately self-defeating, I think, but only the vendor controls the vendor’s intentions. Whether deliberate or accidental, the customer could have seen the lock-in coming, I think, and should have considered the long-term control when forming the deal. This is ?the Dobbin Problem?: creating or accepting asymmetric controls that last after the deal is fulfilled. Yet, some deals need controls because the partners are satisfied at different times, by different things.

Atomic Transactions or Avoiding the Wimpy Problem

Wimpy from the old Popeye comics constantly bummed food without money. His line was: ?I will gladly pay you Tuesday for a hamburger today.? The Dobbin problem is a special case of the Wimpy problem ? a deal that doesn’t stay atomic. An atomic deal includes satisfying both parties, and releasing any controls put in place to manage the deal.

Many deals are designed with a current benefit for one and a later benefit for the other. Once the one side has its payoff, there is little incentive to follow through. When the parties get satisfied at different times, often we build controls into the deal to ensure delivery. So, misaligned payoffs can lead to controls. If the controls don’t eventually expire, we end up with “The Dobbin Problem”.

Many IT service deals include outsourcing IT operations at a loss, recovered in new development later at a profit. (The converse arrangement, new development as a loss leader to profitable operations is even more common.) There is an incredible temptation for the customer to try to split the deal once the IT operations are in place. The later business that was supposed to pay for the earlier loss leader doesn’t happen, and the vendor is in trouble. Or worse, it happens but the customer is resentful from being forced into this later deal by lock-in. Meanwhile, the supplier is tempted to under-deliver on the loss leader, which builds-in resentment before the step where the supplier gets their payoff. Deals like these often include controls to ensure that the deal is completed. That’s fine if the controls expire. Often they don’t. Often, the parties lying to each other complicates the loss-leader game. ?No, no I like outsourcing operations for you. Really.?

The conversation really has to be about the whole deal or it won’t work: both payoffs and all controls together. A good deal must be atomic in exactly the formal sense of database transactions or critical sections of code ? all or nothing. The consequences of non-atomic deals are similar to non-atomic transactions: people left in strange states, bits of the deal lying about here and there, and blocking of other work.

Dobbin and the Farmer had it easy, actually. They were both rid of the wolf at the same time, so they don’t have the problem of sequential satisfaction that Wimpy’s proposal includes. Had they agreed that Dobbin would pull the Farmer’s plow for a season once they were free of the wolf that would be a Wimpy deal. Perhaps the Farmer might ask for some controls, to ensure that his field gets plowed. If the Farmer were clever, he might offer Dobbin a share of the crop that they would work together. The saddle and bridle in this case were things that helped the Farmer and Dobbin work together that happened also to be a control on Dobbin. The Farmer was tempted once the deal was concluded. So, to keep deals atomic look also for accidental controls ? things like vendor lock-in ? as well as deliberate controls and conditions of satisfaction.

The Never Ending Story or, ?It’s a Relationship, Stupid?

Working together is best when the parties have a series of mutually beneficial transactions. The poor Farmer really wants to borrow Dobbin’s speed and stamina for other things. He thinks himself relatively unable to make another valuable offer to Dobbin. With asymmetric controls in place, the Farmer tries to take those benefits. That relationship may last for a while. It won’t be much fun. As a colleague told me during the process of editing this article:

? . . . contracts are relationships, even if we try to treat them as transactions. ?

Each contract is a relationship and a little, fractal-like image of the larger, longer relationship. When each party in a transaction considers the larger future they might have, this deal becomes a trial run for future deals. If we want something more from our partner, later, we are motivated to make our deal work this time. A good deal builds confidence in your ability to deliver, and mine. If Dobbin was strong enough to be helpful with the wolf this time, why wouldn’t he be just as strong later? If the Farmer had a valuable offer of dexterity and tools, where did his confidence in himself go? The Farmer must not think much of himself at the moment. Poor Farmer indeed.

Unfortunately for both of them the Farmer made any cooperative future unlikely. I think the Farmer’s reasoning is flawed. At best the Farmer has lost the cost of enforcement in any future deal with Dobbin. More likely they have both lost the new futures that they might create together, as Dobbin is unlikely to have anything to do with the farmer after this. I like to think it is Dobbin who proposed that they work together to rid themselves of the wolf. In that case, the least they have lost is any deals Dobbin might propose moving forward ? why would he? They both have smaller stories than they might have. If Dobbin has friends, the Farmer has a much smaller story than he might have – word gets around.

The Farmer isn’t showing himself to be too bright in this story. More cleverly self-defeating, I think. The Farmer misbehaved because he forgot that he and Dobbin are both caught in ?The Never Ending Story.? They’ll both have offers to make the other, or not, in the future.

Bad Business and Good Deals

I have become clearer about my visceral distaste for some business practices, especially job practices in recent years. The language is all about getting all you can from a partner in distress. In the current job market, it’s: “We?ll underpay them because we can.? ?We’ll be extra demanding because we can.? ?We’ll be obnoxious because we can.” Some of this is backlash. As the dot-economy was booming employees were obnoxious in exactly these ways. Neither businesses nor employees have been paying attention to good deal mechanics lately, and we are seeing the results: mistrust, no loyalty, controls, legalities, and anxiety. It’s a much thinner story because of past deals with bad mechanics. I wonder how much of the hesitation in the economic recovery, especially in technology, comes from both sides keeping their best offers to themselves.

Maybe we ought to track another economic measure the way we track idle factory capacity or losses due to sick-time: ?Losses due to treating your deal partners like dirt.? There are direct costs, like enforcement and monitoring. Harder to measure is opportunity cost ? the great ideas, deal adjustments, or thousands of little offers that don’t happen along the way. Employees who practice sharp dealing train their deal partners just as surely as employers do. Maybe we need four measures, to track each kind of loss, based on who’s sharp dealing is involved. Maybe we need eight measures to separate losses and lost opportunity within a company from those across companies (to capture the cost of sharp dealings between vendors and customers.)

I think good deals are simply good business – utterly pragmatic for individuals, individuals in organizations, and organizations. Everybody ends up with a richer future when we practice good deal mechanics. So, I have thought about what makes a deal that works well, and written it down, as much for myself as for anyone else.

Good Deals

A good deal has these deal mechanics:

• Ideally, it is a Chinese Contract, avoiding ?The Cost of Compelling Compliance.?
• If there are controls it uses Symmetric, Temporary Controls, avoiding ?The Dobbin Problem.?
• It is an Atomic Transaction, avoiding ?The Wimpy Problem?
• It leaves the deal partners ready to invent a richer ?Never Ending Story.?

These mechanics are all, in the end, votes in favor of your own competence to offer more value later, your partner’s to do the same, and a rich world where you can find an offer that benefits you both. I’m for that.

Good deals pass some hygiene checks as well, that others can explain far better than I:

• Congruence. Use the Satir congruence model to check that the deal takes care of your self, your partner and the context.
• Mindset. If you need a deal to happen more than you need the contents of the deal, you can get all tangled up. So check on what you are really trading for. Is it self-esteem? Is it money?
• Intention. Is the deal creating something you want? The best deals will make a richer world for yourself and your partner.

The best deals satisfy all these mechanics, and hygiene checks. A good deal can be a wonderful thing, which suggests one last hygiene check:

• Celebration. You should want to celebrate your deal. Otherwise, check the deal mechanics and hygiene. Something needs fixing.

I think Dobbin and the Farmer celebrated their first deal, but I’m not so sure about the second.

References

The Age of Paradox, Charles Handy, Harvard Business School Press, 1995 (paperback)

Getting to Yes, Negotiating Agreement Without Giving In, 2nd Edition, Roger Fisher and William Ury & for the 2nd Edition, Bruce Patton, Second Penguin Edition, 1991

The Win-Win Negotiator, Ross R. Reck, Ph. D., and Brian G. Long, Ph. D., Pocket Books, 1987

The Armchair Economist, Economics & Everyday Life, Steven E. Landsburg, The Free Press, 1993

The Satir Model, Family Therapy and Beyond, Virginia Satir, John Banmen, Jane Gerber, Maria Gomore, Science and Behavior Books, 1991

Understanding Computers and Cognition, A New Foundation for Design, Terry Winograd, Fernando Flores, Addison-Wesley, 1987

The 7 Habits of Highly Effective People, Stephen R. Covey, Simon & Schuster, 1990

Wimpy is a character in the Popeye comic strips created by E. C. Seger. Wimpy has his own tribute page here: http://www.theneitherworld.com/popeye/wimpy/main2.htm

The NeverEnding Story is a feature film by Barret Oliver.

The story of Dobbin and the Farmer appears many places. It is found in Aesop’s Fables as The Horse, Hunter and Stag. Find that version here: http://www.pacificnet.net/~johnr/cgi/aesop1.cgi?2&TheHorseHunterandStag

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