Being Good Stewards

Summary

• Think of client spend as your own, and be enterprising
• Conduct due diligence to avoid inflating costs over time
• Always communicate clearly as you go along: situation, resolution, and impact

Our Perspective

“How long will it take and how much will it cost?”

When I was recently renovating a house, I felt like these were important questions to ask.

First, timing: I had to decide whether to secure a long-term rental like an apartment or secure an AirBNB type of short-term rental for the duration of the project. There’s a big difference between the two: an apartment requires utility hookups, moving in and out furniture, and a long-term lease. An AirBNB comes fully furnished but at a cost premium.

Next, cost: I’m not made of money. I needed parameters to understand if the renovation would exceed the personal savings I had allocated towards the project or if I would need to obtain a HELOC or some other line of credit to fund the project.

There’s a general rule in renovation that time and cost are likely to vary 10% – 20% from the estimate. This was a variance I was willing to live with. Then there was reality: during the course of my home renovation we witnessed unexplained worker absences, unexplained delays in placing orders for critical materials (like doors), and uncertainty as to who was doing what and when. My project is still underway, well beyond the 20% threshold, and we have lived in 5 AirBNBs.

Applying this to the Corporate World

Let’s apply this to the corporate world. In business, we emphasize across our team that we should be enterprising. To us, this means we do our homework, conduct the research, are prepared, and, most importantly, are resourceful. We do all we can to be ready for the work and we treat the use of resources as if they were coming from our own pocket. We believe this is what our clients expect from a strong partner, not just a vendor.

When we are engaged by companies to design new digital products, we are often asked “how long will it take and how much will it cost?” It’s a fair question for many of the same reasons above. Timing: their existing systems may require urgent upgrades to serve a new business-critical need, or perhaps they have a broken process and are hemorrhaging money in manual workarounds. Timing is critical in both of these scenarios. Companies' CFO offices generally work with business units to define budgets for the fiscal year. In our world, budgets are sometimes allocated before business units engage us OR we actively engage before budgets are defined so that the business unit can request a reasonable budget allocation aligned to the new product goals. With the appropriate due diligence, we can head off many surprises as we embark upon a new project or continue our work on an existing one. Some appropriate due diligence on the front end, can minimize inflated costs on the backend.

Balancing Craftsmanship with Pragmatic Planning

Sure, in an ideal world, we would all focus on craftsmanship regardless of time and cost. A project would take as long as it takes, because the project team would have all of the time needed to do the work right. Think about great homes like the Biltmore House that took 6 years, 1,000 workers and 60 stonemasons to build and cost today’s equivalent of $150M to build. They took their time and did it right, but their client was George Vanderbilt II who had unlimited wealth and other mansions to live in. Biltmore House was a want, not a need. We recognize this is not how business works. Our clients have budgets and timelines and we must manage to those resourcefully.

All projects...that's right, we used the big word 'all'...will have unexpected issues arise: complexity, newly discovered edge cases, changes in priorities, and new stakeholders contributing new ideas. It is incumbent on partners like us to provide transparency, excellent communication, and most importantly options to our clients. We will make an honest effort to deliver on time and within budget every time, and when nuances occur, we will share this information as quickly as possible and present options.

Method for Reacting to the Unexpected

A simple way we summarize our reactions to unplanned events is using a situation, resolution, and impact framework. You too can do this in your personal projects or professional work. Here's how it works: For every unplanned event, new idea, or edge case, bring your team together to capture the following and then present out to your stakeholders:

• Situation - what happened or is being considered and what opportunity does it offer?
• Resolution - what are two options (minimum) for how the team could address the situation?
• Impact - for each option, what does the resolution mean for time, budget, or resource focus on the project?

Using this basic framework has always resulted in better and more productive conversations within our project teams and with our client stakeholders. This way of communicating encourages enterprising thinking from all members of the team. After all, we're all in the project together. By emphasizing the enterprising nature of the resolutions, we get to be creative in a different way. Lastly, by laying out the impacts and considering all facets of time, money, and resources you can present options that show you continue to use your clients allocated resources wisely.

We fully understand our clients are not George Vanderbilt with unlimited time and unlimited budgets. We proudly serve as good stewards of their resources through our enterprising mindset, being diligent, and communicating palatable options throughout our partnership. We think about it as if it was our own money being spent with each and every decision.

Written by Justin Cullifer, Partner