I recently spoke to a potential client (call it YYZ) about some potential report development work. All of the details of the specific report requests aren’t terribly interesting so I’ll skip those here. I will, however, briefly provide a high level overview of YYZ’s current report distribution process:
- Super-user runs report
- Super-user prints it
- Admins segregate report it by customer
- Admins scan individual reports as separate PDFs
- Admins email PDFs to customers as invoices and request payment
Obviously, this is not the acme of efficiency. After years of doing it this way, YYZ finally realized that the money spent on automating report distribution would more than pay for itself. A guy from YYZ asked me if I wanted to the job. This post explains why I turned down the work.
Why did I take a pass here? Not because of these reasons:
- I couldn’t do the job. No. While I may not be the world’s greatest report writer, I assure you that I can more than hold my own. I have very little doubt that I could have done what the client wanted.
- I don’t have the time. No. I could have fit the work into my schedule.
- I don’t need the money. Hardly. Property taxes in NJ remain the highest in the nation, but that’s a discussion over beers sometime.
I turned down the job because YYZ really didn’t need my help after all. (As an aside, I seem to be writing quite a bit about saying no these days.)
After doing five minutes of research, I discovered a product called PDF-eXPLODE that should allow the organization to automate the electronic distribution of invoices. What’s more, buying this product would, in all likelihood, cost much less than hiring me to do this for them.
My contact at YYZ was not aware of PDF-eXPLODE, much less the fact that it is available for free as a trial version. Rather than keeping this information to myself, however, I passed it on to him.
Balance the long-term development of your business and reputation with short-term needs.
Some people might say that I’m crazy to turn down work in any economy, much less this one. In the short-term, perhaps this is accurate. I know for a fact that many consulting firms would never have done what I did.
For example, years ago, I worked for a large, publicly traded consulting outfit that vigorously pursued each and every lead. Anyone who asked, “Does the client really need this?” would have found himself in hot water. This firm was so concerned about meeting quarterly earnings’ numbers that it frequently made truly awful decisions, one of which is detailed in the Portnoy case study in my first book.
So, what’s the biggest difference between my own little company and a large consulting firm? Four words: I’m long-term greedy.
Simon Says: Be Long-Term Greedy
“Long-term greedy” is a powerful and evocative phrase with origins to Goldman Sachs, a company that has been in the news a great deal these days for all of the wrong reasons. The once venerable firm is plagued by scandal stemming from some moves made during the meltdown of the housing debacle. Gus Levy is credited with coining the phrase. According to Wikipedia, being long-term greedy implies “that as long as money is made over the long term, trading losses in the short term were not to be worried about.”
You don’t have to be an investment banker to be long-term greedy. Despite the fact that Goldman’s reputation is tainted this days, you shouldn’t mind the comparison. For several reasons, I still find it best to be long-term greedy. To return to the YYZ example above, consider the following:
- If PDF-eXPLODE doesn’t meet YYZ’s needs for report distribution, I’ll bet you a coke that my contact will reach out to me.
- If I had taken the job and done the work, what would have happened if YYZ found out about PDF-eXPLODE? I doubt that they would have asked for a refund, but they’d naturally wonder “What else does this supposed reporting expert not know?”
- YYZ probably has other report development or consulting needs and I’m probably at or near the top of their list.
- People talk. Word of mouth is huge. The goodwill that I built up with YYZ may very well translate into additional clients.
Are you long-term greedy? How do you balance the long-term development of your business and reputation with your company’s short-term needs? Is being long-term greedy a luxury? Or do you ever have to adjust your viewpoint based on external factors?
I find, and especially here in the United States, that most organizations–and not just consulting firms–are fiscal quarter oriented, and their long-term view is almost entirely limited to the current fiscal year.
Almost all planning activities and purchasing decisions are limited to the current and next fiscal quarter. Many times, the decision to greenlight something for the current quarter is dependent on how well the previous quarter ended.
Most salespeople are paid commissions on a quarterly basis, which means when it comes to evaluating any potential short-term opportunity, I believe that all salespeople Speak E.A.S.Y. (Everytime Always Say Yes):
Most executives are paid huge annual bonuses, thereby incentivising them to only care about the current fiscal year.
Personally, I have always been long-term greedy.
However, it is getting harder and harder to remain this way, especially since the recent global financial crisis was mostly the result of Chronic Short-Term Greed.
This post should be read and internalized by everyone in the consulting industry. Full stop.
Echoing Henrik echoing Steve.
There is a reason why goodwill is an asset account on your balance sheet. I can’t tell you the number of times that I have been re-engaged in similar situations. Imagine a consultant that actually has the client’s best interest at heart. A rare breed indeed.
Thanks for the comments, everyone. My own bias is that firms like Baseline and independents like Jim and me are much more likely to be LTG. I’m sure that even I have my limits but it’s probably best to strive for it as a general rule.
Great article Phil. Too often we become so focused on the short-term gain that we forget the long-term repercussions of our actions. You have certainly built enormous goodwill with your customer that will translate into enormous future benefits.
All it takes is a rudimentary understanding of opportunity costs and suddenly these short-term losses become enormously valuable.
Again, great article.