Managing Non-Billable Work Effectively, Part 2 of 5

Last week, I talked about work given away by the project team and the various situations when it might make sense to do so. Also, I talked a bit about how to manage non-billable change requests (CR) from within the project team.

As a reminder, non-billable CRs are often issued by the project team as mea culpa when a mistake is made by the team. The non-billable CR can help get the team back in good graces with the client. Additionally, project managers may use the non-billable CR to build goodwill with a customer when s/he knows a hard discussion or larger CR is about to present themselves.

In this post, I will talk about work that is given away by the PSO management

Work Given Away by PSO Management
While it is rare, there are times when the PSO delivers complete engagements at no cost to the customer. Admittedly, most times these no-cost projects are usually initiated by sales and executive management, but there are times when PSO management agrees to a no-cost SOW.

In the case when one of the PSO's primary objectives is to support product sales, PSO management may defined small, promotional projects designed to highlight the benefits of the product while also promoting the value of the consulting team. For instance, I recently put together a program that I called (internally) the "Golden Ticket" program.

Each account manager is given one (1) Golden Ticket. S/he has the option to give away a single two-day engagement during which the PS team will audit the customer’s use of our products. The client deliverable is a 30-40 slide Power Point presentation that summarizes gaps in the customer’s methodology and a summary of apparent Web Application performance issues. Our analysis is limited by time, and we do not talk directly with the client until the analysis was complete. This allows us to complete the engagement quickly, highlighting the value of our best practices (the value proposition being: “We saw all of this without even talking to you”), and indicating where we could go deeper in a "real" engagement.

As a result of this offering, the PSO has engaged in a handful of these projects. In one case, the Account Manager was able to grow the size of the account with the customer in the same quarter the Golden Ticket was delivered. We are also in early discussions with this customer about a potential larger (billable) PS engagement down the road.

These programs tend to be well defined and well managed because they are driven by PS management, who understands best what it takes to do the work. That said, there should be close collaboration with sales management to ensure that the program is designed to meet the objectives – help the sales reps sell more product and services.

Managing Non-Billable Work Effectively, Part 1 of 5

In my experience, non-billable work can be categorized in four ways:

1. Work given away by the project team

2. Work given away by PSO management

3. Work given away by the sales team and/or sales management

4. Work given away by the executive team

Regardless of where the ‘give away’ originates, a PSO must have policies and processes for managing and tracking what work is given away (and in what situations) and how the non-billable work is managed with the client.

Work Given Away by the Project Team

Project teams rely on the Project Manager to manage scope. Technical leads, business analysts, and other team members should never have sideline agreements with members of the client team to do work that is not clearly specified in the SOW. While the SOW defines the guiding principles – or project charter - for the project team, it is unlikely that every detail of every requirement will be uncovered during the pre-sales process. Therefore, an effective change control process should be implemented to allow the consulting and client teams to work together to change the scope of work as needed.

Many change requests are designed to increase or reduce scope, requiring the project budget to increase or decrease in kind. The consulting team needs to evaluate the change request and inform the client of the effect that the change will have on the project schedule and cost. (In my experience, many change requests that must be added to the project, are not so important when the customer learns what the added cost will be.)

At my core, I believe that all work performed by the consulting team should be paid for by the customer. However, having spent the majority of my career in project management roles, I have learned that the no-charge Change Request (CR) is a very powerful tool – allowing the team to give a little to get a little (or a lot). The no-charge CR allows the consulting team to develop goodwill with the customer. Issuing these change requests allows the team to approach the relationship with the client from the position of “partnership.”

So, there are times when a Project Manager may chose to write a no-charge CR. In addition to the opportunity to develop goodwill, as discussed above, there are times when the change does not add any additional consulting time to the project. This can be the case when the customer wants to change a requirement on which the consulting team has not worked and the change represents the same level of effort as the original requirement. Even when there is no change in the level of effort or cost to the project, the Project Manager should issue a Change Request to document the new agreement between teams, allowing all parties to understand the differences between the original agreement and the ultimate deliverable.

However, Project Managers should also be empowered to issue a no-charge change even when the change requires more work. This may happen if the consulting team has made a mistake that caused some amount of pain on the part of the customer. The no-charge CR may rebuild a, potentially, damaged relationship. It may also be advantageous to issue a no-charge CR when the project team knows of a larger request that is coming down the road - bigger changes result in larger bookings and revenues. The smaller no-charge CR may leave customers feeling like “this” team is willing to work with me. The customer doesn’t feel “nickelled and dimed” and the larger, billable CR, may be easier to get executed. A good project manager understands when it is appropriate to issue a no-charge CR versus one for which the client must pay.

That said, PSO management must provide project managers with a process for managing give away work:

1. All changes must be documented, even when the change will not result in additional charges for the customer.

2. Only the project manager can agree to a change, although s/he should solicit input from the rest of the team.

3. Only small changes can be provided as non-billable. Anything that puts the schedule at risk should be billable.

4. You may want to set a cap on the size of the non-billable CR to which a project manager can agree without management approval.

5. A Change Request Board (CRB) must approve all CRs, even the non-billable CRs. The CRB includes representatives from the client and consulting teams. You may want to have PS management on the board, particularly when your less senior project managers are running projects.

The next post will discuss non-billable work given away by PSO management.

Revisiting Non-Billable Work

Earlier in 2010, I started a series discussing the role of non-billable work. I wanted to revisit that series in the next couple of weeks. The first posts, starting today, will be a repeat from that series. Keep reading, though...more will come.

Thanks,

A

World Class PSO: Daily Thought

Value! Value!! Value!!!

That's what is all about.

Every day, whether you a consultant or not, you should ask yourself, "What value am I going to add today?" Before you shut down for the day, ask yourself, "Did I add value today?" If the answer is, "no," ask yourself why not.

Plan your day, know what value you are going to add, and hold yourself accountable to adding value where ever you can. You will be surprise at what success comes when you focus on value and accountability.

World Class PSO: Daily Thought

One of my consultants recently commented that it is harder to build relationships with clients when working remotely than it is when working onsite. He makes a great point. One of my colleagues says that some of the best sales meetings happen after the sales call as he is walking out to the reception desk with the customer. That can be true with consulting, too.

I think we over look the importance of those short, informal, and non-threatening conversations we have with our customers as we are walking to or from the conference room, and it can be hard to have the same informal chats when we are on a bridge waiting for others to join. So what can we do?

On ideas is to use the information available to us. We have more and more information at our disposal online. Take a few minutes to see if the meeting attendees are on LinkedIn and try to learn about their experiences and background. Don't go all "Big Brother" on them, but see if you can use that information to make a personal connection that lightens the mood.

I recently did something a little more bold...ok, just a little more...In a meeting last night, I made a reference to doing a song and dance. The client commented on wanting to see a video of that. Now, I certainly wasn't going to send her a video from my cousin's wedding last summer, that's for sure. However, as a joke, I sent her the clip of Elaine from Seinfeld doing her crazy leg kick dance. We all had a good laugh, and I showed a little of my personality. Next time, we might have an easier time with the light chit-chat that helps lower the barriers...it also showed her that I was listening to her.

Having fun with your clients and exposing yourself for who you are is a good thing - as long as it is done professionally.

So, how do you break down barriers and build relationships when you work remotely with your clients?

World Class PSO: Daily Thought (Trying to get back on track)

Before the summer started, I was in a groove - I was blogging regularly and feeling good about it. Then...summer happened. We had the biggest quarter in our history, we hired new consultants - nearly doubling the size of our team, and we started to make huge strides in maturing the delivery arm of our practice. It's been a good few months!! Now I'm back...

Later this week I will pick up my series on the "Top 10 Qualities of a World-class Consultant." Before I do, though, I wanted to share a quote from the book, 50 Success Classics, edited by Tom Butler-Bowdoin. Tom quotes from Born to Win, by Muriel James & Dorothy Jongeward:

"It takes courage to experience the freedom that comes from autonomy, courage to accept intimacy and directly encounter other persons, courage to take a stand in an unpopular cause, courage to choose authenticity over approval and to choose it again and again, courage to accept the responsibility for your own choices, and indeed, courage to be the unique person you really are."

It may sound corny, but I think this one sentence summarizes the life that we as consultants and project managers need to live. We need to strike a balance between competing forces: The needs of our customers, the needs of our employer, the needs of the delivery consultants, and the contract between all parties. We have to really, truly engage with our customers - care about their successes and failures - and listen carefully to what is being said...and not said.

I have told my consultants that they need to develop the self-confidence required to confidently tell the customer what they need to hear, not what they want to hear. I have also told them that they need to be professional and diplomatic in how they do so.

We walk a tight rope every day. World-class consultants are able to find the balance and be a truly trusted advisor for your customers.

Running an Effective Meeting – A Checklist

The Checklist

Before the meeting:

• The meeting objective has been defined and shared with all participants.
• The meeting agenda has been defined and shared with all participants.
  - The agenda includes topics with owners.
  - The agenda includes time allocates for each topic.
  - The agenda is manageable given the time available for the meeting.
  - The agenda includes reasonable breaks.
  - The agenda enables participation, interaction, collection of feedback,
  decision making, and communication.
  - The agenda allows for Q&A.
• The meeting leader is aware of potential “off-topic” discussions that may happen and is prepared to address (or table) them.
• The meeting leader is aware of political or personality conflicts that may distract from the meeting and is prepared to address them (or reduce their impact).
• The meeting leader has determined the best, worst, and most-likely outcome from the meeting and has prepared for the worst in an effort to achieve the best.
• Critical participants have been identified and are confirmed for the meeting.
• Non-critical participants are aware that their attendance is optional.
• The meeting room has been scheduled.
  - The meeting room has the necessary technology (projector/screen, white board, flip charts, phone, Internet access).
  - The meeting room is suitable for the audience (size, layout).
• Conference Bridge has been scheduled and shared with all participants.
• WebEx has been scheduled and shared with all participant.
• For longer meetings, snacks and beverages have been ordered and supplied.

• Roles and responsibilities have been determined for the meeting (SME, Note Taker, Time Keeper, Judge)
• All participants are aware of their responsibilities in terms of Preparation for the meeting.
  - Assignments have been handed out.
  - Participants have confirmed that they have completed their assignments
• Hand-outs, slides, and examples have been prepared and reviewed.

In the meeting:

• Start the meeting on-time – do not go back for those who are late.
• Start the meeting with a review of the meeting objectives, the agenda, and roles and responsibilities.
• Allow participants to introduce themselves: “Does everyone know each other?”
• Ask participants if any other topics should be added to the agenda, if time allows.
• “Parking lot” items are captured for follow up meetings and discussions.
• Stick to the time schedule – allow “heated” discussions, but cut it off to keep on track with the agenda.
• Manage to the agenda, not personal agendas or politics.
• Encourage questions and discussions – the agenda should allow for this.
• Avoid “Death by Power Point.”
• Keep meeting notes, including action items.
• Capture owners for all action items and commitments for when the action items will be completed/delivered.
• Action Items and Next Steps have been determined and agreed on.
• Thank participants for their time and attention.
• End on time – respect everyone’s schedule.

After the meeting:

• Meeting Notes, with Action Items, have been captured and distributed.
• Meeting leader has followed up with participants and action items are complete.
• Follow meeting and discussions have been scheduled.
• Feedback from participants has been captured

Resources:

http://www.mindtools.com/CommSkll/RunningMeetings.htm

http://www.businessweek.com/smallbiz/content/sep2006/sb20060927_259688.htm

http://www.suite101.com/content/running-an-effective-meeting-a59348

http://sabes.org/resources/facilitationguide.pdf

http://www.meetingwizard.org/meetings/running-effective-meetings.cfm

http://spac.ucdavis.edu/forms/leadership_tips/running_fun_and_effective_meetings.pdf