The Statement of Work, Clause by Clause: The $10,000 Client Who Vanished | Consulting Guest Lecture 2017

This is Richard Lowe’s second annual guest appearance, via Skype, as consulting expert for Professor Makadok’s university business class, recorded September 18, 2017, as the student teams began consulting engagements built around Richard’s book on managing consulting projects. The recording captured only the classroom side of the call, so Richard’s answers below are reconstructed from his contemporaneous positions on these exact questions, anchored by the professor’s on-air summaries of his responses; the professor’s questions are verbatim. Historical book counts appear as spoken; current figures are bracketed.

The introduction

Professor Makadok: Benjamin Franklin once wrote: I’m sorry to have sent you such a long letter, but I didn’t have time to write a short one. Expressing yourself in a succinct, clear, brief way can take a lot of work, and that’s what I appreciate about this book: it packs a lot of wisdom into a very small amount of paper. Richard Lowe Jr. served as Vice President of Consulting at Software Techniques and for seven years as Vice President of Consulting at Beck Computer Systems, then for 20 years as Director of Technical Services and Computer Operations for Trader Joe’s, which is kind of like Whole Foods at half price. He left in 2013 to pursue his dream of becoming a professional author, and since that time has ghostwritten 54+ books and authored 113+ under his own name [12 and 63 at the time of this 2017 lecture] through his publishing company, The Writing King. How did you get involved in consulting in the first place?

Richard Lowe: Through the technology. One of my college teachers started a computer company, hired me as a coder, and within a year I was vice president of consulting with a technical team under me. Consulting found me before I ever thought to look for it. Then, at Trader Joe’s, I spent 20 years as the client: most of the technical workforce around my department was consultants, and I hired and managed them, sometimes dozens at once, through their consulting firms. So the book comes from both chairs, and honestly, the client chair taught me more, because I got to watch every mistake consultants make from the receiving end.

The highs, the lows, and the client who vanished

Professor Makadok: Tell us about your experiences as a consultant: the highs, the lows, the successes, the disappointments the students could learn from, especially once you’re actually working the project.

Richard Lowe: The highs are real: walking out of a project where the client’s business measurably works better because you were there, and being asked back, which is the truest evaluation a consultant ever gets. The lows are almost always about commitment, and usually the client’s. I had a client pay me ten thousand dollars, up front, and then disappear: wouldn’t schedule the interviews, wouldn’t return the calls, wouldn’t do his share of the work, and the project simply evaporated with his money spent. I learned to watch for that from the first meeting: a client who won’t invest his own time is telling you the project doesn’t actually matter to him, and no amount of consulting effort substitutes for an absent client. The other classic low: discovering mid-project that you were hired as the white knight, expected to wave a wand and rescue everything without the client’s participation. White knight is not a clause in any statement of work I’ve ever written.

Professor Makadok: The guy who paid you ten grand and then disappeared: why would he do that? Maybe he wasn’t fully committed to the project in the first place, which is why he hired a consultant. If he were really committed, maybe he would do it himself. Which brings us to the statement of work, which your book has a big section on. Tell us how it works and why it’s important.

Richard Lowe: The statement of work is the contract that governs the whole engagement, and its real purpose is exactly what you said: preventing misunderstandings, and providing a procedure for the ones that happen anyway. Everything the client and I have agreed lives in that document: what’s being built, what it costs, what each side provides, how either side exits, and how changes enter. Anything not written in it, however thoroughly we discussed it, is fiction; oral agreements are worth the paper they’re written on. And it protects both directions. The client knows what they’re buying; I know what I’m delivering; and when memory disagrees, and memory always eventually disagrees, the document is the referee.

Clause by clause

Professor Makadok: The statement of work has to define the purpose and deliverables, define the project, define the compensation, define termination, define change. Let’s go through each. What’s best practice for defining purpose and deliverables?

Richard Lowe: Specificity, ruthlessly. Not “a marketing plan” but the actual artifacts: a document of roughly this length covering these subjects, delivered in this format, by this date. Vague deliverables guarantee an unhappy ending, because the client imagines one thing and you build another, and both of you are right according to the contract. And define the negative space: what is not being delivered. The client may assume the plan includes executing the campaigns, or the book includes the marketing, or the system includes training the staff. Write down what’s excluded and you’ll have the conversation now, while it’s cheap, instead of at delivery, when it’s a war.

Professor Makadok: And defining the project itself?

Richard Lowe: The project definition is the scope’s boundaries: which systems, which departments, which markets, down to details like user interface issues on a technical build, because “we’ll just improve the screens” can mean forty hours or four hundred. And critically, the definition includes the client’s commitments, not just mine: how often we meet, how quickly they respond to questions, what data and access they provide and by when, how information moves between us securely. A project is a two-party machine, and defining only one party’s obligations builds half a machine.

Professor Makadok: So client commitments on meetings, communication, and response times belong in the statement of work, along with how to exchange information securely. Then you have a section on meetings and communicating with clients. Lessons learned?

Richard Lowe: Meetings are the most expensive activity a project has, so ration them. Agenda in advance, start on time, end on time, required attendees only. And put the meeting economics in the statement of work: the project includes this many meetings of this length, and meetings beyond that are billed at the hourly rate. That single clause changes client behavior remarkably: the client who’d happily schedule daily status calls discovers a weekly one covers it. It’s not about nickel-and-diming; it’s that unpriced meetings are unlimited meetings, and unlimited meetings eat projects.

Records: the cheap insurance

Professor Makadok: You have a section about what information to record regarding the client relationship, the benefit being that you can refer back to it and minimize conflict, going back to who said what. If we can’t record conversations and have to resort to note-taking, what are best practices?

Richard Lowe: Notes during the meeting, brief, capturing decisions and commitments rather than transcription: who agreed to do what, by when, and any change to scope or direction. Then, the same day, while memory is fresh, the recap: a short written summary sent to the client and the team, this is what we discussed, this is what we decided, correct me if I have anything wrong. Silence is confirmation. File everything by date. Months later, when the client remembers deciding the opposite, you’re not arguing memory against memory; you’re forwarding an email they received and didn’t correct. In twenty years of hiring consultants, the ones who kept records like that almost never ended up in disputes with me, and that’s not a coincidence.

Controlling chaos: the impervious and the shapeless

Professor Makadok: Your book has a section on controlling chaos: the client who’s hands-off and the client who’s way too hands-on. Last year we had a client absolutely impervious to feedback; the team would advise her, she’d plow ahead, and she didn’t believe it until a SCORE mentor told her the same thing. And another client whose project definition stayed vague and kept shifting all semester. What does your experience tell you about those situations?

Richard Lowe: They’re the two ends of one spectrum, and both are commitment problems wearing different clothes. The impervious client has decided that her belief outranks everyone’s data, and the honest answer is: you can’t consult for someone who won’t receive consulting. You do what your students did: present the evidence, in her language, empathetically, on the record. Sometimes it takes a different messenger, like the mentor, and that’s fine; the goal is the client hearing it, not you being the one credited. But document that you advised it, because when reality arrives, the record matters. And know the walk-away point: some engagements cannot succeed, and recognizing that early is a professional skill, not a failure.

The shapeless project is the opposite failure: no definition to be impervious about. There you stop the work and force the definition: we are not proceeding until we’ve written down what this project is, because motion without definition just burns your money. Every drift after that gets named as a change and run through the change procedure. The client experiences this as rigidity at first, and then, about halfway through, as the reason the project is the first thing in their business that’s actually on track.

Teams: one manager, and a charter of their own

Professor Makadok: If I had one item for the wish list, it would be a chapter on consulting teams. Your consulting work and the consultants you hired at Trader Joe’s were largely team efforts: best practices for managing team members? And would you recommend our student teams have a decision-making structure?

Richard Lowe: Absolutely, and the structure is the same one I enforced as the client: one project manager per team, appointed before the work starts, owning the schedule and serving as the single voice to the client. At Trader Joe’s I’d temporarily place my own employees under the consulting firm’s project manager for a project’s duration, because one boss per project beats two better bosses every time. Within the team, the manager isn’t a dictator: specialists own their pieces, disagreements get argued privately on evidence, and once a decision is made, the team presents one face. A team that argues in front of the client is a team the client stops trusting immediately.

Professor Makadok: And do we need a corresponding document for the team members’ relationships with each other, a team charter: how decisions get made, how quickly members respond to each other?

Richard Lowe: Yes, and for exactly the reason the statement of work exists: teams break on unstated expectations just like engagements do. Who decides when the team splits two-two. How fast members answer each other. What happens when somebody misses their piece. Write it in an hour at the start, and most of the conflicts simply never form. And the mechanism that binds team and client together: the meeting notes go to every team member and to the client, and everybody confirms that’s what happened. One shared record, everyone signed on, no factions with private versions of the truth.

Professor Makadok: So meeting notes get distributed to all the team members and to the client, and everybody gets a chance to confirm that’s what really happened. We’re just about out of time: any final piece of advice?

Richard Lowe: The one thing under everything else: the client is looking to you for leadership, even a client twice your age who owns the company. If you don’t provide it, they’ll take it from you, and the project will drift. Be prepared, be on time, put it in writing, tell the truth early, and don’t be afraid of them. The worst that can happen is you lose one project, and there are always more projects. Fear is what makes consultants small.

Professor Makadok: That’s an important piece of advice. Thank you to Richard Lowe for joining us and sharing the benefits of your experience. And Richard asked me to pass on that it would be really helpful if you’d post a review of the book on Amazon; I’ll send the class a link. An honest review, in gratitude for Richard spending his time with us.

Find Richard Lowe at thewritingking.com/.

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