Mutually Escalating Commitment

It takes two to tango

He seemed like the perfect client – Tom was the CEO of a significant regional business that, while growing, was having profitability issues that were becoming a risk to the business …..and his career. Our firm had very relevant experience and insights on their challenges.  

We had struck up a good rapport and I was working diligently to understand the situation, problem, implications…... We met several times to discuss the challenges and possible solutions. I wrote an astoundingly brilliant “pre-proposal” that described the challenges, possible approaches and benefits.  We had several meetings to review it.

A couple of months later I shared relevant thought leadership and arranged to have an expert visit with  Tom. And after still more meetings I updated the pre-proposal…… twice.

But Tom wasn’t biting – it seemed that there was always something that made it not quite the right time to start the project……

I finally went to a Yoshi, a senior partner in the office for advice. I outlined all the things had had done over the last six months and then he asked a strange question :

“What has Tom done for you?”

“What do you mean?

“What has Tom invested to help get to a project approach he would find acceptable?”

“Well we have had at least half a dozen conversations and meetings…..”

“Yes, but what has Tom invested in or committed to the process?”

“Beyond our discussions?  Nothing really – but I am not sure what you mean…..”

Yoshi then walked me through a concept that was totally new to me - Mutually Escalating Commitment. (should that be a three letter acronym?)

It’s a very simple idea……but one that would change the way I prioritized and invested in pursuits.

As Yoshi explained it, the client development process must be one of mutually escalating commitments - both from myself and the potential client. While I had to invest time to get things started, I should only invest as long as the client was making reciprocal investments.  

I realized that my pursuit of Tom as a client had been a very one-sided investment. In fact, I realized I had had a number of these one-sided pursuits over the previous year. As a new partner I was painfully learning that the time I had to develop clients and new work was limited – and I needed to be much more selective and much more efficient.

Tom had certainly invested his time….but he had invested nothing else. Tom wasn’t doing anything wrong …. he was happy to keep learning …… he was “picking my brain” so to speak.  But who could blame him? …. I was laying my brain out on a platter for him….for free…..

I learned that I could create opportunities, beyond just meeting, for potential clients to invest and signal commitment. For example, I learned I could ask them to (in order of escalating commitment):

• come to our offices to meet some colleagues

• give written feedback on a preproposal

• share data or documentation about their issues

• introduce me to others in the organization with insights on the issues

• introduce me to the other stakeholders in the decision

• let me sit in on relevant meetings to better understand issues

None of these things have a financial cost – but they do have an exposure or reputational cost for the client.  I found that potential clients that made these commitments were many times more likely to follow through to a real project. Clients that did not reciprocate investment in some way rarely moved forward – at least not right away.

The concept also helped me at another level. Responding to RFIs (Request for Information) and RFPs (Request for Proposal) can be a very significant investment. They are an effective and legitimate way for companies to get smarter and decide how (and whether) to award work. But they can also be very one-sided. Potential bidders can make very big commitments of time and expense in responding with little to no commitment by the company.

There are some indicators that a company is not making a commitment with their RFIs and RFPs – and we should think twice about responding:

• Out of the blue request – no previous relationship

• Poorly written, vague or overly broad scope

• Little to no description of the background or objectives

• Poorly defined or executed process

• Little or no process to ask clarifying questions

• Slow, incomplete or generic follow-up

• No opportunity to present to the decision makers

• Very junior staff managing the process

A very robust request and process indicates commitment and investment (maybe a strong incumbent!).

I wince when I remember my naïveté in responding so thoroughly and enthusiastically to half-baked requests…..the wasted time and resources…..

Over time I became smarter at reading and creating opportunities for mutual escalating commitment. It saved me from over investing - and just as often it helped me pace my investment. I realized that often the client issue has to mature enough for the client to take the next step.

I suspect the concept of mutually escalating commitment may well apply to other types of relationships. Certainly the employer/employee relationship…. And perhaps personal relationships…. but that is an area of expertise far beyond the capabilities and credibility of Friday Thoughts……

Thanks to Yoshi for sharing his wisdom to an enthusiastic but naïve new partner.

Thoughts for a Friday……

Related Posts:

Swinging at every pitch

First you get a chicken neck….