Landing a $2 million dollar contract is a big deal in a company the size of Syncroness, a Denver-based engineering consulting firm. CEO Mike Walraven was delighted when a new client signed Syncroness to provide research for a technology feasibility study.
“It was a fairly significant contract for us,” says Walraven. This was exactly why the team was disappointed to find – two weeks into a two year contract – that the existing technology could not do what the client wanted. “The physics was such that it just couldn’t be done – it couldn’t be scaled to fit the need,” says Walraven.
Now Walraven and his young company faced an ethical decision: let the client know immediately, and loose the $2 million dollar deal, or drag the project out in hopes of keeping some of the contract’s money on the table.
Walraven made the ethical choice. “I had to tell the client, ‘We’d just be burning your money to continue this research.’”
The tough choice paid off: it took a few years, but the client returned to Syncroness the next time they had an engineering research need. More importantly, word of Walraven’s honesty with clients circulated in the industry, leading to new clients and a strong reputation.
What this client found was that Syncroness was a good culture fit for their organization. Finding clients that fit your company’s culture has the long term benefit of creating loyalty and easier, often more profitable, working relationships. Walraven offers these suggestions for keeping, cutting, or changing clients to ensure a culture fit with your organization:
1. Choose clients carefully. It may seem that the choice happens in the other directions – clients choose you – but in reality, most bigger contracts begin with a courting season that allows both companies to get to know one another, including the culture and values at play.
Walraven recommends watching for these red flags:
- The prospective client treats you like a commodity rather than a partner.
- The prospective client has tried outsourcing before and hasn’t found a consistent partner.
- Their goal is only financial and they just want to get it done cheaply.
- They can’t articulate what they need, and they lack a clear vision the project’s future.
Being selective about clients is a privilege, Walraven says. But it also prevents future headaches.
2. Do everything you can to keep commitments to your clients. Once you have a strong client relationship, or have an agreed upon set of expectations, Walraven’s team goes out of their way to keep the relationship thriving.
One recent Syncroness client project began to go over budget. “We hadn’t set clear expectations up front,” Walraven says. Along with that, a change in leadership for the client, along with a slow scope creep had taken the project off path and over budget.
“My team was saying, ‘Let’s just cut this project now. It’s hurting the company,’” says Walraven. But he knew Syncroness’s long term reputation was more valuable than this short term problem, so he made the decision to finish the project.
“To quit now wouldn’t speak too well to our values,” Walraven told his team. “We want a lasting relationship with the customer, and killing the project would kill the relationship. Word of mouth would come back to bite us.”
3. Respectfully confront clients. Syncroness’s clients are often under a lot of pressure to find new technologies, meet tight deadlines, and operate on lean budgets. As a result, clients can sometimes get over-bearing with Walraven’s staff. He won’t tolerate it.
“We have the tough conversation. We remind the client that they can’t talk to our staff that way. And often,” he says, “the reminder is all it takes.”
4. End relationships gracefully. Not every relationship can be salvaged. Recently a long term client began failing to pay bills. With 10 staff members dedicated to the client’s project, resolving the situation was important. But the client’s new ownership – they’d been purchased by an off-shore firm after facing financial problems due to a law suit – seemed to be stripping the company of resources while also making decisions that were ethically questionable.
“We’ve tried communicating with them,” says Walraven. “If times are tough, we’re willing to work through it with people. But it requires a significant amount of communication. We put our cards on the table and say this is what’s okay and not okay – from our standpoint of integrity and good business sense.”
Seeing no changes in the client’s behavior, Walraven made the tough decision to end the relationship before it became costly to Syncroness. “You have to exit gracefully – do what you’ve committed to do, communicate clearly, and then move away,” he says.
Finding (and keeping clients) that are a good culture fit is part of the long game of business, Walraven says. “There’s plenty of work out there. You should be able to find the people you want to work with and not work with others.” Making that choice inevitably works better for your company in the long term – even if it’s a tough call in the short run.
Amber Johnson is the Center for Values-Driven Leadership‘s corporate relations and social media advisor. She is a non-profit and small business communications professional. In addition to blogging about business for the CVDL, Amber writes about marriage and other topics on her personal blog.
For more details on the Center for Values-Driven Leadership, visit our web site, www.cvdl.org.