Tuesday, July 26, 2016

How to Respond When a Client Changes the Budget

view into a meeting room window with people at a conference table
Read Time: 5 minutes

Eddie was a Chicago creative designer who’d built a strong reputation. So he was delighted when Andrew, a partner at a startup he’d worked with previously, tapped him for a new product launch. Eddie took notes over the phone and later that day sent Andrew a work plan and budget for approval. “All looks good,” was Andrew’s somewhat terse email reply.

Eddie was excited, and not only because everything was so fast-tracked. His last project with Andrew’s company had gone great and was a blast to work on, so he was more than optimistic about this new one.

Within the week, Eddie was flying to Andrew’s office to talk over the details. They spent the morning working together before Andrew suddenly shifted his tone. “Uh, Eddie, about the budget. I have some awkward news. Turns out we don’t have as much for the design as we’d originally thought. I hope you’re still able to do the work and make this our best project yet.”

Eddie was caught off guard, but as he later recounted, “I just wanted to go on talking about the project. Maybe it’s silly, but I love doing the work itself.” In the meeting with Andrew, Eddie managed to mumble, “Sure, I can make that happen.” But he spent the whole flight back to Chicago thinking, “What am I going to say to my team? And why on earth did I give in like that?”

Getting Blindsided While You’re in the Zone

When I’m focused on my work, there’s nothing I’d rather be doing. And by “work,” I mean the actual hands-on process of designing, but I also mean the whole halo of events associated with that: meetings, planning, assessing needs, strategizing changes. I love the feedback loop of doing something I’m good at and seeing it please others. It’s the first circuit of a virtuous cycle that I’m addicted to—and many people, especially creatives, feel much the same way.

But that deep immersion can make sudden adjustments all the more paralyzing. Getting a significant, last-minute change to the game plan thrown at you can make you react in a way that surprises you in retrospect. Personally, like Eddie, all I want to do when that happens is get back to that good feeling. The last thing I want to do is interrupt the process I’m engrossed in to make room for an awkward business negotiation on the fly.

Unfortunately, this kind of blindsiding is common. And while I don’t know how everyone reacts to it, I know from my own consulting work that creative professionals often acquiesce to downwardly revised conditions that seem to come out of nowhere. I believe that’s because we want to keep on doing the parts of the job that are most gratifying.

There’s a psychological dimension, too. Dr. Carola Salvi, who studies creativity and problem-solving, suggests that many of us also experience “sunk cost effect” in situations like these, which makes us feel we’ve already invested ourselves too far in an endeavor that we don’t want to stop, even when continuing is to our disadvantage. We’ve come too far now to cut our losses.

What to Do When Someone Changes the Plan

If you get taken by surprise this way, first of all, give yourself a break. Know that you’re not the only person who doesn’t want to challenge others’ demands or shift your approach while you’re in the flow. But read the rising feeling of irritation or anxiety as your mind’s way of saying, “Pay attention, this is important.”

Take a moment. Pause. Breathe. Consider. This will let the other party know that you’re trying to change gears to catch up with the new information they’ve just dropped on you.

Then — most critically — don’t take their statement as anything other than a conversation starter. This isn’t the end of your project. It isn’t the end of a paycheck. It’s the beginning of a better understanding. Now is your turn to ask some exploratory, open-ended statements to spark further discussion: “Okay, help me understand your thinking here,” or, “How did you determine this new budget?”

When they respond, rephrase what you hear and ask for confirmation: “So it sounds like you have new budget restrictions, is that correct?” or, “Sounds like your payment policy is designed to stretch your internal resources, is that a fair view?”

The more information you can get, the better your chances of partnering with them on a solution that works for both sides.

Preventing (and Overcoming) Eleventh-Hour Changes

My client Jamie had the opportunity to rebrand a well-known product. Pulling this off was going to be a life- and career-altering boon, and Jamie was thrilled to think she’d be working with her team on such a major project. The client had a hard date when they wanted to launch the rebrand, so Jamie quickly submitted a budget and proposal. Both were accepted.

Six weeks into the project, Jamie got a call. “It was the head of the client’s purchasing department calling to tell me their terms of payment,” she told me. Those terms? A check was issued 180 days after project completion. “Man, did I feel ambushed,” she said.

Two minutes before, my team and I had been relishing the details of this new design, and out of nowhere comes the news that I’m not going to be able to pay anyone until after Christmas. Luckily, I had the good sense to get off the phone without agreeing.

Jamie huddled with her partner, and they came up with a plan. They requested an in-person meeting with the purchasing head and their main contact at the client’s company. “We explained that we have cash-flow needs just like they do and can’t wait six months to pay our employees.” And then Jamie and her partner sat quietly and waited for a new proposal.

“They must have realized what we already knew: They’d never meet their deadline if we dropped out now.” The client ended up proposing a staged payment plan and the project went forward.

And what would Jamie do differently next time? “Get everything in writing before we do one minute of work.” That’s a lesson for anyone to fend off last-minute changes before they happen. But here’s another: Even when they do, you still have leverage if you know where to look for it.

Originally published at Fast Company.

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