Primal Knowledge
Here is the heart and basis of my proposals and consulting model. It’s simple, but it’s incredible how many people mess it up.
Conceptual agreement is based on a trusting relationship with a buyer. You must deal with an economic buyer, who can authorize payment for your value. You must have a trusting relationship or the buyer will not share what you need for a proposal: conceptual agreement.
Conceptual agreement has three elements:
1. Objectives. These are ALWAYS business outcomes, never deliverables (which are always requested by low level, non-buyers), tasks, or activities. An objective is not to “Observe your work force” but rather to “Improve productivity and accountability.”
2. Metrics. These are measures of progress and success. They must be seen in the environment, so a metric cannot be “phone representatives will feel more confident that they can handle a multiplicity of client questions.” How would you know? The indicator may be “logs show that there is a continuing reduction in calls referred to technical experts.” (A metric can be subjective if you agree on the standard: “The buyer will report that time spent on serving as ‘referee’ for the management committee has significantly declined.”)
3. Value. This comprises the real power of ROI and your fee justification. It is not merely a repetition of the objective. An objective such as “increase profits” may seem like value in and of itself, but it can also translate into other value:
• Higher dividends for investors
• Better treatment by lenders
• Higher equity for resale of business or exit strategy
• Greater philanthropy and community support
• More competitive investment in overseas growth, use of technology, etc.
You can see that 5-6 objectives, multiplied by 5-6 statements of value for each, can create a very compelling reason to make a major investment in the project.
It’s really that simple.
© Alan Weiss 2010. All rights reserved.
Dave Gardner
Alan…your process is burned into my brain. I would add–per your guidance–that we not create a proposal with options until after conceptual agreement is reached with the economic buyer and no one else. It is deadly to combine the conceptual agreement phase with proposal phase even if it is what the buyer insists on. I’ve learned the hard way that, if you combine these steps, what the buyer really wants is a price, the value conversation never materializes, and the proposal dies.