“You need failure more than you need success. Success breeds repetition. Failure breeds change.”
Going back through my notes from SXSWi in Austin, Texas, I find myself gravitating back toward a panel called We F*cked Up: Happy Cog and Friends, Exploring Failures, Together, where panelists from Happy Cog Studios, Seer Interactive, Airbag Industries, and Fastspot shared their stories of project failures. It wasn’t so much that I learned anything new from this panel that made it so interesting. It was that the web designers and developers on this panel validated so much of what Pelago has done to cope with similar problems.
Our small web design and development agency has experienced some of the same trials and tribulations of a multi-office creative firm like Happy Cog. And we’ve handled the problems in much the same way — even more effectively than these panelists in some cases. Here is what Happy Cog and friends had to say about failure, and how Pelago believes you can take your contingency planning one step further to avoid similar fiascos.
Own Your Mistakes
This is a no-brainer for any small business who expects to build an successful business with an established client list. Your clients are your bread and butter and you can’t afford to lose them. Especially the good ones. Greg Story made it clear, if you f*ck up, own it and apologize for it. Our experience at Pelago has been that most clients will forgive you immediately. The rest will likely follow suit once you’ve atoned for your mistake. The other panelists expanded on Greg’s comment, sharing don’t just apologize, apologize profusely. Greg Hoy added, don’t put your client in the position of playing bad cop, trust is the most important aspect of the client relationship.
Client trust is built on transparency and honesty. We’ve designed and developed over 300 web sites for more than 100 clients since the year 2000. We’ve made plenty of mistakes, but we’ve always been forthcoming with our clients when it happens. In fact, we’ve made some mistakes that we could have easily hidden from our clients. We chose instead to bring attention to our failure and work through it with the client until we’ve found a resolve.
You have to earn your reputation and respect if you expect to grow your web design and development agency upon an established client list. Wil Reynolds from Seer Interactive shared his unique methodology for earning a client’s trust. If Wil feels as though his agency is not performing as promised, he’ll call up the client and tell them to stop paying him, meanwhile, his agency will continue doing the work until they are happy with the results. What a brilliant idea for building strong and battle-tested client relationships.
The Curse of the Flat Bid
According to Greg Hoy, 80% of the issues that threaten a project to fail arise from scope. Yup. At Pelago, we learned this the same way the panelists did. We lost time and money trying to launch a project because its scope — no scope document is ever ironclad — was misinterpreted by the client. That was the last time we flat bid a project. Now we sign only time and materials contracts and project estimates.
The folks at Happy Cog have implemented a similar methodology for controlling project scope. I would call it “Pseudo Flat Bidding”. They provide the client with a scope and an estimate, then assign hours to each phase of the project. When the hours run out on one phase they will move over hours from another phase. When the hours run out completely they use change requests to handle the overages. Regardless of how you dress it up, the important lesson here is that flat bids just don’t work. The only way for a web design and development agency to effectively keep a project from spinning out of control is to bill hourly.
We feel so strongly about this we’re giving away our time and materials hourly maintenance contract as a PDF document. Download it and use it for your web design and development projects.
However, this whole point is moot if you don’t help your clients set their expectations from the beginning. As Tracey Halvorsen pointed out, agreeing to unrealistic expectations, or not addressing expectations at all just sets everyone up for failure.
Stick with What You Know
Tracey Halvorsen shared a story about launching an eCommerce web site that included functionality they had not developed before. It was a component to the web site that would send out an email to the client’s current customers. When the site launched the email went out as planned, but with all 5,000-plus customers in the To field. Oops.
Taking on more responsibility than your team is technically capable of handling is a big mistake. But it’s an easy mistake to make. Have we done it? Yes. It’s a tough predicament for any interactive design and development agency. Often times we don’t know how difficult a part of the process can be until we dive in and start development, or as in the example above, until the site has launched.
Be extra cautious when launching a web site project, especially a web-based application, when it involves some technological aspect you have not encountered before. And if you find yourself in over your head, find someone who knows it better than you do and hire them for the remainder of the project. It’s better to lose money wrangling in an over-committed project than to lose a client from failure.
Play Nice With Third Parties
We’ve had the privilege — and sometimes, the burden — of working third-party specialists in the interactive web design and development sphere. From branding specialists to SEO consultants, clients will often bring in a third party and expect a symbiosis to occur. Working in this type of environment can be extremely beneficial, but you have to be intentional and willing to teach and learn. Sometimes, you are going to be that third party, so give the same respect and patience you would want in their position. After all, this is a client project, not a turf war.
It is a given that the more parties involved on a project the greater the chance of failure. For example, you may have the web site designed and developed, sitting around and waiting to launch, while the copywriters are weeks behind on delivering the final edits. It’s easy to place blame and excuse yourself from responsibility. Don’t. As Greg Hoy advised, “If you see the third party doing something counterproductive, talk to them directly first to give them a chance to fix it. If that fails, then take it to the client.”
All parties involved should be focused first on the client’s success. This requires setting your ego aside and putting the clients needs first. Do this and the possibility of failure drops dramatically.
Severing the Client Relationship
I’m glad the panel addressed the topic of the design and development agency and the client going their separate ways in an amicable manner. It’s important that when failure happens the issue is resolved regardless of whether or not the client stays with your agency. Greg Storey explained why the client must always be let go in person or on a phone call, not in an email. As the panelists all agreed, the process of firing a client is a dreaded one. The sooner it’s over, the better.
I was surprised to hear Tracey Halvorsen share some advice gleaned from a conversation with a lawyer, which was to simply start charging the client exponentially more for the work until they go away. Aside from ethical and legal issues involved, this practice skirts the issue of termination clauses. Every contract you sign with a client should have a termination clause. Our contracts at Pelago state:
Either party may cancel this contract. If CLIENT cancels contract, fees paid
to date are non refundable. <snip>boring legalese</snip> (a) CLIENT shall remain liable to pay PELAGO CORPORATION the costs and fees that have accrued under this Agreement prior to the effective date of termination, and (b) all rights and duties of the parties shall survive the termination of this Agreement.
Including a simple termination clause in your contract will make it much easier to sever an unhealthy client relationship. The termination clause will not get you out of making that dreaded phone call, but it does give you the option to say “Look, this relationship just isn’t a good fit…” More often than not, that’s all it takes.
This was an excellent panel and underscored the reason I was at SXSWi. Not only did it validate many of the business decisions Pelago has made in the past, it also gave us new ideas and insight on handling clients in the future. While it is true that making mistakes is a necessary step in the evolution of a small business, especially in the relatively new medium of interactive web design and development, it is always better to learn the hard lessons from those who’ve endured the fallout of their mistakes before you.
Notes From the Underground
Explore the links below to see what others at SXSWi had to say about this panel: