When approaching software development from a focus on outcomes and results, instead of efforts and billable minutes, I’ve noticed an early indicator. When conversations digress into nuances of what will be accomplished, it’s usually a sign of a lack of value. Although the outcome appears lofty, in reality it isn’t.
When investments are extremely valuable, people tend not to obsess over the minutiae. Why? Because when a project is extremely valuable there’s more to go around. There’s more value to be reaped by the customer, and there’s more margin for a consultant to make it a reality. In these situations, I’ve noticed ROI on the level of 10 to 1 for my customers and sometimes just as high for myself. Imagine that, a win-win for everyone. This is hands down the best way to do business.
But when an investment isn’t so valuable, customers tend to want to control the minutiae in an attempt to reduce the cost. In detailing requirements they think they’re reducing risk and effort for the supplier. They hope to squeeze as much as possible out of really thin margins.
This is bad for both the customer and the supplier. Customers might make a paltry 10% return, that’s 1.1:1. Suppliers are often lucky to break even. In a healthy partnership neither party would want to put the other in this situation. If margins are thin, there’s no reason to do the work. Therefore, if nuances dominate the conversation, there’s probably no reason to invest in the work either.
Think about the investments you’re working on lately. What are the margins like? Is anyone obsessing over details? What would your work be like if your projects had margins closer to 10:1 instead of 1:1?