Managing Expectations & Expectation Management
 

We've all been there. Your boss (or your client) expects the world from you – and he wants it double quick. If it's a client you're working for, they want it quick and cheap. With a client, you will typically agree outcomes, cost and timeframe before you sign the contract. Even so, there's plenty of scope for disagreement on what constitutes satisfactory work completion. Your deliverable might be a simple spreadsheet, but you could always wrangle on the level of detail – number of data points, period of analysis, granularity of the data and the quality of inferences drawn.

There will always be a gap between what you think is realistically possible, given time and resource constraints, and what your customers expect. This gap can be because:

a) Your estimate of 'reasonable productivity' is too low. You haven't taken into account productivity that is possible if you were 'to stretch'.

b) Your customer is in fairyland. He or she has no conception of what is realistic, with all the stretch and goodwill in the world thrown in.

In most situations, the gap usually has both elements. Most people when asked to come up with a realistic estimate will always give a number that has an in-built safety margin thrown in. If a piece of work should ideally take 2 weeks, people will quote 3 weeks. If 100 units of sales are achievable in a month, they will start resisting at 60. Cost estimates will be 50% higher for starters. It's an automatic defense mechanism that the school of hard knocks has taught all of us. On the other hand, as customers the defense mechanism works in the reverse direction.

Naturally, you cannot let this expectation mismatch remain unresolved. The question is, how should you go about aligning expectations and reality? Well, there are two ways, and I am going to argue in favour of one of them as a preferred option.

Managing Expectations is where you engage with your customer and rationally explain why certain expectations are unrealistic and cannot be met despite your best efforts. This also involves recognizing where it may be possible to commit to more, once you realize it may be feasible. There is a give and take process on both sides, which results in a mutually acceptable outcome. Obviously, it will not be easy – getting a customer to settle for less never is. It involves moving away from an 'Us vs Them' mentality towards a joint problem solving approach. This approach pre-supposes transparency, and willingness to take the risk that once you open up your effort estimate basis to your client, that openness will not get abused.

The fine art of Expectation Management, on the other hand, is a black-box approach. 'Always under-commit and over-deliver' is its motto. Here the person or organization committing time and effort justifies and internalizes the defense mechanism. Even if the service provider internally thinks that what is asked is possible, he tries to bargain for less (output) or more (fees). If it eventually turns out that the actual performance is marginally better than that agreed then the service provider feels that he has done a good job, because he has 'over-delivered'.

Why do I discourage people from adopting the latter approach? After all, it is pretty prevalent - so what's wrong with it?

There are two fears that this approach tries to counter - a) the fear that if you in-build stretch into your realistic assessment, you are left with no room for maneuver in case things go wrong and b) the fear that a customer will always, like Oliver Twist, expect just a bit more. Both these fears express the same outlook and attitude towards client relationships - that customers and service providers essentially have adversarial positions. Clients 'win' at the expense of service providers and vice-versa.

This attitude is great if one-off transactions with your customers are all you are aiming for – a typical 'here and now' sales mindset. But look at what happens when you view the interaction as a relationship, comprising multiple cycles. Say you managed to under-commit and over-deliver the first time. What happens in the next cycle? Do you really think your client wouldn't have done her math, or would be unaware of the actual extent of slack in your execution the first time? Second time round, you may up your numbers and shout yourself hoarse, but she will always believe that you still have some reserve up your sleeve!

The thing with buffers is that they become transparent over cycles. You can either have that transparency upfront, or start with a black-box which becomes transparent over time. The difference between the two is the degree of trust and the quality of the relationship.

In an open, transparent, trust-based relationship, both the fears are mitigated. When your workings and assumptions are shared with your client, and things outside your control go wrong, you can reasonably expect some slack from your client, in the form of deadline extensions, agreed additional fees or agreed reduced work completion criteria. As for the second fear, once you have jointly worked out the maximum that is possible, your client has no basis for asking for more.

For the hard-headed realists, I do not believe I am advocating an impractical, idealistic approach. Our defense mechanisms exist because we have been hurt in the past, by trusting too much. Obviously, there are customers who will not hesitate in extracting as much as they can, and if you 'reveal all', you are likely to lose out. You may be better off asking yourself whether you want to retain those client and customer relationships.

So identify your 'good clients' and manage their expectations - be open and transparent with them. Recognise your 'bad clients' and be transactional, but honestly evaluate whether your business gains from those clients are worth the effort (including the effort of second-guessing and operational brinkmanship). Over the long run, try and substitute a few good, long term relationships for a large number of smaller transactional clients.

Note: You may have some leeway in client selection, but you rarely get to shuffle your bosses. If your boss is a 'bad-un', you may just have to grin and bear it for a while, unfortunately!

 

Category: Managing Client Relationships | Author: Sriram Subramanian