Networking

Beware of geeks bearing gifts: Avoiding pitfalls when friends bring you business

It might seem like a godsend to get a great referral from a friend. But be wary of the dangers that can accompany a contract that lands in your lap by a pal's doing.


Whether you’re working out of your house or with a 10,000-person consultancy, personal networking is vital to a consultant’s success. The longer we’re in this business, the more we rely on our personal contacts, for a variety of reasons. First, your network of friends and business associates can provide a source of technical assistance when you run into problems on a job. Second, they help you recruit staff and subcontractors, so that you can grow your business. Third, and most important, they can refer new and repeat business to your firm.

For many consultants, it may be true that there’s “a lot of business out there,” as we keep hearing. However, it’s still preferable to get a client referral from a friend, as opposed to having to cold-call a prospect.

As nice as such referrals are, they aren’t without risk. If one of these jobs blows up in your face, you could not only lose a friendship, but also damage your firm’s reputation. In this column, we’ll examine some steps you can take to navigate this minefield of potential dangers.

A horror story
Before we talk about those steps, let me illustrate the possible problems you can run into by telling you about something that happened to a friend of mine a couple of years ago. Having finally made the big plunge to go into business for himself, he had rapidly built up a staff of five or six folks and was doing well, mostly developing software for smaller firms. One day, he got a call from one of the other tenants in his office building—a guy he mainly knew from small talk in the elevator every morning. Over lunch, his new best friend outlined the projects the firm needed done.

My friend could hardly believe his luck. His fellow tenant was giving him work that could bill into the low six figures over the next couple of years. They dove in on the first project, which involved planning and building a WAN to connect several locations this company had in the city.

That’s when the trouble started. After my friend was in the middle of the project, it became clear that the man who brought him the job was using the installation of the WAN as a way to force centralization of all IT functions at his location, getting rid of a rival IT group at one of the other locations. What’s worse, everyone within the client company knew what was going on, and viewed my friend as complicit in the plan.

To make a long story short, my friend got no cooperation from anyone, and became the scapegoat when the project fell behind plan. When the person who hired him took an offer with another firm, my friend’s contract was terminated. Needless to say, he lost the chance to bid for any additional business from the client firm.

Preventing your own horror story
Looking back with the benefit of hindsight, it’s easy to see where my friend went wrong. He forgot to perform the kind of due diligence that consultants normally do on new clients, because he was eager to please his friend. The result was a disaster.

Fortunately, it’s possible to still reap the benefits of personal networking without ruining your personal relationships or making your company vulnerable. If you take the steps outlined below, you should immunize your firm against any severe problems:
  • Uncover the real agenda. This is probably the most important thing you can do. Ask your contact to lay his or her cards on the table, and tell you what they really hope to accomplish with the project. Ask about any internal political issues surrounding the project. Don’t rely only on the friend who brought you the business. Talk to as many other managers as you can, and try to uncover organizational problems on the front end.
  • Get a broad organizational buy-in. If your friend’s project doesn’t extend past his or her department, you might not need to seek broader approval for the project goals. However, most IT projects affect many groups, so you need to get commitments from a larger constituency. By doing so, you reduce the dangers of noncooperation later on.
  • Assert your independence. While you can’t go out of your way to alienate the man or woman who brought you the job in the first place, you need to clearly explain where your loyalties lie. After all, unless you’re being paid personally out of someone’s pocket, your client is really the organization, and not the individual who hired you. Of course, that’s easier said than done, but if you’re frank with your friend up front, you’ll reduce the chance for problems down the road. For example, you can say, “I absolutely want to hear your ideas on this project. At the end of the day, however, I think you’re going to want me to propose what my firm thinks is the best solution for your company. Don’t you?” It’s hard to argue with that.
  • Discover any assumptions regarding your hiring. Before you start a project, you need to find out how your advocate sold you internally. For example, if your client hired you on the assumption that you could get the project completed faster and less expensively than the previous consulting firm, you need to know that.

Common sense saves the day
The main thing to carry away from this discussion is to walk into this project with the same care you do on projects that you won through a bidding process. After all, most of these suggestions are common sense. Unfortunately, common sense is often in short supply when you do business with friends. While no set of guidelines prevents all problems, if you follow these suggestions, you can avoid the major difficulties.

Bob Artner is vice president for content at TechRepublic.

Is it wise to accept work from a friend? What precautions should be taken by a consultant who does so? To share your opinion, post a comment below or send us a note.

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