CXO

Catch 22: Lose a key client or alienate a critical technical lead?

Should you choose clients over star employees? This is the dilemma one IT manager faces as his best technical lead focuses on a new position that would leave a big account in jeopardy. Is there any solution that makes everyone happy?


An IT manager is faced with a tough decision when a top employee is offered a job that could jeopardize a crucial corporate account. Here's a closer look at the situation. After reading it, let us know what you would do if you were in this manager’s shoes. Then check out the resolution to our previous What Would You Do column.

The scenario
”I am part of a large corporation that provides outsource services to various customers. Each customer is supported by an account team. I have been the IT manager on one particular account for about six months. During this time, I have discovered that one of my employees is held in high esteem by the client and is largely responsible for acquiring, retaining, and expanding my company's role with this client.

“This employee is also perceived as the technical expert on all systems related to this contract. Every technical team on the account turns to him first whenever a problem escalates. The client is currently negotiating its outsource agreement with my company and the only area where the client is satisfied is the area where this employee is the technical lead.

“As part of the spirit of cooperation at my company, I made this individual's expertise available to another account that was in technical difficulty. Apparently, the problem was resolved to everyone's satisfaction. The account manager on the other account called me to request releasing this individual for transfer to this other account. The transfer would be a promotion and significant pay increase for the individual. But, not wanting to put the original account in jeopardy, I declined the transfer.

“Then I received a voice mail from this top technician. He is requesting a meeting to discuss a possible transfer to the other account and wants to know what needs to occur for this to happen. I placed a call to the other account manager to confirm that this manager had improperly talked with my employee. To make matters worse, apparently the technician had not been particularly receptive to the idea at first and had stated some unique and expensive terms. Unfortunately for me, the account manager confirmed that the manager had agreed to meet and even exceed these terms.

“From a corporate position, the transfer hinges on my agreement. Further, the account manager is on the carpet for not following standard procedure. However, I now have an employee I consider key to my team and the original account, who has just been given an excellent internal offer. My budget does not allow me to counter offer. How do I handle this situation?

“The immediate loss of this individual may impact negotiations with my client and cost my account business. Keeping this individual with no action may result in a disgruntled employee who could poison both the account team and the client relationship. My relationship with this employee has been purely professional and I cannot leverage any personal loyalty or respect in any discussion. What do I owe this employee, what do I owe the original account, and what do I owe my client in dealing with this?”

We want to hear what you have to say!
You can submit your ideas either by e-mail or by posting a discussion item at the end of this column. A week after the publication of a scenario, we'll pull together the most interesting solutions and common themes from the discussion. We will later present them with the situation's actual outcome in a follow-up article. You may continue to add discussion items after the week has elapsed, but to be eligible for inclusion in the follow-up article, your suggestions must be received within a week of the scenario's publication.

How do you avoid being unfairly blamed for project failures?
Here is a summary of your responses to the previous column, which detailed a Web developer’s attempts to be fairly paid for a project overrun caused by his client’s poor project management.

Unfortunately for the subcontracted Web developer in question, most of your responses offered little hope for his being able to recoup his losses on this particular project. The strongest point in the Web developer’s favor is his documentation. Several suggestions were made for how he could attempt to use this documentation to, at the very least, reduce his losses:
  • Present the evidence in the documentation to the client and ask for a compromise.
  • Prepare a new document comparing the work completed with the original specifications and bill for every item that matches. For all items that do not match, but for which you can demonstrate a reason, bill for these as well.
  • Use the documentation as the basis for a negotiation, and if this fails, go to court.
  • Demand payment from the contractor, as it should pay all subcontractors regardless of whether the client pays in full or not.

Or as Nyert suggested, “Ask for a meeting with George, the members of ‘the committee,’ Company A officials on the contract, and George's agency's contract officer(s). At the meeting, I would ask for specifics on what ‘doesn't meet the original objectives.’ Then I would use my documentation to either show how I did meet each objective or how that objective was changed. I would show the contract officer(s) correlation to the contract requirements and George's agreed changes. Hopefully the documentation would show that I met all contract requirements and/or whatever else the agency's representative (George) asked for. This sets my legal floor. Then, I would offer to ‘fix’ some of the complaints if we could all reach a compromise. The compromise would include getting back as much of my unpaid time as possible, and avoid putting any more time or materials into the job than I felt I could not afford.”

And even if none of the above suggestions are successful, numerous responses showed how the Web developer could learn from this experience to avoid a repeat occurrence in the future:
  • Define specific goals to be met during the course of the project, and write a contract with the client to be paid a proportionate amount on the completion of each goal.
  • Each time a change is made by the client to the original specifications, insist that their project manager sign off on each change.
  • “As a subcontractor, my ‘contract’ would seek payment from the contractor, not the client. If the client fails to pay, but I have completed my job with signed acceptances from the client, then the question of payment should be with the contractor, not the sub,” wrote Lrobertson.
  • More professionalism is required in the project management, particularly as regards to change control management. According to just another guy, “the change policy needs to be defined in the original agreement, and the amount of time to be spent in meetings with the client needs to be defined, and documented as it is used up.”

To date, the Web developer has not been able to recoup his losses, but we are optimistic that he will be able to use your advice to avoid being caught in a similar situation in the future.

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