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Pawel Brodzinski on Software Project Management

Project Management Failure Stories: Win-Lose Relationship

fail

It was one of these cool cooperation contracts where you declare to do some work for the client for a monthly fee. It had its up and downs – sometimes Jane the Project Manager thought the customer is expecting much more than it was agreed in the contract, sometimes the customer complaints were justified since there wasn’t happening much in the project.

In the long run both sides were happy. It was that way until new manager, Ivan the Bold, joined the vendor. “Hey, doesn’t the agreement allow us to suck some more money out of the client?” So Ivan did. He used some hooks from the formal agreement to jump on the big cash.

What he succeeded in was the customer has rejected to pay, forcing the vendor either to forget about the thing or to sue the client. As a bonus this nice cooperation contract was cancelled by the client since they didn’t feel safe with the vendor anymore.

Failure

A classic fail in building (or maintaining) relationships with customers.

Win-Win Is Crucial

What happened here is a basic case of imbalanced relation. For pretty long time it was a win-win scenario where both sides were rather happy with outcomes. When the game changed with one side trying to suck the other one out it started to be win-lose. Win-lose contracts happen to be terminated. Well, it happens pretty often. In this case even the short-term outcomes didn’t compensate in any way long-term loses since there were no short-term outcomes at all.

If you run a project to take advantage over your customer (or vendor, this relation works both ways) you put your project at risk. But after all “no risk no fun” they say, don’t they?

Read other project management failure stories.

in: project management

4 comments… add one

  • Priyanka D February 15, 2010, 11:55 pm

    Yea I agree win-win is important, it is just not worth letting a client walk off feeling miffed about the deal. And even if they don’t see the loopholes in the contract etc… they will still catch on if you are cheating them.

  • Pawel Brodzinski February 16, 2010, 1:32 am

    In this case the important aspect is the cooperation went smooth for some time so there was an actual proof things go fine and deal is fair for both sides.

    Failure here isn’t even in the point when Ivan lost the deal but with his general approach which will result in losing (or not getting) other contracts. No one likes to be sucked out.

  • Nick Myers February 17, 2010, 12:16 pm

    Trust and integrity would be shot to hell in this situation! We work hard to create strong relationships with our customers, and the more we prove that we are trustworthy and have integrity, the more willing the customer is to reflect this in the type of contracts they sign.

    I believe that the only way to ‘get more money’ from a customer is to deliver more value.

  • Pawel Brodzinski February 21, 2010, 11:04 am

    I know vendor-customer relationships where getting money isn’t strongly connected with delivering value but I wouldn’t describe these relationships as healthy one. So yes, in normal situation make it win-win and you’ll get your money.

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