Watch Your Blind Spots

If you ask any professional services provider team about the criticality of stakeholder alignment to winning business and delivering successfully, they will tell you it is indispensable. Yet, few provider firms institutionalize building stakeholder alignment as an organizational capability.

This absence creates a host of blind spots throughout the life cycle, from sales, through contracting, transition, execution, and renewal. And it’s difficult — most likely, impossible — to create deal value if one party has only a vague idea of what’s important to the other party, or how they view a successful outcome.

In a recent survey of clients and providers of IT professional services, clients rated stakeholder alignment issues as the top barriers to deal value realization.

A key element of this misalignment was the finding that client stakeholders had different interpretations of the expected outcomes of a deal than the provider. Consequently, they believed the actual deal structure often didn’t meet their critical interests. This hurts client satisfaction, it causes conflicts during delivery, and it crushes both margins and any hopes of extending or renewing the contract.

And what’s worse, we found in the survey that while clients don’t feel properly consulted in the deal-making process, providers believe (evidently falsely) that there is alignment of interests.

What does this mean in practice? During the sales process, disconnects often don’t become apparent until late in the cycle, causing contracting delays; more often than not, clients simply reject the deal without explanation, leaving providers thinking they lost on price when in reality it was a much more avoidable error. If they succeed in winning the deal, disconnects then arise in the delivery process, as client stakeholders make demands providers can’t meet the way the deal is structured and staffed, at least not profitably; disputes arise, creating tension and wasting time and resources. And you can just forget about client retention as the deal comes to term. By the way, the need for tight alignment is even more acute in transformation-driven projects (over 50% of projects, according to our survey), where the moving parts (and goals) are even more complex and diverse, and must be understood by a broader variety of both client and provider stakeholders.

To prevent this misalignment and avoid deal-destroying blind spots, we recommend two crucial activities:

1)    Prioritize Skills

Every provider periodically revamps and enhances their sales process, with the pendulum swinging between adding more gates, reviews, deal boards, etc. and delegating and devolving more authority to those closer to the market. But it takes more than good process to get alignment. Provider teams need also to help client stakeholders get aligned, and they need to continuously learn, adapt, and regroup on their own side. The skills needed actually to achieve and maintain alignment are often neglected by providers and need to be made a priority to make alignment operational. “Soft” skills like influence, making sense of data and telling a compelling story, and managing conflicting priorities should be taught to — and mastered by — all members of the sales and delivery teams. Not only will these skills enhance alignment with the client, but they’ll also create better internal alignment – another key element of successful client delivery.

2)    Enhance Governance

Formal, streamlined, and cross-functionally aligned processes for engaging client and internal stakeholders — both early and throughout the project — need to be in place. This is especially important for “transformation” projects where a multitude of people and functions are engaged, and where client and provider are engaging, from the start, in what is often a dynamic and changing journey.

We urge you to evaluate whether your organization has the infrastructure in place to cover your blind spots. Having more engaged clients (and their internal stakeholders), who trust you to have them in mind, will ensure the success of not only existing work, but will guarantee the client will be in your corner when new opportunities and renewals arise. 

About the Report
“Winning Deals and Improving Margins” - an IT market report based on a cross-industry study of deals greater than $5M annual contract value with 163 executive leaders, directors, and managers at firms with greater than $250M annual revenue (125 Clients and 38 Providers).

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