Early this month, another CEO bit the dust. The forced departure of Commerce Bancorp Vernon Hill were the business arrangements between various members of the Hill family and the company. Bank regulators caught up with those various interests and decided that enough was enough. If you think that these considerations are valid only at such high levels, think again.
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Hill founded Commerce Bank in 1973 in New Jersey and over the next 34 transformed it into a powerful entity in the region by creating top notch customer service and engaging in smart marketing moves.
The related party arrangement can be tricky to pull off. Perhaps Shirley Hill was the best architectural design and facilities management choice, yet the fact that she is Mr. Hill's wife has cast doubt on the deal. Were timelines stretched and costs incurred because of the familiarity between parties? That may have been one of the deliberations that stuck in the regulators' craw.
If you think that these considerations are valid only at such high levels, think again. Over the years, I had a couple of instances in which hiring a third party to do a job who was also a friend bit me in the tail.
In the past I shared a project with a trusted company, one that served me well numerous times. The objective was to complete the simple assignment within a set time period. We discussed the time line, the budget and the scope quite openly. Yet it was not delivered on time, and there was some discussion of the budget not quite covering the work.
What went wrong? Our friendship got in the way of the project. After having done all the leg work with the client, and delivering on the first stage of the project I released it to my friend. Our conversation about expectations was quite clear to both yet it failed in the details.
Lesson number one: the devil is in the details.
The lead designer was not able to being work immediately due to personal circumstances. I learned that one week after I was expecting the design draft to share with the client. One other detail I had not considered was that yet another provider had to be involved to complete the project as the company did not have the capability in house. By now, with the timeline expanded, the budget agreed upon at the start was also getting stretched.
Through no exact fault of anyone, I was able to present a version of the deliverable to the client two weeks behind schedule. What was supposed to be the work of one week, plus another for revisions and completion, had become now four weeks. At that point, the company was starting to look for payment while the client had not yet seen any of the completed work. Not a good place to be. In the spirit of complete disclosure, I have also known the client for a number of years through work.
Lesson number two: the same people may behave differently in different circumstances, including you.
We all worked through the final comments and tweaks as a team. However, everyone was now occupied by other commitments; not to mention the tough discussions we had to broach so we could get past the challenges. I stand behind my promises and the additional funds for the company came out of my cut. That was no problem at all.
What happened was a classic case of familiarity breeding a false sense of security --because we have known each other and worked together for so long, we all made assumptions about where the project was. We talked at every single stage, yet we didn't communicate right.
Lesson number three: don't assume that because you're talking, the right message is coming through.
Along with the lessons, here are some takeaways:
1. Even if the project is a small one, request a firm quote in writing of what the agreed budget covers. The document will stabilize the details you both agree on and will serve as a reference later.
2. Keep a close contact with all parties involved and insist that the project lead on the other side knows what is going on. In our case, the designer had taken the initiative to interpret the charter one way and took too much time down that road.
3. If you need to outsource a big portion of your project to a third party, select one that has the capability to do the rest. In my case, it would have been better to have everything under the same roof as a third relationship and pricing structure impacted the cost considerably.
We grow most when we learn, and all parties involved in my story are professionals who will deliver the best outcome .... we are now in problem solving mode. I am sharing the story with you so you can share yours, I'm sure you have at least one.
C'mon, do tell and stay constructive. What other advice would you give me and others on hiring friends? This is important .... we spend a lot of time networking and building relationships, we don't want all that energy to go to waste when the time finally comes to do great work together.
Continue reading "Why Let Friendship Get in the Way?" ... Read the full article
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