by Brian Skowron

Lullabot’s Hierarchy of Qualification

My daily life, like most people’s lives, is filled with countless decisions that I rarely take the time to think about. What I’m choosing to eat for breakfast or where I decide to walk my dog are decisions that I make on the spur of the moment without much insight into the mechanics of how I arrived at them. In each of these decisions, I’m sure there are lots of little details that my brain weighs subconsciously against one another. A lot of times my motivations are clear to the outside observer, but sometimes they’re harder to piece together.

I imagine it’s similar when companies start discussing a new project with development or design agencies like Lullabot. Why we do or don’t get excited about a new opportunity might be clear as day, but other times it may seem completely counter-intuitive to you as a potential client. After all, if we’re offering a service and you’re able to pay for it, then it’s time to start working together, right?

Well, not exactly.

That kind of purchasing dynamic works with products, and as normal everyday consumers we’ve been buying products our entire life. We’re conditioned to think that businesses offer their goods and services at a certain price, and we can partake of those goods and services if we’re simply willing to spend the money for them. Imagine if you went to buy a new television with money in hand and the sales rep told you, “Sorry, you’re just not the right fit.”

But in our line of work, it’s a fact of life. Agencies like us need to be extremely selective in order to sustain our business. We almost certainly wouldn’t survive otherwise.

When companies look for design and development partners, they may not realize that most of us are selling a scarce commodity—our own talent and expertise. And there’s only so much of it we can sell at any given time. What this means is by saying “yes” to your project, we’re essentially saying “no” to every other project that could possibly use the same resources. That’s a heavy decision, especially when you consider that we’re also shouldering a TON of risk for every new project we take on. The fallout from one bad project might extend way beyond dollars, to our employees, our reputation, maybe even our business entirely.

So what makes a good project and how does Lullabot evaluate potential work? Well, like all decisions in life there are a lot of factors influencing our evaluation. Fortunately we examine these factors and motivations much more carefully than our breakfast decisions.

Maslow’s Hierarchy of Needs

Most of us have probably heard of Maslow’s Hierarchy of Needs at some point in our life. In case you haven’t, it’s a theory of human motivation which posits that humans seek to satisfy certain basic needs (like food, water, shelter) before ascending to seek more advanced and complex needs (like friendship, self-esteem, and creativity). That’s a very simplified explanation, and I recognize that Maslow’s hierarchy has been applied to so many different things that it’s probably cliché at this point, but despite its critics, it does provide an excellent model for how we qualify a project.

Maslow’s Hierarchy of Needs

In our case, the categories are different, but the concept is essentially the same. There are some basic needs that are a prerequisite for having a viable project, and as you move up the hierarchy we look to satisfy other higher-level needs from the work we do and the clients we engage. I suspect most agencies, consciously or not, evaluate new projects with the same factors in mind.

Lullabot’s Hierarchy of Needs

Quantitative Needs

At Lullabot we tend to look at four quantitative aspects of a project - Need, Timeline, Authority, and Budget. These needs are basic across all sales deals, and when I’m talking with a potential client, these are some of the first things I am looking to identify. These are the underlying linchpins of any viable project, regardless of the attractiveness of the work. If you don’t have a quantifiable need, timeline, budget, or the authority to approve the work, there is no potential for a project to get off the ground. I view these needs as analogous to physiological needs. If you don’t have them, none of the other stuff really matters. If you’re looking to hire a design or development agency, I would recommend defining these things clearly before you start bidding out your project.

Need is the real reason or “why” behind the project. What is it that’s really driving you to seek an agency? What outcomes are you hoping for, and how do you define success? When I’m looking at someone’s need, I also want to know the impact beyond the superficial details. It’s great to know that you have to launch a new design by Q3, it’s even better to know that you’re hoping to gain a foothold in a new market with this relaunch and change the perceptions of your brand amongst key demographics, and that your CEO is pegging his reputation to the success of this project.

Timeline is also less superficial than it may seem. Sure, you probably have an idea of when you’re hoping to launch or complete your project, but what business factors are influencing those timeframes? What happens if those timeframes are missed, and how much time should we budget for your decision-making process, procurement procedures, and legal review. In my experience, clients routinely gloss over these things, so doing a little homework and being open about them upfront goes a long way when we’re qualifying timeline and deciding what’s realistic or what’s not.

Authority is simply who amongst your team holds decision-making power. It may be one person, or it may be a group of individuals with different roles. Knowing your authority structure is more important to agencies than you might think. We know that we’re not always talking to the person or people who have the final say; and beyond just knowing who can sign off on the finances, this is really important to the success or failure of a project. If there are unknown stakeholders whose opinion is material to the outcome of the project, it can be disastrous not to have their insight and involvement early. Weeks and months of work can be lost when a critical person’s voice is only heard too late. Identifying all of the stakeholders in a project and their roles is something we’re always looking to do.

Budget is unique because it can often be hard to qualify for agencies and clients alike. There’s a natural tendency for people to hide their budget for fear of losing negotiating leverage or to define their budget based solely on the quotes they get back from the agencies they talk to. This is almost always a bad idea.

First off, when we at Lullabot are looking to qualify budget, it’s usually just to determine whether something is viable, and if so, how much awesome can we fit into it? I’m sure there might be some unscrupulous firms that would take advantage of a client’s budget, but for reputable agencies, knowing the budget means knowing the breadth and depth of work that can be done. Then we can have a frank and honest conversation about what we can do within that budget and what tradeoffs we should consider. And if you are worried about disclosing an exact number for fear of losing your bargaining leverage, at least provide a range so we know what ballpark we’re in. Anything helps.

Oh, and if you don’t even know what your budget should be, worry instead about what your budget actually is. Ask yourself realistically what’s the most amount of money you’d possibly be willing to spend on your project, and then communicate that number. It takes an incredible amount of effort and resources for an agency just to estimate or bid on a project, and most won’t undertake that effort if they don’t know there’s a possibility of securing work. Worst case, if your budget ends up being unrealistic, a reputable agency will let you know up front, saving you a lot of time and effort.

Risk Needs

Once we’ve qualified that the quantitative needs of a project are viable, we then seek to understand how risky the project and engagement will be for us. This isn’t always a simple thing to evaluate, as risk can take many forms with a project. It could be risk that other vendors on the project won’t uphold their responsibilities, risk of undefined scope, risk of onerous contract terms, or even risk that the entire project gets cancelled.

One of the most common risks we encounter is fixed bid contracts with unknown deliverables. Like most agencies, Lullabot would much prefer contracts that pay us for time and materials instead of a fixed bid with fixed deliverables. Even when scope is extremely well-defined (a rarity), software and design estimation is still a very delicate art. Any error in estimation can turn into a huge loss, and fixed bid contracts put that risk squarely on our shoulders. Granted, among many companies fixed bid contracts are a necessity we live with, but we’d almost always prefer time and materials if that possibility exists. In cases where we do agree to fixed bid projects, we commonly engage in a focused discovery phase beforehand in order to give us confidence in the items we’re estimating.

Ultimately, however, really attractive commercial terms don’t mean a lick if the risk of a project is too great to bear. Sometimes even a time and materials contract can be too risky if there are fundamental problems like unachievable project goals or lack of access to key stakeholders. These problems won’t change if there’s more money on the table, and in Lullabot’s case, our reputation of launching successful projects is far more important than short-term financial gain. In our 7 years, we’ve walked away from plenty of otherwise attractive opportunities due to their accompanying risk.

Personality Needs

Quantitative and Risk needs essentially answer the questions of whether the project is viable, and whether we’re rolling the dice with Lullabot’s well-being; but Personality needs start to examine whether there’s a harmonious fit between our companies and stakeholders.

Often this simply comes down to whether or not you’re a good human being we’d enjoy working with. Because let’s face it, if our respective teams are going to be working intensely alongside one another, possibly for months; we probably want to at least enjoy who we’re in the trenches with. At Lullabot, we take personality needs very seriously, not only when evaluating client work, but also in the way we recruit and hire our talent. And believe it or not, this actually impacts project success. If our employees and client stakeholders are not trustworthy individuals who are equally invested in the success of our relationship, they aren’t going to engage in the type of open communication that is necessary for a successful web launch. It tells us a lot when we’re presented with an RFP or requirements document from someone who doesn’t want to speak with us or have any meaningful interaction around their project. Personality fit is a huge deal, and we always look for like-minded clients wherever that possibility exists.

Beyond the individual, personality needs can also apply to companies as well. Like many successful agencies, Lullabot has built a track record in specific verticals where we hold strong domain and subject-matter expertise (like Media, Technology, and Higher Education). A personality need for us is to work with companies that fit our profile and match some of this expertise. Sure, we’ll work outside of this comfort zone from time to time, but our background doesn’t necessarily make us the best fit for medical records processing firms, or commercial shipping operations, for example. There’s an unserved personality need there which could ultimately create friction in our work.

And there’s another element to personality needs involving the organizational culture of the companies we work with. In general we like to work with companies that share our drive to create impact with the work they do, and who are respected leaders in their fields. We like cultures that reward innovation and creativity, and feel good when we’re helping organizations that affect positive change in the world.

Esteem Needs

Esteem is a big one, and often overlooked by people shopping their project to agencies. Put it to you this way, remember when you were looking at our client list and reading case studies to get a feel for us? Well guess what? We know that’s how we’re evaluated, and it’s really important to us that we talk about the work we’ve done. It’s how we get new business, how we differentiate ourselves, and how we solidify our identity among other agencies. Future business potential is a tremendous motivator, and esteem is definitely a part of that equation.

Esteem isn’t a requirement per se, and lately it seems a lot of Lullabot projects are under tight NDAs, but publicity and reputation are huge incentives for agencies. We get excited about projects that have high visibility where we can earn some recognition for the work we’ve done. We also like to perform work that’s unique and challenging, where we can earn admiration and respect from our colleagues. It’s one thing to take on grunt work that pays the bills and keeps the lights on, it’s another thing entirely to be working on the front lines of the web inventing new techniques people will notice.

It’s always easy for legal teams to strike a clause about press releases and publicity in a contract negotiation, but if you can allow your agency to talk about the work they’re going to do and use your name, your project will instantly become more attractive to them. And if you’re unsure you’ll be happy enough with the final product to warrant this publicity, provide some parameters where your agency will be able to earn the right to publicize your relationship. This can be a very compelling carrot, and a very strong negotiating chip in your favor.

Self-Actualization

I define Self-Actualization as the ultimate status agencies seek to achieve with their clients. It’s a point beyond all of the other needs before it, where we identify so strongly with a client or project we’re working on that it becomes a part of our identity at Lullabot. These are the rare circumstances where we’re so culturally and creatively aligned, that we’re uncovering new value in ourselves by working on the project together. Some of our closest clients and longest-standing relationships fall into this category, and it transcends mere deliverables on a statement of work.

Self-actualization also encompasses autonomy and the latitude to extend our own boundaries in pursuit of a solution. When we can use new technologies, enrich our own learning and mastery, and grow as professionals within a project, that’s the ultimate business high. We don’t always know right away when we encounter these types of opportunities, but sometimes the possibilities of a project are clear, and they simply make us say “Wow!”.

And it goes without saying, if you have a project like this, I would love to talk.

So what can you do with this knowledge?

One thing to acknowledge within this hierarchy is that it’s rare for a project to hit on all of these needs at once. We recognize that certain characteristics we qualify are completely beyond your control, and that you couldn’t change them even if you wanted to. We also understand that you’re not always going to have the right budget, or time and materials contract terms, or be comfortable with a press release. As with any decision-making process, there are trade-offs and factors to weigh against one another. This isn’t an exact science, and at Lullabot we don’t explicitly quantify or score each attribute I’ve described because there’s always going to be a ‘gut factor’ involved in qualifying new business.

But what you can do is look at this hierarchy as a representation of how we think and what motivates us with potential new work. I assume we’re not that different than most agencies in this regard. It can also provide you with some insight on how to change the things you do control to make your project more attractive to agencies in general. If you’re stuck with an onerous timeline, for example, you might be able to apply less risky contract terms or let your agency publicize the project. If you can’t publicize the work, maybe you can give your agency more autonomy in how they approach the project, or a more flexible timeline.

Finding good talent is hard these days. Understanding how agencies like Lullabot decide which work to take and which work not to take can help you understand how to prepare your project to be more attractive, and as a side benefit, it’ll increase the chances that the project will be successful for everyone involved.

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