Paul James
If I said to my piano teacher that I was willing to pay £20 per week for a year but I wanted a guarantee that I would be grade 8 pianist by the end of that year, and that if I was only at grade 7 I would expect a 10% refund, grade 6 at 20% refund and that if I didn’t make grade 1, I would expect a full refund, would the piano teacher accept my business? Similarly if I employed a Personal Trainer and said that I would pay him based on the results of my next triathlon where my finishing time would equate to the amount of money I pay, would that be a good deal for the trainer? Well, if the conditions of the deal were no more sophisticated than these, then almost certainly not and I suspect it would be a very short conversation.
Some things you can throw money at and get a result, but other things it doesn’t matter how much money you fork out, the outcome is not proportionate. We have become used to the “as a Service” commercial model in recent years and if what you are buying is a service that you consume and there is a direct correlation between the amount spent and the service delivered, then fine. This works for CRM software, accounting software, computing infrastructure and many other examples where what you pay for is what you get. But where the buyer needs to invest their own effort and time into the “as a Service” commercial model, it has not historically worked. That’s because we are talking about improving capability, the definition of which according to Google is “the power or ability to do something”. The fact is you cannot buy ability and if you could, the richest people would also be the best sports people, the best musicians, the best writers and so on.
Now, what if the piano teacher said, I can’t get you from novice to grade 8 in one year but I could do it in two years and I could get you to grade 4 in the first year, but… you must follow these conditions and you must allow me to measure your adherence to these activities. The conditions are that you must practice for ½ hour every day and you may only practice what I tell you to, you must read music theory for ½ hour every day and you must listen to prescribed music every week. Also, you must achieve 80% pass marks in weekly tests in each of these areas. What about if the piano teacher said that she would charge an additional 10% for every grade achieved above 4 in the first year? Now this starts to sound like something that works for everyone. You can imagine a similar negotiation around the triathlon outcome where the variables might be training, nutrition, sleep and stretching.
Most businesses will state that their most important asset is their people and the capability of those people is what sets them aside from their competitors. To keep the music analogy going, if we compare a business to an orchestra, the business creates a budget and then expects it to be spent on courses and consultancy – it throws money at the problem. If that doesn’t work, businesses tend to increase the budget, change suppliers, change the people or change the systems. The orchestra is full of musicians who understand that no amount of money will replace practice and a commitment to self-development.
There is a running theme here. In order to improve capability the whole attitude towards that improvement needs to change from a commoditised procurement to a true partnership where the amount of commitment, propensity to change, acceptance of measurement and willingness for scrutiny must all be considered if the budget is to be well spent.
In my next blog I talk about how this translates into a tangible proposition and how we can jointly improve your capability and how can your spend can be linked to the outcome (as long as you hold up your end of the bargain).
I really do have a piano teacher, which has allowed me to be part of a band. Here's a clip of us in action:
