“Do not pay attention to what people say, only to what they do, and to how much of their necks they are putting on the line”
Nassim Taleb in his book “Skin in the Game” from my post “Do you have skin in the game?”
I’ve entitled this post: “I’m looking for clients where I can have more skin in the game”
Why, and what do I mean by “more” ?
Let’s begin with the “Why”.
It stems from frustration. Frustration around occasions where clients, for whatever reason, pause their commitment to our work together, almost always at the wrong time for them and their business.
Let me explain.
To begin, I am always totally committed to the success of my clients. My intent in life is #MakingPotentialPossible, so it literally feeds my soul to help clients realise their potential. However, as I wrote about in “Back Yourself” in October 2020:
I am selective about businesses I take on as clients and will only do so if I see something the client doesn’t see in terms of “what’s next”. Though I rarely take a “skin in the game” stake in client businesses (I normally work on a long term retainer), I love to support them through to the point where they see their full potential then realise it, so in these cases, my “investment return” is feeling fulfilled from playing a part in their journey!
Now, within that quote from last year sits the core issue, which is that clients pay me on a monthly retainer, yet I am there to help them over the longer term in realising their potential, their “what’s next”, their assets, valuation, succession.
Heck, in personal finance you don’t buy or build an asset like a house using short term finance like salaries, credit cards, that would be ludicrous. I’m therefore frustrated at myself that I typically set up my client engagements on monthly retainers when my strength is long term support to realise the potential in transformative ways that build assets, valuation, succession etc.
This can, on occasion then, create a misalignment, where clients may “pause” their monthly retainer and work for various reasons (being too busy, cash flow demands etc), though almost always at exactly the moment where the time is right to look at the really transformative changes the business needs. Of course, it is always their choice to do so, but you can imagine my frustration when this happens at not being able to live my Intent in supporting them in making their potential possible!
So, with all of that, first I take full responsibility for having typically structured client work around monthly retainers, it will inevitably create such tensions from time to time.
Next, at this time this is why I am saying I’m looking for clients where I can have more skin in the game. By “more”, I am still seeking clients truly committed to asset and valuation growth, to the transformative changes in their “what’s next”, yet I am also looking for those energised by the idea of a different model of retaining my support, one where they only reward me when they achieve their transformative and longer-term outcomes.
That model of working with me then will look like
- a lower monthly retainer, at the same time as ;
- a longer-term performance remuneration (eg bonus, shadow equity, actual equity).
In this way, these clients will recognise the ongoing commitment in terms of both paying out the (albeit reduced) monthly retainer and in my commercial return in investing in them being aligned with their own return on investing in me. Also, this way I only see commercial success when they do, I have my “neck on the line”, I have “skin in the game”.
This is what I mean by: “I’m looking for clients where I can have more skin in the game”
I’d appreciate it if you spread the word. To paraphrase a famous movie: “I’m looking for a few good clients”!
Originally published at Tom McCallum.