Sometimes a lightbulb goes off for me and, rather than analyse it, I realise it has significance and sit with it. Yesterday a conversation with a colleague switched on one such lightbulb. The lightbulb was around my work and that Equity drives Commitment.
Often I work on monthly recurring retainer with clients. On average my clients work with me for at least two years, and during that time sometimes things may ebb and flow. Occasionally they even “take a break” during that time, asking to pause the engagement (and the paid retainer) for various reasons. Why do they take a break? Sometimes it is labeled as “we aren’t making progress as we expected”, sometimes as “we need to cut expense”.
However, as per the drawing above, this is often nothing to do with their monthly investment in me, but happens when they are in the “trough of disillusionment” in the model above and, rather than commit, to stick to it, they back off. I have to tell you that it is really FRUSTRATING when that happens, as I love my work and feel truly fulfilled by being part of them and their businesses realising their potential, so when they back off just when they need to keep going, they risk seeing their full potential being unrealised. Did I say it was FRUSTRATING?
Now, I also have, over the years, worked with certain clients for an equity stake in place of all or part of the monthly paid retainer. My lightbulb moment was that equity drives commitment more than a paid retainer, and from both parties.
When a client is paying every month for the retainer, sometimes they may rationalise pausing or stopping that monthly commitment. However, when they have already “paid” in terms of an equity stake in the business, they can no longer rationalise pausing or stopping as being related to an expense, so they have to truly look at why they aren’t making the most of having their sounding board and adviser there to help them grow the business. Typically they then recommit. In other words, equity helps them drive more commitment.
As for me, as and when a client pauses or stops, I don’t push them too hard to keep going, it is up to them to choose their level of commitment. Part of my lightbulb moment is that, where I have an equity stake, I don’t let go as easily, I do push them to make the most of working with me to help them through whatever hurdles they are currently facing and feeling, as we are all committed to the growth of the business through our equity stakes. In other words, equity also drives my commitment even more than a retainer.
So, equity drives commitment for all more than a retainer. Yes, perhaps an obvious thought, but it hadn’t really landed in this way for me before.
I love my work as it fuels me through my Purpose of #MakingPotentialPossible. The more committed both I and my clients are, the more likely they will ride through the troughs to the peaks and realise that full potential.
From that lightbulb moment, then, it is time for me to attract more clients that wish to commit to me and me to commit to them such that at least part of their investment in me (and my investment in them) is in the form of equity rather than monthly retainers.
Thanks for listening to my musings, would love to hear from you on your experiences on equity driving commitment.