After years of working closely together, it's only natural that a business partner can also become a friend. In this month's Associations Now case study, a marketing manager struggles with the line between friendship and business when he discovers that his association might be better off working with a new partner.
Editor's note: See guest commentary by scrolling your mouse over the speech bubbles that appear in the text. This month's commentary provided by Rob Batarla and Cecilia Sepp.
Cameron smiled when he saw the email alert pop up in the corner of his computer screen. He'd been looking forward to it all day.
Tyler's email was short and to the point, as always:
"Hey man, how's it going? Here's some ideas for the program cover. Hope you like."
Opening the attachment, Cameron saw just what he expected: Three You have to wonder if Cameron would think anything Tyler sent was "great." Does he have blinders on?—Rob Batarla great possible covers for NSTS's annual conference program. The challenge would be deciding on only one.
"It's just harder to say, 'It's just business' when I'm talking about someone I consider
Tyler had been working with NSTS as a freelance designer for more than five years now, and Cameron had actually worked with him longer than that. Aahh! So the relationship between Cameron and Tyler actually predates the relationship that Tyler has as a vendor for NSTS. Did Tyler get the designer gig because of his "great" work or because of the preexisting relationship?—RB Over the years, the two of them had developed a kind of telepathy. Long-term relationships are great for building knowledge and trust, but staff should always be aware of the temptation to become complacent and not fully manage the consultant relationship.—Cecilia Sepp Cameron couldn't remember the last time he'd had to send Tyler back to the drawing board for more ideas. And that freed Cameron up to spend less time worrying about design It is great that Cameron doesn't have to worry about design, but he still needs to be actively engaged. Consultants consult—they don't do all the work!—RB and more time on planning marketing efforts and measuring their results.
After considering the cover designs and the overall goals for the conference, Cameron forwarded the file on to Gina, his supervisor, along with his personal recommendation for which cover to choose. Then he sent Tyler a quick email.
"Hey Ty, thanks for sending those. They look great. I think we're going with option 3, but I'll confirm once I hear back from Gina. "Are we still on for lunch next week? Same place?"
Later that week, Cameron was knee-deep in budget planning. He was confident that he had his financial ducks in a row, but he was still slightly nervous C'mon! Let's not be nervous to talk to your CFO. Most of us are very friendly and understanding.—RB as he headed to discuss his numbers with Gina and Kate, the CFO.
Gina was already in Kate's office when he arrived, although Kate herself wasn't there. "Hi, Cam," said Gina, with a wave.
"Hi," he responded, settling in next to her at the small conference table. "Did you see the email I sent you about the last email promo for the summer symposium?"
"Yes, thank you," said Gina. "Great open rate."
"I'm pretty happy with it," he said. "Our numbers still aren't where we want them to be, though. I think people are going to make the decision to register even later this year than they did last year."
Gina sighed. "I'll be breaking out the Tums, I'm sure."
"Save some for me," said Cameron.
"Sorry, guys," said Kate, rushing in. "Too many meetings today—I'm running late. I hope you weren't here long."
"Only for a minute. Don't worry about it," said Gina.
Kate grabbed a binder off of her desk and sat at the table with them. "Great. Let's talk budget, then."
They worked methodically through Kate's list of questions about the marketing budget. I hope that Gina and Cameron have met beforehand. The CFO is going to want to hear a unified voice from the two of them.—RB Most of them were easily answered—yes, he'd factored a postal-rate increase into the mailing line; yes, he'd confirmed the pricing for their blast email management service for the next year. But the last question brought Cameron up short.
"When was the last time you bid out design?" Kate asked.
He blinked. "You mean, did a full RFP?"
Kate looked up from her notes. "You consistently work with the same designer, right? But I don't have a contract with him in my files." This is kind of unfair of Kate to spring this up at this meeting.—RB No matter how long you work with a consultant, agreements/contracts should be reviewed and updated on an annual basis. This protects both parties and avoids conflicts.—CS
Cameron shook his head. "No, we just work with him on a project-by-project basis." He glanced at Gina. "I'm sorry. I thought our policy I can understand why the policy has a dollar-amount threshold, but why doesn't it have guidance on how often you should RFP?—RB only required RFPs for projects above a certain dollar amount."
"You're right about the policy," said Kate. "But since you consistently use the same designer, I think we have to look at your whole I do agree with Kate here. If all design work is with one vendor, I would consider that in aggregate.—RB outside design line as if it's one project, for budget purposes. In the aggregate, it's a lot of money to pay to a single vendor without considering other options."
"We get a lot of value from our relationship with Tyler, though," Cameron said, leaning forward. "He really knows us and our products well, and it shows in the design. Managing his work takes up very little of my time, because he knows us so well. And he offers us a lot of flexibility."
"It never hurts to get some bids," Way to go, Gina. Throw your employee right under the bus in front of the CFO. Perhaps Gina should have acknowledged Kate's concerns and that she and Cameron would discuss it.—RB said Gina.
"I'm not saying that you have to make a change. He may be the best designer for us," Kate said. "But it's important to make sure that his prices are reasonable compared to designers who can offer us similar services. That can change over time." There are many ways to measure value of a working relationship, as Cameron noted about Ty. However, long-term relationships can lead to skewed budgets if market comparisons are not made.—CS
"That makes sense." Cameron looked over at Kate. "Should I just keep my budget as is for now?"
"I think you should leave your budget as is," she said. "If you end up deciding to go in another direction, we can always adjust the numbers later."
Cameron looked at his list of potential designers for the upcoming RFP and then looked at his calendar. Seeing the entry for "Lunch with Ty" on Friday made him wince. Wincing demonstrates that Cameron has not maintained enough professional distance with Ty. Even friends can do business together if they both take a professional approach to work.—CS He'd have to break the news then; he couldn't spend an hour with Tyler and never mention the fact that an RFP was in the offing. But he wasn't looking forward to it.
Derailing that train of thought, Cameron decided it was time for coffee. Rising, he grabbed the mug off of his desk and headed for the kitchen.
"Hey, Holly," he said, greeting NSTS's membership director as she stirred sugar and cream into her mug.
"Hi, Cam," she said. "How are you? You look stressed."
"A little," he admitted, adding a pod to the coffee machine and hitting the start button. "You look relaxed, though. How did you do that?"
She smiled. "Things are actually going a little better with the membership committee, believe it or not. They're pretty happy that we're getting so close to meeting our recruitment goal for the year, and they're getting used to me, I think. Thank you again for your help with that letter to the lapsed members, by the way. We had a great response."
"My pleasure," said Cameron.
"So, what's getting to you? Can I help?" asked Holly. I love that Holly is a team player!—RB
He shook his head. "No. It's just an awkward situation. I have to get some bids from new designers, because Kate's concerned about whether we've done enough due diligence. I'm sure it's going to prove that Tyler's our best choice, Cameron wouldn't be stressed if he truly believed this. His friendship has caused him additional worry, because he knows it might not turn out this way.—CS but it's still a lot of work, and I can't imagine he's going to be thrilled about it."
"Oh, I get that," she said. "You've worked with him for a long time. And of course he'll feel threatened—we must be one of his bigger clients. But he has to understand that it's business. You have to do what's best for NSTS. He wants your business, he needs to give you the best bid he can."
Cameron nodded. "It's just harder to say, 'It's just business' when I'm talking about someone I consider a friend."
"That makes it hard," Holly said sympathetically. After a moment's thought, she offered, "If you do get bids that are better than his, it's not like you can't mix it up with different designers. Actually, this is a very good idea. Given that Tyler is a small freelancer, it is conceivable that he will not be able to handle everything that NSTS will have in the future. Having several places where NSTS can go is a smart plan.—RB It's easier to coordinate all your work in one place, but maybe you could experiment with other people for some projects and keep Tyler for the complicated or difficult ones, where we need someone who knows us really well."
"That's true," said Cameron. "It doesn't have to be all or nothing." But it didn't make him feel better.
A Request for a Proposal
"Hey, Cam," Tyler said, shaking his hand with obvious pleasure. "It's great to see you, man."
Cameron and Tyler always met for lunch at the same Mexican restaurant. They usually had some business reason to meet, but it never felt formal—they spent as much time talking about their families as they did about design.
Today, though, Cameron felt like he had to get down to business. After a few minutes of small talk, he said, "Hey, before we talk about the program design, there's something else I need to talk to you about." Kudos to Cameron for having this discussion in person. A lot of people would have chosen email.—RB
"Sure," said Tyler. "What's up?"
"You know I'm working on my budget for the next fiscal year," said Cameron. Tyler nodded, frowning a little at the word "budget." Tyler has taken advantage of the easy nature of this relationship. Responsible consultants work with budgets and communicate with clients about their annual planning/budgeting.—CS "Well, when I was meeting with our CFO about it, she told me that we have to bid out something as large as our design expenses to more than one service provider. It's a policy thing. Really, Cameron? Do we have to blame the CFO and the policy when this is actually the right thing to do and Cameron should be standing behind it?—RB I wanted to tell you first before I put out an official request for proposals to anyone else."
"OK," Tyler said slowly. "So, what does that mean? Will you have to bid out all of the design projects?"
"It's more that I have to get proposals for overall pricing," Cameron said. "It doesn't make sense to bid every project out, I don't think."
Tyler pulled a notebook and pen out of his pocket. "So, I'll need to work up an overall pricing list, and answer some other questions, right?" Cameron nodded. "What will the deadline be?"
"About a month from now. The date's in the RFP." Cameron hesitated. "I know this whole thing is a little out of the blue, but I want you to know it has nothing to do with your work. Honestly."
"I appreciate that," said Tyler. "I think we work well together."
"I can send you the RFP when I get back to the office. Once you've had a chance to read it, give me a call, and I'll answer any questions you have." I hope that Cameron gives all potential vendors the same opportunity to talk to him. It really isn't fair that Cameron will answer Tyler's specific questions while the other potential vendors just have to send their stuff in.—RB
"That sounds good."
There was a pause. Finally, Cameron said, "So, what were you thinking about the program design?"
Moment of Truth
A month later, Cameron found himself with even more proposals than he'd expected. Cameron should have been reasonable on the number of RFPs he sent out. For something like design work, I would think he'd send out about 10 or so.—RB Gina stopped by as he was working his way through the stack.
"How's it going so far?" she asked.
He turned away from his computer to face her. "I'm still working on entering everything into my comparison matrix." I am pleased to see that Cameron is using some type of systematic way to evaluate the proposals. A comparison matrix is definitely the way to go.—RB
"How is Tyler comparing to the others?"
"There's a range of pricing, it looks like," he hedged.
Gina gave him a sympathetic look. "So, he's not necessarily a slam dunk?"
He winced. "He's about the middle of the pack, depending on how we weight the various factors." I would like to think that the factors and the weighting would be done before any of the proposals came in. And Cameron shouldn't be the only person to set up the criteria.—RB Cameron confirmed the answer he didn't want to hear. While it's hard when you consider your consultant a friend, this is the reason regular budget proposals are important.—CS
Gina sighed. "Once you've got everything into the matrix and you've had some time to think, let me know and we can talk about it. Price definitely isn't everything, but we have to justify whatever choices we make."
He nodded. Justifying a decision to his CFO was one thing, he thought. Justifying it to a friend was something else. As a consultant, no matter how friendly I am with a client, when it comes to business I maintain a professional demeanor and provide regular budget information so clients can make the best choice for their needs.—CS
Lisa Junker, CAE, is editor-in-chief of Associations Now. Email: [email protected]
Rob Batarla, MBA, CPA, is the vice president, finance and facilities/chief financial officer for the American Physical Therapy Association in Alexandria, Virginia. He is also an adjunct accounting professor at American University, the lead instructor for ASAE & The Center's "The Bottom Line: The Nonprofit Finance Game," and a member of AICPA's Exempt Organizations Expert Panel. Email: [email protected]
Cecilia Sepp is a consultant and writer with CS Association Services. She is currently chair of the ASAE & The Center Communication Section Council and immediate past president of American Independent Writers. Email: [email protected]
This article is part of a series of fictional case studies developed for Associations Now. All people, places, and RFPs contained herein are hypothetical and based entirely on the imagination of the author. No real events are intentionally reflected.
What Should Cameron Do Next?
This case study is the second of a six-part series of articles that will focus around the (fictional) staff of NSTS. How should Cameron make this decision (and how should he justify the decision he makes)? What happens will be based on reader input. Leave a comment below with your suggestions for his next steps.
View the other installments in this series:
- "When the Welcome Party's Over," by Lisa Junker, CAE, Associations Now, February 2010