Contractors: Friend or Foe?

Working with outside consultants, contractors and vendors has lots of advantages, but it’s not easy.  Here’s my analysis of what to watch out for.

For us, we like working with consultants because:

  • We get to choose the best person or team for each situation. For example, different designers have different styles that fit specific situations better than others.
  • We can scale up and scale down as needed without locking in long-term cash flow commitments.  For example, when we want to build out a new feature on our site, we want to get it done as soon as possible, and we’re willing to pay to get it done right.  But when we’re trying to evaluate a new feature, and listen to our customers to figure out what direction we ought to move in next, we don’t want to feel like we need to come up with work for programmers just because they’re on our payroll.
  • If a relationship isn’t working out, it’s easy to move on to someone new.  Swapping out employees is much harder.

At the same time, each new relationship has its ramp up costs. Here are some examples we’ve experienced:

  • As excited as we are about a new partner, it always takes a while to navigate cultural differences, expectations around how much process is needed to keep projects moving smoothly, etc.
  • There’s also technical information transfer, which always takes longer than we expect.  That’s things like getting everyone on the same IM chat system, and access to the same joint work space.  Making sure programmers have access to the right repositories and understand where certain files they’ll need are kept.
  • And here’s the one that’s always hardest for me personally.  Consultants, by the nature of their business, tend to be nervous about where their next meal will be coming from.  No one wants to be sitting on overhead liabilities with no work to do.  So, they tend to overbook themselves.

When a contractor tells us they’ll be able to give us 10 hours of work in the next week, and they only manage to do 3 hours, it doesn’t matter how amazing the work is.  It kills us.

Consultants often dramatically underestimate the external costs they cause to projects when they deliver their part late.  I’d usually prefer working with a less spectacular talent who always delivers what they promise on time than a superstar that never gets the work done.

More than once contracts have ended up costing us two or three times what we were paying the contractor in external consequences of their slow turnaround.

So what have we learned about mitigating these issues?

1.  It’s great to work with the same contractors that you like, once you’ve found them!  We do our best to treat them nicely and keep them happy.

2.  Take the time before starting a new relationship to brainstorm everything you’ll need to have ready to hit the road running.  For example, have you thought through what resources you’ll need to make available to your contractor and have you created usernames and passwords for them in advance?

3.  Start relationships with frequent touch base meetings, like twice a week, until you feel like everyone’s got aligned expectations.

4. And, write everything down.  Write down your meeting agendas.  Write down your “action items” during you meetings with what everyone’s agreed to do before the next meeting.  And make sure everyone orally signs off on the deliverables they’re claiming.

In time, the relationship can become less formal.  But it’s always easier to start with too much structure and oversight, than to wake up 3 weeks into a partnership and realize you’ve got totally different expectations.

Summary:

  • Consultants and contractors can be extremely cost effective and empowering for a small team.
  • Beware of consultants over promising without being realistic about how much they’ve already got on their plate.
  • Take the time before your first project meeting to make sure you’ve done everything you can to prepare for a smooth kick-off.
  • When you find a contractor you like, do your best to keep them happy!
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