Why Clients Should Incentivise Innovation - Not Capture All the Gains

By Tom Davies, Datanest Co-Founder
Last month I attended the CE3C conference in Vancouver, the pre-eminant gathering of Environmental and Engineering executives from across Canada. One discussion that stuck with me was around how to get away from constant downward pressure on fees and to how to improve efficiency with technology while not giving away all the gains.
As a SaaS provider, we are all about improving the quality and speed of our customers' workflows. Most people are excited by what they can achieve with our platform but the following question often arises:
“If we’re more efficient and complete projects in less time, how will we maintain or grow our revenue, if we can’t charge as many hours?”
Now how to switch to a purely value based business model is a topic for another day. The issue we want to address here is that consultants don’t always see the benefit in being more efficient because they think their clients will just want to take all the gains. In our experience this fear is not always well founded and most end clients are perfectly reasonable, and understand the concept of a win-win situation. However, as with all areas of life there are those people who see the world as zero-sum and assume every interaction is an opportunity to maximise their share by minimising everyone else's. This attitude is more prevalent in certain industries than others, but our customers do come across it in a fairly broad swathe of industries, both private and public.
As with all areas of the economy, environmental consultants are being asked to invest heavily in tools, training, data infrastructure, and process redesign to deliver smarter, faster, and more reliable outcomes. These investments carry real costs and risks. Yet when efficiency improves, the immediate response from some clients is to push fees down.
In our view this approach is short-sighted and ultimately serves to stifle innovation. When incentives are aligned so that everyone can benefit from improvements in quality and productivity, everyone can win.
We want to give a shout out to all of those end clients who understand the importance of supporting their consultants to enable them to deliver better and faster results. You are the ones who will ultimately win by receiving better advice and designs in less time.
To those with a zero-sum mindset, why not try incentivising your consultants to do better work, faster, by letting them keep some of the gains. If you shift your focus from cost to value, you will start benefiting from the virtuous innovation cycle. Give it a go, you won’t regret it!

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