Dear Liz,
I'm in the awkward position of watching a business acquaintance on the verge of making a disastrous mistake. "Doug" has landed a huge contract which is far beyond his capabilities and he doesn't know it. Complicating the matter, Doug is the son of the owner, who has even less understanding of the scope of this contract because it represents new territory for the company.
Because neither of them did their homework, they bid the contract at a price about half of what it will cost them to perform. I see a train wreck coming. When Doug fails (not "if"!) his Dad will end up in a multi-million dollar lawsuit which could devastate the business. Doug has asked me for some advice on equipment purchases to ramp up for the job. How do I respond to this?
Equipment is only the tip of the iceberg - he really needs to hire my team or someone else to perform the job, and of course, he has no budget. Also, Doug is not the decision maker, and Dad is oblivious as to the magnitude of the danger he is facing. The four month window to get this done will be risky even to a seasoned pro, but not impossible if action is taken immediately. The straight to the heart answer is to tell Dad that he can choose between spending money now by subcontracting (and thereby losing money on the contract) or he can bet the farm on his son and lose it all, but neither one is going to want to hear that.
What do you think?
C
Dear C,
You are gallant to look out for your friend, and there is a gracious way to do it. I understand that you don't want to taint your helpful message with any language that would make Doug think you're trolling for business. Here's how to avoid that trap. Tell Doug flat out that you have huge concerns. Walk him through a more accurate, appropriate plan for the project, detailing resources - way beyond equipment - schedules, budget and so on. Don't talk about remedies, yet. Let him know the size and danger of the train wreck you foresee. Let him know that he has two choices - to take a loss on this work or possibly lose his business (if that's how you see it).
One of two things will happen. Either Doug will turn colors and get very afraid, or he won't - because he doesn't want to look bad, because he's hopelessly naive or for some other reason. If he just can't hear what you're telling him, you're done. You've done all you can do. Sometimes the hardest learning is the most important to experience, and you can't save him or his dad. If Doug's response is more hopeful - that is, he panics as he understands what he's signed up for - then talk about solutions. DO NOT talk about subcontracting to your firm. Talk about subcontracting, in general, among other solutions. If you turn the "I can help you save yourself" speech into "Hire me and I'll save you," you risk losing the business and sinking your friendship as well.
Clearly, you will have shown Doug that you're qualified to help out when you walk him through all that he doesn't know. Let him choose you, if he wants - don't sell. If he takes your advice on the subcontracting piece but hires someone else, chalk it up to a good deed that will come around to benefit you one day. But I'd say the chances are good that you'll get the work. Either way, you're helping a friend and that's the key. Isn't it nice to be reminded of how much you really know about this business?
Cheers,
Liz
