When I was contracted for the first time by the World Bank, I remember the conversation with the Task Manager. After the scope of work was discussed, he asked me – can you estimate the number of days effort you will take to complete the tasks? And send me your CV in the World Bank format so that I will get your daily rate fixed by the HR.
I didn’t understand the concept of daily rate then. It took some time for me to get my CV cast in the World Bank format. It was quite a self-revelation. Estimating the number of days of effort was also not easy. I did few iterations so as to propose something reasonable and acceptable.
After the CV was forwarded, a few weeks later I received the contract that stated that I will be paid at the rate of US 500/day over 20 days to deliver the tasks stated in the Terms of Reference attached. And I was commissioned.
I did many such assignments afterwords. Each year, the daily billing rate was enhanced by some 5% and sometimes by 10%. Most senior consultants hovered around the rate of USD 600 to 1000/day across institutions.
I always wondered how the HR fixed the daily rates just based on the CV. Of course the qualifications and experience were always considered but honestly how could a CV alone reflect a person’s competency for the task? For example, REAL number of years of experience differs from the INTEGER number! I therefore had reservations on the logic of arriving at the daily rate. I hold these reservations even today.
I was working with a senior Dutch colleague on a project where we were contracted by the Royal Netherlands Embassy. During one of the dinners, he asked me whether I work on the daily rates. When I said yes, he strongly advised me not to follow this practice. Getting paid by daily (or nightly!) rates is just like prostitution he said. You should be charging based on the outcomes. Charge low if outcomes intended don’t materialize and charge a premium if the outcomes do happen. This has nothing to do with the daily rates and the number of days.
When he saw me a bit dumb founded, he further explained
“Recently, Vice President of SAS Airlines contracted me. He had developed a Sustainability Awareness Program (SAP) for SAS and its customers but did not have buy in from the CEO. He asked me to make a presentation to the CEO, improving further on his ideas. The objective was to get a fund sanctioned of a minimum of 800,000 USD for the SAP.
The Vice President said – “I will pay you 50,000 USD as the fee if you get me this budget sanctioned and if not I will pay you only 8000 USD”. If I had gone by your daily rates logic, then the presentation would have taken 10 days of my time for research and improvisation and I would have got paid a flat fee of 10,000 USD. So his offer was fare. Fortunately, I did well and got the budget for the Vice President sanctioned. Made good money.
I thought this was like a jugad. But then my Dutch friend had a point.
I told him that organizations like the World Bank don’t think that way. Whether there are outcomes or not, you get paid for the time you spent! Few care for the outcomes. My Dutch friend said, then don’t work for the World Bank. Go to the clients who want to see outcomes, do partnership or a deal with you on risk and opportunity and through this – understand your value better. And if you follow my advice then you won’t need to work for 200 days in the year – as you will make same money over just 60 days. You can live life better, feel good and do something else useful for society. You don’t live life just for yourself.
This conversation made an impact on my mind. I wished if I could follow his advice
I started working in Indonesia for a Asian Development Bank (ADB) project on development of a Computer based EIA using Expert System. I used to frequent to Jakarta to conduct knowledge engineering workshops with Indonesian EIA experts. Dr Emil Salim was the Minister of Environment then, He is a well-known conservation economist. A towering personality. One day, Dr Salim asked me to accompany him to Bogor. He was to address a meeting on Biodiversity Conservation and wanted me to visit some of the botanical gardens in Bogor along with him. Bogor is a city near Jakarta with thick forests and rains drizzling all through the year. It’s also a place where maximum frequency of lightening takes place.
(Bogors Botanical Garden)
We reached Bogor during the lunch time and Dr Salim took me to a place where you get some of the best beef pepper steaks. Both the place and food were enjoyable and the lunch was indeed a gastronomical treat with enlightening conversations with Dr Salim. Our conversations drifted along various topics – crosscutting professional and personal interests. When I mentioned to Dr Salim my dilemma on consulting in general, the illogical concept of daily rates and feeling of getting trapped as number of days get booked over the year through contracts etc., he smiled.
“I must introduce you to the four Canadian consultants who work in Bogor. I will drop you to their office – then go to my meetings and later pick you back for the tour to the botanical gardens. You will enjoy meeting with them”.
We reached a complex of 5 villas tucked in a thick cluster of trees after taking a few detours little in the outskirts of the city. There was a large Vila at the Centre and the four other villas were around placed like quadrants. We reached the central Villa through a winding road with tall trees dotted on the either sides. I learned later that the central Villa was the office or headquarters of the “company”.
The company was founded and run by four Canadians. All the four were working in the environment, natural resources and social sectors focusing in biodiversity conservation and impact assessment. Three men and one woman. They actually followed my Dutch friend’s model. Being really on the top of the line, they were successful to deliver the outcomes to the clients and the clients paid them “success fees” at the premium. So they worked only three months in the year and again intermittently. They were always “booked” in advance.
What about the remaining time? I asked John, one of the senior Principals of the Company.
“Well, we have a well-stocked library in the Villa – so we read. We also write and publish monographs/working papers regularly. We trek. Our wives are interested in cooking and so we have done up a great large kitchen here where we cook health organic food. Every week there are innovations and experiments Peter paints and Laura sings with a box guitar. And we have a great stock of wines and we a sport a well-stocked bar”
Peter told us that they love to receive guests of equally creative minds. So there are weekends generally with the visitors. This has been always refreshing.
All the four families live in the Vilas around the Central “office”. That’s the privacy. Being old friends however, there is a continuous mingling between the Vilas, especially the children. Jim’s family (Jim is a biodiversity specialist) does not have children so he has volunteered mentoring of all the kids. He is a great teacher. “Our children are brought up differently” Laura said. (I soon learnt that the four families were doing a commendable work on the social front, especially education to the poor) I wanted to chat with Jim but he was immersed in a large bath tub with a cigar on the first floor of the office. I was told that it was his “thinking den”.
Laura hoped that this model of living and earning gave all of them a sense of balance. “When you hold expertise then why put it on cheap sale on the basis of daily rates with no challenges on the outcomes – she said. “We live here at a pace we want, enjoy the work we do and complement each other on professional front. I dare say we may not have to look for old people’s home when our children leave us. We will find ways to take care of each other”
I was impressed how business and art of living were blended together – collectively – and leveraging on each other’s expertise like an ecosystem. The key however was to reach the status of top of the line consultant in the early stage of life, and demonstrate outcomes working with the client not as a vendor but more as a partner. Share risks and ride on the opportunities.
On our way back I told Dr Salim that meeting with the four Canadian’s was inspirational and an eye opener.
On return, I asked one of my real estate friends to look for 5 villas near the Mulshi dam close to Pune. Mulshi is a wonderful place with a sprawling lake. My friend found one 5 villa complex in a weeks’ time.
The challenge was however to get three friends who agree to the Bogor philosophy. I spoke to many of my old friends – but it was either “too late” or they were not interested. I could thus find the Vilas but not the friends I was looking for
I kept looking for connecting with the other three.
For several years, I am not able to get even one.
And I still continue consulting on the daily rates. My clients want outputs and are not interested in involving me in the outcomes
Message – Plan early and action in time if you want to live a different kind life.
(Cover image sourced from http://www.digitaltrends.com/music/best-songs-friendship/)