Three project pillars that no guarantee can replace
Clients often ask us: “What guarantee can you give on the timeline, the budget, and the quality of the project?”
My answer is simple. A guarantee does not replace the correct structure of work. A guarantee does not give real control over a project. It works only after a problem occurs.
Three pillars protect a project: the ownership structure, aligned incentives between the client and the developer, and open management. These mechanisms help the client control important decisions, reduce conflicts of interest, and see risks early.
Why a guarantee is not enough
A guarantee is a promise of compensation. If the project fails, the client can claim money. But the client did not invest to receive compensation. The client invested to receive a completed project.
A guarantee also does not change the behaviour of the team during the project. The three pillars do. They change who decides, how the developer earns, and what the client sees.
Pillar 1. Ownership structure and control
The first pillar is the ownership structure. The structure must give the client real control over key decisions.
Important questions need reserved matters. A reserved matter is a decision that nobody can make without the consent of the client. Examples are changes to the budget, large contracts, and a sale of the project.
This mechanism protects the project better than a promise to compensate for a problem after the problem occurs. The client does not wait for a failure. The client takes part in the decisions that can cause the failure.
Pillar 2. Aligned incentives
The second pillar is aligned incentives between the client and the developer.
The developer must earn from the result of the project. The developer must not earn from higher costs or from a larger scope of work. If the fee of the developer increases when costs increase, the developer has no reason to control costs.
A clear fee system reduces the conflict of interest. The client understands why the developer proposes a specific decision. The client can trust the proposal because the developer and the client want the same result.
Pillar 3. Open information and proactive management
The third pillar is open information and proactive management.
The client must see the budget, the timeline, the changes, the risks, and the responsible persons. The team must report a problem before the problem affects the result. Then the team must propose a solution and a deadline.
Open information changes the relationship. The client does not need to ask for information. The client receives it in a regular format and can judge the project with facts.
Conclusion
Three pillars protect a project:
- Control through the ownership structure
- Aligned incentives
- Open management
No guarantee can replace these mechanisms. A guarantee works after a problem. The three pillars help prevent the problem or reduce its effect.
This theme comes from the Morning Muesli series, a short informal video format in which Nikita Pestrikov discusses one investment idea.
