360° Coverage : Of Rainmakers and Managers

2 Updates
Of Rainmakers and Managers

Of Rainmakers and Managers

Jan 10 2014, 12:18pm CST | by

What’s worth more? Bringing in a huge account? Or managing the hell out of it and growing it tenfold? These are questions that many partnerships encounter when they start negotiating their operating...

Filed under: news

 
 
 

33 weeks ago

Of Rainmakers and Managers

Jan 10 2014, 12:18pm CST | by

What’s worth more? Bringing in a huge account? Or managing the hell out of it and growing it tenfold?

These are questions that many partnerships encounter when they start negotiating their operating agreement or when they decide to revisit it because things have started to feel unfair to one or more partners. It is, in fact, the line of questions I hear most.

First, some definitions. When I say “rainmaker,” I”m referring to the partner who attracts and closes big pieces of business. There’s a lot of networking, promotion and relationship building that goes into this role. It can be time consuming and indeed, all consuming because much of it happens after hours. When I refer to the “manager,” I’m talking about the person who manages the day-to-day of the project, whether that means overseeing a team or doing the actual work.

But if there’s no rainmaker, then there won’t be anything for the manager to manage. Well, that’s not exactly true. The portfolio might not be as big, but that manager will use the good relationships she’s built over time to bring in work. It may not be as sexy or as big, but it’ll grow slowly and steadily. And the manager might argue that a Rainmaker needs the manager to take care of the customer and grow the business. While that is true, it is also true that projects and accounts can be run by non-equity staff.

Navigating the issue starts with realigning egos. Will the rainmaker acknowledge that the other parts of the customer care life cycle are just as important as the close of the first deal. Will the manager assert the value that reliable, steady service contributes to the bottom line?

There is no right answer. You have to decide whether the partnership makes sense. What are you gaining by having a partner that you couldn’t get from a skilled employee? What does the other person bring to the table that increases the value of the enterprise? Do you share a vision for the business? Are there special skills that you need to ensure the creative or financial success of the organization? What kind of agreement will make you feel resentment? Don’t commit until you have explored how different scenarios might play out, and you come up with a framework that feels fair to all parties.

If you decide to stay in business, the next thing to talk about is whether you need a more creative compensation model. Here are three ways to go about it:

  • Equal equity: I’m a fan of the equal split because it’s simple but I understand that it requires an enormous amount of trust and a certain willingness to let occasional inequities go.
  • Lockstep: British law firm use a system that rewards seniority and loyalty, by awarding partners points as their tenure matures. Promotions, pay raises, and bonuses are awarded in a systematic way, and not necessarily based on merit. To incentivize performance, some companies do a hybrid in which a portion of the compensation is merit-based.
  • Source of Origination: In this system, the partner who brings in business gets extra credit and extra compensation to go along with it. This can be executed as  purely proportional, where you track all business and divide profits up based on who brought what in. Or you can share profits up to a certain point and then allocate any additional moneys above that point to be distributed based on origination.

    The downside of this approach is that it can be hard to define origination. For example, if an account comes in and a manager takes over, after the initial engagement is over, and the client renews, does the manager get credit or does the rainmaker still get a piece? Some partnerships impose time limits for origination or define it by contract.Another problem is that some accounts are prone to cycles and over the course of years, things equal out but the income discrepancy year to year can be high. Purely merit-based partnerships may experience extremely high turnover (or collapse) if the compensation model is subject to such volatility.Some companies have developed sophisticated variations of the Source of Origination model, and assign points to each part of the account life cycle, or to particular roles/tasks that deserve credit. Under this model, the rainmaker may get credit for bringing in the work and the manager can earn credit for retention and growth. Meanwhile, the system can also reward thankless, non-revenue producing work such as pro bono or administrative.

The last thing to talk through is just as important as the first two: What happens if one of the partners fails to make the goal? Are there penalties? Second-chances? Or is it game-over? My advice here is to err on the side of compassion and take the long view. Plan for bad things to happen, because they will. And go easy on each other because the reality is that it’s unpleasant to be the low performer and what a partner in distress needs is support, not punishment.

Tell me about how you handle compensation or tweet me @furiouslymandy with the hash tag #committed. If you’re willing to share more details for a survey I’m conducting, please fill out my questionnaire.

If you liked this article, subscribe to my site and Forbes will alert you every time I publish a new post.

Source: Forbes Business

 
Update
2

4 days ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workforce of 2 ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

5 days ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the d ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

US CDC calls for global response against Ebola
Washington, Sep 3 (IANS/EFE) The head of US Centers for Disease Control and Prevention (CDC) Tuesday warned of the risk that the Ebola outbreak could get out of control without a greater worldwide response.
 
 
US doctor tests positive for Ebola in Liberia
Washington, Sep 3 (IANS) An American missionary doctor working in Liberia has tested positive for the Ebola virus, his organisation SIM USA announced Tuesday.
 
 
IS video shows beheading of second US journalist
Washington, Sep 2 (IANS) Days after the beheading of American photojournalist James Foley, Sunni militant group Islamic State (IS) has posted a video showing the beheading of another kidnapped American journalist Steven Sotloff, CNN reported.
 
 
IS beheads second US journalist
Washington, Sep 2 (IANS) The Islamic State militant organisation has posted a video titled "A second message to America", showing the beheading of American journalist Steven Sotloff, CNN reported.
 
 
 

Latest from the Network

US warplanes drop leaflets on Iraqi city
Baghdad, Sep 3 (IANS/EFE) US warplanes Tuesday dropped thousands of leaflets on the northern Iraqi city of Mosul, urging residents to keep clear of places occupied by the Islamic State (IS) extremist group that overran...
Read more on Politics Balla
 
US CDC calls for global response against Ebola
Washington, Sep 3 (IANS/EFE) The head of US Centers for Disease Control and Prevention (CDC) Tuesday warned of the risk that the Ebola outbreak could get out of control without a greater worldwide response. "This is...
Read more on Business Balla
 
Don't have a perfect body: Charlize Theron
Los Angeles, Sep 3 (IANS) Actress Charlize Theron says she doesn't have an ideal figure, but is happy with the way her body looks. The actress features on the cover of Modern Luxury's September 2014 issue and looks...
Read more on Celebrity Balla
 
Kate Hudson is 'basically married'
Kate Hudson says she and Matthew Bellamy are ''basically married.'' The 35-year-old actress, who has son Bingham, three, with the Muse frontman, 36, admits they're in no rush to plan to a wedding and she rarely wears...
Read more on Celebrity Balla
 
Cee Lo Green's reality show is axed
Cee Lo Green's reality TV series has been axed. TBS announced on Tuesday (09.02.14) that the 'Forget You' hitmaker's show, 'The Good Life,' which focused on his attempts to juggle his careers as a producer, recording...
Read more on Celebrity Balla
 
Chris Martin spends weekend with Gwyneth Paltrow
Chris Martin and Gwyneth Paltrow spent the weekend together in the Hamptons. The former couple, who announced they were ''consciously uncoupling'' in late March after 10 years of marriage, reunited at their home in the...
Read more on Celebrity Balla
 
Mali mine blast kills four UN peacekeepers
Bamako, Sep 3 (IANS) Four United Nations peacekeepers were killed and 15 others injured after their vehicle hit a landmine in Mali Tuesday, security sources said. The UN vehicle was hit by a landmine when the...
Read more on Politics Balla
 
Kate, Cara new faces of Burberry's latest fragrance
London, Sep 3 (IANS) Supermodels Kate Moss and Cara Delevingne have been roped in as the new faces of Burberry's latest fragrance. The models are pictured in the campaign for the label's latest scent My Burberry, shot...
Read more on Celebrity Balla
 
Former Israeli PM on trial again for corruption
Jerusalem, Sep 3 (IANS) Israel's former Prime Minister Ehud Olmert appeared before a Jerusalem court Tuesday after the state prosecution reopened a corruption case against him. Olmert was acquitted in what came to be...
Read more on Politics Balla
 
11 killed in Argentina van accident
Buenos Aires, Sep 3 (IANS/EFE) At least 11 people were killed Tuesday when a van carrying teachers collided with a truck in Argentina, police said. The accident occurred about 7.45 a.m. near El Simbol, 1,000 km north...
Read more on Politics Balla