The Fixed Fee That Kept Growing
You are five weeks into a 12-week operating model review for a 1,800-person industrial components manufacturer, fixed fee £95,000, staffed by you plus one associate. The agreed scope is current-state process mapping across three plants, an external benchmark, and a target operating model concept. Your sponsor is the COO; your day-to-day contact is a transformation manager who controls access to plant data. By week five you have consumed 40% of the fee but 55% of the planned effort, because two plants had incomplete downtime records. Then three requests arrive in a single week: build a five-year financial model for the division, run six supplier negotiation workshops, and redesign the organisation structure for the whole division. Each was mentioned in passing at kickoff. Your associate is booked onto another client from week nine. The transformation manager says escalation will follow if you are not a team player, and mentions a follow-on programme worth £300,000.
1. How do you run the scope conversation with the COO?
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Take it to the COO, not the transformation manager, and take it this week - before week six makes the overrun irreversible.
Open with delivery risk, not with money. You have a concrete fact: 55% of effort consumed at 40% of fee, caused partly by data quality at two plants that nobody could have scoped precisely. That is a shared problem, and naming it first frames the conversation as protecting the outcome rather than protecting your margin.
Then present the three requests as a package with explicit trade-offs. For each: what it would take in weeks and fee, what it displaces from the current scope, and what happens if it is added without displacement - which is that the target operating model concept is delivered late and thin. Use a one-page table: request, effort, cost, scope displaced, decision needed by date.
Offer a recommendation rather than a menu alone. A defensible line is: financial model deferred and priced separately; two negotiation workshops in scope instead of six, because supplier behaviour is an input to the operating model; org design for the division out of scope, but a design principles and sizing note included so the client can brief another provider.
Get the outcome in writing as a scope variation before any of the new work starts.
2. The COO refuses any additional fee and says the firm will be remembered at renewal. How do you respond?
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Decline the trade, politely and once, then offer a smaller version they can say yes to.
Absorbing the work has three costs that are easy to underestimate. Quality: the associate leaves in week nine, so the extra deliverables land on one person, and a weak target operating model damages you more than a refused request. Precedent: a free five-year model tells the client, and your own team, that scope is negotiable under pressure, and the next conversation is harder. Commercial discipline: renewal promises are not consideration; they are unenforceable, often decided by different people, and in competitive tenders cannot be relied on at all.
So respond on delivery grounds rather than principle. Explain what will not get done if the three requests are added at no fee, and let the COO choose which deliverable to sacrifice. Then make a genuine concession: fixed fee holds for a reduced version - a two-workshop series and a sizing note, no financial model, no full org design - or a phased proposal for the remainder priced separately.
If the pressure continues, escalate internally to your own partner or account lead before you commit, and put your position in a short file note. The transformation manager's escalation threat is best defused by making the COO the decision-maker on record.
3. What early signals did you miss, and what would you change?
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Several signals were visible before week five.
Kickoff capture. Three requests were mentioned at kickoff and never logged. Anything a client says at kickoff belongs in a parking lot with an owner and a decision date, even if it sounds like context-setting. Send the kickoff note back with a scope-in/scope-out table for confirmation.
Data quality. Two plants with incomplete downtime records was a foreseeable risk, not a discovery. A one-day data readiness check at each site before week one would have either fixed the problem or triggered a variation immediately, at the point where the client still had negotiating appetite.
Access dependency. Your contact controls plant data. That concentration is a schedule risk; you should have had a named backup and an agreed escalation route at signature.
Effort tracking granularity. Tracking at 40% fee and 55% effort only tells you the problem exists; it does not tell you which scope line caused it. Track effort by deliverable from week one, review weekly against the plan, and treat two consecutive weeks of overrun as a mandatory conversation.
Change control artefact. Have a one-page variation template ready at signature. The barrier to raising scope is rarely disagreement; it is the effort of writing the request up while delivery is in flight.