A performance fee should follow the authority to deliver the result

## Separate useful influence from control over completion

A client wants a professional recommendation to produce action. That is reasonable. A report that is never considered can leave both the client and the service provider dissatisfied. It does not follow, however, that the supplier controls every action required to implement the recommendation. Site owners may need to allocate capital, arrange access or change an operating process. The insurer has its own decisions to make. A commercial condition that makes payment depend on all those actions can appear to align incentives while assigning the supplier a result it cannot responsibly promise on its own.

Our fictional 2024 proposal offered a ₹6.4 crore annual fee schedule, with fifteen per cent dependent on every engineering recommendation being implemented within ninety days. That placed ₹96 lakh behind the condition. The account sponsor saw an attractive headline amount and a client asking for useful outcomes rather than a collection of reports. I agreed with the aspiration. My concern was the boundary between the work we could answer for and the decisions required from the people who owned the sites. The payment story needed to acknowledge that boundary instead of making it disappear through a strong deadline.

Influence is still part of a useful service. Engineers can explain a recommendation, clarify its basis and respond to appropriate questions through the agreed process. They should not treat a lack of direct control as permission to deliver work nobody can use. The distinction is more demanding than that. The supplier must provide a credible account of its own contribution while avoiding the implication that explanation gives it authority over another organisation's capital or operations. A contract should make that contribution assessable, with the surrounding responsibilities identified rather than borrowed into the supplier's promise.

Girish Qevzari's technical colleagues also raised the effect on judgement. A difficult but justified recommendation could take longer to implement than an easier one. If payment depended on universal implementation within the period, the commercial model would introduce pressure around which recommendations appeared in the first place. That did not establish that any engineer had changed a finding improperly. It identified an incentive the business should examine before accepting the condition. Professional integrity should be supported by the commercial arrangement rather than left entirely to individuals resisting a predictable conflict after it has been created.

## Compare fee schedules with their conditions attached

The account sponsor proposed accepting the term and managing the relationship closely. That was not an irrational response. A strong client relationship can help resolve obstacles, and refusing every outcome-linked condition could make a service difficult to sell. I wanted the decision to be specific: could we support this condition, given the actions required and the authority retained elsewhere? Appropriate commercial and professional advisers reviewed the arrangement. The discussion was about the actual service and evidence, not a universal rule that suppliers should never share responsibility for results.

The parties agreed a ₹6 crore annual schedule based on defined service quality and timeliness instead. The company gave up ₹40 lakh of potential headline fee compared with the original proposal. It also changed the basis on which performance would be assessed. Those facts should remain connected. The smaller schedule was not merely a discount for doing the same thing under the same terms, and the larger schedule was not unqualified revenue waiting to be collected. Each described a different exchange. Strategy needed to compare the whole exchange rather than rank the proposals by their most visible number.

Nor was the agreed ₹6 crore already earned revenue. The service still had to be delivered and the relevant recognition requirements satisfied. A contract schedule belongs in the commercial account at its proper stage. Presenting it as a completed financial result would repeat the same problem in another form: a condition would disappear behind an attractive number. Directors should be able to see the approved terms, the obligations they create and the work still required before an eventual result can be reported. A signed agreement is important evidence, but it is not every later stage at once.

The revised route retained accountability. Quality and timeliness needed definitions, suitable evidence and responsible review. Choosing not to promise all site implementation did not excuse an inadequate report or a missed service obligation. The point was to attach the fee to work the supplier could credibly undertake while keeping implementation with site owners and insurer decisions with insurers. That made the professional boundary more explicit. It also required the account team to explain the lower schedule without suggesting that the client should care less about action or accept reports as an end in themselves.

## Keep professional judgement outside a convenient payment story

A board can ask whether a contract's apparent alignment creates an incentive to narrow the professional answer. The question is particularly relevant where the supplier is paid to identify a difficult condition and might earn less if the condition takes longer for someone else to address. Directors need not review individual site findings to understand that tension. They can ask management who controls the required actions, how the professional basis of recommendations is protected and whether the commercial terms reinforce or undermine that arrangement. The answer should include the cases in which the desired outcome remains unfinished.

The account should also preserve the reasonable objection from commercial colleagues. A more carefully bounded fee can be harder to sell, and the business may lose an opportunity if it cannot agree suitable terms. That cost cannot be dismissed simply because the professional concern is persuasive. In our case, the agreed schedule was lower, and management needed to accept the difference. Another negotiation might not reach agreement. A leadership profile should show that possibility rather than make every principled recommendation end in a convenient commercial result that leaves no meaningful tradeoff behind.

I would now examine the authority required by a payment condition before comparing headline fee schedules. The review should identify our own deliverables, the client's actions and the work of other parties. It should then ask how the proposed evidence relates to those responsibilities. This is not a substitute for professional advice on the actual contract. It is a strategic discipline that makes the business model easier to assess before specialist review is asked to make an already preferred proposal workable. Early clarity preserves more room to choose a suitable arrangement.

The lesson is that a performance fee has a theory of responsibility inside it. Someone is expected to make the result happen, and the company should understand who that is before accepting the number. We negotiated a narrower condition and a lower schedule, retaining quality and timeliness obligations while leaving site implementation with its owners. That choice did not establish a universal contract template. It showed how a professional-service business could keep its commercial promise aligned with its actual authority, with the opportunity forgone and the continuing work visible in the same account.