The pros and cons of providing your clients with a money-back guarantee run to the core of why you are in the consulting business. Does your mission statement communicate a heart-felt commitment to provide world-class professional services or, at the other extreme, is your mission limited to earning a profit margin on your employees and sub-contractors?

If your consulting practice doesn't have a heart-felt commitment to provide world-class professional services and the talent to back that commitment up, then a money-back guarantee will eventually bankrupt your company. On the other hand, if you are determined to assemble an outstanding team with a passion for helping clients, then a money-back guarantee can effectively communicate that commitment to potential customers.

Some of the best consultants are born from the frustration of waging war against the intellectual dishonesty of the large company they work for. They go out on their own after six or eight promotions because the position they've finally arrived in honors political savvy at the expense of world-class performance.

Those multiple promotions recognize hard work and creativity driven by an intense determination to re-engineer things which didn't make any sense. In lower level roles, that passion and zeal is lauded, but in many companies, passion and politics are incompatible in higher level positions. Why? Because when these bright, eager, determined individuals are promoted high enough, they encounter a group of senior executives who have equity in the status quo and who evaluate proposals according to the weave of political circumstance rather than intrinsic merit.

It's easy to identify employees who are soon-to-be-great-consultants. They're the ones who show up in the CEO's office to promote the merits of a proposal other officers have rejected. Despite the obvious political consequences, they're driven to appeal the rejection directly to the CEO because they fervently believe in it.

Sadly, their charts, flawless logic, eloquence, and passion are rarely persuasive if the CEO would embarrass senior people by embracing the proposal on its merits. The net result is typically another (polite) rejection of the proposal, a victory for intellectual dishonesty, a missed opportunity for world-class performance, a politically ostracized employee, and an extremely disheartened person.

There's a limit to how much intellectual dishonesty and political isolation a bright, creative, and determined employee will put up with and after the second or third discouraging trip to the CEO's office it's time to leave. Some elect employment at another company ... but if they lack sufficient authority in their new role, they'll typically be facing a new strain of intellectual dishonesty before long.

The exceptionally courageous and gifted find consulting to be a much more attractive alternative. Why? Because it's a way to get paid for delivering the world-class performance concepts and principles they couldn't sell to their prior CEO. Many find it quite refreshing to channel the pent-up energy from prior political frustrations into serving clients who are willing to pay for their opinion.

Consultants of that ilk can usually afford a money-back guarantee of client satisfaction because it is entirely consistent with the content of their mission statement. These individuals are confident in the merit of their advice, have considerable practice taking risks to defend their point of view, and are willing to accept the consequences of client dissatisfaction. They are sold out for the client and typically believe that a job is not worth doing if not done well.

Allow me to hastily add that passion, poise, creativity, and intellectual honesty are not the only ingredients needed to make a money-back guarantee affordable for a consulting practice. Other very helpful elements include humility, clarity of expression, tact, and a gift for understatement.

Expanding a money-back guarantee consulting practice from a one-man operation into a several-dozen person shop is not so easy. Subject to space limitations, I'll summarize the principal challenges my company has weathered.

First, it's hard to identify candidates with world-class consulting skills and a heart-felt commitment to serve clients well. Resumes are a poor substitute for a rigorous interview with detailed skill questions. References can be helpful because people have more freedom to make candid observations about a former consultant than a former employee. The key is to resist extending offers to people with A- or lower interview/reference check results.

Second, if you can find world-class consultants, it is enormously expensive to hire them. Several implications flow from that reality. High costs drive premium hourly rates and the money-back guarantee isn't always sufficient to overcome objections from potential clients. The premium rates make it hard to generate sufficient local business so national marketing to large enterprises is required.

Third, the competition we face at large enterprises includes consulting firms with tens of thousands of people situated across dozens of offices. They know the CFO because they audit the books every year. Their average billing rates are lower and their margins are better because a high percentage of their people are trainees who are expected to work outrageous hours. Our money-back guarantee has helped us win some of this business.

Fourth, one company did abuse our money-back guarantee. Legal recourse wasn't a viable option because attorney fees are unaffordable. Consequently, our professional service agreements now specify mediation/arbitration under the rules of the Institute of Christian Conciliation. We've found this process is far less contentious, the findings are based on scriptural values rather than arcane legal precedents, and the fees can be under $100.

Finally, leading a large project team of passionate, hard-working, world-class professionals is not easy. We've learned that individual competence is not a substitute for disciplined team process, that three-sigma ingenuity is not always predictive of project leadership acumen, and that world-class teams are subject to Murphy's law. Nevertheless, we know that obstacles will not long survive because each team member has a heart-felt commitment to serve the client well ... that's why we can afford a money-back guarantee.