I’ve noticed something recently, and its finance wrecking projects. Now, don’t get me wrong, finance teams are just doing their jobs, safeguarding budgets, managing risk, and all that good stuff. But occasionally, their well-intentioned actions can inadvertently turn projects into grey mush.

This is because there’s been a big push lately towards goal-based deliverables, essentially fixed-price projects under a fancy new name. On the surface, this sounds sensible: clear expectations, predictable costs.

But what often gets bundled into these contracts, thanks to diligent finance and legal teams, are penalty clauses, those little contractual bombs that promise severe consequences if deliverables aren’t met.

The idea makes sense in theory: if a vendor doesn’t meet expectations, they face penalties. But in practice, it’s often a nightmare. Vendors, already feeling stressed from fixed-price constraints, become understandably cautious, even penny-pinching.

Every extra detail, every moment of generosity, or even a minor freebie given to clients becomes a direct hit to their bottom line. Add in severe penalty clauses (sometimes, unbelievably, with unlimited financial exposure), and vendors start playing defence.

The outcome? Projects shift from being innovative and collaborative efforts to a game of “minimum viable product.” Every potential corner is cut, flair and creativity vanish, and teams deliver just enough to fulfill the contractual obligations, nothing more. The joy, enthusiasm, and innovative spark that can differentiate groundbreaking projects from merely adequate ones are often lost.

From a client’s perspective, this cautious approach is problematic. Companies typically outsource projects precisely because they lack the internal expertise or resources, so it makes sense to leverage the specialist skills of vendors. By introducing overly harsh and rigid contractual conditions, clients unintentionally stifle the very expertise they’re paying for. Opportunities to create truly differentiated, standout products vanish.

And here’s the irony: being overly cautious and protective financially might safeguard budgets, but it can also rob clients of the chance to genuinely innovate or take the lead in their market. Instead of getting a product that could have been the best in class, they settle for something safe, predictable, and frankly, dull, often making the project a waste of money, as you could have just stuck with what you had.

Fiscal responsibility is essential, but perhaps balance caution with courage and encourage your vendors enough freedom to deliver excellence, not just adequacy.

One thing I’ve noticed in large, established organisations, particularly in finance, is that their internal processes for provisioning resources (be it cloud services, personnel, or any shared resource) are always in a state of change or apparent “improvement.”

New cost cutting exercises, updates due to regulation or industry standards, and attempts to “improve” how things get done are constantly in play. These initiatives are rooted in good intentions, reacting to external factors or seeking efficiency, but they inevitably bump into active projects.

When Projects Become “Guinea Pigs”

Picture this: as a project manager, you estimate three weeks for a task, only to have it balloon into eight because your project is chosen to pilot a new process. This happens all the time. Large organisations often see an ongoing project and decide it’s the perfect candidate to test that next “Major Upgrade” to the infrastructure.

Suddenly, timelines slip, and no one could’ve predicted it. Voices get raised, people start blaming each other, and you find yourself wondering if you can just do things the old way to stay on schedule. Meanwhile, the process-improvement folks push back because they don’t want to delay their innovation.

How to avoid grumping at each other

If it looks like your project might be the next guinea pig, try to get out in front of it. As soon as you get a hint that someone wants to apply a new process to your work:

Ask why: Make sure you understand the rationale, so you can feed it back to the busness in case of delay.

Negotiate timing: See if you can stick with the old way for development and switch over in user acceptance testing (UAT). This gives you some breathing room and doesn’t derail the entire project.

That way, you avoid appearing hostile to the team driving process improvements while still guarding your delivery timeline. Yes, it’s messy, and yes, it might slow things down. But with a proactive approach, you can at least minimise the chaos and keep relationships cordial.