Most of us like to think that our jobs are simple and straightforward. We get a specific task by our managers or bosses. And we then set out to accomplish that task to the best of our abilities. If we do a good job, our bosses reward us. If we do a bad job, they critique our work and tell us to do better next time. However, this simple state of affairs is actually something of an illusion. In reality, we always have at least one “hidden client” above our immediate superiors. In this article, I will explain why you must always remember to work for your “hidden client” if you want to prosper.

Who is the “Hidden Client”?

The video above comes from a series by Dr. Mike Arundale and Prof. Syd Howell from Alliance Manchester Business School. (I am a student there and these are videos in the public domain, fully accessible to anyone on YouTube.) This specific video addresses a very important point in consulting projects. Namely, whenever you engage in a project, you actually have TWO clients.

As Prof. Howell points out, the individual that engaged you for a particular project is your visible client. But this advice extends far beyond consulting. There is ALWAYS a hidden client behind any visible client.

That “hidden client” is the one who needs to be convinced by the visible client to sign off on some sort of business plan.

Note that I mean what I write about how you ALWAYS have a hidden client. I do not care what kind of job you do. Nor do I care if you are dealing directly with the CEO of a company. In any publicly traded company, and in most private companies, that CEO is accountable to a Board of Directors. Even in the rare instances where that is not the case, the CEO must still answer to shareholders and/or customers.

These two clients often have competing interests and loyalties. As a result, the consultant’s job becomes considerably harder. This is because he now has to balance between the demands of the individual paying him, and the demands of the individual paying that individual.

Given my background in consulting and banking, I can tell you from long and sometimes bitterly painful personal experience that this is often an uncomfortable situation. But it doesn’t have to be. As long as you keep your hidden client in mind, you can deliver a product that satisfies three different sets of interests.

How to Discover the Hidden Client

As I hinted above, this idea of “the hidden client” is not exclusive, at all, to consulting. Every job that you can think of has a hidden client. This is true regardless of the kind of work that you do. Even if you work for yourself, you actually work for someone else. You simply do so with considerably more freedom and “skin in the game” than a corporate peon.

The key here is to discover your hidden client as fast as possible. That way, you can always remember to satisfy your “hidden client” because you already know who he is.

Let’s take a fairly straightforward example. Suppose you run your own dropshipping business. Your visible client is your buyer. And that’s a simple interaction. You setup an electronic storefront that caters to a particular set of tastes. Perhaps you intend to sell watches, manufactured in and shipped from China. And that’s all fine and dandy.

But your visible client also has clients, and your job is to discover them in order to improve your sales. This involves doing market research. Suppose you find that Technomarine watches sell better than any other in your store. Why is that? What makes them special compared with comparable items from, say, Casio, Seiko or Victorinox? Is it the build quality? Or perhaps the styling? Maybe it’s the battery life?

Now suppose you discover that your visible clients buy Technomarine watches because of their looks. That tells you that your visible client is keenly interested on looking good in front of the world. That world is your hidden client.

And now you know that you can market other fashion-conscious, “trendy” products to the same visible client. You can increase sales and profits with minimal extra effort as a result.

The Hidden Client in Your Career

This concept of the hidden client applies just as strongly in your career. If you fail to acknowledge his existence, your career will probably suffer as a result. Typically, the hidden client is your boss’s boss. Your manager may want you to do Task X, because that is in his interests. But his manager may not always be interested in the success of Task X. Perhaps that task is only relevant to a particular local market at a particular point in time. Meanwhile, your boss’s boss needs to worry about an entire regional market, across the entire fiscal year.

In this situation, you need to demonstrate value to your boss. But you ALSO need to make your boss look good in front of his boss. That is the key to “managing upwards”. Most of us forget to do this at one point or another in our careers. We become so focused on performing the task at hand that we forget about the next level up.

Don’t make that mistake. It will cost you dearly later on, especially if your current project does not work out. The old saw above is more true in today’s risk-averse corporate culture than ever before.

Case Studies

Here are a few examples from my own personal experiences that demonstrate how to find and engage a hidden client :

Example 1: The Missing Risk Runs

Back when I was working as a technical expert in Big Bad Globobank, the whole Rates desk was moving over to differential discounting. The Muni Derivatives Desk was among the last to go because of the considerable complexities in figuring out how to bootstrap a proper BMA curve. After the quants resolved those, my team managed to shift all of their risk runs over to the new curve. The test environment showed good results and everyone was happy.

Then the new risk runs went live, and… immediately the Market Risk team started complaining. Why? What went wrong?

After a bit of digging, we discovered the answer. The MRM team needed one very specific risk run to complete by a certain time. They needed the output from this run in order to compute second-order risk on the portfolio. But the new curve greatly increased computation times for this run. And without that run’s data, the entire Desk’s VaR numbers went haywire.

The lesson was clear. In our zeal to satisfy the needs of our visible clients – Front Office and Product Control – we ignored our hidden clients in Market Risk.

We fixed these issues, but the migration was very bumpy and difficult. We were limited by our test environments and incomplete knowledge. The first issue could never be resolved for various reasons. But the second issue was. After that incident, we made sure to account for MRM’s needs in future projects.

Example 2: The Runaway Client

A while back I started playing around with Microsoft Azure for a client project. The client specifically wanted to migrate its existing data warehouse from expensive legacy systems onto “the Cloud”. My job was to create a training manual for the client and implement some test cases to “kick the tires”, so to speak.

I started in on my task and quickly discovered that my Azure Data Factory test case took 30 minutes to run. This task involved extracting, loading, and transforming 5 tables totalling about 1,000 rows in a database. There were about 20,000 records involved.

That sounds like a lot – unless you know something about Structured Query Language. And with SQL, you can write a stored procedure that would do all of those transformations in (and I’m not making this up) about 3 minutes. It’s not even half as hard as it sounds.

I duly reported this problem to my managers. They were surprised, to put it mildly. Of course, they realised that this would never fly with the client.

After some internal debate, they told the client the bad news. And, unsurprisingly, the client dropped Azure like a hot potato. There went the project.

My visible client here was my immediate management. But my hidden client was the senior IT manager on the buyer’s side. He made the decision to cut the project.

What was the right solution in this case? Business ethics demanded transparency about the fact that the platform couldn’t do what was expected. But business sense demanded that the client be retained as a major source of revenue.

In such situations one really has to be very careful. Deceiving either the visible or hidden client NEVER ends well, so don’t do it. Be honest – but provide face-saving alternatives as well, to both clients.

Example 3: Politics and Sausages

For anyone who works in capital markets, I always recommend getting as much face-time with traders as possible. If you want to understand how that business works, you HAVE to spend time with the people who work on them. I genuinely like working with traders because of the very analytical and precise manner in which they think.

But traders are only human, and they face significant pressures in their jobs. And sometimes those pressures make them challenging to deal with.

A few years ago, Big Bad Globobank created a short-term rates desk. That business was intended as a pilot program for a completely new risk system that Front Office management were developing in-house. The pressures from the business to get the new systems online were intense and led to some very challenging late nights for our teams. During that time, the new people in the business copped a lot of stick from us in the middle office teams for their willingness to push things “upstairs” and land us all in soup.

Looking back, however, that business was clearly under immense pressure from senior management to deliver specific things by a specific time. A lot was riding on the success of this new venture. The “hidden clients” behind the scenes drove the traders hard, and the traders drove us hard. In the end, it all worked out and we got the pilot project that everyone wanted.

In a situation like that, where your visible client is giving you immense grief, take a deep breath and ask who his client is. Chances are, the hidden client is behind your problems. Start looking at the issue from his perspective. You will quickly find that many of “your” problems will resolve themselves.

Conclusion – Always Remember Your Hidden Client’s Needs

Keeping clients happy is hard work at the best of times. In any business organisation or situation, you need to recognise who your client is, first and foremost. Then you need to figure out who is pulling his strings behind the scenes. Finally, you need to balance the interests of your visible client, your hidden client, and yourself. This is as much an art as a science. As you advance in your career and business, you will get better at it – because if you don’t, you’ll quickly find yourself without a career or a business.