Pay peanuts, get monkeys

I am often contacted by organizations who wants me to do consulting or architecture work. Some of these inquiries come with a stipulated maximum hourly rate, typically fairly low.

There are two problems here:

  • Paying by the hour creates an incentive for the consultant to solve the problem as slowly as possible
  • The savings from hiring a poor or mediocre architect is completely dwarfed by the additional cost of the poor or mediocre architecture he instigates

Do you think Richard Branson instructs Virgin Galactic HR to “get the cheapest astronaut you can find”?