Like many of you, I have more than one competing lines of work, operating across multiple schedules and through many different teams. This is a similar situation in most largish organisations. As an academic, I was reflecting recently and realised the huge amount of effort involved in making things right after mistakes have been made. I’ve tried to quantify it below.
Costs of Mistakes
I estimate the cost of mopping up to be around 3-5 times that of having conducted the original process properly. I believe this to be a conservative estimate as it only considers the immediate costs. It fails to consider the loss of income and the increased workload in various parts of the organisation that failing to follow an established process with a good workflow entails.
As with the recent report from the National Audit Office (NAO) “Investigation into government procurement during the COVID-19 pandemic” 1 and the use of Public Procurement rule 32, everyone was trying to do their best, working hard to meet deadlines but errors happened, nonetheless.
In my own experience (unrelated to Covid) these errors seem to have the following common features:
lack of a vision;
where there is a vision, lack of continual questioning of that vision when the information changes;
lapses in concentration;
lapses in judgement;
individuals with too many tasks to respond in a timely fashion;
lack of focus on the client and responding to what they are telling us.
The consequences associated with these features can be far in excess of a simple cost when the contract is part of a business-to-business relationship.
Erosion of Trust
In a previous organisation the subtle loss of trust with the client caused by the mistakes highlighted above, led them to re-evaluate the relationship and, whilst they maintained the existing contract, they did not win the competitive tender for other work that they had been expecting to win. They had allowed their inability to plan and perform erode the client’s trust in them.
At this point the organisation came under some duress: it was the long-term loss of a major client leading to cashflow issues and a need to wear out shoe leather looking for new clients. Whilst they did this successfully, they were put back 20 months against their strategic plan. Other casualties were brand, reputation across suppliers and customers and also the loss of a buyout opportunity. The loss was out of all proportion with the original error. That is why I am a strong advocate of ‘right first time’!
Prevention is better than cure
Design your systems to identify mistakes early;
Your resolution time should be in hours and days not weeks;
Have a no-blame culture, you want to know about problems early;
Failure to have a no-blame culture means that people seek to insulate themselves from the problem when a mistake is discovered, rather than dealing with it;
Delay can often mean it is too late to implement new processes in time to save the goal.
Our Solution, for you…
Contract Toolkit seeks to ensure every clause in a contract is ascribed to a named individual, be it in your organisation or a client’s. These obligations are checked on a pre-determined frequency. Everyone with the right authority receives a real-time dashboard highlighting any concerns and failures indicated by the various obligation owners. This enables even the most hard-pressed managers to comply with the contract and its service level agreements to get it ‘right first time’.
Contract Toolkit can work with you to develop these features and processes within your own existing software stack or utilise our software solution. It is an intuitive, easy-to-use app developed on the Claris Filemaker platform (Apple Inc.) that is capable of running in the cloud or via an on-premise solution. Contact us today for a demonstration.
Author: Monica Augustine