Member Jeff Antrim Speaks: Double Down on Quality and Accountability
The case at hand was brought by a CEO whose services firm was suffering from expensive “go-backs,” where he would often find it necessary to send his staff back to client sites to fix mistakes. He came to the Alliance seeking strategies to keep this trend at bay and protect his profit margins.
If you were in this situation, what would you do?
If I were in this situation, I’d inject more quality control into the processes, while also providing new incentives for staff to get it right the first time.
Before getting into the weeds, let me congratulate you on the rapid growth your firm has experienced in the past year. I believe your growing pains are normal and can be mitigated in a straightforward fashion. If I were in your shoes, I would first create a pre-bid audit where estimators assess the cost of the project and recommend a bid. They can make judgement calls like increasing the project bid if there is a difficulty factor, or decreasing the bid for a repeat client that deserves a quantity discount. But most importantly, the task must be defined correctly. Then, I would put in a quality control officer who will do random checks on completed jobs to make sure they were estimated correctly. These project scope audits could be random for smaller jobs and then, once above a certain dollar mount, they can become mandatory.
Now that I have audits establishing credible anticipated cost, I can better incentivize managers to stay on budget. I would build in a few basis points for each project that go into a bonus pool. If mistakes are made, the increased costs get taken from the pool. However, if efficiencies are found, these savings can then flow into the bonus pool. With luck, the results will show less mistakes and happier employees.