What’s the Real Cost?

posted in: Tips & Tricks | 0

costsThere is a cost that comes with the chaos and dysfunction in an office. Many will say, yes, we waste time and time is money, but it’s not that much. I have to inform you that it is so much more than that!

Let me tell you how I discovered the real cost of not having good systems. My second day working on the biggest development project I ever worked, an incident happened that made me fully open my eyes to the real costs and detriment involved. With a huge construction project comes a lot of paperwork and drawings, this was a $1.2 billion project – I did say big! Even now, with much transferred to electronic documentation, the problem I’ll describe could still happen.

The Project Director came to the front office and said he needed a particular document right away. There was a disputed question that was holding up production at the work site. At this point the filing system was a mixed up, confusing assortment with empty copy paper boxes filled with paperwork, but the staff didn’t know where it should be filed and so, there it sat.

It took three people: the office manager, the receptionist, and me over a half hour to locate the needed document. During this time there were four contractors waiting at the job site for the response so they could continue their work, the Field Supervisor was waiting in the office, and of course, the Project Director was held up too.

There is the obvious dollar amount of 9 people not being productive, but that doesn’t even begin to account for the true cost to the development office. Think about what was going on while the front office was scurrying in their attempt to retrieve the paperwork.

Those four contractors had time to talk as they waited to continue with the work. I am sure the conversation went the course of: “Sheesh, we’ll never get this thing built if it takes this long to get one little answer! The work has hardly begun! This must be run by a bunch of idiots!” ( I cleaned up the language out of politeness!)

The Field Supervisor had his own thoughts, probably along this route: “Holy Smokes! This is taking forever. If they keep holding us up like this, it’s going to be a job from you-know-where! Do these guys know what they’re doing?”

Do you believe any one of them was thinking: “Gee, this office needs a better filing system?” Not a chance! The perception arose that the entire business and management is incompetent and no one knows what they are doing. There was a lot of trust loss over this one incident. The Project Director will now have the added task of re-building trust and confidence in him and his organization.

The detrimental effects are there when you do not have a good systems in place.

They are:

  • Accountable cost of time lost
  • Cost of the trust to your clients, colleagues, etc.
  • Cost of your self-confidence
  • Cost of reputation
  • Cost of income

As an entrepreneur, you don’t have the luxury of working to rebuild trust once it’s lost. If a client loses trust, they’ll leave and go elsewhere. You’ve just lost income and reputation. Bystanders don’t pay attention to how something operates until it causes confusion or trouble for them, and then they blame the people, not the system. Please don’t let this be your story.

This can be avoided by establishing good working systems in your business so you can always demonstrate top notch professionalism. Start making this a priority today!

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