Things We’ve Learned in 30 Years..
Business relationships are built on trust. However, business agreements are built on contracts – whether written, verbal or implied – so when we set up an agreement, the contract is the rule and the expectation and the document that we refer back to in the event of not receiving or giving what was expected.
However, whilst this may be the ideal in the perfect corporate world where resources are more easily available, processes are as predictable as a pre-programmed machine and access to cash is swifter, it doesn’t happen in Small Business World.
Is it time to take a reality check on the fact that people have limitations?
Limit to Cash
The promise to deliver what was agreed for a fixed fee suits many clients and also many suppliers/providers as it keeps control over the costs and liabilities for each party. However, when the scope drifts, or the client changes their minds and wants something extra that wasn’t detailed, but they think should be included, someone is going to have to pay for that or there’s going to be an argument. SME and micro businesses rarely have the cash resources to dip into their pockets ad infinitum, they want to satisfy the client, but also don’t want to be in breach of contract for failing to provide what was agreed. A conundrum that sees many SMEs out of pocket.Clients may often be limited in their understanding of the situation or the complexity of what they’re asking for. After all, the expertise they asked for from us isn’t necessarily available to them in house, so we shouldn’t make assumptions.
Limit of Understanding
In a client/supplier relationship, both parties are probably experts in their own field. If a client makes a purchase based on a catalogue entry, they take the responsibility of the assumptions that whatever they are buying will solve their own application problem. Likewise a supplier must take responsibility that whatever they sell will perform what they lay out.
Of course, this leaves a gap between how the supplier intends the product or service to be used and what the client actually needs, and this leads to frequent misunderstandings and incorrect expectations.
Naturally, to make this work, both parties need to be speaking the same language and terminology to make sure that whatever is purchased will meet the customer’s expectations.
Limit of Capability
We’re all guilty of making assumptions, and it’s hard to avoid making them to fill in gaps in our knowledge. The project manager who proudly announces at the progress meeting that “It’s a software problem and the software guys will sort it out by the end of the week” is laying themselves open to a challenge and false promises if they haven’t already confirmed that this is the case.
(A common theme in manufacturing environments is that a mechanical problem in a production line might take 30 minutes to identify and 10 weeks to fix, but that’s OK by the client, whereas a control and automation problem might take 10 weeks to identify, with the client on the engineer’s back constantly wanting an update and criticising lack of progress, while a fix take 30 minutes!)
Capability and experience often go hand in hand, but again assumptions get made that experience inevitably leads to greater specialist knowledge. It doesn’t necessarily, and with a smaller pool of talent immediately available in the smaller business, it pays to ask and discuss this.
Limit of Time and Energy
We imagine ourselves to be inexhaustible, unrelenting and perfect, but in Small Business World, reality falls a bit short of the perfection that we might aim for. For very human reasons: we are human.
People take holidays, can be sick, feel under the weather, might be underresourced, or frankly just be exhausted. We aren’t machines – but then even machines require a certain amount of maintenance.
It’s easy to become frustrated when dealing with another party where you feel that you’re being ignored, receiving poor service or disadvantaged, but often this is a result of overpromise by the person or their organisation. Not an excuse, but possibly a valid reason, which is something that we can work with rather than just venting our anger on someone who is (hopefully) just trying to do their best.
Limit of Authority
Most of us have had that moment, where we’ve been on the end of a transaction (lucky if you get to deal with an actual human being too!) and there seems to be no resolution other than a stock answer of “computer says no”. Maybe that person doesn’t have the authority to take it any further and needs you to take that initiative.
This is also a useful relationship tool when working with clients and suppliers. Those who are responsible for making the project happen can sometimes “defer” to someone higher up to make decisions about the contractual responsibilities while the working relationship can remain intact and amicable.
How We Work with the Limitations
We have found that there’s very little to gain in creating animosity when there is a human limitation in sight, so our recommendations are:
Make sure everything is clearly defined. Many contractual scopes are often woolly and imprecise, because some feel that by not being specific, it allows clients to change the scope without incurring penalties, or for suppliers to claim that what they supplied is to specification. We found that being detailed enough so everyone knows what is required and in the same language avoids those arguments.
Break down the costs so that everything is open and up-front, wherever possible. As a supplier, even if the client doesn’t make this clear, a robust breakdown makes it easier to justify.
Change control. We can’t emphasise this enough; you don’t have to have a certified quality system in place, but keeping control of changes in an orderly manner allows you to highlight the causes and the costs of any changes. It’s surprising just how many businesses don’t do this. Moreover, when a client has their own internal processes to satisfy, it’s so much easier for them to justify any authorisation of cost or overrun.
Treat people as human. A contract should be written to include what happens in the event that things deviate. Those arguments have already been agreed, often by someone else in the organisation, so there is no need to personalise.
So, whilst we might expect that everyone is fully competent and capable with infinite energy and drive 24 hours a day, 365 days a year, the reality is that we all have limitations and a little patience and understanding in this pragmatism goes a long way in smoothing out our journeys.