It would sure be nice if the laws of physics held for economics, but unfortunately we do not always get out of a project what we put in. Everyone business must face off against non-payment, late accounts and collection now and then. For small consulting companies and professionals, this is a pretty trivial task since the number of project managers and stakeholders lends itself to everyone being aware when work needs to be stopped on a project. As the number of employees and managers increases, though, the risk of not communicating stopped job status to all team members increases as well.
For purposes of illustration, consider an e-commerce web site project assigned to several teams each working on different aspects of the assignment. One team focuses on developing copy text, another developing search engine marketing, another performing graphic design and yet another developing the application logic behind the site. This project is but one of several that each team is working on simultaneously.
Each team is doing well and plugging along with each of their projects. In the meantime, the bill for the last deliverable on the e-commerce project goes past due. In this scenario, it is usually best to contact the client immediately to gauge their intentions - are they going to pay? Are they satisfied with the work? (I talked about some of the benefits of regular communication with clients in my last blog.) If it doesn't look like payment is on its way, it's a good idea to stop investing time into the project immediately, especially given the current state of the economy.
In the event that work needs to be stopped, the stop must be communicated to every individual across every team, beginning with the accounting department. With many tasks already assigned to various individuals across man teams and some tasks possibly subcontract to third party firms, ensuring that everyone is aware of the work stop may be difficult depending on the level of organization and communication within and between the project teams in addition to accounting. If work does continue, especially in the case of third party contractors, the project loss can get big quickly.
One approach to ensuring that project status is well communicated to all team members is holding regular project meetings to discuss status and details. One drawback is that it may not always be practical to arrange these types of meetings with busy schedules - another is that any team member not present may not get the information at all. Another approach is to integrate time tracking with project management such that all tasks to which time is attributable can easily be put on hold, thus eliminating the possibility of performing work. This, of course, relies on good time tracking practices in the first place.
The bottom line is that if a clear and consistent method of documenting and communicating project status to all team members is not in place, you can end up doing a lot of work that you never get paid for.
Friday, July 24, 2009
Friday, July 3, 2009
Litigation Mitigation, Communication Implementation and other non-rhyming business necessities
I grew up in a world where a handshake constituted a binding contract that need never be enforced in a court of law and where a person's word was more important than money. I can't say that I see those principles much today for a couple of reasons. Firstly, there are a lot more people today and therefore a lot more liars, a lot more looters and moochers, and a greater need to protect the interests of the rest. Secondly, our lives and our world are immeasurably more complex than they were fifty years ago.
The bottom line is that contracts and "litigation mitigation" pervade our business lives these days because law suits spring up every day over disagreements concerning copyrights, patents, real estate transactions, ownership, contract performance, liability, employment and for hundreds of other reasons. Employers have every right to be concerned and devote their attention to preventing lawsuits - just one bad lawsuit can destroy a company's future and ruin lives.
Good documentation and consistent practices are the cornerstones of a good defense against frivolous or wrongful lawsuits (avoiding legal action with employees, OSHA protection, minimizig litigation risks). In the absence of good documentation, litigation relies on testimony, i.e., words against words against recollections against fabrications. I'll provide an illustration by example of a client I recently worked with.
A client I consult with was recently involved in a wrongful lawsuit for contractual non-performance (which was actually a counter-suit against a suit by my client for non-payment for services rendered). My client "Joe" had provided services on a particular project over the course of several months and had billed out against that job regularly and communicated status regularly via phone. During each payment follow up communication between Joe and his client Joe's client indicated that they just hadn't gotten to it, but would be sending payment soon. Finally, after nearly a year of attempting to collect payment from Joe's client, Joe finally broke down and filed suit for payment.
To Joe's surprise, he was slapped with a counter suit from his client alleging that his performance under their contract was not acceptable and caused the client monetary damages. Unfortunately for Joe, although he and his staff had regularly communicated status to the client and had been told by the client on multiple occasions that they would be paid and that the work was excellent, there was no documentation to support it. Joe's insurance company settled and Joe actually lost his contract proceeds, the time and efforts of his staff and experienced increased insurance premiums as a result of the settlement. What went wrong?
What went wrong was that Joe was unable to provide enough evidence to establish that there was regular communication of project status to his client throughout the project lifetime. The client was able to claim that they were unaware of the project's progression and that they had no chance to object to the work being completed as it was completed.
This is one clear cut case where some consistent knowledge management practices would have gone a long way. If, for instance, a regular schedule of client contact was in place company-wide it would have been easier to establish that it was likely that the client received regular communication since all Joe's clients receive regular communication. Second, if each communication was well documented complete with subject matter, Joe would have had a much better chance at convincing a judge that the client was apprised of project status with no disapproval.
The short and skinny: two great ways to avoid litigation are to be consistent with client communication and to make sure that all client communication is well documented. The first alone will often lead to better client relationships and reduced chance of misunderstandings or dissatisfied clients. The second does a great job of CYOA in the instances where the first just isn't enough.
The bottom line is that contracts and "litigation mitigation" pervade our business lives these days because law suits spring up every day over disagreements concerning copyrights, patents, real estate transactions, ownership, contract performance, liability, employment and for hundreds of other reasons. Employers have every right to be concerned and devote their attention to preventing lawsuits - just one bad lawsuit can destroy a company's future and ruin lives.
Good documentation and consistent practices are the cornerstones of a good defense against frivolous or wrongful lawsuits (avoiding legal action with employees, OSHA protection, minimizig litigation risks). In the absence of good documentation, litigation relies on testimony, i.e., words against words against recollections against fabrications. I'll provide an illustration by example of a client I recently worked with.
A client I consult with was recently involved in a wrongful lawsuit for contractual non-performance (which was actually a counter-suit against a suit by my client for non-payment for services rendered). My client "Joe" had provided services on a particular project over the course of several months and had billed out against that job regularly and communicated status regularly via phone. During each payment follow up communication between Joe and his client Joe's client indicated that they just hadn't gotten to it, but would be sending payment soon. Finally, after nearly a year of attempting to collect payment from Joe's client, Joe finally broke down and filed suit for payment.
To Joe's surprise, he was slapped with a counter suit from his client alleging that his performance under their contract was not acceptable and caused the client monetary damages. Unfortunately for Joe, although he and his staff had regularly communicated status to the client and had been told by the client on multiple occasions that they would be paid and that the work was excellent, there was no documentation to support it. Joe's insurance company settled and Joe actually lost his contract proceeds, the time and efforts of his staff and experienced increased insurance premiums as a result of the settlement. What went wrong?
What went wrong was that Joe was unable to provide enough evidence to establish that there was regular communication of project status to his client throughout the project lifetime. The client was able to claim that they were unaware of the project's progression and that they had no chance to object to the work being completed as it was completed.
This is one clear cut case where some consistent knowledge management practices would have gone a long way. If, for instance, a regular schedule of client contact was in place company-wide it would have been easier to establish that it was likely that the client received regular communication since all Joe's clients receive regular communication. Second, if each communication was well documented complete with subject matter, Joe would have had a much better chance at convincing a judge that the client was apprised of project status with no disapproval.
The short and skinny: two great ways to avoid litigation are to be consistent with client communication and to make sure that all client communication is well documented. The first alone will often lead to better client relationships and reduced chance of misunderstandings or dissatisfied clients. The second does a great job of CYOA in the instances where the first just isn't enough.
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