The Power of 1
Security of payment acts around Australia have upped the stakes for disciplined contract management. It was an intended outcome on the part of State governments. One of the consequences is that payers have tightened up contract conditions. Payees are not responding with tighter contract management to ensure that they protect their entitlement to payment. It is demonstrated most graphically in a high-profile Queensland Supreme Court case that overturned an $86 million dollar payment claim substantially because the contractor failed to meet notice provisions under the contract. In one adjudication, encouraging words in an email from a site supervisor cost his employer $500,000. In my opinion, it is extremely difficult, if not impossible to meet notice provisions and other tight conditions on fast-paced projects using old-world management and technology. It is also difficult to pick up on issues that may arise on site on a day-to-day basis. Recently and old friend of mine, driving an excavator on a poorly-performing tunnelling project gave a supervisor some advice based on his forty years experience. Ignoring his advice cost the head contractor $1 million; but they will never know how the loss was generated or that it could have been avoided. So what is to be done? Respected commentators, including Thomas Friedman in his recent book "That used to be US", tell us that business leaders are saying to be successful, employees must offer much more than their "technical" skill. Research also tells us that people are much less motivated by money than by respect and satisfaction. What does this mean to you? What do you need to do to take advantage of this new wisdom? The Power of 1
Empower every individual in your business.
Recognise that your employees and subcontractors are your eyes and ears on the job;
Establish new management processes to bring EVERY employee into the contract management loop;
Train them to take responsibility for their role in contract management. (remember, it is likely they have been inadvertently trained to shut up, just do their job, don't contribute);
This value-added work will be to report on instructions given at site, changes to drawings and specifications, delays and disruption;
Provide the technology to fulfill this role efficiently, accurately and instantly.
The return to you will be:
You will not lose your entitlement to variations, extensions of time and delay costs;
Your contract and payment claims will be early, accurate and supported with facts;
You will save 20% or more in supervision costs and reporting will be more accurate;
Your team will become highly motivated to work for the interests of your business;
You will keep yours clients happy by responding to your obligations, both under the contract and on the job, much quicker.
We have the training and systems to make these changes to your business that will drive your bottom line. You can download a free margin uplift calculator here to see how easy it is to improve your profit margin by 20% or more from your existing contracts. For more information, contact: firstname.lastname@example.org. Or call 07 5630 1350
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