It's no secret that having documented processes is important for any company. What you may not realize is the amount of money you can potentially lose by either having inefficient processes or not having processes documented correctly.

Unfortunately, early on my company missed the mark on a few integral processes--one of which cost us upwards of $100,000 in lost revenue.

Recognizing Failure

My company, Leverage, specializes in outsourcing--we pride ourselves on doing "anything, as long as it's legal." With that we get a wide variety of tasks from our clients--everything from making a dinner reservation to building a website.

The problems started to arise with these larger projects. We had a loose policy where a project manager would step in on larger tasks to coordinate efforts and streamline communication. While this is a good idea--and something we still do--the execution wasn't great. As an example, here are a few of the biggest problems we were facing.

  • We had no criteria for when something required a project manager.
  • We had no way of overseeing all the current projects.

  • Our contractors didn't know how to get a project manager when they needed one.

  • We had no formal training for our project managers.

  • We had no metrics to measure the profitability of a project.

  • There was no standardization for documentation and workflow--one project may be handled a certain way, while another would be handled entirely differently.

Ultimately, this created a ton of client complaints and lost revenue. There were three main places where we were losing revenue:

  1. When larger projects were mishandled due to the lack of a project manager, we had to issue refunds to unhappy customers. (And rightfully so.)
  2. Some of our contractors were simply telling clients that we couldn't handle larger projects because they were unaware of our project management capabilities. We were throwing thousands of dollars in revenue out the door because we hadn't properly educated our contractors.
  3.  Clients weren't aware that they could give us larger projects or they were hesitant due to problems in the past.
  4. We were missing potential revenue that a project manager could bring in by upselling or cross-selling the client at various stages throughout the project.

Correcting Our Mistakes

To be honest, it took us far too long to realize there was a problem here. But once we took a hard look at what was going on and connected all the dots, the problems became abundantly clear.

We didn't have a legitimate process in place for project management. Up until this point, there was a loose system where someone would decide that a task needed a project manager and appoint themselves, or they'd find someone that seemed like a good fit. There was no vetting and no way to monitor anything. Not good.

Correcting this and creating a functional process was no walk in the park, but looking back on it, there were four key decisions we made that ultimately created a successful outcome.

1. We Brought in an Expert.

We got ourselves into this mess because we had a lot of people with some experience in project management. The key word there is some. These people were creating their own processes with no concrete structure. We were learning through trial and error, which was costing us thousands of dollars.

We found a project management expert with years of high-level experience who was able to come in and help us analyze the problems we were currently facing and how we could address them. This was eye-opening, to say the least.

2. We Questioned Everything.

With the help of our expert, we dove deep into what we were currently doing, why we were having problems, what we could do to fix it, and all the possible consequences that could happen when changing parts of this complicated process.

There was a lot of humility in this and a lot of creative thinking. With every decision made, we had to look at how that one change would affect the entire system and every possible scenario that could arise from it.

3. We Got Feedback From Our Team.

There was a small group of executive team members working on this new process, which allowed for a lot of consolidated brainstorming. We were able to avoid the problem of having "too many cooks in the kitchen," and everyone in the room was qualified for the task.

While this was great, we did get to a point where we needed to bring the rest of our team in. We discussed our proposed solutions with the people who would actually be implementing it--the boots on the ground, if you will. Our team of managers were the ones who would be using these processes day in and day out, so we had to make sure that we 1) got their feedback, and 2) created a process that they would actually use.

4. We Tested It in a Closed Environment.

When we had something that we felt comfortable with, it was time to test. Before rolling this out company-wide, we tested it out in our development department, which naturally has a lot of complex projects.

We learned a few key lessons, but ultimately we had confirmation that our proposed process was miles ahead of what we had before.

By the time we rolled out this process company-wide, it was fine tuned and we had already encountered just about every possible scenario that could arise. It was all broken down into simple, defined steps. We documented everything in a program called Process Street, so all the necessary info was in one place and we had control over it.

This was certainly one of the more expensive lessons we've learned, but it has made an impact on many of our processes company-wide and has helped to set us up for lasting success. Not to mention, recouping our losses from the mess we had before.

Published on: Apr 3, 2018
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