It’s three months after the completion of a fairly routine water loss, and you are still waiting to get paid.
The customer’s mortgage company (who you didn’t know would be on the check) is still holding the funds until an inspection takes place (which should have been completed three months ago). The inspection is held up because the customer is disputing the flooring allowance (which was never explained to them) that does not match the insurance adjuster’s estimate (or yours) that the customer received with the settlement check (which was delayed because it required a supervisor’s approval).
If any part of this scenario sounds familiar, you are not alone.
There is a distinct difference between restoration projects that are run smoothly and those that don’t: discipline. This discipline can be found in the Project Management Body of Knowledge (PMBOK, Project Management Institute), which identifies the four phases in a project life cycle: initiation, planning, execution and control, and closing. In reviewing hundreds of completed projects over the years, I found that most, if not all project failures, can be avoided with a solid foundation laid in the “initiation” phase.
There are five critical project management activities and one very useful tool that can be used during this phase to start projects the right way. Without identifying stakeholders, defining business needs, clarifying project objectives, defining deliverables and identifying risks, we are faced with miscommunication, poor execution and ultimately aged or disputed receivables.
Identifying Stakeholders
The stakeholders of a restoration project can be anyone with a material interest in the job – property owners, agents, adjusters, tenants, mortgage companies, suppliers, subcontractors, employees and many more. The outcome of a project impacts these parties to one degree or another. They all have a voice, and most want to be heard. Restorers would be well-advised to identify these parties and determine their degree of influence as quickly as possible. This step is a prerequisite for any effective future communication plan.
Defining the Business Needs
Restoration projects fulfill the most basic business need: generating revenue. Beyond that, project managers must also consider the impact each project has on some of the other needs of the organization. These may include, but are not limited to, new and existing referral relationships; brand image; human, material, and capital resources; profitability; and, most importantly, cash flow. Defining the business needs for each project is a qualifying activity during the initiation phase. If one or more of the business needs is not met, the best thing a restorer can do is decline the project.
Clarifying Objectives
Unlike the business needs, project objectives need to be SMART (Specific, Measurable, Achievable, Relevant, and Time-bound). They can be determined by both the restorer and the customer. This is where project managers make frequent assumptions about the customers’ expectations with regard to the scope of work, time frames for completion, and cost of service. This can be dangerous and misleading when the customer has one set of objectives and the contractor is working toward something completely different.
Fortunately, this situation can have a simple solution: present the customer with the company’s standard job processes and a detailed explanation of what the finished products and services look like. Customer engagement and open dialogue during this presentation enable the project manager to gain a better understanding of exactly what the customer wants. It also presents an opportunity to reframe any expectations that may be unreasonable, as it is better to address these before the job starts.
Defining Deliverables
Deliverables are any verifiable product or service required to complete the project. Each deliverable must be accompanied by measurable criteria the stakeholders will use to determine if it meets their needs and expectations. Most deliverables are standard across all restoration projects. A damage assessment; an estimate; mitigation, repair, and content cleaning services are all common deliverables, depending on the type and severity of damage.
Getting projects started correctly means carefully defining these deliverables by assigning the measurable criteria from the stakeholders. That criteria can be specifications, as outlined in product or service quality, or time frames, such as schedule and deadlines. Regardless of the method, the criteria must be in alignment with the stakeholders’ requirements.
The deliverable requirements should be in written form, agreed upon by the stakeholders and signed off by the customer. The deliverables are then assigned to a responsible party on the project team. Any deviation from the specified requirements moving forward should be accompanied by a change order, approved by the project manager and customer, without exception. This eliminates the typical “he said, she said” scenario that often takes place when it comes time for the customer to pay his bill.
Identifying Risk
Risk is any event or condition that, if it occurs, can have a direct impact on the project deliverables. Restoration projects are riddled with them. Weather, health, safety, resource availability, funding, building codes, and industry regulations are just a handful of the potential risks that can cause project delays and incomplete deliverables. Identifying these risks early and discussing them often can keep you out of hot water during the course of any project.
One of the more common misconceptions in the restoration field is that it is a low-risk business. People will boldly proclaim, “It is insurance money. Our payment is secure.” While that statement may be true in theory, I know plenty of contractors who go have gone broke waiting for that secure payment to arrive!
The Statement of Work
In non-project based businesses, internal projects start with a document called a “Project Charter.” This charter contains all of the information discussed in this article and more. In the manufacturing and construction fields, that document is more commonly referred to as a “Statement of Work.” This is a powerful communication tool that keeps all of the stakeholders on the same page.
The statement of work contains a narrative description of the products and services (deliverables) that are to be produced for the project. It ranks the priority of time, quality and cost for the project. It identifies any constraints subject to the conditions of the project and makes expectations and assumptions transparent to stakeholders.
I am certainly the last person who would advocate for more paperwork in this business. However, if we could envision, for a moment, the use of a universal document or even a checklist to capture all of the information for the review and approval of all stakeholders, I am certain the likelihood of the scenario with which this article was started could be reduced significantly. The end results would be better communication, higher levels of execution and ultimately faster payments.
Take the time to get your projects started the right way. Use good discipline that has already been employed by cross industries for decades. The methods are proven and effective and the results will undeniably make an impact on your business where it matters most: the bottom line.