Business Rocks: The Cost of Delay

 

Last week I was working with a client in the US to help the business accelerate its internal pace of delivery. Like many organisations with a desire for improvement, the company is already doing many excellent things – as with this client, when it comes to change, it’s often more a question of sharing existing best practices than creating something totally new!

One of the corporation’s senior leaders told me, for instance, about a technique he uses to maintain the pace and urgency of his key initiatives. At the start of every project, he and the team determine the monthly cost of delay- how much the business will lose each month by not delivering the initiative on time.

On his latest project, he had estimated the monthly cost of delay at $20 million. That calculation had two consequences. First, it provided the entire leadership team with the shared desire to deliver as soon as possible. Second, it helped the project team to make better decisions about the best way to overcome potential delays.

At one point in the project, for example, the team decided to invest $10 million in new software to accelerate its delivery by six weeks. Even though the level of spend was high, it was cash generative in less than a month!

 

For how many of your big projects do you really understand the monthly cost of delay? And what changes to your decision-making and your speed of execution would it make if you did?

 

Off The Record: I Say A Little Prayer by Aretha Franklin

 

I’m conscious that I haven’t paid tribute to the amazing Aretha Franklin, who sadly passed away last month. I’m sure we’ve all turned to Aretha’s songs at some point in our life, as she seemed make an emotional connection that others just couldn’t find. If you hear other versions of Respect, I Say A Little Prayer or A Natural Woman, for instance, you realise that no-one else comes close to Aretha’s ability to capture the soul of a song. A true legend.

I run for the bus, dear

While riding, I think of us, dear

I say a little prayer for you

At work I just take time

And all through my coffee-break time

I say a little prayer for you

 

© Stuart Cross 2018. All rights reserved.

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