Sometimes projects under-perform. Disagreements happen. The causes are usually complex and the result is often inaction. The project gets further into trouble, the disagreement festers into dispute.
Projects and contracts need to maintain momentum. Disagreements are a distraction.
You may need and seek legal advice, but resolution should be driven by the business, not by the lawyers.
If you are feeling discomfort about your project or contract but can’t explain why, your experience and knowledge are sending you an alarm signal. Don’t ignore it.
It takes courage to face difficult problems, but the rewards can be tremendous and with Kiah as your guide, the pathways safe.
We have saved our clients millions of dollars, avoided costly legal processes, and ensured long term viability of critical services through our review, restructure and remediation services.
See what we can do for you.
Contract review and remediation
A contract is a static representation of the deal at the time of signing. Most programs, other than the simplest, continue to evolve over time.
Your agreement needs to evolve too. Without change, it will increasingly diverge from reality. This might be accommodated in the short term, but it is a recipe for disaster over time.
Regular review is an essential part of active contract management, but it often doesn’t happen. People mistakenly believe the contract’s terms are fixed, or other priorities intervene, or time simply gets away. Sometimes a fresh perspective is needed to see the potential value that can be unlocked for both parties.
Here are three warning signs that your contract is due a review:
Your contract doesn’t change
We have observed multi-million dollar programs operate for years without an approved Contract Change Proposal (CCP). Not surprisingly, they ended in dispute when the mismatch between the original terms of the contract and the reality of the services delivered became too much to bear.
If you have a major contract with a backlog of CCPs or are not seeing a regular progression of CCPs, you need to assure yourself that it is not a sign of trouble on the horizon.
Your forecast payment profile is not met
Divergence from the planned spend profile indicates one or more of these things:
- deliverables are being delayed
- an unplanned change in services has occurred
- invoices are not being paid.
A lag in invoice payments can reflect discomfort in the contract management team. It may result from a change in contract interpretation, perhaps accompanied by a changeover of staff, a failure in delivery, or a mismatch of current expectations with contracted obligations (above).
Whatever the cause, these issues need to be resolved before they escalate into a significant rift that threatens delivery and distracts effort from the organisations goals.
A general unhappiness
Sometimes there is no immediately identifiable cause but an element of discomfort or tension that pervades. Do not ignore your intuition but seek to understand what is behind the discomfort.
Sometimes a fresh perspective is needed
As a programme owner, you should be concerned if your team never brings you a problem
Many public sector organisations use some variant of the gateway review process, to ensure that projects don’t get off the ground unless they are carefully thought through, aligned with objectives, and appropriately funded and resourced.
But there’s a big problem with the gateway review process. There’s nothing between Gate 4, the launch, and Gate 5, delivery. The meat of the project, the doing of the work, doesn’t have a gateway!
Classic project methodologies have plenty of safeguards and checkpoints to keep the project activity aligned and on track. But these can become an industry of their own, consuming time and resources that could be better used doing the work. Often, the project controls are allowed to become lax or lapse entirely.
We reviewed one project where the performance data was green ticks all the way up the chain month after month – until the day the asset needed to be deployed for emergency support and was found to be unsafe for use. That’s a bad way to find out that your program controls aren’t working.
At the same time, projects of any length will incur changes. Changes to the organisational or political environment, new or additional data, changes of personnel – all these and more can influence the direction of a project and inadvertently steer it away from outcomes it was designed to achieve.
As a programme owner, you should be concerned if your team never brings you a problem. It won’t be because there aren’t problems there. It will be because they haven’t seen the problems, or worse, they have seen them and are hiding them because they don’t know what to do.
Regular checks against the original purpose of your project, ideally by an external, objective audience in the manner of a gateway review, can help to ensure your project is on course, maintaining a healthy level of momentum, and continues to meet requirements.
All programmes, large or small, public sector or commercial, will almost certainly be faced with a level of disagreement at some stage.
It is a natural part of doing business, but it is when disagreement and misalignment is not resolved in a timely manner that the issues become problematic.
The temptation might be to ignore the signs, but we can unequivocally advise that the problems will not go away, they will only worsen. Most issues are resolvable through negotiation and, if done well, to the advantage of both parties. It takes courage to face difficult programs, but the rewards can be markedly positive and, with an experienced mediator, the pathways quite safe.
At Kiah, we deal with deadlock, disputes, rapid establishment, re-alignment and recovery. We work with the public sector, private sector, and across the divide as neutral facilitators and mediators or as advocates.
Our approach provides for a business led negotiated resolution owned by the participants.
We have saved millions of dollars for our clients while ensuring long term viability and protection of critical services.
We have saved millions of dollars for our clients…