Full Costs of a Problem

5 minute read

People have a lot on their plate, and most people describe it as way too much.  I’ve certainly been in the spot where I was running from situation to situation, applying band-aids and temporary fixes, and not making the kind of real progress I wanted.  Part of my problem was that I wasn’t slowing down enough to understand the real costs of some of my problems.  And when I wasn’t clear on these impacts, I wasn’t focused on doing enough to solve them.  Even if those costs were big, I had a blind spot and didn’t necessarily see them.  Today we’ll help you get past that blind spot.  

There are 5 key areas we talk about with teams when discussing the costs of repeated problems and behavioral performance patterns.  Those are money and time (of course)…and heartburn, employee issues, and reputational risk.  

Let’s dive in, using the simple example of George who repeatedly sends off incomplete or inaccurate shipments.

Money and time are pretty straightforward and usually under-represented…when George doesn’t pay attention and ships only part of an order, there is a financial impact with extra shipping costs.  When the team repeatedly meets to work out a solution because George isn’t doing his part, that eats up time.

Here’s where you want to go further.  The first order impacts are those for the immediate participants, and you’re probably clear on those.  Get into the second order impacts…what happens to the other team members’ time when they do rework because George screwed up again?  What happens to the customer service reps’ time?  Also – what ISN’T happening because you and others are putting attention to this?

Also determine how much time YOU personally are spending on this.  If in an average week you’re devoting 2 hours, multiply by 50-ish working weeks and boom…you’re spending 100 hours a year…2.5 FULL WORKING WEEKS sorting this out.  How differently does that feel for you now?

Heartburn is the third big area of cost.  Heartburn for you, for the team member, clients, partners, etc.  Really dig into what that looks like.  And remember, you’re directly affected by this situation…how much time do you spend thinking about it, working to solve it, ruminating about it, talking about it to a friend.  Your heartburn and frustration are an energy drag and will slow you down in other areas that really matter. And that’s just you.  Other people as well as the team member who is creating the challenge are likely frustrated about it as well.

Employee Issues are the fourth way that ongoing problems create costs.  When people are regularly frustrated and disappointed, they will start to change their part.  They may create secondary problems like getting confrontational, or checking out, or doing the bare minimums.  Those are gonna hurt you and the business.  What could hurt worse is if people start to leave.  Now you’ve got a frustrated team with too few people to actually do the work.  Ouch…

The fifth way that costs really multiply is through reputational risk.  When George repeatedly ships out incorrect orders, he creates a reputational risk for himself, for the department, and for the business.  Right now, people may not want to work with him because he’s shown that he’s sloppy.  Clients may not want to buy from your business because there is a pattern of partial shipments that create problems for them.  And people may not want to work with YOU because you’ve shown that you’re willing to put up with this, or you won’t do anything about it, even though you know it’s a problem.

And those costs don’t just show up today…they show up in the future with canceled orders, or contracts you’re not invited to bid on.  They show up when people decide not to apply to your company’s open positions because they’ve heard “it’s a mess over there”.

I met with a team of CEOs a month ago and one had a problem that he was chewing on.  He initially described it as a $10,000 problem and showed a bit of interest in solving it…then we started to talk, and peel the layers back on these 5 areas, both today and in the future.  In short order, he got uncomfortable and began to shift in his chair and said this was a 7 figure issue for his company, which was 8% of their annual revenue.  He had more completely recognized what it meant so he could PRIORITIZE doing something about it. 

This can be hard, and uncomfortable.  Lucky for you, you’ve got friends at Wingspan who are ready to help.  Reach out through our website for a consultation, or enroll in the Wingspan Performance Academy to learn more about your patterns and how you’re accidentally contributing to these costs.  You’ll be able to take that frustration and turn it into something useful and productive.  See you soon!

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Wingspan partners with leaders around the world to strengthen their behavioral performance and communication. Our approach centers on creating more intentional outcomes by developing healthy behavior systems, more productive interactions, and more meaningful relationships.