Avoid unexpected losses through contract health checks
Dara Lawlor

How to avoid a nasty and surprising contract loss

Dara Lawlor -
Avoid unexpected losses through contract health checks

“So what’s all this about then?”

“Em, he’s just trying to rule something out.”

“Ok, well he obviously didn’t like what he saw.”

I was sitting in my GP’s office mulling over the results of a routine endoscopy.  Two weeks previously I had left the consultant’s office post-procedure happy enough.  On first glance he said that I looked “as clean as a whistle” inside.  The results of the biopsy told him otherwise.  I was now staring at a recommendation to “get a blood test for coeliac disease.”

The following week the blood test confirmed that I was indeed coeliac.  So ended the joys of munching on crusty baguettes, eating my mother’s soda bread and washing down plates of muscles with delicious pints of Guinness – which can be a big deal if you’re an Irishman.  But not to worry, in the seven years since then I’ve discovered that red wine is just fine. 

Now the scary thing about this is that I wasn’t suffering from any symptoms or tell-tale signs.  I’ve always been an early to bed, early to rise sort who has heaps of energy and loves his sport.  I wasn’t sitting on the pot all day.  Short of a bit of junk and a scatter of pints with my mates I had a pretty clean lifestyle. Google the consequences of undiagnosed coeliac disease and on the Mayo Clinic website you’ll find terms like malnutrition, bone weakening, lactose intolerance, nervous system conditions and that old spectre, cancer.

It’s a good thing that I’ve never been shy about getting checked up.  I have a good life and if something is wrong I want to be able to do something about it.  But crikey, what a bullet to dodge!

Over the years I’ve picked up a number of clients who have one problem in common.  They all have had undiagnosed conditions that gave them a nasty surprise – an unexpected contract loss.  They chugged away delivering what they thought was a great service and, like the boiling frog, were oblivious to the sucker punch that was waiting.

Now if you’ve had one of these, and in my experience most businesses do, then you’ve probably just had a shot of cortisol flush through your blood.  My apologies because this article has more to do with improving your health than destroying it.

At the extreme end of the scale this type of loss can result in witch-hunts, retribution, scores being settled, redundancies, divisions closing down, communities suffering, prospective suitors fleeing and finally your business going under.   At the milder end, if your business is more resilient, you may wind up just with the witch hunts and a bit of retribution – fight on.

Well it’s obvious:

What you don’t know about can kill either you or your business.

When you are stuck in the middle of your business you are unlikely to see everything and have a balanced and unbiased view on what’s going on.  If you engage an external subject matter expert to review how one of your contracts is performing what could they find?  I could run down 99 rabbit holes on this one, but I’ll stick to just a few:

You may go about your business without sensing any dissatisfaction in daily interactions or contract meetings.   That said, your contact may be too polite or insincere to let you know what they really think of you.  The other issue is that they may not be the only ones who count.  There are generally a number of people on buying teams these days and their views may be invisible to you. 

A skilled practitioner will know where to look and who to interview in order to surface any hidden views and assessments.

It’s rare that a client’s concerns today are the same as when they originally bought from you.  Any contract signed and service delivered deals with what the position was back then.  The client’s “here and now” concerns will more than likely have changed.  The zeitgeist may have shifted for a number of reasons – technology, fashion, politics –  and what you are offering may not be tapping into it. 

Your consultant could review the nuts of bolts of what you’re actually delivering, identify breakdowns, as well as whether it stacks up to what is making a big noise in the market.  You’re unlikely to retain business if you continue to serve what was in fashion three or four years ago.

Your product or service could genuinely be the best in the market and always hit the bullseye, but your client may be a little bored with your delivery team and how they are going about things.  There may also be a level of discord due to poor matches between your team and theirs.  This is a more prevalent and bigger risk than you’d think. 

Your consultant may identify that a few changes to the team will freshen things up and reduce the risk of you suffering an unnecessary loss.

It’s easy to forget – especially if you’re an SME – that while you’re slaving away inside delivering against your hard-won mandate, your competitors on the outside are at their most dangerous.  They will be in the client’s ear showing them what they’re about.  They’ll find out how the contract is going and what problems the client is experiencing with you.  While you are focused on delivery, they will be focused on design for the client’s “here and now” concerns. 

The consultant could identify, either through their interviews or via their network, what the risk level is and what you need to do to move your current offer past what is now in the market.

Each one of the four symptoms above is enough, on its own, to result in an unexpected contract loss, but every now and again you may be better off doing without.   Your consultant could discover that there is a good reason why members of your team are breaking out in rashes and going on regular sick leave.  They could be dealing with someone who is a bully and has Hannibal Lecter posters on their bedroom wall.  This is a dilemma as you may really need the work in order to survive as a business.  That said, you may be lucky to have more than enough of a financial buffer to cope with firing a client – and if you do well here’s some food for thought from David Ogilvy:

“I have resigned accounts five times as often as I have been fired, and always for the same reason:  The client’s behaviour was eroding the morale of the people working on his account.  Erosion of morale does unacceptable damage to an agency.”

If you’d like to know more about how to avoid nasty and surprising contract losses you can either subscribe to this blog or click on the link below to arrange a chat.

Dara Lawlor

Want to know more?

Schedule a conversation today...

Dara Lawlor
Dara Lawlor

Stay Ahead

Business and leadership development insights and offers delivered straight to your inbox