I learned about Scope Creep while working as an architect and project manager. It’s one of those subtle things that on the surface looks harmless…like you are just being nice and adding exceptional customer service. Below the surface, it is insidious as it eats away at your business and profits.
SO what is scope creep?
Scope creep is a situation in which a customer/client ASKS for something beyond the scope of the contract, beyond the scope of the agreed upon service or something extra added to a product that you then add for free.
When put that way, it just sounds like you are being nice right? Like you are just doing exceptional customer service.
Imagine the house to the left as your business. The ivy growing up the side looks beautiful, it may be your amazing customer service. Did you know that certain varieties of ivy have these runners that help them grow up the wall? These runners will burrow into the grout between bricks and stone eroding away the structural integrity. I once pulled some English ivy off of a house and a brick came away with it!
When you think about it, scope creep is like that ivy. It is seemingly innocent looking on the surface, but underneath it is one of those subtle areas of a business that can suck your profits dry while potentially putting you at legal risk.
Let’s start with sucking your profits dry.
When you price your products and services, you start with a set of assumptions that cover your overhead costs, the cost of materials to deliver that product or service, some assumptions regarding the time required to produce and deliver that product or service, contingency in case something unexpected comes up (economic changes, equipment breaks down, etc.) and hopefully you factored in some profit. Pricing is both an art and science.
Potential legal risk.
What happens when you agree to do something that effects something that you didn’t think about? What happens if that seemingly simple change causes a $50,000 piece of equipment to not work or it causes delays or something to go wrong on a multi-million dollar project? The client may have asked you for something, but if you did not take the time to add it into the contract with consideration of the different factors, YOU are at risk.
When you agree to ADD something (scope creep) to your product or service without evaluating how it will effect your price, YOU lose profit. You also lose TIME that you could be spending on a paying client, TIME you could be spending with your family or friends, TIME you could do something for yourself, TIME you could be spending to grow your business.
When you think about it, scope creep is STEALING from your business!
I understand that you were probably not trained to recognize scope creep prior to this blog post. This isn’t just about you though…it is also about your staff. Most people are not trained in this concept.
Two tips to help you avoid scope creep:
1. PAUSE: When a client or customer ASKS for something extra, pause for a moment. Executives especially are trained to ask for extras (it’s a game for some – If you don’t ask, the answer is always no.)
2. UPDATE THE CONTACT or AGREEMENT: If what has been requested is outside of what was agreed to, evaluate whether it will add time, materials or cost and then discuss this with the client. Update the contract or agreement if the additional cost is agreed to.