Calculating the Cost of “Good Enough”

But we’ve always done it this way.”  As a business leader, you would never accept that response from one of your staff members if you observed them performing a task in a manner you know is unproductive or unprofitable. Lost time and lost opportunity equate to lost revenue. You know this and you likely work to prevent these losses as you lead your team each day.

 

Have you ever considered where you may be accepting status quo in your daily routines and from your daily processes? Are there areas in your organization you are challenged to review, but a lack of time or knowledge leads you to say, “what we are doing is ‘good enough’.” How do you know if “good enough” is truly “good enough”?

 

There are many reasons business leaders settle for “good enough”. Here are four common ones:

 

  1. You are skeptical of vendors.

As a busy executive, your attention is highly coveted by salespeople wanting “just” a moment of your time.  You are likely called on by vendors daily who want to sell you their products or services. Chances are you have been disappointed by some of them. This may lead you to shy away from opportunities that could significantly minimize your losses, improve your operations and improve your profitability. You have reason to be skeptical. A salesperson is never going to say: “You may lose time and money by purchasing my product or service. I may cause you great frustration and disappointment. Shall we continue this call?”

Engaging with an unfamiliar vendor can be unsettling but there are strategies you can take to lessen your risk and not miss out on opportunities that could stem from the relationship. The best way a vendor can earn your trust is by assuming much of the risk associated with the exploration of their solution. If a vendor is truly a subject matter expert, they know what questions to ask to determine if you stand to benefit from their product or service. They help you identify pains you might not even know are hurting you. They have stories to tell of your peers who have found success with their solutions and they are willing to share those stories and references with you.

When a vendor is willing to perform the up-front work required to review your processes, that vendor shows they are vested in your success. You lose little by allowing the engagement. If they report back to you following their evaluation that they have nothing to sell you, you get the benefit of knowing that “good enough” is truly “good enough.”  If instead, you receive recommendations for improvement, you are a step ahead of where you were before the engagement. You can calculate what you are losing by doing nothing, and make a decision on whether you can accept that loss.

 

  1. You assume purchasing a new product or service is going to be complicated and time-consuming.

Technology solutions can be complicated. Take the healthcare industry, as an example: EHR, HIS, RIS, PACS, DMS. Solutions like these take time to implement, they take time to learn and often much time passes before we see the benefits promised by their developers.

Don’t make the mistake of assuming all solutions that improve the performance of your organization is complicated or that they require significant effort on your time to implement. Ask your vendor what their implementation process looks like. You may find that the burden of success is placed entirely on the vendor leaving you with little to lose but much to gain.

 

  1. You think your current solution is providing maximum returns.

Often you may find yourself saying, “I have a vendor that handles that. They are doing a good job so why would I change?”   They may be doing a good job, but are they doing the best job? Do you think they’d tell you, “we could have saved you 5% last year, but instead we saved you 4%?”  Of course, not. The only way to know is to review their performance and compare the benefits of what you gain from their performance to the price you pay them.  When approached by a competing vendor, challenge them. Ask them to compare their solution to the results you are currently getting from your existing vendor.  If you are reviewing a solution or service that involves an annual contract, performing a review like this 60 – 90 days prior to the renewal of that contract provides you with an opportunity to know you are minimizing your losses and maximizing your results.

 

  1. You and your staff are overwhelmed.

The final reason you may neglect to challenge your status quo is quite simply because you and your staff are overwhelmed. You don’t know what you don’t know and you don’t have time to research those things. The idea of doing “one more thing” is stressful and so you resign yourself to remaining still.  While it may sound counter-intuitive, this is exactly the time to seek assistance. If you purchase a solution that makes you more efficient, how might that help you one year from today? If you decrease revenue loss, how might that positively impact your department by the end of this fiscal year?

I encourage you to challenge your acceptance of your “good enough.”  Ask yourself these questions:

 

  • What is the cost to my company if I do not make a change?

 

  • What changes are anticipated in my industry that might make me incur losses I am currently unprepared for?

 

  • What are the estimated benefits of this change, and how do those benefits align with my business goals? What would be the return on those advances?

 

Answering these questions will help you to calculate the cost of continuing to accept “good enough” in your business.

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