3 Ways ‘Scope Creep’ Can Ruin Your Startup

And how to avoid it tearing through your hard-earned cash

One of the very easiest ways to watch your hard-earned profit disappear is through scope creep.

As I found out the hard way.

Several years ago, I had a manufacturing business. It was a tough game with low margins, but we were doing ok. More than ok, we were growing fast.

One day, we received a call from a very large lifestyle brand. The fact that they had heard of us felt dazzling. Off I went to their head office, where their buying department grilled me and, subsequently, one of their designers.

They proposed using tiny-little-us to supply three ranges of furniture through all their stores, which translated meant one in virtually every major town. It was the stuff dreams were made of. I quickly agreed to make some sample pieces up for them.

The whole team was thrilled, and we slaved on them. It was challenging from the start. Supposedly, slight variations to some of our standard pieces had morphed into distant relations, with different materials and very different construction. But given the value of the opportunity, we weren’t phased.

Niggling worries started as it became clear that the designer had little or no clue about the practicalities of manufacturing, merely some whimsical concepts, which were next to un-deliverable.

Still in awe, I sanctioned change after change.

Initially thrilled by the prospect, the members of my team developed a dull hatred of the whole thing. We dreaded the designer’s visits, where she came to nit-pick every detail and argue that something should have been done that appeared nowhere in the original instructions.

When we finally delivered the samples, they were received with lukewarm enthusiasm.

Those samples cost us a fortune. Our already low margins on the proposed project ahead were now barely visible. Finally, I woke up and walked away from the “opportunity” of the deal.

The whole disaster was a classic case of scope creep.

Defining scope creep

Scope creep is when a project grows in an out-of-control way: needs or objectives may change, or new features or specifications may be added. Yet despite the changes, neither time scales nor budgets get changed.

These changes are often small to start with, but mushroom beyond expectation in size and number, and the cumulative effect can be devastating.

Scope creep and its effects are far beyond the usual project challenges that would be covered by the proverbial:

“Expect the best, plan for the worst, and prepare to be surprised.” — Denis Waitley

Scope creep’s causes lie in three major areas:

Customer-caused scope creep

We all want happy customers.

And the bigger the customer, the more inclined we are to adapt and keep them happy.

We have all done it. Perhaps you have some new software, and a large customer is asking for some modifications. It sounds entirely reasonable.

But some things should always send up a red flag.

In our case, we had very different people to please within the customer’s team. The buyers were controlling the time scales and money. The designer was focused on her concepts.

Neither appeared to liaise. That creates an immediate issue.

The designer only worked part-time, rarely deciding to grace the office with her velvet Alice band and faux pearls.

This meant that when any issues arose in bringing her vision to life as the work progressed, any questions we had resulted in long delays as we tried to get clarification. In turn, this meant that to still deliver by their deadline caused us a continual overtime bill.

And there were queries. A lot of queries. As with many clients, the vision was sketchy. The word traditional came up often but without specific reference to a period. We lost track of what their vision was.

It hit hard financially, but when goalposts are continually changed, it causes stress and damage to team morale, leaving people frustrated and miserable.

Burning the money would have been more fun.

In-house scope creep

It isn’t always the customer’s fault.

The very best of customers can come up with bright ideas for changes after a project is launched. And they may well be wise changes.

All communication has to be crystal clear. If the details of the project are not set out from the start, there is no way of tracking what is new and what is old nor the effects.

Without an agreed system for changes, trying to point out that time and money will be affected is almost impossible.

Another issue is that just as the customer can have too many people dealing with a project, all with entirely different agendas, so can the supply company.

Different people may be in touch with the customer, perhaps a creative or someone from sales. All too easily, the result is a massive mess of he said/she said with lots of confusion and zero paperwork trail.

There is a natural reluctance to say no to a customer.

We focus on pleasing customers, and this prevents us from saying no. It also means that sometimes, in-house teams themselves get carried away and start offering improvements and alterations with the fatal words, “It’s no trouble.”

In business, you can never afford to give away your time and money.

Two-sided Scope Creep

Bad communication is one of the very biggest of all causes of scope creep.

Imagine the chaos.

A customer who doesn’t clearly know what they want but instead offers vague, and sometimes conflicting, brushstroke ideas.

A provider who operates on a wing and a prayer basis, agreeing to anything and everything in the hope of a happy outcome.

A lethal combination with zero hope of success.

Remember the Dale Carnegie quote:

90% of all management problems are caused by miscommunication

How to stop scope creep

Too much rigidity can be a bad thing, just as saying no to a customer for the sake of it can damage the relationship, often terminally.

However, with scope creep on the rise (according to the Project Management Institute) and taking into account the degree of damage it can do, it is far wiser to put in systems to ensure you are not exposed.

To minimize the damage:

• Agree all details and timescale of the project with the customer from day one in writing.
• Request that they include an overall brief of their aims at the start, as it will help you achieve the best job for them.
• Establish who you are dealing with at the customer’s. You only need one boss.
• Also, establish how to reach them and their availability. Include a caveat that if you do not get responses to queries within a specified time, delivery time may be affected.
• Set out a procedure for any requested changes after the original agreement, clearly stating that not only will they be chargeable, but delivery time may be affected.
• Confirm that no changes will be accepted unless in writing and with new costs and times agreed.
• Commit to a regular schedule of detailed reports from you to the customer.
• Have only one project manager liaising with the customer.
• When a change is requested, before you agree, do a detailed impact study on how it will affect the work, your work schedules generally, and what resources might be needed. Take into account any additional stress they might put your team under.
• Have everyone involved in-house on the project continually updated with progress and timescales.

Last but not least, be brave, be bold, and learn to say “no” to customers.

Do it in the right way, calmly and in direct conversation, and explain why the no is necessary. But say no and stick to it.

Your business will thank you for it.

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