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Summarized Benefits

Against a background of high contractor activity we achieved:

  • • A better disciplined workforce
  • • Significant reduction in contractor numbers
  • • Significant reduction in size of the contractor infrastructure and effort in managing it
  • • Reduction in the number of accidents
  • • Contribution to savings in contract payments of about US $5m a year

Lessons

  • 1. It is important to become knowledgeable about contractors, how they think, and what drives them. A hands-off approach is seductive, but a hands-on active management produces much better results. Do not, however, fall into the trap of micro-management.
  • 2. A few simple facts, analyzed and presented appropriately, can make a lot happen.
  • 3. A small, disciplined, contractor force with the necessary core competencies can outperform an undisciplined horde every day. All research confirms this simple thesis.
  • 4. Poor supervision and organization cause many contractor performance issues. The root of many of the problems can be our own supervision with poor organization or people management skills. The best and worst supervisors have been shown to deliver significantly different productivity outcomes.

Principles

An important role for leaders is to shake people away from their comfort zones. Visible costs do not tell the whole story, and may only be the tip of the iceberg. Other direct and indirect costs also matter, and there may be a large intangible element hidden away. Lowest cost often means lowest visible cost, and that may not be the best way to judge a contract. Value for money is a better selection criteria than price in awarding contracts. Active management of contractors using factual information is essential for good performance.

 
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