Part 2: Why the Ship Sank.

A major reason the ship sank was poor management of resources. It was like pouring water into a basket. Even with the tap flowing abundantly, the basket did not get full. The water sipped through with every cent made. You must manage small resources effectively to grow big, and once you’ve grown big, you must ensure you have systems in place to cut all kinds of waste. This was underestimated in many ways, and it eventually sank the ship.

After close observation, some significant reasons responsible for the fall can be traced back to the following:

1. High Overhead Costs:

Within the company, there were too many leadership roles, with two to three people shadowing the same position but with different titles, in a bid to manage quality. This was not only costly in operations but also left a high margin for error because everyone was somehow responsible, but no one was fully accountable. This created blurred lines, especially when it came to making important decisions and taking full responsibility for them. Additionally, there was an unhealthy reliance on external consultants, who were costly for their perceived experience. While this served as a short-term solution, it was not beneficial for long-term staff development. Some consultants were chosen as project leaders at the expense of staff members who could easily have been nurtured into these roles without incurring major costs for the company beyond appropriate compensation. Although this approach requires patience, its rewards are long-lasting.

By underutilizing staff, the company created a vicious cycle of relying on external consultants to gain the confidence of clients. Money is made, the business is happy, but the staff feels stagnant and eventually leaves. With each new project, the quick solution is to recall the consultant, perpetuating a cycle that increases the project’s overhead cost. To grow and sustain wealth, the principle of spending less than you earn is paramount, and this principle applies to organizations too. Keep overhead costs low, establish clear lines of responsibility, identify your team’s skills, and actively put staff development at the forefront of your business.

2. Repeating the Same Mistakes:

Lessons learned on previous projects must always be considered in future projects. When mistakes happen, no one is happy due to the disappointment, financial impact, or risk they create. A healthy approach to mistakes is to acknowledge, learn, and establish corrective measures to prevent recurrence. A healthy company isn’t averse to mistakes; it views mistakes as opportunities for growth. While there was excellent attention to health and safety-related lessons, operational matters received less focus. As a result, similar mistakes were easily repeated on other projects, increasing costs.

This may have stemmed from the company’s decentralized operations, where knowledge was limited to project members with relevant experience, who often worked remotely at various sites. In some cases, appointing external consultants as project leads may have compounded the problem. Once a project ended, the consultant left with the knowledge and experience gained, without a proper channel to share it within the company. Knowledge must be circulated, and lessons learned should be documented to avoid repeating costly mistakes.

3. Not Using the Right Tools:

To navigate high seas, you need sophisticated engines to withstand turbulent waves. Increased efficiency with minimal error is essential. When managing millions in revenue, relying on customized tools that minimize human error is crucial. Heavy reliance on Excel tables isn’t secure and should have been a top priority to address. Simple mistakes, like an incorrect formula or an omitted cell, can lead to costly errors that only come to light during project closure, impacting shared profits.

4. Less Autonomy for Local Branches:

As a global company, restricting local branches from acting on local knowledge is costly. When branches lack the freedom to act based on local insights, their potential is limited. Branches shouldn’t be micromanaged by those unfamiliar with local dynamics, culture, or practices. A one-size-fits-all solution doesn’t always work. It can be risky, and early evaluations are essential when performance metrics show a negative trend. An uninformed decision can drive a project in the wrong direction or stifle growth, resulting in significant financial losses. Rely on local expertise and help develop local teams’ strengths through collaborative and cost-effective methods. Put aside pride, identify with local teams as colleagues, and foster genuine collaboration to overcome invisible barriers.

5. Not Hiring Leaders Carefully:

Effective leadership is essential for running a successful business, and clear criteria for selecting leaders across the organization are crucial. In some cases, urgency to fill positions led to hiring decisions that overlooked the long-term impact. Some hires did not share the business values or lacked the necessary competencies for leadership. Hire people who believe in your mission. Seek leaders with the right attitude, who are committed to advancing the company, improving processes, and sharing their experience to benefit the organization. Leaders shouldn’t only be numbers-focused; they should understand that the right team, proper tools, and an empowering environment drive results. Leadership selection should consider not only technical skills but also emotional intelligence and cultural awareness, especially in multicultural settings. Poor leadership often drives talent away, creating a toxic workplace. In the end, everything rises and falls on leadership.

The way forward for the various stakeholders will be explained in Part 3.

#ResourceManagement #LeadershipMatters #BusinessLessons #GrowthStrategy #OperationalExcellence #CostEfficiency #LocalExpertise"