---
title: The Cost Of Capital Mis-Management
description: "Here are \"28 ways to lose $1 million a day”, lose value and destroy capital — check how many are in your organization"
---
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# The Cost Of Capital Mis-Management
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Last updated: April 3, 2020
Here are "28 ways to lose $1 million a day”, lose value and destroy capital — check how many are in your organization
---
# “28 ways to lose $1 million a day”
**Do you know any more?**
In our book THE CAPITAL CRIME we reveal that the average loss or wastage on capital investments can be computed as $1000 per working day for every $1 million per annum invested.
So, for a company that invests $100 million pa, that is $100,000 loss/wastage a day; and for those investing $1 billion a year, that is $1 million a day loss.
Executives’ reaction to this figure – which works out as about a 25% capital loss/wastage figure pa – is incredulous.
**But it is true.**
Here is a list of 28 ways costs are consistently increased over the optimum cost and the optimum value is consistently missed, lost or destroyed within and across projects, programs and portfolios – and ongoing operations.
The cumulative ‘cost’ of these 28 value loss drivers is *at least* $1000 per day per million pa invested. All of these ‘Value Loss Drivers’ are avoidable. Indeed, each Driver is addressed by one or more of the TOP Programs. It is precisely because TOP is specifically designed to address each of these Value Loss Drivers that it dramatically increases the business value, results and returns delivered – every time.
Do you have any more drivers?
Also, notice how few of these Drivers are directly addressed by current, orthodox project management tools and techniques.
#### **The 28 Value Loss Drivers**
1. Over estimation of workload (and, therefore, of the necessary time and costs)
2. Over priced resources
3. Poor on-project productivity
4. Poor individual productivity
5. Unnecessary project rework
6. Overly complex solution developed/implemented
7. Vague/ambiguous/no specification
8. Not delivering to the agreed specification
9. Adaptation of a wrong/ inappropriate solution
10. Adaptation to a wrong/ inappropriate solution
11. Scope reductions
12. Ineffective implementation
13. Missed benefits
14. Non-realized benefits
15. Non-sustained benefits
16. Delayed benefits realization
17. Forced realization of no longer available benefits
18. Realization of non-economic benefits
19. Funding of projects with duplicated benefits
20. Continuing to fund failing/ unviable/no longer relevant projects
21. Funding non-strategic/ strategically irrelevant/ unnecessary projects
22. Unnecessary extra project workload due to projects being done in the wrong order
23. Unnecessary extra project workload due to the same tasks being done in multiple projects
24. Funding of duplicative projects
25. Funding of conflicting projects
26. Missed alternative opportunities not funded
27. Missed future opportunities unable to be realized
28. The costs of cancelled projects
We have seen all of these causes in organizations — and they are not diminishing.
A full explanation of each Value Loss Driver plus how one or more TOP Programs address each one is on our new website www.TheCapitalCrime.com.
NB The standard ‘over time/over budget’ losses are not included as they are the results/symptoms of one or more of the above Drivers.
### Do a quick check — how many can you find in your organization?
Topics: [Strategy Execution](https://blog.totallyoptimizedprojects.com/top-thinking/topic/strategy-execution), [Project Controls](https://blog.totallyoptimizedprojects.com/top-thinking/topic/project-controls), [Costs and Waste](https://blog.totallyoptimizedprojects.com/top-thinking/topic/costs-and-waste), [Capital Investment](https://blog.totallyoptimizedprojects.com/top-thinking/topic/capital-investment)
### Further Reading
#### Footnotes
[1] ...
---
###### Revision History
First published: [](https://hubspot-cta-redirect-ap1-prod.s3.amazonaws.com/cta/redirect/467424/2854883b-1600-46fc-9eaf-1e12fb465102) (May 2012) as "The Cost Of Capital Mis-Management"
Updated: [](https://hubspot-cta-redirect-ap1-prod.s3.amazonaws.com/cta/redirect/467424/0cd0ed44-5c71-45ed-895d-2b8bc841e12b) (March 2020), Revisions and Corrections
### TOPics
- [Benefits Management (29)](https://blog.totallyoptimizedprojects.com/top-thinking/topic/benefits-management)
- [Business Case (24)](https://blog.totallyoptimizedprojects.com/top-thinking/topic/business-case)
- [Business Simplification (5)](https://blog.totallyoptimizedprojects.com/top-thinking/topic/business-simplification)
- [Capability Development (38)](https://blog.totallyoptimizedprojects.com/top-thinking/topic/capability-development)
- [Capital Investment (24)](https://blog.totallyoptimizedprojects.com/top-thinking/topic/capital-investment)
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