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

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, Project Controls, Costs and Waste, Capital Investment

Further Reading



[1] ...

Revision History

First published: Simms, J. (May 2012) as "The Cost Of Capital Mis-Management"

Updated: Chapman, A. (March 2020), Revisions and Corrections