Scenarios // The CEO blog

What Was Really Happening

One disguised situation a month, written for chief executives and boards: what it looked like, what was really happening and what fixes it.

Scenarios

No. 01 // MiningThe Restructure That Changed Nothing3 restructures of one reporting line in 4 years. Each was announced as the fix for the last.

What it looked like

A mining group restructured the same reporting line 3 times in 4 years. Each new structure was announced as the fix for the last one. Production decisions kept stalling, and somebody on the board began to doubt the answer they kept being given.

What was really happening

Decision rights were redrawn every time. What people were actually allowed to approve did not move. One approval limit had not changed since before the first restructure, and every stalled decision had passed through it.

The deferred capital decisions and the slow production ramp were modelled at R1.2bn over 2 years. The restructures themselves cost less than that.

What fixes it

Not a fourth structure. The work is to restate who may approve what, at what level, and to give that change one owner and a test anyone could check. Then the board re-scores it until it holds.

The question for your board: which approval limit has not moved since your last restructure?

Disguised. Names, places, dates and exact figures are altered. The mechanism and the order of magnitude are not. Read the case file

No. 02 // BankingAgreed in the Room, Not Funded Outside ItA new core banking system, approved 3 years running and late every year.

What it looked like

A bank approved a new core banking system 3 years running. It was late every year. The executive committee had settled on the view that the supplier was the problem.

What was really happening

The committee approved the programme in full. The budget was set months later by a different team, on a different timetable, treating it as one request among many. Neither side knew the other was working from a different number.

Delay and rework were modelled at US$12m–18m a month. Neither team owned the contradiction, and both were doing their jobs correctly. The money went into the gap between them.

What fixes it

One owner for the gap between approval and funding. Both the committee and the budget team work from a single number, and the board checks the 2 against each other until they match.

The question for your board: what did we approve last year, and how much of it was actually funded?

Disguised. Names, places, dates and exact figures are altered. The mechanism and the order of magnitude are not. Read the case file

No. 03 // EnergyWhen Internal Audit Is Treated as the Police4 years of perfect audits, and a chief risk officer who did not believe them.

What it looked like

A utility passed 4 years of internal audits with perfect marks. The chief risk officer could not point to anything wrong, and did not believe the record.

What was really happening

5 years earlier, a concern raised in public had been answered in public, and badly. The organisation learned that raising a concern costs you something. After that, teams kept problems away from audit instead of solving them with it.

17 issues were downgraded before they reached the executive layer, 3 of them still live, with combined exposure modelled at US$90m. The audits were accurate. They recorded what had been reported, and what was reported had been shaped by one incident.

What fixes it

Separating learning from punishment. Incident reviews are kept apart from performance reviews, and the route for raising a concern gets a stated time to respond.

The question for your board: when did someone last raise a concern early here, and what happened to them?

Disguised. Names, places, dates and exact figures are altered. The mechanism and the order of magnitude are not. Read the case file

Coming in 2027

  • No. 04The Green Dashboard
  • No. 05The AI Decision Nobody Owned
  • No. 06The Succession Everyone Saw Coming

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