Doing Your Homework
“All of us, at certain moments of our lives, need to take advice and to receive help from other people”
How often in your work or business life have you not done your homework and put yourself under unnecessary pressure?
I can remember an incident very clearly where I thought I could prepare a capital expenditure application for an environmental washing plant at a concrete plant located in regional Victoria, whilst sitting in my office in Melbourne. There had been great reluctance from head office to fix the environmental problem of disposing of concrete waste as it was costly. Nothing surprising about that! I gathered ‘letters of protest’ from neighbours, one of whom was an employee who lived behind the plant. Upon touring the area with my General Manager several weeks later, he brought out the application and stood near where I had said the washing plant was to be located and started asking questions. This was a very trying time as the document explained where the waste water was running – and it was up hill! Obviously not immediately obvious from my office in Melbourne!
I learnt two valuable lessons:
• do your homework
• there is no substitute for physically being on site
However, even the largest companies fail to do their homework. Several years ago Rio Tinto, a major international mining company was forced to write down $3B because their plan to barge coal down the Zambezi River was not physically possible and required government approval to dredge the river. Perhaps they could have learnt from history – David Livingston the famous African missionary and explorer was unable to navigate up the Zambezi in a small craft due to the Cahora Bassa rapids which he had not investigated previously. The Rio Tinto Managing Director lost his job primarily over this debacle.
Years later in our logistics business we had to convert a casual warehouse lease to a more formal non-casual lease. We were nervous that our landlord would want both a long term commitment and an increase in rent. The previous week our warehouse manager advised us that the owner had been on site several times over the past month with ‘unknown’ persons in suits and that there had been some cosmetic tidying up and painting on external parts of the building.
I did some more homework and discovered that the landlord was seeking to sell the property and he needed a permanent lease to interest a possible purchaser. This information changed the dynamics of the negotiations and we were able to negotiate a less than market rent, shorter fixed terms and lower annual increases and the owner was delighted – a real win/win.
Remember there is no substitute for doing your homework thoroughly……..