Here is why you must identify and close revenue leakages

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A leaking container cannot hold water for long. In 1992, my grandfather taught me a leadership lesson, that I never grasped well at the time, until I was of age to relate it to life events that I got to understand. I am sure you too have lessons you grasp, as you grow older. It is normal.

Mzee Ataanansi Komunjara Akiiki was a religious man of integrity. He always said two things i) trust after controls, and ii) a leaking container cannot hold water. One day, he took me on a lesson on why I should always take time to patch up leaks.

He told me that if you keep forgetting what you have been taught, you will not progress. And from him I understood where common sense comes from – good lessons taught and demonstrated that you keep with you for a lifetime. If you are taught table manners, keep that lesson in your permanent memory and apply it whenever circumstances dictate so. When you forget such lessons, you lose. And that is what it means by leaking containers not holding water!

If you concede more goals than you score, you will not win the game. To drive the point home, Mzee Atanansi gave me a cup with a big hole in it, to fetch water from a nearby basin to fill another basic a few meters apart. I would scoop a lot of water in the cup, move with it only to lose most of it along the way. And that is when he made the lesson: if your cup is leaking, it will take you more effort and time to fetch enough water for your needs.

To drive the point home, he gave me another cup without any hole or leakages and asked me to fetch water and fill the other basin. Indeed, the process was swift. I was able to fill up another basin so quickly, as I was not losing any water along the way.

And that made the magic if you want to progress, reduce leakages in any area of your life. Fetching water or not, focus on preventing leakages in your relationships, business, and career, or anything that matters to you.   The more the leaks, the more you keep moving in circles.

When it comes to business, fraud is one of the top business risks that lead to revenue leakages. By far, the biggest risk is where staff steal in small amounts or undertake such activities that lead to loss of value of the business, even without them noticing it. Imagine a staff on your team that only puts in just 40% of the potential 100% effort and time into the business or their work. The company may appear to be growing and things improving. But the pace of change is so slow to make a real impact because some people on the team make it leak. Such productivity leaks make a huge impact on your competitiveness and value creation. More areas of employee leakages include:

  1. Use of company resources for personal ends – for example, a staff using company stationery for their children’s homework. On the surface of it, this is innocent. Yet, if many people do it the company will lose a lot. Imagine a staff buying a ream of paper for use at work. However, in the evening they park it and take it home. Give it to their child for schoolwork! If you have 50 parents doing the same thing in different departments, it could total a lot of money. During cybersecurity hygiene assessments, we often find that many staff spend a lot of their paid productive time updating their social media accounts like Twitter and WhatsApp. If a staff spends over 1 hour a day on their social profile, that represents a huge loss. Assuming the company pays such a staff says Ugx. 1,200,000 monthly, which translates into Ugx. 1,200,000/ (40 hours i.e. 5 working days weekly times 8 work hours); which gives Ugx. 30,000 per hour. If a company has 500 staff, and 80% waste time that way, that is a loss of Ugx. 12,000,000 or US $3,287! Many staff spend far much more time on YouTube, and now on Netflix while on official duty thereby affecting productivity. That is a huge leakage of revenue. The challenge with online time wastage is perversive meaning it affects other areas of the business. If one of the staff is using the company’s local area network Internet and computer to watch the YouTube movies during working hours, they are effectively slowing down the network for the rest of the staff who need fast Internet to deliver services. That means more lost productivity is slowed Internet speeds.
  2. Direct theft of small company assets. Some staff steal the tools they are allocated to use at work, and report that such tools have been stolen or lost! Small tools like punching machines, Hard drives, paper clips, spoons, and forks, etc, or even cups provided for use at work often find their way to the homes of the employees. Innocently, the company just replaces. However, such a practice going on for a long time leads to the loss of huge value. A leaking container cannot hold water for too long. That is why some companies never register tremendous growth despite leadership efforts to win.
  3. And of course, fraud- the intentional misrepresentation of a material fact, to cause a loss to one party and again to another. This involves people abusing their positions of trust.

To win, leaders must fix the leakages. The starting point to assess which part of the business has a hole that needs patching.

A leak is like a car with a flat tyre. However, you want to rev or accelerate and move faster, the car cannot respond because one tyre is down. You must first stop and change the flat tyre with a spare one or branch at a tyre repair station and get it fixed. When you take a flat tyre for repair, the serviceman usually first conducts a thorough assessment of the same, to find the location of the hole or patch that needs fixing.

It is called diagnostic assessment.

As a leader, you must conduct an ongoing independent risk maturity assessment to identify the areas in your business that have holes that need patching. That way, you reduce leakages and set your business on a strong foundation to succeed.

To conduct a fraud risk assessment or cybersecurity risk assessment or enterprise-wide risk maturity assessment, visit and contact us.

Copyright Mustapha B Mugisa Mr. Straegy 2021. All rights reserved.


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