Poor engagement leads to missed
deadline, resignations and damages
In 2006, a Swedish company won a major, multimillion-dollar private contract to design, engineer and install heavy equipment for a marine project. Initial meetings were held with all internal departments involved and an overall project schedule was formulated to meet the build’s demanding completion date. Several managers were assigned responsibilities for each stage of the contract.
The CEO took a “hands off” approach and did not seek regular updates on the project’s progress, instead relying on his managers to handle the situation. Unfortunately, however, design difficulties were encountered after several weeks, which put the engineering department well behind schedule. As a result of poor engagement levels, the various departments did not communicate openly and in the spirit of collaboration about these circumstances, leading to major disputes erupting between the respective managers, and a key team member’s resignation.
At this point the client expressed serious concerns, which prompted the CEO to step in and call a crisis meeting. Bitter recriminations occurred between the departments, and although an emergency plan was prepared, the project deadline was indeed missed.
The company suffered major financial losses, including being served substantial liquidated damages, and the CEO’s resignation was sought by the company’s board.