Ineffective Owner’s Team Structure

By Kenny MacEwen

The success of any mining project relies heavily on the effective coordination and management of its many moving parts. However, an ineffective owner’s team structure is one of the most overlooked factors that can significantly hinder project progress. Whether too lean or misaligned, these structural flaws can act as bottlenecks, stalling progress and leading to substantial delays and cost overruns. This issue is far more common than many realize, with industry studies revealing that inefficient team structures contribute to over 40% of project delays in the mining sector.

The Problem with Lean Team Structures

Lean team structures are often the result of cost-cutting measures or attempts to streamline operations. However, when a team is too small, it can struggle to manage the wide range of tasks required to keep a mining project on track. According to recent data from the International Council on Mining and Metals (ICMM), 40% of mining projects experience delays due to understaffed owner’s teams. These teams are often spread too thin, leading to critical oversight failures and slower decision-making processes.

In a lean team, the workload can quickly become overwhelming, resulting in missed deadlines and incomplete tasks. Specialized areas such as risk management, environmental compliance, and safety protocols may not receive the required attention, further compounding the issues. Over time, the inefficiencies caused by an understaffed team can lead to significant project delays and increased costs, jeopardizing the project’s overall success.

The Consequences of Misaligned Team Structures

Misaligned team structures, where roles and responsibilities are unclear or poorly distributed, can be just as detrimental as lean structures. The ICMM study also found that 35% of mining projects are delayed due to misalignment within the owner’s team. Misalignment can manifest in several ways, including unclear reporting lines, conflicting departmental priorities, and a lack of cohesion between the owner’s team and external contractors.

When a team is misaligned, communication breaks down, leading to duplicated efforts, missed opportunities, and poor decision-making. This lack of clarity can cause significant delays, as critical decisions are postponed or revisited multiple times. Furthermore, misaligned teams are more prone to conflicts and misunderstandings, further slowing progress and leading to costly mistakes.

The Real-World Impact

The financial and operational impacts of ineffective owner’s team structures are substantial. A report by McKinsey & Company highlighted that mining projects with well-structured owner’s teams are 30% more likely to be completed on time and within budget. In contrast, projects with lean or misaligned teams are three times more likely to experience cost overruns, with the average overrun reaching $1 billion.

Additionally, the Mining Industry Human Resources Council (MIHRC) has found that inefficiencies within owner’s teams can lead to a 25% decrease in productivity, resulting in six months or more project delays. These delays increase costs and lead to missed opportunities in the market, as the timing of a project’s completion is often critical to its financial success.

Ineffective owner-team structures, whether too lean or misaligned, are a critical risk factor that can undermine a project’s success. The financial impact is not limited to the immediate costs of delays and overruns; it can also affect a company’s long-term profitability, reputation, and ability to secure future projects.