Yes! This blog post carries spoilers and recipes …………. for disaster!
Ever wondered what the single most fundamental and perfect strategy of dooming a business is? Not having one! Yes, it is INACTION! When the executives / management sleep over everything vital they come across and decide to sleep some more; you’ve what is called Inaction.
It’s not that they don’t know about those vital issues, or they have not discussed it or even better not planned for it, but they don’t put all their talk to walk. They make themselves believe they fully understand what action they need to take and the implications of those actions, but they don’t understand what the implications of their inaction are.
And since actions do not see the light of the day, these executives never get the chance to improve upon their skillset; they don’t see their plan in action and thus don’t understand how to deal with the implications they foresaw and those they never saw. Resultingly; they’re incapable, incompetent and inexperienced.
The issues thus that need attention become fodder for a plethora of meetings where it is decided to well, sleep over! To these executives it is well understood that their worth is gauged by how impressive they were at the meetings not on the ground!
Let’s now look at the blueprint of disaster; you might not see all these that make up the blueprint if you are only somewhat lucky! SPOILER ALERT! What you’re going to read next, is for the chicken hearted, because others act!
Result # 1 Business fading out!
| The imbecile arguments | Based on |
| We’re the biggest and best, the market can’t survive without us | The current size and contribution of the Business to the market is good |
| We’re integral for the industry | The current strengths the business enjoys |
| Revenues and profitability are contractual, why worry? | In a sector where no market forces exist |
| This market is good, why think of another? | Current market knowledge is good, and Business is doing well |
| Why research or invest in an improved product / service offering? | The product / service is well received and reaping benefits |
| Why invest in market trends or customer consumption pattern research? | Our offering remains the most sought after |
The executives in this case exhibit smugness and lack of foresight. Resultantly they cannot sustain the business let alone make growth moves.
Result # 2 Unethcial practices!
| The imbecile arguments | Based on |
| No malpractice reported | Ensuring none is reported or those reported are killed by committees |
| No significant issues identified by auditors | Downplaying all findings on their symptoms rather than causation |
| Faking records is not a big offence | No significant financial losses |
| Right now, more important things on agenda, action on code of conduct violations can wait | Rhetorical perspective on the code of conduct, integrity violations aren’t serious, work optics are |
| Can’t find a resource better than the one that is, even if unethical | Expediency, cost of unethical practices is not understood |
The executives here clearly value work practices, even if these are unethical and take a myopic view of the significance of ethics and integrity.
Result # 3 Failing operations!
| The imbecile arguments | Based on |
| Controls only work well with exceptions | Some exceptions need to be there while others could go into the system |
| Getting the task done is more important than controls | Task accomplishment does not need controls to function |
| Trusted colleagues’ supervision is important than unbiased controls | Having the human intervention is better than having a system |
| Have lots of important work to do than exercise controls | Resources are overburdened if tasked to perform controls |
| Exercising controls will divert focus from the core tasks | Controls and tasks are different |
| Sometimes lack of controls allows growth | Opportunities are wasted owing to controls emphasis |
The executives making these arguments exhibit sheer lack of understanding on internal controls and their significance in pursuit of operational excellence and sustainable processes.
Result # 4 Doom-sized organization!
| The imbecile arguments | Based on |
| Good to employ more people, giving more opportunities in market | The entity will earn a good name for being always on the lookout for talent |
| More people mean better controls | Overall effectiveness will improve as more people will be responsible |
| Greater number of people allows a better structure | Allows greater promotion opportunities and a well-structured entity |
| Rightsizing works best with a target financial number | Finance is the bottom-line so all decisions should begin there as well |
| The correct approach to rightsizing is asking the colleagues on their choice of individuals | The manager knows about the team so its best to ask and act accordingly |
These executives do not have any rational process and system understanding, they can’t map resources to their requirements since they are not aware of their precise requirements. Resultantly such an entity has a lot of fat and slack. It is doom-sized waiting for its doomsday.
As for my Internal Audit brethren, they can work in such entities for the purposes of acquiring experience, bad primarily. They are good for finding faults, but don’t expect to find interest for improvements or sustenance!