BUSINESS BEING RUN ON FAITH = BUSINESS ON FAIT ACCOMPLI

Lot of times during past 22 years I have heard the statements from reputed CEOs that we need to have faith in our employees. Well, it is most desirable to have total faith in our employees talent but, it is altogether a different proposition to build a business model around this thought process. My experience indicates that a business model centring on faith, hoping that all employees shall continue to work truthfully, is a perfect recipe for business disaster. By not having adequate controls in business models, we offer opportunities to most honest talent to turn dishonest. Some of the examples are listed below :-

(a) A store Supervisor shared his password with his subordinate cashier in GOOD FAITH to tide over a minor customer issue at that time. Supervisor never changed his password, as he believed that it is with his team member. Later, it was detected that this cashier (to whom supervisor had provided his password) had misused supervisor’s password ("when one person uses other employees' data to avoid detection") and carried out fraudulent refunds causing a huge loss to the store.

(b) Critical sales data of a retailer was fraudulently shared with competition by one employee for monetary consideration. Independent studies show "50 per cent said they had been the victim of data theft in the last 12 months"

(c) Disputed property was hired on behalf of a company by its employees for personal monetary benefits. The issue of such properties went to court, thereby, preventing company from using the premises which it got hired through its own employees.

(d) System data was found fudged by some remote login for the simple reason that the remote login was made possible due to password sharing done on GOOD FAITH. Even former employee can cause such data loss/ manipulation.

(e) It is known world over that employees in retail sector are responsible for causing approximately $ 98.6 billion every year to retailers.

(f) Vendor caused a loss of million of rupees to the company by employing dishonest means.

(g) In one of the investigations it got revealed that some employees joined hands with dishonest transporter and changed superior quality goods with inferior quality goods enroute from one business entity to another.

THE LIST GOES ON (all of above are issues which have been witnessed / investigated personally)

The experience also conclusively proves that had there been adequate controls in the businesses, all the above could have been prevented or atleast, they could have been detected much before they assumed such gigantic proportions.

The issues listed above conclusively prove that a business can only be run in business like manner, based on system of checks incorporated in various business processes. Any business being run on faith is business designed to be doomed.

Indian Army has a very popular saying, "A task which is not checked is a task not done at all." Well, there is a lot of wisdom in the saying.