2840868MBWA, “the one minute manager,” BPM for dummies, TQM, “open door” policy, EIEIO, ad nauseam.

Chances are you have heard them all.  Do this, do that, hire this way, read this book, do this exercise, attend this conference, join this group, activate this new fad, network-or-die, participate in various peer groups, roundtables…and on, and on, and on.

When I lead discussions, particularly on campuses, talking about: fraud prevention and detection, or ethics, or operations, or management techniques, or best actions-to-take, I use this example:

By the time you get your degree(s), certifications, advanced degrees, and become successful in your initial jobs, you have spent a great deal of time understanding accounting, debits and credits, how to record transactions, how systems work, financial reporting, regulations and so on.  Finance and accounting people spend a great deal of disciplined time learning how all of these things work, and we can quote rules and regulations, the FASBs, the latest forecast, last month’s variance analyses, MD&A, or whatever.

Now…if we could take that same disciplined approach that was successful for us (or imposed upon us) to learn how all of those accounting, finance, systems and inter-connections worked…and go learn the business we are in…we would be downright dangerous!

One thing we need to remember is that as we achieve success, and gain experience, we are business people.  We evaluate, then provide value; we are skeptical, we analyze, then we act.  Said another way, we end up using the scientific method, in many ways and instances: (from www.sciencebuddies.org), we:

  • Ask a Question
  • Do Background Research
  • Construct a Hypothesis
  • Test Your Hypothesis by Doing an Experiment
  • Analyze Your Data and Draw a Conclusion
  • Communicate Your Results

My point is this…at least with fraud detection…we know that TIPS is the best source for uncovering fraud, from an employee, a customer, a vendor, even via “anonymous.”  The reason TIPS is the best source for uncovering fraud is because that group knows the business processes the best.  It’s NOT the auditors (internal, external, governmental), and it’s not internal controls, or “by accident,” or any of the other “methods.”  It’s proven to be the business process experts IN YOUR COMPANY, realm of influence, business relationships.

However, to milk that source, you just gotta go talk to them.  So, get out of your office, go meet with them, ask them questions, seek ideas, recommendations…but listen too.  You’ll hear a lot, and some of it will be marginally helpful.  But here’s the other advantage…now that they know YOU, and know that you will listen…when they see something that doesn’t seem to fit, they’ll give you a call.  And that may be the call that triggers the steps of your scientific method, initiates a review, saves money, creates efficiency, helps a relationship, finds fraud…all because…

…you got out of your office.