Blowing the Whistle

By Mary Helen Gillespie, 1/12/2004

So here we are, wallowing in a New Year so fresh that you can still see the steam rising above it. The economy is healing, the corporate scandals are abating (truly, can there be anything left?) and with luck, managers will soon be able to replenish dwindled resources with revived hiring campaigns. The go-go years are still gone for awhile but it does appear that there's a tiny sparkle dancing on what has been the cusp of darkness.

One small but crucial facet of this late but welcome gift is the new accountability required of managers. No matter what the size, scope or governance structure of the organization, the stringent demands from all stakeholders is very clear: Do the right thing. No more winking around. No more fudging the numbers. And no more "business as usual" that flaunts, tweaks or tests legal, regulatory or ethical boundaries.

All of which begs the age-old question: Do you really have to blow that whistle? Answer: Yes, and louder than ever before.

Managers juggle many roles, while specializing in a single industry or process. They must master a bit of finance, a dash of HR, a splash of marketing and at the same time ensure that the operations, teams and technology for which they are responsible perform to reach or better yet, exceed goals. Today, there's a crucial additional skill to the management tool kit: Auditor.

The traditional audit, as defined by the Dictionary of Financial Risk Management, involves the systematic examination and evaluation of a company's financial statements and control practices by a firm of accountants and auditors for the purpose of confirming the accuracy of published financial statements. Other published financial statements, such as investment performance reports, are also subject to audit.

But I would argue that the new definition of audit extends to all operations, not just finance, and that management must be able to monitor, control and change organizational culture to reflect this reality. The failure to develop sufficient management accountability, communications and oversight results in the breakdown of tasks and processes that are reflected in lost productivity as well as profitability.

This does not give license to micromanagement, the misguided meddling and useless needling that ensures no good deed goes unpunished. Rather it is a call to action for management to create and communicate reasonable controls to validate the job at hand. These controls trigger early warning signals of inadequate or ineffective performances that must be corrected or mitigated.

Example: A sales executive needs to do much more than ensure that his or her sales force has sufficient inventory of company-branded 2004 calendars to distribute to customers. An audit checklist of sales controls could include:

Equitable procedures for evaluating quotas and performances
Benchmarks of peer or industry best practices along with accurate competitive analysis
Effective, and in some cases, sufficient incentives or bonuses
Customer retention and recruitment models
Clear communications between the sales force and other organizational departments
Optimal functionality of customer satisfaction measurement tools
Adequate resources to support the organization's mission and objectives
Dedicated risk-management support
And, finally, cost-effectiveness analysis. If there's fat on that bone, get rid of it pronto.

Yes, there's much more to this concept than black and white numbers in a spreadsheet. But in order to plan for the unknown, which is part of every manager's role, there must be accepted policies and procedures in place that are monitored closely, and certified as such. Everyone in the organization must accept the control process as a critical success factor, not a barrier to additional profits or opportunities.

Finally, and here's where we get back to the whistle blowing, management must immediately respond to a breach or conflict, whether this means a quiet, offline conversation with an employee or a three-hour presentation to the full board of directors.

So stop tooting your own horn and get ready to wet that whistle. As they say in the diet ads, New Year, New You.