Fear and Loathing on the Audit Trail

I spend a reasonable amount of time thinking about why management disasters occur and what might have been done to prevent them. Preventing a disaster is much less expensive in every way, especially the human toll, than cleaning up a disaster. When I worked for the supermarket company, We were among the top well managed and profitable and successful companies in our industry. As the Manager of Internal Audit, I was in a perfect position to be able to review and analyze company operations, policies, procedures and culture to try and correlate some of these with our reliable and uninterrupted success. We did not experience disasters. We were never sued by the many shoplifters we apprehended or internal thieves we terminated. The Senior Vice President of Retail Operations was legendary in his reputation for being fearless. He did not suffer fools, but he was not a bully.


Since I left the company, the “old guard” management has retired, and a vice president of government relations for the company was sent to jail for embezzlement and a former vice president of accounting went to jail for 10 years as a result of naughty behavior at completely different company.


A coward dies a thousand deaths, a brave man only one.


I see too many people in positions of management who are afraid. On the one hand, that may seem like an exaggeration, but I don’t think so.


They are afraid to pass along bad news.

They are afraid of missing a deadline or sales target.

They are afraid the stock price might fall.

They are afraid they will not get promoted.

They are afraid they will insult someone.

They are afraid they will offend someone.

They are afraid they will hurt someone’s feelings.

They are afraid they will not be liked.

They are afraid to make a decision.

They’re afraid they’re getting fat and old.

They are afraid their bonus won’t be enough to allow them to cover their personal “nut.” (That’s a term for their fixed costs of living to include loan payments, food, clothing, shelter, vacations, car payments, credit card payments, tuition payments, tax obligations, mistress, travel, restaurants, cable, phone, internet, etc.)

They are afraid they will lose their job.

They are afraid they will lose their house.

They are afraid they will lose their spouse.


Their fear drives them to be ineffectual, indecisive, irresolute, undecided, hesitant, undetermined, weak. Fear is the mind killer.


They are a disaster waiting to happen. The Board of Trustees at Penn State was afraid that the reputation of their football program would be tarnished. Well, too late for that now.


Good, strong, productive and effective companies, organizations, schools and internal audit departments are run by smart people who are not afraid. Major CPA firms are vulnerable to being afraid of losing the client as a revenue source. I think that was a huge factor in the Enron and Arthur Andersen debacle. All CPA firms are vulnerable to this weakness. So I was pleasantly surprised at this…..

While at Blue Cross, the company was struggling to develop a new claims processing system. The project was late and getting later and over budget. There was no good project plan or regular, honest, reliable status reports. The CIO was a strong-willed person and as I was detailing my specific reasons for being concerned at the projects health, told me I had never been a project manager of an IT development project and therefore, had no idea what I was talking about. After running out of options within the company, I took my concerns to the external audit firm, Deloitte and Touche. They examined my data, documents and analysis, and then did their own review. They came to the same conclusion that I had come to and actually issued an interim management letter comment to the Board about the overall risks facing the company due to the troubled project, an unusual event, I think. The CIO didn’t last much longer after that. Sometimes, I actually DO know what I’m talking about.


I don’t know how this translates into direct, productive information that drives success going forward. Perhaps it’s a warning to avoid environments where you sense a culture of fear. Or perhaps it’s a recommendation for self-examination with respect to how fear impacts your work and life. I have never been unable to cover my nut, or lost a spouse, or lost a house. I HAVE experienced all of the other items on my list of things to fear. I have failed in the past. But that taught me not to fear these things. I survived. I’m a better internal auditor for that.


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This entry was posted on July 13, 2012 and is filed under Project Management, Retail Operations, Small Business Advice. Written by: . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.