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Monday, 27 October 2014

Danger - White Collar Fraud Ahead...

...how Fraud shows up in all shapes and sizes...

I remember being given a principle of Management to research when I was doing my Post Graduate studies at what is now the University of Central England...
The concept I was given was;
"White Collar Fraud..."
The concept was first defined in 1939 by Edwin Sutherland and defined as a crime committed by a person of reputation in the course of his or her profession...
While the obvious things such as nicking a few pens and paperclips were included, there were a few other bigger issues that became apparent.
Doing what I do working with Entrepreneurs, Executives and their Teams, there are a few situations that crop up from time to time that should be looked out for and quashed at the first opportunity...

Fraud of Time

If anyone is spending time that should be spent doing their job, then this is a fraud. This includes more than just playing on Face Book, it includes being late, absent without permission, being "lost in transit", taking extended lunches and leaving early.
A Manager of a company was supposed to be in Manchester with the team for a 09.00 meeting. AT 09.30 one of the team 'phoned and asked where she was - turns out that she went to see her Mother on the way and didn't think anyone would notice.
It is not the actual time that is the Fraud; it's the opportunity cost to the company of the lost time that should have been expended in pursuit of Sales, Profit and cash...

Fraud of Expenses

Of course, some expenses are allowed, but others are not. Taking friends and family out for dinner when they are not associated with the business, eating and drinking at top restaurants when a sandwich would suffice.
Before you give company credit cards and expense account until you know that they will treat the money not as their own but as YOURS; much more important...
Then of course, there are the personal expenses that are made into business ones; financial advice, holiday travel and insurance for example.
Inflated, unnecessary expenses can be easily monitored, but is not the Money, it's the attitude that will show up elsewhere that is most damaging.

Fraud of Attitude

If someone is employed and they are not happy in their job, or they moan and complain about the business, the people and the customers, then taking a salary is fraud too...
I hear CEO's and Directors moaning about their jobs, bosses and salary; I simply say to them - "if it is that bad, I'm surprised you don't leave and let someone else have a go..."
People have the opportunity to be successful wherever they work, sometimes they need to be encouraged to successful somewhere else...
This is a tough one, but if you compare the performance of a motivated and engaged employee with one that is moaning and negative, then the decision is easy to see. It's not just their performance in the business that is a worry, it's their attitude and behavior outside that is of equal concern...

Fraud of Behaviour...

Entering into "dodgy" agreements, not providing excellent customer service and damaging your brand and reputation are really expensive.
Your reputation is all you have, and a member of the team can destroy it in an instant if you are not careful.
The "rules of the game" need to be clearly laid out for everyone, including the standards of performance with relation to how customers, team members and the public are to be treated..
Not behaving according to the standards expected is Fraud on a grand scale and can be hugely expensive in terms of moral, client relationships, sales and profits..

Fraud of Integrity

Trust is paramount in just about any business. If an employee cannot be trusted then they are toxic to the organisation and their salary or wage is the least of your concerns.
Talking with competitors, not keeping promises and office gossip and bullying are all examples of this type of fraud.
I remember as a young Technical Manager in Dudley, I saw one of the Salesman's cars parked in the car-park of our biggest competitor. I reported this to the Managing Director who fired him on the spot when he arrived at the office.
As he walked out of the office he looked at me and said..
"I thought you were a mate..."
I was his mate but his actions threatened my job and those of others in the company; my loyalty to my employer was greater than my friendship with him...
Remember - you hire people on their Experience and Background - but you fire them on their Attitude...

Is it time to call time on all aspects of Fraud in your company..?

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