I WAS astounded as my friend almost cried over the phone a couple of weeks ago. She is the head of a trading company in Manila and just discovered that her most trusted assistant had been taking money from the company for the past six or so months. The amount: over P1 million already. And it all happened right under her nose.
My friend is a kind person and trusted her assistant greatly. Whenever she had to go out of the country or out of town, which happens at least once or twice a month, her assistant would oversee the day-to-day operations of the company.
This assistant has been with the company for over two years already and has shown herself to be reliable. She had great administrative skills.
When the bank the company used to do business with merged with a bigger bank, that’s when trouble started. Payroll, which used to be given out through employees’ ATMs, had to be done by check voucher. My busy friend would sign the vouchers presented by her manager. Little did she know that her manager had been padding up the payroll check and pocketing some of the money.
I was sad that this had to happen. But it has happened all too often already. Within the past two years, I know two people, both CEOs of their companies, who also fell victim to this kind of scam done by their very own assistants right under their noses. In one case, the amount added up to P5 million, and the money used by the assistant to buy a parcel of land in the province.
Dr. Henry Cloud, author of the book 9 Things a Leader Must Do, confesses to having faced a similar trial. “An employee of mine had horribly mismanaged the company I owned while concealing from me the mounting debt his failures had cause,” Dr. Cloud writes. When he related the bad news to his business mentor, this man readily admitted to having been there too. His mentor said, “Anyone who builds something gets duped or fooled or surprised at least once. We have all had this experience where we don’t know the next step or how to get out of trouble. But I’m confident that you’ll figure it out. In fact, this is when you are at your best.”
Everyone goes through some sort of failure and mistake in business. The successful leader accepts this and moves on. Dr. Cloud adds: “Déjà vu leaders…are not surprised that they make mistakes; as a result, they can identify with others who do, give to them, and not judge them or wrongly judge themselves.”
So, bad things happen. But we can all learn from them. For starters, make sure internal controls are tight. Next, arm yourself with knowledge. My friend, for instance, is planning to attend the next Accounting for Non Accountants seminar at a university nearby.
October 11th, 2008 at 12:53 pm
very good article. It’s what makes life exciting. When you are young, it is okay to make these kind of mistakes than making them when you are already old and wouldn’t have the time to learn from them.