Trust But Verify. . . .


Trust But Verify

Every day, there are lawyers who find themselves in trouble due to theft or embezzlement by a trusted employee who they felt could be trusted with the keys to their vault. But not so. . . .

Years ago, as a sales rep who was responsible for a five state area of farm tractor dealers, many of my dealers had large parts departments. Tractors and accompanying implements are made of thousands of parts.  In my experience farm equipment dealers were used to doing things in a certain way and often set in those ways. Many of them were located in dusty backroads where farm fields were frequently cultivated right up to the gravel bed of those roads. Most of the dealers for large farm equipment were used to farmers coming into their dealership with the expectation that the parts that they needed would be in that dealer’s inventory. So, the dealers carried very large parts inventories that increased in volume with each passing year to service the new models of tractors and implements that continued to be produced. And their parts departments were supervised by their parts managers.

My sales manager explained how those parts managers enhanced their job security. Many of the parts managers seemed to be the most difficult, burdensome, demanding, and exhausting employees in the dealerships to me. Many of them were irreplaceable because they often “held the keys to the kingdom”. They knew where every part was located in any of the thousands of parts bins located in those dealerships – and they were the only ones who possessed that knowledge! Today, with computers and barcodes, it is possible to code every little part in a way that it can be easily located and inventoried by anyone in the dealership. But in the early seventies, inventories were often kept on 3×5 cards or rolodexes, but even more often, parts were categorized and sorted by brand and function and that information was committed to memory by the parts manager alone.

The reason why many of those parts managers didn’t need to have the tact or interpersonal skills that the sales associates had was that they were secure in their positions. They knew that, if they were discharged, the owner would have a very difficult, if not impossible job of locating all the parts in all the bins. And, if you were unable to find them, that entire inventory would have little or no value to the owner.

Do you have someone in your organization who has “the keys to the kingdom”? Are there individuals in your organization who possess knowledge that is not shared by anyone else? IT departments are full of specialists who have been instrumental in creating systems or programs which have custom modifications which will require costly intervention by experts or a complete change of software to function. Do you have someone in the office who oversees the accounts and also writes the checks? Do they have that authority because you are “not a numbers person” and they are “scrupulous” in their attention to detail and have always been trustworthy in the past? And she has worked for you for many years without a hint of trouble.

The IRS calls to tell you that you have failed to pay your estimated tax payments for the last year but you have been told that those payments were made by your “trusted” employee. In fact, she even had you sign the paperwork attendant to those filings. How could you be so stupid? The truth is that you are not the first, nor the last person to be swindled. Always make sure that the person who does the accounting is not the person who is authorized to write the checks. Always have redundant systems and individuals in critical positions of authority sharing the special information that they were empowered to hold. Always be alert to the “parts manager hostage taker” in your organization. And never let your guard down especially toward those that you feel are most trustworthy.

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