Tuesday, May 25, 2010

An Ounce of Prevention

By Joe Molony, Elizabethtown College professor of accounting and senior advisor to the S. Dale High Center


As one who still reads the local papers on a daily basis, I am astounded to see the frequency with which a trusted, loyal employee has been caught stealing hundreds of thousands of dollars from their employers who often are family-owned and operated businesses.

Why does this happen. Are employees just not trustworthy? Well, maybe they are or maybe they aren’t, but even the best of us often succumb to temptation especially when we are most vulnerable and the temptation so easily available.

The point is we owe it to our employees to avoid putting them in potentially compromising situations.

The appropriate cash controls need to be in place. If you haven’t got the right checks and balances in your accounting system, you are inviting that employee to dip into the till should they run into financial difficulties such as unexpected medical expenses, loss of spouse’s employment, or mounting personal debt. Of course, some may be motivated to raise their standard of living with access to easy money. And who can blame them if no one seems to know or care? If you really cared, you would be monitoring the flow of cash.

The saddest part of all is that it isn’t very hard to do. Here are a couple of recommendations for your consideration:

1. Have an accountant perform an annual audit. Just the idea that someone will be checking their work is often sufficient to deter an employee from dishonest acts.

2. Have someone who was not involved with the transaction being paid be the check signer. They should review the documentation and question anything that appears unusual. Involving more than one person in the transaction will require the dishonest employee to gain the cooperation of another employee thereby creating a road block that may also deter them.

These two simple suggestions just might save you enough money to retire early! ( And keep your employees out of jail).

Wednesday, May 19, 2010

You, too, can learn from politicians...

by Mary Beth Matteo, Founding Director of the S. Dale High Center

Nothing like a real life example to bring “bad leadership” into focus. In your view, what mistakes are our politicians currently making?
• Failure to listen

• Failure to think strategically—planning for the long haul

• Refusal to give up some of their power

• Following their agenda, despite criticism, because they know “they’re right”

• Assembling the facts selectively

• Failure to bring constituents together: dividing people instead of unifying them

• Failure to set an example, leading with integrity

Sum & Substance: If you’re like the rest of us—not quite perfect yet—you may have a few of these failing in common with our politicians! Some of these failings, when made by people in the government, seem arrogant and blatant. But these practices are easy to slip into, even when we’re so close to perfect!

Tuesday, May 4, 2010

Quote of the week

“Bo Burlingham reminds us of a vital truth: big does not equal great, and great does not equal big.”
--Jim Collins, coauthor of
Built to Last and author of Good to Great.

Monday, May 3, 2010

Book pic: Small Giants: Companies That Choose to Be Great Instead of Big

The Washington Post writes about Small Giants, “Bo Burlingham’s done for private companies what Jim Collins did for public companies in Good to Great.” Bo Burlingham has succeeded in drawing a blueprint for businesses that choose to be great instead of big.
One of Burlingham’s favorite leadership concepts is called “The Mona Lisa Effect.” In a wonderful story about the ups and downs of Buffalo, New York, an underdog city that was revitalized by a quirky local business, Burlingham asserts that all great companies are rooted in their communities. Their communities shape them, and they shape their communities.
This quality is illusive and hard to define, says Burlingham, who is also the editor of Inc. Magazine, but it’s like the Mona Lisa. If the painting were framed in a different way, hung in a different way and lit in another way, it wouldn’t be the same work of art. Likewise, great businesses flourish in a particular “context” in a particular way. Take them out of the context and they cease to be great.

Walmart or even Whole Foods, according to Burlingham, can’t be great because they’re not rooted in their communities. He cites other companies that are synonymous with their cities, Zingerman’s and Ann Arbor, Anchor Brewing and San Francisco, ECCO and Boise, and O.C. Tanner and Salt Lake City.
This suggests great things about family businesses. Most family firms are deeply rooted in their communities, especially in our region!

Sum and substance: Don’t forget that Bo Burlingham is coming to the Center for Family Business on September 23rd for our Fifteenth-Year Celebration. His Small Giants is about you!

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