Rounding the Bases: Tone at the Top Goes Beyond Fraud Prevention

Posted on Feb 17, 2016

By Pete Miller, CPA, CFE

Tone at the top is a very powerful fraud prevention tool, but it is also one of the most difficult to introduce into an ongoing business. Like many internal controls and cultural elements, the impact of tone at the top stretches far beyond detecting errors and fraud. A solid tone from the top executives can drive more efficient operations, better communication and, in many cases, improved operational results and profitability.

A prime example from the sports world

As the major league baseball season fast approaches, the Seattle Mariners are starting to demonstrate their tone at the top. Speaking as a (long-suffering) fan of the team, I am very hopeful that this tone translates to better communication and improved operating results on the field.

A recent Seattle Times article discusses how the team’s new executive leadership is using a top-down approach to institute new standards that they plan to permeate throughout the organization, from the major league club to the minor league teams, as well as all aspects of scouting.

They aren’t doing this by holding a one-time retreat or issuing a company-wide memo they hope everyone reads. They are very diligently and consistently telling their staff and players that communication and culture are critical and they are backing that up by displaying this behavior themselves. They take every opportunity to both demonstrate this behavior by their own actions and remind everyone the role these two critical components play in the future success of the organization.

As the article points out, “communication and culture won’t be just the words of the day, but the words for every day.” That kind of approach is what it takes to indoctrinate a new philosophy and effect powerful and lasting change.

Consistency is the key

The article illustrates the Mariner’s top-down approach by outlining the team’s new method to hitting. The general manager imparted the organizational approach to hitting to the manager and the hitting coach. They held a hitting summit that included major and minor league baseball players. Those players were instructed to go back to their teams and tell them about how to “command the strike zone.” That consistent, common messaging is a direct result of having a strong culture and is the glue that keeps a successful organization moving forward.

Now, the relatively frequent turnover at the general manager and manager/coaching positions for a professional sports franchise affords the organization with the opportunity to start anew with some regularity. That is not the case for most businesses. Most businesses have consistent leadership but also significant inertia behind their culture and business philosophy.   That doesn’t limit the impact a powerful tone at the top can have, it can just make it harder to introduce something new.

Despite the inherent challenges, the impact can be tremendous and is well worth the investment of time and effort to drive it home. Start by understanding what needs to change. Then make sure your lieutenants buy in and are willing to (1) share that message, and (2) live that message as well. Executives should be prepared to run into resistance. If you do, be ready to coach your team along, but also be ready to make some tough decisions. Your organization’s well-being is worth the tough conversations and tough decisions.

The Seattle Mariners may or may not see immediate success under their new leadership. One thing is for certain though, the organization will be stronger and poised for success as a result of consistent messaging and tone at the top.

© Clark Nuber PS and Focus on Fraud, 2016. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Clark Nuber PS and Focus on Fraud with appropriate and specific direction to the original content.

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This article or blog contains general information only and should not be construed as accounting, business, financial, investment, legal, tax, or other professional advice or services. Before making any decision or taking any action, you should engage a qualified professional advisor.

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