Set the Tone, Don’t Break It

Posted on Nov 19, 2014

By Pete Miller, CPA, CFE

Earlier this year, I attended a workshop where the discussion leader used this music video to demonstrate the power of social media. The more I thought about it, the more I thought it was a terrific demonstration of what not to do when it comes to setting a positive, winning tone at the top.

You may have heard of the “broken guitar” saga undertaken by Dave Carroll and his creative way to resolve his frustrations. The story is worthy of some attention, and his resolution was certainly effective. However, once I finished watching the video and basking in the genius of its creation, I started to wonder what happened to some of the other characters in the play. In case you haven’t heard the story or seen the video (or even if you have), please take the 4:37 to watch the video in the link.

If you’d rather not, here’s the short version. Dave and his bandmates were waiting for a flight to leave Chicago that would take them to their next gig. They saw the airline’s personnel on the tarmac, loading luggage into the belly of the jetliner, which is when all the trouble started. They watched as a guitar case went flying out of the hands of one employee, intended as a pass to another employee, and then crashed onto the tarmac. At that point, Dave was certain that his guitar was broken, and that was unfortunately confirmed when they landed and inspected the contents of the case.

Like most people, he lodged a complaint with the airline and sought restitution. Pretty reasonable under the circumstances. What he encountered was one apathetic employee after another, after another, who gave him endless Catch-22 rationale about why they would not reimburse him for the damaged guitar.

Over 9 months, he continued to make his way up the chain of command until he reached an employee in charge of such things. She continued the refrain and denied his request.

He got sick of it and like most singer-songwriters do, he got out his pen and started writing. Not only did he start writing, but he filmed a video about his quest. He posted it online and it was an overnight viral sensation. What do you think the airline did at that point, with all of this backlash and negative publicity? They called him right up with apologies and a request to use his video for training. They also offered $3,000 compensation, which Carroll asked to be donated to a charity. By that time, Carroll had already spent his own money to fix the original guitar and then been offered a replacement guitar by Bob Taylor, owner of Taylor Guitars.

Quite a story! But how does this relate to tone at the top and to fraud? Consider this – do you think those guys on the tarmac or the various customer service agents learned anything of value from the incident? Most likely not. They might still be mishandling luggage or passing the buck up, down and sideways. Now I am hypothesizing of course, but had executives set the proper tone at the top before this (or any similar) saga started, the millions of viewers of that video would have never heard of this incident (nor the catchy tune that Dave wrote). Had executives seen to it earlier that baggage handlers and customer service agents received proper training, if they had replaced flawed policies and set a tone that misbehavior and poor service would not be tolerated, this event might not have unraveled into the mess it became.

Being aware of the power of a positive tone at the top is critical to the effectiveness of internal controls and fraud prevention. It drives everything. If the folks at the top don’t set proper rules or, worse, don’t follow the rules or policies, nor follow through on errors and mistakes when they are supposed to, then why would/should anyone else in the organization? Believe me, in those cases when the folks at the top aren’t following policies like everyone else, others in the organization are certainly asking why they should have to. It is a slippery slope that is hard to crawl back from.

The week of November 16, 2014, is International Fraud Awareness Week. In that spirit, think about something you or your organization can improve upon when it comes to tone at the top. This is one area of fraud prevention where an ounce of prevention is worth a pound of cure…maybe even a ton!

© Clark Nuber PS and Focus on Fraud, 2014. 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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