Barking Up the Wrong Tree

‘Wirecard collapses into insolvency.’

This was the headline of the Financial Times some time ago. Wirecard is a large fin-tech company, which seems to have committed a 2 billion dollar financial fraud, right under the watchful eyes of government officials and external auditors.

We have seen this movie before, and the next phase in this drama is predictable: Similar to the recent scandals with Worldcom, Enron and Bernie Madoff, investigators will find that the root cause of the Wirecard collapse is a culture of greed and hubris, which could thrive because of improper controls. No doubt, additional regulations will be proposed to improve control and prevent future scandals such at these. This seems effective, until we hit the next big case of fraud, and this predictable drama starts all over again.

What we’re facing here is an example of barking up the wrong tree: We try to solve issues at the same level where the impact of the issues are visible. In this case, we are trying to fix a behavioral issue by adding more systems for command and control. 

You may recognize this in your organization as well: Think of the last time there was a serious safety, security, or legal issue. The solution probably involved additional checks, procedures, or systems. An easy fix, but unfortunately ineffective. Real change only comes from changing the organizational culture.

The right approach is to define new behavioral standards and take ownership of role-modeling these standards. This takes courage. 

What will you do next time someone hides behind a process solution to fix a behavioral issue?  

Photo Credit: iStockPhoto/diego_cervo

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