Good audit trail = job security

People often fear a process or system that enforces compliance and creates a transparent audit trail. Some fear it because they might be corrupt – others because they don’t want to be held accountable for any errors that occur. The first group have good reason and we hold no sympathy for them. The second group however don’t realise that it if they do their job correctly, it actually protects them as it also holds others involved in the process accountable and can prove their innocence in situations gone wrong.

Take the example of a project manager who managed for a very large project for multiple complex pieces of equipment. At the end of the tendering process he recommended the entire job be given to a reliable supplier that the company had dealt with for many years. In his report he clearly documented the reasons for his recommendation. However the CEO overrode his recommendations and awarded half of the job to a new unproven vendor – a company loosely affiliated to his company.

Two years later the reliable supplier had delivered his half of the job on time and in budget, whereas the new vendor had not completed even a third of his contract. A meeting was held to discuss a solution as the equipment was now overdue and losses were being incurred. The project manager was called in by senior management and he recommended (and clearly documented) that the cancellation clause be invoked in the contract of the non-performing vendor and that the remainder of the job be given to the good vendor. Again management over-rode his recommendation and without invoking the cancellation option, contracted the good vendor to complete the job.

A short while later the non-performing vendor sued the company for losses and for handing the job over to the other vendor. As the company had never formally invoked the cancellation clause, the non-performing vendor won the court case and was awarded millions in damages. This resulted in a cost overrun of more than 40% for the total project.

Of course at this point everyone was looking for a scape goat. The project manager was called in and asked why everything had turned into such a mess. As he was the project manager, everyone was ready to blame him. He quietly produced the documented evidence showing his recommendations and the responses during the process and of course it became clear that his recommendations were ignored by senior management. This of course saved his well protected behind from being fired. The CEO who overrode his recommendations was not that fortunate.

The moral of the story – document, document, document everything you do. A good audit trail can save your job when everyone is running around assigning blame.

A consultant once taught a class promoting the following principles:

  1. If you want to test the waters on an idea that might not be that smart or may be controversial, do it informally and be cautious in documenting it, as it can come back and bite you in the rear (“if he had such a stupid idea, how many others things has he messed up”.., and
  2. Document every decision and discussion so that you have proof should something go wrong.

Wise advice to live by.