Curiosity was Framed, Ignorance Killed the Cat

My first job after public accounting was as Director of Internal Audit for a large regional insurance company. Given free range to determine my own assignments, I immediately launched a review of the claims processing operation. As Willie Sutton would say, “That’s where the money is.”

Back then, mainframe computers housed in cold rooms that took up an entire floor were the order of the day. Reports printed on large “green-bar” paper with perforated edges, bound together between heavy cardboard covers using bendable wires.

On my second day on the job, I was flipping through a report of claim payments. It listed basic information like policy and claim number, payee, amount, dates and so forth. The report probably had 50 to 60 claims per page, and was several hundred pages long.

I spotted something strange. About every 15 or 20 pages, a claim would show a negative payment. Based on my understanding of the system, there was no logical explanation for negative numbers. I started asking questions, lots of questions!

To make a long story short, I had stumbled across an internal control weakness that allowed certain claims to be paid twice. As best I can recall, I found about $125,000 of duplicates. That was not a lot of money to a billion dollar company, even in 1978 dollars. Still, with an annual salary of $22,000, I cost-justified my first five years’ compensation the second day on the job.

My point in recalling this story is not to take you with me on a boring stroll down memory lane. OK, that is part of it, but a very small part.

My point is that other people who had worked with the claim report every day had undoubtedly noticed negative amounts before, yet had failed to follow through with a few simple questions. If they had, they might have closed the control weakness years earlier. Why?

I offer two words: human nature.

People seem to have a natural tendency to accept most things as they are. Asking questions and challenging the status quo is actually considered rude in many cultures. Sadly, it is career limiting in many corporate environments. Relax and remember what happen to the mythical cat! I heard it was a mid-level manager in a Fortune 500 company somewhere on the east coast.

That is not to suggest people are by nature lazy, apathetic or any other negative adjective. It’s just how things are.

Contrast that to Thomas Edison, who said he rarely picked up an object without wondering how he could make it better. I call that the curiosity factor. Either you have the curiosity factor, or you don’t. It cannot be taught or learned, and is seldom spoken of. Yet in many professions (including internal auditing), it is probably the single best predictor of ultimate success.

Every business desperately needs someone who will leap headfirst into operations or finances with a dedication approaching a Pit bull on a pork chop. If that is not you, go hire someone with the curiosity factor.

You will be amazed at what valuable business opportunities are waiting to be discovered just below the surface.

 

© 2011 by Dale R. Schmeltzle

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Comments

  1. I blame the Dept of Education for making schools stifle creative thinking and inquisitive thought. After all this is where we learn to ask “Why?” and then try to move beyond the typical corporate response of “We’ve always done it that way.” It is also important to thank those who show us an issue that may be causing grief, be it a loyal employee or a valued customer.

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