One Rule for Owners, Another for Employees

Bill Lee

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As a child growing up and hanging out at my father's business, I remember that we had a gasoline tank on our property to refuel our delivery vehicles. My dad, his partners and their family members gave themselves the privilege of refueling their personal automobiles at the “company gas pump. " We abided by a strict rule, however. Immediately following the refueling process, the family member was to walk directly to a log book and jot down the quantity of gasoline he had just pumped into a personal vehicle.

My dad knew that if employees saw owners taking advantage of the system; that is, pumping gasoline in a personal vehicle and failing to pay for it, that employees would feel as they were entitled to the same privilege.

Then later in my career, when I was employed by a large corporation, we employed a former FBI agent; his name was Tom Dyer. Dyer was a world-class security expert who provided security services to our customers who had perhaps experienced an inventory shortfall they couldn't explain or some other type of internal theft. It was Dyer's job to find the culprit.

Dyer was a master interviewer. It was always amazing to me how quickly and effectively he could persuade the guilty party to confess his or her dishonesty.

On numerous occasions Dyer would tell me that employees who had just confessed would make statements like these as their excuse for stealing:

"Yeah, I stole gas for my personal car, but why shouldn't I? I must have seen the owner's son do it a hundred times. "

"Yes, I took material out of stock and delivered it to my personal home. But why shouldn't I? I know for a fact that the owner built his entire house out of company inventory he never paid for. How do I know? He used to brag about it. "

"Yes, I put cash in my pocket and not in the cash register. Why did I do it? Well, I'll tell you. First of all, I haven't had a raise in two years, so I figured the company owed me a lot more than I took. But I'll tell you another thing, on several occasions when the owner would take a business trip to Las Vegas, I've seen him clean out the cash drawer and use company money to gamble with. "

Rule: If owners and managers expect to prevent employee theft, they must understand human nature well enough to realize that employees will justify stealing when they see owners or managers stealing. It's something like, “If he can do it and get away with it, why shouldn't I?"

These examples are intended to emphasize to owners and managers that they should not be surprised if their own behavior is modeled by observant employees. So I encourage management to take the following precautions:

When an owner or manager takes material home from a retail business, make it crystal clear that the material was properly invoiced.

When a member of the management team uses, say, a company credit card on a business trip, make it obvious to administration workers that any personal expenses are reimbursed with a personal check accompanied by an expense report.

Put yourself through Dr. Norman Vincent Peale's “ethics check" with everything you do and with every decision you make. Here are the simple questions you must ask yourself to keep yourself from using the power of your position to engage in or authorize unethical conduct:

  • Is it legal?

  • Would I be embarrassed if what I am about to do was published in the local newspaper?

  • Would I be embarrassed if my spouse knew that I was engaging in this activity?

  • Would I be embarrassed if what I was doing was posted in the company bulletin board?

    It's a good rule to assume that everything you do will be found out by someone in your company. There are just too many eyes and ears, too many checks and balances to think differently. So my experience has taught me to walk the straight and narrow when it comes to making business decisions. Don't give your people the excuse some of them may be looking for to justify dishonesty.

    Bill Lee is author of Gross Margin: 26 Factors Affecting Your Bottom Line ($21.95) and 30 Ways Managers Shoot Themselves in the Foot ($21.95) Plus $6 S&H for the first book and $1 S&H for each additional book. To order, See Shopping Cart at

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