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Picking Up the Pieces

January 1, 2013

The employee would not explain what the second position was and why there would be no conflict with his Siemens work. Therefore, the manager's refusal was entirely appropriate. He had exercised his due diligence, but he still felt unwilling to make the call without an approval from the audit department. But while a desire to consult is undoubtedly part of a strong control culture, a fear of taking the decision after having done one's own due diligence is a warning sign that paper compliance is on the rise and people are overly concerned with "checking all the boxes." When management sees this happening, it is time to rethink the messages the company is sending and possibly even to revisit its reward systems.

Lesson 5: Invest in quality.

If lasting change is what you need, make sure you find people who have traveled down this road before and know what they are doing, and do not under any circumstances sacrifice quality for speed. It is great to show the board that you have moved ahead and fully staffed a new compliance department within the first month, but if these personnel turn out to be reconditioned junior staff who can follow a process but not add insight, then it is a false gain. Better to lean on an outside expert for a while longer to make up the numbers while you keep looking for quality. High-quality people who can add value will want to advance their careers, so when hiring, make sure you can credibly offer this opportunity. Of all the things we did at Siemens, this was the most challenging, the most fun, and ultimately the most crucial to rebuilding the company.

Anthony O'Reilly spent four years as the Partner for Quality in the Corporate Finance Audit division at Siemens AG in Germany, rebuilding the company's corporate audit group following the bribery allegations and settlement in 2008. Prior to this he was a partner at PricewaterhouseCoopers.

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