The Family Employee Problem

Everyone knows. Nobody says.

01
Situation
A relative of the founder manages stock. Stock counts do not match, and staff are reluctant to raise it.
02
Evidence
- Stock variances every month
- No independent count
- Informal authority over purchasing
- Staff avoid the topic
03
The decision
Protect the relationship, or apply the same controls to everyone?
04
Analysis
The problem is a control gap that relationships made undiscussable. Separation of duties removes the need to accuse anyone.
05
Framework
Segregation of duties: whoever orders does not receive or count.
06
Resolution
Purchasing, receiving and counting are separated for everyone, with monthly independent counts.
07
Founder exercise
Apply it to your own business:
- List who orders, receives and counts in your business
- Find where one person does two of these
- Design the split

Situation