Management investigations strike at the heart of any organization. When an owner or CEO thinks one of his managers has done something wrong, it may hurt deeply. It may feel like a betrayal by a person who was given important authority.
But bad behavior by managers must be understood and dealt with quickly. Such behavior may not only cost the organization money, it may cost the owner or CEO his or her own job. When not dealt with for a long time, it may even subject the owner or CEO to criminal liability. In most cases you may have to go outside for the particular skills needed for an effective investigation.
When beginning a management investigation, remember to set clear objectives for the investigation, and to preserve every record and detail. Preserve all the paper trails, reports, phone records, emails and correspondence of any person possibly involved. Written records of every relevant relationship may also be invaluable. This is incredibly time consuming, but success may hang on discovering a single document.
As you plan your investigation, ask yourself “What will I do with the information that I develop ?” Because criminal prosecution is becoming increasingly rare, you should have a clear goal for the use of the information, before you look into anything.
Every prudent business owner and business leader should maintain a written list of the most serious management risks that they face, and they should prioritize these risks. The list of risks will vary according to the type of business and the kinds of managers employed. The owner or CEO should regularly review the risks to see if any have changed. Preventive investigations are almost always less expensive than after-the-loss investigations.
When you are satisfied that something has gone wrong, or that a crime has been committed, it then becomes your duty and/or obligation to complete an intelligent investigation. In certain cases, you may ask an outside agency or resource to complete the investigation for you, especially if you have any kind of relationship (business or personal) with the manager in question. Management investigators should be licensed.
You should first develop a careful list of written considerations related to the management investigation. These considerations should be prioritized according to your judgment and experience. The manager’s privacy and employment rights are often the top priority. Legal obligations and client considerations are often your second and third considerations. Your attorney should review this list of written considerations, and your plan of investigation (outlined below). All of the considerations should directly relate to your goal for the investigation.
A careful written plan of investigation is the next step. In some ways this plan is like a low cost wish list for the “perfect” outcome of the management investigation. Develop your plan as if there were no limitations on the investigation, and as if costs were no object. Then study the following question: If we had a perfect plan, could we reach the goals of this investigation ? If you can’t reach your goals with a perfect plan, you may be disappointed with the results of your actual plan. You may still decide to pursue the investigation, but you should be aware of the plan’s limitations at all times.
At least three forms of investigation are widely used, covert, overt and a hybrid. The hybrid combines some of the best elements of the covert and the overt, and it is often performed by an outside consultant or investigator. If you hire an investigator with actual business or consulting experience, then you have a very strong cover story for your investigation.
Hiring an outside consultant or investigator to work on a real business problem or opportunity has the following benefits: (1) the suspected manager(s) are not the focus of the intervention, (2) a broad range of questions can be asked, (3) all managers are obligated to answer questions and participate in any solutions, and (4) you may find out about other problems and opportunities, outside the scope of the original management investigation.
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