Open plan office space may inhibit concentration and productivity

William Belk of Rocket Fueled People is reporting something that many of us have known for a while now: Open plan office space is the worst if you need quiet to concentrate and, y’know, actually get things done:

Their work appears to be geared toward tech workers, but the open plan office fad has spread to non-tech companies as well. I work in the very conservative construction and building materials industry and even my company is converting offices to open plan. It’s also taken the accounting firms by storm.

Executives and high-performance employees (HPEs) tend to optimize against completely different trade and life principles—they generally have very different views of the world. This disconnect shows itself very clearly in the environmental conditions of our creative and technical offices. My latest anonymous survey shows that 58% of HPEs need more private spaces for problem solving, and 54% of HPEs find their office environment too distracting.

It’s comforting to know I’m not the only person who finds the hustle and bustle of an open plan office to be distracting and to inhibit concentration. When companies move to open plans, perhaps they should make sure there’s sufficient quiet rooms available for everyone who wants them. At least half of us, it seems.

Check out the link for even more discussion around how innovation depends more on processes and time, not space.

When I looked at the Rocket Fueled People website, I found something else interesting. Part of the work they do is described culture auditing, which is something internal auditors can and should do more of. These types of findings are valuable for management.

Good design facilitates effective communication

I follow a few presentation/design related blogs and a quote near the end of one post recently caught my eye, as I think the following is instructive for those of us in the audit business, tasked frequently with presenting the results of our work:

Business presentation design is a blend of practicing good design, and making compromises to deal with the practicality of working with lots of non-designers. Being able to deal with frequent changes, keeping design standards up (also on page 5 to 20), and making sure that everyone can make decent looking edits in the presentation.

Now, I’m painfully aware that the majority of auditors don’t give a hoot about designing a beautiful report or presentation. It’s a reliable source of frustration for me!

But the quote above is something I need to keep in mind when I notice misalignment of elements of a slide or poor structure in a Word document report.

As a profession, auditors are aware that effective communication skills are critical to being able to do our job well and make sure our clients know the value we bring to the organization. The content of our reports and presentations is most important, but good design facilitates effective communication of that content.

Using Slack in the internal audit department

I love the idea of Slack. If you haven’t heard of it before, it’s collaboration software for teams that replaces a lot of what we’re currently using email to do. It’s main features as far as I can tell are persistent chat rooms (channels), direct messaging, and file sharing with cloud integration.

It would be so great if audit software did something like this, along with the audit specific features we need like work paper approval and sign-off, issue tracking, and report generation. All the audit software I’ve seen and used is just so clunky and poorly designed. I guess it’s too much of a niche market to get really well designed software that is polished and complete.

With Slack, you could set up a specific channel for each audit, or even sections within an audit (e.g. procurement), or phases of the audit (e.g. planning). Invite only those team members that are involved in that area of the audit to the channel, and add people later as needed. They’ll be able to read back and catch up on what’s happened before they joined.

So much of email is sending files back and forth, which would be eliminated with Slack. You wouldn’t even need to let someone know via email that a file’s been updated and is ready for review by the team or manager, since that communication would be within Slack too.

Are there any internal audit teams out there using Slack to reduce email volume and work collaboratively?

The mindset of white-collar criminal

Auditors of all kinds would be wise to read up on the psychology of white-collar criminals, to better understand the rationalization vector of the fraud triangle:

David Myers, the former controller of WorldCom, recalled thinking that he was “helping people and doing the right thing” while perpetrating one of the largest accounting frauds in history. In his mind, the fraud was superficially sustaining the company, its stock price, and the jobs of its employees.

For some, the theory is that it was a simple cost-benefit calculation, underestimating the likelihood of being caught and, therefore, the cost. But the article linked to above notes that in other cases, there wasn’t a whole lot of calculating going on at all:

Waksal understood that calling his daughter and telling her to dump her shares was wrong. Since he knew the SEC monitors this kind of trading, his decision couldn’t possibly represent the careful reasoning of a self-made man who prided himself on his intellectual prowess. Had he actually put his mind to it, presumably he could have devised a better fraud.

Part of the problem is how separated the perpetrators of white-collar crime are from their victims, or how relatively small the impact of their fraud will be on them, in their minds. As businesses become bigger, and our communities grow and our connections to each other loosen, this will continue to be a big factor.

Actually the article doesn’t really conclude much. Some felt remorse, some didn’t. Most didn’t think things though, but if they did they underestimated the impact on their lives and their victims’ lives. Some acted out of perceived pressure to meet earnings targets, while others believed they were doing what was right and would be recognized as such (*cough* Fastow).

Interesting read, and always fun to read about the schemes and perpetrators’ justifications for them. Be vigilant, it can happen in your company.

Bitcoin and the blockchain

You’ve probably heard of bitcoin, the most recognized online cryptocurrency, but like me, you may not know very much about it. The concept of a peer-to-peer (P2P) currency which requires no intermediaries to facilitate transactions is exciting to me, because of its potential to make transactions more efficient. Nobody likes middlemen.

The concept behind bitcoin, and other similar currencies, is the blockchain. Blockchain is a distributed ledger of transactions, replicated across the network by members or users of the chain in sequence. Each new entry is timestamped and follows the previous valid transaction. A transaction, once validated, cannot be reversed. The strength of the process is rooted in the distributed nature of the blockchain. It’s basically a constantly updating database that everyone has a copy of, or at least part of a copy of it.

Deloitte held a Dbriefs webinar on blockchain on January 14. It was an introduction to all of us (it seemed) to the confusing concept of blockchain, and how it will be used in the future by businesses to conduct transactions. The Big Four are really starting to explore the potential of blockchain in this area.

In case I haven’t made it clear (and that’s a real possibility), the picture in this WSJ blog post is worth a thousand words, and at least several thousand of my words.

In talking to a friend of mine the other day about blockchain, he noted that the primary risk is on how distributed the blockchain is, or whether any single entity controls a significant part of it. This makes sense, because if any one entity controls a significant part of the chain, it can effect fraudulent transactions, and replicate them across the chain.

A second criticism of blockchain is whether there is anything original about it if there is no cryptocurrency involved. For bitcoin, it only exists in its blockchain. For transactions involving non-cryptocurrencies, is blockchain any different from a database with a distributed version of multiversion concurrency control?

I’m pretty interested to see where this technology takes us. How do you think bitcoin, and the blockchain, will be used in the future?