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Blogs Mike Jacka, CIA, CPA, CPCU, CLU Jan 08, 2019

We used to do a lot of branch claims office audits at Farmers Insurance — about 120 per year. (Basically, 100 percent of all claims offices.)

Our approach was to spend a week in the office going through files to support analysis of about 10 different processes. it was our practice (not a best practice by a long shot, but a practice nonetheless) to then sit with the claims office manager Friday afternoon and go through all the files where we had identified potential issues. The purpose of this review was to obtain agreement on the findings, what would be reported, and how things would be corrected.

This particular time, the manager was out of the office, as were the two claims supervisors. No problem. We had already arranged to meet with the clerical supervisor. Everyone involved knew it was going to happen, and everyone agreed that what was agreed upon would be what wound up in our report.

So, we went into the meeting armed with our files, our findings, and our knowledge.

Boy, did we take a beating. Oh, it wasn’t a bad thing. It wasn’t an auditee-who-hated-the-auditors kind of thing. Rather, the supervisor was able to provide additional information in a significant (emphasize significant) number of the files — information we had missed or just didn’t have the knowledge to understand. And with that additional understanding, file after file was found to no longer contain an inadequacy. Suffice to say that the potential four or five areas we planned to report as having issues were reduced to one.

At the end of the meeting, we joked with the supervisor about what had happened. And we all agreed the discussions were a good thing. We shook hands and went our separate ways.

But what followed was the more important thing. Afterwards, when we were climbing on the plane to get back home, the auditors were still joking about what had happened. No second guessing, no pointing fingers, no wailing and gnashing of teeth about how we had looked like amateurish buffoons who embodied unprofessionalism and that we should just jump out of the plane without a parachute because we were the lowest form of human being — the incompetent internal auditor.

No, we accepted our (minimal) lumps and went on with our lives — a little wiser, but not particularly beaten nor bowed.

I know a lot of audit groups who would have taken a different route. They would have been mortified that they had shown a chink in their armor, a crack in their veneer, a hint of error in their work in front of an auditee. They would have felt their professionalism had been left in ruins and they would never be respected in that town again.


Because of that meeting, in subsequent reviews of the same office, we were welcomed with open arms. Invariably there were jokes about that meeting, but the clients had seen two things. One, we were willing to admit when we were wrong. We weren’t dogmatic blowhards who had to have our way no matter what. We were willing to listen to a reasoned argument without having our opinions sealed in the concrete of absolute infallibility.

Two (and maybe more importantly), we were human. We proved that we were not so uptight that the mere mention of a potential error would make us pucker up like we’d just swallowed a dose of never-sweetened lemonade. We had shown ourselves capable of making mistakes, owning up to them, and being able to laugh about them.

In some of my presentations (they seem to change every time I give one, so I can’t tell you exactly when the following has occurred), there is a slide that sometimes gets inserted that generates some interesting (positive) reactions. In fact, I’ve gotten feedback that it may be the most important slide of the presentation. It states a simple message.

Be human.

Don’t get hung up on perfection or professionalism or decorum or respectability or independence or objectivity or whatever excuse you use to hide your reality behind a three-piece suit and a tie. (Some of you still wear these, don’t you?) To be able to work with people, to be a partner, to be seen as part of the solution rather than the problem, you have to let yourself be human. And you have to let the clients see it happen.

Mike Jacka, CIA, CPA, CPCU, CLU

Mike Jacka is co-founder and chief creative pilot of Flying Pig Audit, Consulting, and Training Services (FPACTS), based in Phoenix.