In the more than four decades that I have been in the corporate investigations field, there have been very significant improvements and innovations in theft and fraud detection or prevention. Yet, inventory shrinkage attributable to theft and fraud has remained almost precisely where it was when I entered the industry. The explanation is simple: people. While we have developed high-tech electronics, advanced camera systems and great inventory management programs, the old adage in the investigative business remains true. The dumbest thief, with the right motivation, can outwit the best system.
The key to reducing theft and fraud always will remain the human factor.
In French, the word “Moi” means “me.” Using a combination of technology and human intelligence, we can use the three elements of MOI–motive, opportunity and indicators—to thwart thieves and crooks. This trinity of tools is very similar to that used by police worldwide: Identify motive and look at the clues or indicators to focus on probable perpetrators, but look at the opportunity, and, conversely, risk, to anticipate the crook’s next steps and intercept them.
There is a critical mass involving motive and opportunity where deviance likely will occur. That is, if the risk is high and the motive low, theft likely won’t happen. But if the opportunity is high and motive also high, it generally will occur. In between, there is a tipping point weighing opportunity and motive together where the perpetrator will probably commit an act of theft or fraud.
Risk and opportunity are the flip side of the same coin. To decrease likelihood of criminal activity, decrease opportunity and increase the risk associated with the activity. With outside deviance, it is difficult to know motive, but with a company’s employees, it is much easier to recognize the amount of motivation that worker may be experiencing, making it much simpler to develop preventive or detection strategies. With outside perpetrators, then, the business must increase visible risk of being caught while reducing opportunity.
This concept means that your best chance of keeping your profits where they belong—in your own pockets instead of the thief’s—is to combine innovative and effective technological tools with good old human intervention.
Each type of business, however, requires an approach unique from other industries. The response by retailers is largely different from that of manufacturing plants, restaurants different from warehouses, office settings unlike outside sales or repair forces.
The common element, though, in all businesses, is motivation of each of your employees. The common identifier is the critical mass of opportunity/risk plus motive. Identifiers let you know that you are on the right trail and are essential to anticipating loss and reacting.
Our company used to do loss prevention seminars for all sizes of business. Where they were public seminars, often held in independent conference rooms, we were able to run routine tests of our MOI Principle with the participants.
In every gathering, we would set up a snack table at the rear of the room and a podium at the front. Throughout the seminar, virtually every set of eyes would be on the speaker at the front, but anyone wanting a coffee or snack was encouraged to go to the back whenever they felt the need for nourishment.
That layout meant that someone getting a coffee during the presentation would be observed, at most, by one person: the speaker. And the speaker often would be facing the projection screen as they spoke.
Before the meeting started, we place three five-dollar bills strategically: one at the front on the podium, one on the snack table, and one on the hallway floor just outside the entrance. That last one had a name and phone number written on it.
In 27 gatherings, we lost every $5 bill from outside the room, except for one. For obvious reasons, we never lost one at the podium. We lost 8 of the bills at the snack table. Why were the thefts distributed this way?
First, the one at the front always had eyes on it. The one with the coffee and donuts had eyes during breaks but was otherwise relatively unobserved. The one in the hallway with a name on it seemed quite accidental, even though the finder could ask if so-and-so was in the room (It always was an unusual name).
The outside money had very little risk attached to it, the one at the front had immense risk and the one at the table a moderate risk. That’s half of the critical mass equation.
The other half was motive. It would be almost impossible to know motive, except that, with the very small value of the money at play, no one who attended would be desperate for $5. But the motive was clear with the outside bill that was not taken (1 of 27).
That seminar was held in a town referred to by outsiders as “the Bible Belt.” Anyone taking the $5 from the floor ran a very small risk of being seen, but the risk of being exposed in the community as a thief was overwhelming.
At the end of each session (and after the participants had rated the speaker), we explained the theft test. Not one person ever returned the five dollars. That’s 34 people who chose to remain silent about their deviance.
The balance of motive along with opportunity, the weight of indicators of theft to deter future acts, the understanding of risk versus opportunity, and the ability to use technology in coordination with human intervention enable you, the business owner, to significantly increase your profit and reduce your shrinkage.
This program guides you in that process. It is a constantly evolving process, because, as we stated at the beginning, the dumbest thief will eventually find ways to beat the current systems. It’s your choice. Tell the thieves to get their hands outta your pockets!