Circle of escalation
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JC sounds off on Management™
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Not to be confused with the circle of delegation.
A phenomenon that may happen in an organisation of a certain size and is guaranteed to in a big one, the circle of escalation resembles a 4x100 medley relay, only one where contestants carry a stalk of limp celery rather than a stiff baton.
It plays out as follows:
A salesperson approaches you with what is, on its face, a narrow and uncontroversial question — one to which, in your direct recollection, the salesperson already knows the answer. This is a sure sign she is indulging in compliance arbitrage where, while after a fashion she presents the whole picture to the internal control functions, she does so in several[1] instalments, each so thinly-sliced as to present only those facts the salesperson considers sufficiently germane to question (and helpful to her cause).
As a seasoned compliance professional, you adopt the standard approach: ostensible approval, hedged around with caveats deep enough for you to jump into and hide in later on, should shots ring out:
- “I would be inclined to be okay with this, subject to you confirming the withholding position with Tax,” you say, happy that you have passed the tangled skein off your desk.
Of course, the tangled skein has not magically winked out of existence. It has ascended from your desk, hovered momentarily, and thudded on someone else’s. This poor blighter in tax, will have the same aspiration as you: to quickly and quietly pass le petard on and, to fulfill it, he will take the same approach you did:
- “There may be an increased risk of retrospective withholding which is hard to quantify,” he will say[2] “but as long as the desk is prepared to absorb that additional risk then I have no objections.”
And lo, off the escalation goes to the business. Salespeople, naturally, have but one goal: impregnating their clients, while assuming no responsibility for the congress at all should it go wrong. So, along the chain it goes to the trader, a young whippersnapper who will neither know nor care what “absorbing additional tax risk” is, and certainly won’t want to be responsible for it. He will pass it up his line management, a better-coiffed version of himself, but holding no more insight into tax risk, who will instinctively direct the query to his chief operating officer, a chap who is nothing if not expert in retrospective withholding risk.[3]
And so on.
Eventually this query will get to the level of exaltation in the firm whose personnel known by all — not to their faces, of course — by only familiar versions of their Christian names. Chuck will say:
- “In principle I would be inclined to be ok with this at this stage, but can you just run this by Chip to make sure they have no issues.”
Chip is the general counsel, a handsome silvered fifty five year-old with the bearing, and legal acumen, of a 747 pilot. You know exactly where he’s going to send it, don’t you.
And so the cycle of life revolves. Sales will demand that you now confirm your approval in writing. You will wantonly neglect to do so, and through the effluxion of time the organism which is a modern multinational will resolve on the course of proceeding with the transaction, along the way having neatly tranched up, distributed and diffused responsibility for the decision in a way that will never come back to bite anyone until all concerned parties are elsewhere in the financial firmament.
See also
- Celery, and limp celery
- I would be inclined to agree
- I am supportive in principle at this stage
- I have no objections
- The circle of escalation
- I could get comfortable
- Middle management ouija board