Possible Human Error Causes Rapid Market Decline

I was going to post something on Human Error in a later post, but in light of today's alleged incident in the U.S. Markets which caused a nearly 1000 point drop in the Dow I thought I would at least touch on it.

Currently here is what we know about the alleged incident - (Which is still being investigated) A trader at Citi entered a "B" for Billion instead of an "M" for Million. This in turn caused a nearly $10 {CORRECTION it was about $20 give or take a few} stock price dip in PG, and subsequently caused the rest of the market to drop before recovering. 

On the good side, these things can be researched, and fixed. However, in an already skittish and heavily volitile market it can easily cause additional panic by the average investor.

In addition to other issues, it has already been proposed that someone else who knows what they are doing could easily manipulate the market and cause an intentional crash (I believe the commentators were implying a cyber-terror event).

Already the investigations by the SEC have begun and we will have to wait and see what the outcome will be.

Look for a future post coming soon about Human Error and the Impact on Business coming soon.

The Loss of a Key Employee Can Be Devastating To a Business

Many businesses have Key Employees who are the only people responsible for specific duties, and often these are critical, core functions to the business. Often these employees will also have the only access to certain information that may be needed to perform some of these critical functions and operations.

The impact on the business after the loss of a key employee can be severe and can include but are not limited to the following:

• The distraction of other employees, resulting in missed opportunities and deadlines, deteriorating morale, and internal conflicts

•  The loss of confidence from employees, managers and financial backers of the business and can include both suppliers and customers

•  The business may suffer a weakening of their credit rating.

•  The financial cost (in time and dollars) to find, hire and train a replacement.

•  A need for immediate cash to fulfill promises made to the deceased employee's spouse or family, such as salary continuation or deferred compensation or other incentives promised.

• The business might also fail to capitalize on important business opportunities because cash reserves are being used to recruit and train the new employee(s) or pay out compensation.

Fortunately there are a number of things you can do to mitigate these issues the first of which is consider key employee insurance. Documenting the processes acurately that the Key Employee is responsible for is another.