Standard Directive 006: Do An Audit

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Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Jocko Willink?

  There is a reason that financial audits take place, right? And there's a reason that they are always run by external accountants. Because the people in the business, the internal accountants in this case, they have a tendency either consciously or unconsciously that they might try and make themselves look good, right? Just do like little adjustments. They're gonna adjust some numbers. They're gonna round up some incoming revenue. Maybe they're gonna round down some expenses. They're gonna move some costs to the next quarter.

• 0:46Jocko Willink?

  They're gonna forecast some payments that might happen in the future as if they're gonna happen 100%.

• 0:56Jocko Willink?

  And you add all these little adjustments together and things start to look pretty good. Things start to look pretty good. And at a minimum, they look better than they really are. At a minimum.

• 1:14Jocko Willink?

  And that leads to problems.

• 1:17Jocko Willink?

  That leads to problems, little problems at first, but big problems in the end if they go unchecked. If they go unchecked, we're talking about bankruptcy and foreclosure and insolvency.

• 1:33Jocko Willink?

  So that's what happens in a company.

• 1:36Jocko Willink?

  But this can happen with us as well, in our heads.

• 1:41Jocko Willink?

  We make little adjustments in the way we report things to ourselves. That's what we do. "I'm in, I'm in, I'm in pretty good shape. You know, I'm not drinking that much. My financials are good.

• 1:59Jocko Willink?

  I don't waste too much time. I don't really need to train today.

• 2:05Jocko Willink?

  My, my husband or my wife or my spouse or my kids, they won't mind just this once."

• 2:13Jocko Willink?

  That's what we do. Little lies. Little adjustments to the truth.

• 2:22Jocko Willink?

  Just to get by, just to, just to make ourselves feel a little bit better today. Just so we look good to ourselves.

• 2:34Jocko Willink?

  But, just like a lying accountant. And by the way, the lying accountant has good intentions, right? They're not a bad person. They just want the company to look good, they want the company to feel good.

• 2:48Jocko Willink?

  But by trying to make the company look good and trying to make the company feel good.

• 2:53Jocko Willink?

  And by you lying to yourself to make yourself feel good. Here's the problem, over time, it catches up.

• 3:03Jocko Willink?

  Little problems turn into big problems. You end up out of shape. You end up broke, you end up in bad relationships, if you're in a relationship at all. You ended up with wasted time.

• 3:18Jocko Willink?

  And wasted life.

• 3:22Jocko Willink?

  So, don't let that happen. You need to audit yourself, but you need to do it with the truth.

• 3:29Jocko Willink?

  You cannot lie to yourself, even in the littlest way. You gotta run the numbers, you gotta account for everything. Everything.

• 3:39Jocko Willink?

  And there can be no lies.

• 3:42Jocko Willink?

  And then, you get things in order.

• 3:48Jocko Willink?

  You do what you're supposed to do.

• 3:51Jocko Willink?

  Account for yourself.