INTRODUCTION
Long before he became "the human error," before computers had even entered the picture, plan A, for Graeme Payne, was the army.
Graeme grew up middle class in Christchurch, New Zealand, in the 1970s, the oldest of three. As a boy he'd relished structured activities that required him to master new skills. Rugby, an early passion, remains a pillar of family activity for Graeme and his own sons today.
In high school, Graeme joined the Army Cadets, where he quickly rose up the ranks, his discipline drawing the admiration of peers. He also nurtured a love for tinkering and building. When Ferrymead, a local historic park, received the gift of a massive anti-aircraft gun, he recruited friends to help restore it. The gleaming gun complete, Graeme used the effort's success to launch the founding of a military museum.
Not every idea met with success. A renegade foray into bagpiping ended...swiftly.
Graeme's father was an accountant, and so it was unsurprising when Graeme demonstrated a propensity for numbers. Thinking back, he recalls that it wasn't the math that interested him most about accounting. It was the learning. Every audit process began with discovery, the need to quickly and thoroughly understand the inner workings of a business—the flow of activities, the systems of production. Only then could you get down to numbers. Deep learning was what he loved and took to naturally. The spreadsheets, he didn't mind.
For years Graeme had planned to enlist after high school. Right before he left, however, he caught wind of a university scholarship offered by the accounting firm Arthur Young (known today as Ernst and Young). On a whim, he applied—and won. He accepted the scholarship while joining the army reserves to earn his basic training units.
"I've always embraced change," he says, reflecting on this formative, sudden pivot. "What the heck? What have you got to lose?"
* * *
Change was already coming, like it or not, for him and many other New Zealanders. After decades of agricultural boom, on the backs of which New Zealand enjoyed one of the world's highest standards of living, its long-standing wool, meat, and dairy economy had begun to wane. In its place, alongside manufacturing, the newer services sector was on the rise. Today, services account for 60% of the GDP in Canterbury, the region surrounding Christchurch.
Big changes were coming to the field of accounting, too. When Graeme started as a financial auditor for Arthur Young in Christchurch, there was a single IBM PC serving the whole office. Within a few years, each person had a so-called luggable at their desk. Older partners viewed the newfangled gadgets with suspicion, as gimmicks rather than time-savers. They preferred their "word processors"—not the electronic kind, but human beings, typically women, who would type up recorded voice memos.
Graeme, by contrast, embraced new technology. He took pleasure in understanding how the machines worked, using their programs to build graphs, lightening his workload with software that could perform calculations faster and more reliably than he could on his lined yellow pads. He spent hours teaching himself the basics of computing from books.
"I was an early adopter," he says, a half smile emerging. "I even had the Apple Newton."
Ever the leader, Graeme did his best to help others around him adapt. He and a colleague produced an instructional video on how to use a PC, which they mailed to the homes of partners for viewing on their personal VCRs. In time, Arthur Young came to value Graeme's proficiency. They asked him to create a computer training program for all of New Zealand. He did, and for the most part it worked, though some older partners continued to struggle. Graeme recalls one who, well into the email era, would have his assistant print out then read aloud each email message as it arrived.
Even for Graeme, the pace of change could be hard to keep up with. But he understood what was at stake: the very future of the firm. Outside the walls of Arthur Young, computers were rapidly transforming the businesses of its corporate clients. Auditing now meant understanding how this new technology was being incorporated into practices like data storage, payroll, and analytics. The credit industry, for example, had for a century relied on paper records: first notebooks, then storehouses full of file cards. The 1960s brought a shift to electronic records. By the 1970s and '80s, everything was on a mainframe, housed in a data center. In those days, keeping the records safe meant restricting access to these centers. A guard at the door, say, or a heavy-duty padlock.
Enter the internet.
