Change is an emotive topic – it inspires fear, excitement, and apprehension in many people. Of course, working in the area of internal audit, we are often called on to advise and support others in their change management programmes as experts in our field. But how often, and how well, do we turn the spotlight on ourselves and apply the advice we give to others to bring about change within our own internal audit functions?
In the first of three articles, I’d like to share my personal perspective on the topical and provocative subject of change management - and its application to internal audit functions.
While there is plenty of guidance available on the technical aspects of change in modern business environments, perhaps the first question we need to consider is why do it at all? Is change really necessary?
Assuming the answer is yes, what is really driving the change agenda in the professional discipline of internal audit and are we able to bring some order to the various forces driving that change?
Changing, enhancing, developing, evolving, and re-imagining the IA role in your organisation is a big deal, but does it differ from any other support function? If your answer is yes, how do those differences impact?
What are the particular issues to bear in mind, based on our shared experience and expertise, when driving a step change in the role and contribution of an internal audit function? Having clear views, and a common understanding of the answers to these questions is one of the ways to build momentum and buy-in when you are driving a change agenda
It’s a simple concept but a powerful and persuasive one. That’s why role models in high profile public positions such as sport or business are considered so significant.
If one of our key roles is to advise and monitor how well others are controlling and managing their business change programmes, we must ensure that we are implementing (and seen to be implementing) our own advice. It would be hard to take the advice of a health professional whilst they are slugging back a Jack Daniels and taking a drag on a Marlboro! If you are advising people to embrace a culture of openness and change whilst refusing to listen to feedback, you are being equally contradictory.
The business world is like an escalator – always moving forward. So, the change agenda is simply acknowledging that reality and deciding where you are going to be. Any functions that don’t move at least as fast as the pace of business change are essentially moving backwards. If this is the case, your organisation and people might be expending a lot of effort just to stay where they are.
The fact that the IA remit includes a whole enterprise is both a strength and a challenge, requiring an acute awareness of all these forces to ensure that the function is moving in the right direction and staying relevant.
A lot may be happening (movement), but unless that activity is directed to making progress (the direction of the escalator), then it’s likely to be wasted effort. So, it’s important for the internal auditor to be clear on the direction that the organisation should follow / is following and how the internal audit function is helping to get it there.
When considering the need for change, ask those around you: “Would you really be happy to be part of a lagging profession?” Of course not. Support functions are evolving rapidly, and by doing so, raise questions around their relevance and place within an organisation. For example, in the finance profession there is often real conflict between the largely backward-reporting and transaction-processing role and the current expectations of finance personnel as senior business advisers. The role of CIO didn’t exist 30 years ago – but is now commonplace, whilst whole companies like IBM have morphed to ensure they remain relevant.
The level of expectation placed on Boards has risen significantly in the last 20 years, to the extent that they are now being asked to reflect on areas which include corporate risk appetite, business culture and business viability. So, it is not just about whether your IA function has a track record of delivery – it’s about how well it is stepping up to the new challenges being posed to those who give us our mandate.
Organisations have many stakeholders, and many have differing perceptions of what the internal audit function offers. For example:
This breadth of expectation is especially acute for internal audit functions. The fact that we can add value in all these areas and more is both a strength and a curse. But one thing is certain – we can’t achieve what stakeholders demand or desire with limited resources. This means that any change programme should be clear and direct about what will, and won’t be given priority.
Personally, I find it exciting to be working in a profession that is relatively young and still changing. The role of the internal auditor feels like a role that is evolving at a rapid pace - and we all have a great opportunity to shape how it is perceived both now and into the future.