It is that time of the year when New Year resolutions get mulled over, new dietary plans emerge, ambitious fitness regimes are embraced, enrolments to new on-line courses soar, gym memberships see an uptick, bold book-reading commitments are announced on the likes of ‘Goodreads’, the daily alarm clock is set 30 minutes earlier than usual….It is indeed a time for soul-searching, deep reflection and imagination, a time to truly “ring out the old, ring in the new”.
For Internal Auditors world over, particularly in the backdrop of the year that has been, this is the time that merits some innovative thinking, impactful initiatives and above all, re-imagining Internal Audit; for, it is not just a New Year that is about to begin, but a whole new era is upon us.
As a ‘just-retired’ internal Auditor, I wonder what my thoughts would have been, had I continued to lead the Internal Audit team of my firm. Here are a few thoughts that cross my mind; and may perhaps resonate with Internal Auditors across industries and geographies.
Zero-based strategic planning:
This is the time to set free from the past trajectory of the internal audit practice/function and think afresh – how can internal audit be relevant to the new world of e-commerce and digital payments, of remote work and global classrooms, of physical lockdown and digital freedom, of driverless cars and bitcoin-driven economy. What is interesting is that many of the traditional business models and revenue streams have got replaced – the customer gets a lot of things free (free entertainment, free news, free training, free credit) but in exchange pays with privacy, data and digital trail, and a higher vulnerability to cyber risks.
In these times, to plan based on the past, making incremental growth projections and marginal tweaking of audit plans would not suffice. I would encourage the internal audit strategy and plan to be zero-based – start with a blank canvas and approach the changed world with some bold masterstrokes!
Realigning the Team
The Internal Audit team will need to be realigned to respond to the changing world. In addition to understanding of risks and controls, processes and procedures, laws and industry practices, I would invest in people who understand the paperless, borderless economy better. At this point, I would need to supplement my team with people on the ground – the street-smart ‘slumdog millionaire’ would be as valuable to me as those with professional qualifications and formal work experience.
I acknowledge that the age of the stereotype CV (matriculation, graduation, internship, professional qualification and work experience, in that order) is history. We will have to understand CVs that have diversions and gaps, and multitude sources of learning and experience. Those who have learnt fraud vulnerabilities through episodes of “jhamtara” may be regarded equally well-trained as those who have attended classroom case studies on cyber frauds; just as those who have understood financial markets through watching “Scam 1992” may be well-placed to match those who have taken certificate courses on understanding capital markets.
The Tech Imperative
Much has been said about the need for Internal Auditors to embrace technology; and yet, many Internal Audit teams struggle to make that big shift. I have realized that an existing Internal Audit team may be able to embrace technology incrementally, one application at a time. The team will keep attending training workshops and the organization will invest in getting the relevant software licenses – but integrating technology into internal Audit takes more than that. I would identify (from within the team or outside), a few persons who are passionate about technology and are capable of catalyzing the team’s technology shift at a rapid pace and make them the tech champions for my team, empowering them to challenge and change the status-quo.
My entire focus at this stage would be to absorb technology in every facet of my team’s working – holding meetings, internal and external communication, data analysis, process automation, reporting, visual presentations, work paper documentation, team appraisals and more. There is now no looking back.
Team Well-being:
The year 2020 has made most of us make rapid changes to almost all aspects of our lives. What started off as a lockdown of a few weeks continues to limit our movement and activities even after 9 months. This change has not been easy for everyone – and while most have got used to WFH culture and screen-based meetings, the loss of personal connections, social interactions and physical environments has left a void. It has created a greater need for looking after the well-being our teams.
I would pay attention to the overall well-being of my team members, create open forums to reach out in case someone felt the burnout or ‘disconnection’ stress. I would have an open house, periodically, to discuss how each one is coping and explore what we, as a team, can do to ensure that each of us feels connected and supported. Sharing talks from leading mental health experts and healthcare specialists would also help in bringing the focus on overall well-being of the entire team. Building resilience in my team would be a priority for me at this point.
Social media and increased screen time has caused a serious problem of being distracted all the time. I would invest in helping my team stay “indistractable” and pursue their work and other life passions with focus. Perhaps, starting a book club with books such as “Indistractable” (by Nir Eyal) may be a good start.
Connections
Staying connected with our stakeholders wasn’t easy even in the past era. In these post-Covid times, this has become even more challenging. We would develop a strategy for staying connected with our key stakeholders by creative means. In an era where even a “5 Minute Read” is “saved for later” and “forgotten forever”; my team will have to innovate ways for meaningful engagement, with minimum intrusion on the stakeholders’ time and privacy. We will explore options such as hosting an interesting 15-minute capsule talk by an expert to a “coffee meet” with a small group; stage a quiz contest on cyber risks or conduct interesting surveys on data privacy, we will create small video movies on topics such as “what’s new with Internal Audit” or “How did our team support the Covid crisis within the organization”. We will earn our time slots with those who govern by always keeping our reports and presentations crisp, fair and forward looking.
Solution-Orientation:
For long, our internal Audit teams have focused on “spotting the problem” or identification of gaps. While we have made certain broad recommendations, we are not perceived as solution providers. As we move from one audit to another, we have seen our role as bringing out the gaps or deviations and leaving others to resolve them. The present times have revealed that versatility, holistic understanding and coming up with innovative and workable solutions are skills that make or mar careers not only in Internal Audit but in all spheres.
Solution-orientation, like technology absorption, cannot be taught but needs to be cultivated. Offering our team members to become part of cross-functional teams working on specific solutions, creating training modules that focus on coming up with collaborative solutions (modelled on hackathon) and arranging formal training in design-thinking and novel work approaches could be some of the approaches. Adding team members that have experience in working on social issues (low resources, practical solutions) or adventure travel (critical thinking, quick action) could help in bringing in the “solutions” mindset. Developing such traits would be an integral part of every training and development initiative; likewise, assessment of these traits would be integral to performance reviews and potential assessments.
Engaging with the New Economy:
The best way to understand the dynamics of the new economy is to plunge into it. As a head of Internal Audit team, I would seek every opportunity to engage with, and provide professional services to, the players in the new age economy proliferating with payment gateways, Edtech, Fintech, App developers, influencers, social entrepreneurs, digital entertainers, virtual universities, Healthtech and more.
We cannot learn to swim with an instruction book or trainer videos – taking a plunge would be not only the fastest way but the only way to learn. So, here’s to a New Year and a New Era – are you ready to take the plunge?
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