internal audit - leading as the trusted advisor

David [email protected]

Internal AuditLeading as theTrusted Advisor

voice of the profession

© David Mallard Consulting Pty Ltd

1. Are you perceived as a Trusted Advisor?2. Love Internal Audit?3. Recent Research4. What Trusted Advisors do that others don’t5. Capability Development6. Communication, Influence and Relationships7. Increasing Complexity8. Navigating Complexity – the Integral Framework9. Growing into a Trusted Advisor

Road Map for our session



Requires higher levels of

‘systems and people’ thinking

• D. Goleman, Emotional Intelligence: Why It Can Matter More Than IQ (Bantam Books, 1995)

EQ is twice as important as

technical competence*

Are you perceived as a Trusted Advisor?



Internal Auditors have the opportunity to significantly influence the vitality,

wellbeing and the success profile of the organisations and the people they work

with

DON’T YOU LOVE BEING ANINTERNAL AUDITOR?

Internal Auditors are very fortunate.They are in a unique and privileged

position at or near the apex of the places they work with direct access to Directors

and Senior Executives



• We bring many strengths to our role – Professionalism– Objectivity – Business acumen etc• Like all professions, we also face our challenges.

Being ‘audited’ for many people can be perceived as an uncomfortable

experience.

Who of us really likes being reviewed/assessed/audited?




Do you thinkInternal Auditors are sometimes seen this

way ?

PEOPLE SKILLS?



DON’T YOU LOVE BEING AN INTERNAL AUDITOR?



The question is:

• How do we not take this personally ?• How do we build trusted and mutually beneficial relationships

with our clients?• How do we build our personal and collective capability to

cultivate, maintain and leverage relationships• How do we navigate Internal Audit toward Trusted Advisor status




There is regular research published about the state of

Internal Audit around the world.

Within the context of growing global complexity and

increasing challenge for Internal Audit let’s

examine a few highlights of this

research.

Recent Research into Internal Audit



2. An integral part of a complex web of relationships

1. Internal Audit is a relationship and communication business

3. Requires high levels of Emotional and Social Intelligence to be successful

5. In a complex, volatile and changing environment (VUCA) our experience tells us that the ‘softer’ attributes of Audit performance are increasingly critical to the success of Internal Audit functions

4.Mastering interpersonal and communication skills is among the most important capabilities that successful internal auditors need.

6. As the role of internal audit evolves and stakeholder expectations rise, internal audit increasingly requires competencies that exceed the more traditional technical skills

7. The most effective Internal Auditor possesses a broad range of non-technical attributes in addition to deep technical expertise.

8. People skills are vitally important to internal audit’s ability to stay close to company leadership and remain aligned with the key strategies and priorities of the organisation.

Recent Research into Internal Audit



Techn

ically

Strong

Big Pi

cture

Perspe

ctive

Busin

ess Ac

umen

Coura

ge & C

onfid

ence

Custo

mer Orie

nted

Initiat

ive

Communi

cation

Skills

0

5

10

15

20

25

30

35

40

45

Majority of Audit

Development focus

What Trusted Advisors do that others don’t



What does this research tell you?

Moving toward Trusted Advisor status involves personal and collective growth into many of the ‘soft spots’ identified in the research



What does this research tell you?

Moving toward Trusted Advisor status is not about adding

another ‘App’ to your technical toolkit. It is more about

investing in your communication, influencing, relationships and strategic

capabilities - extending beyond traditional analytical thinking



Capability Development Takes Time

Horizontal Learning = Competence DevelopmentMore information, skills, competencies. Increases what you know and strengthens technical expertise.• Typical Audit, Risk, Compliance training• Essential for using known techniques to solve clearly

defined problems• Develops functional knowledge, skills, and behaviours

that strengthen your current level of capability



Capacity Development Takes Time- Leading as a Trusted Advisor requires more

Vertical Learning = Mindset TransformationMore complex and sophisticated ways of thinking. Improves how you think and how you interpret any situation.• Essential to address complex problems, cultivate high-

stakes relationships, and navigate rapidly changing, uncertain circumstances

• Develops your mental complexity and emotional intelligence, literally upgrading your internal operating system for more wisdom and care



Capacity Development Takes Time



Capacity Development Takes Time- The Complexity Gap



Vertical Development

Capacity Development Takes Time



People Development Research andInternal Audit

Creative and Relationship Attributes

‘Compliance, Control, Protecting’

Task and Reactive Attributes - often

where Internal Audit is perceived as ‘living’



Research highlights a high correlation between individual development maturity, ‘creative’ leadership attributes and personal effectiveness, particularly in dealing with

the increasing uncertainty, ambiguity, volatility and complexity of interconnected global business markets. Capabilities necessary for Trusted Advisors.

Relating, Self Awareness, Authenticity,

Systems Awareness, Achieving

This i

s parti

cularly

releva

nt for t

he role of In

ternal Audit

People Development Research andInternal Audit



TRADITIONAL AUDIT/COMPLIANCE

People Development Research andInternal Audit – left and right



The

#1problem in most organisations

is that….

Communication, Influence and Relationships



eople

ommunicate

oorly

‘Communication is Everything’

Lee IoccocaNominated as one of the greatest

CEO’s of all time by Portfolio




- Common examples in the workplaceCommunication, Influence and Relationships



- Where do we begin?Communication, Influence and Relationships



Developing more effective communication and relational capability begins with the recognition

that each of us is unique and different




As individuals, we each have a communication and behaviour style which we use on a daily basis often

with varying degrees of effectiveness

Our communication and behaviour style is based on our individual needs




Behaviour/Communication

ThinkingFeeling

ValuesBeliefs

Needs

- The Whole Person ConceptCommunication, Influence and Relationships



So, what are your needs?




A needs driven Behavioural and

Communication model

DiSC® - A User Guide to People!

Understanding peoples needs is a key to

developing and effective relationship




There are two basic needs that influence how people behave in relation to one another

Need for Affiliation Need for Control




DiSC® is a doorway to communication

It identifies the uniqueness in ourselves and others




Dominance Influence Steadiness Conscientiousness

Control Specialist

Social-Recognition Specialist

Relationship Specialist

Analytical Specialist

Pushy Severe Tough-minded Dominating Harsh

Manipulative Excitable Undisciplined Reacting Egotistical

Conforming Unsure Pliable Dependent Awkward

Ambitious Stimulating Enthusiastic Dramatic Friendly

Supportive Respectful Willing Dependable Agreeable

Critical Indecisive Stuffy Picky Moralistic

Industrious Persistent Serious Exacting Orderly

Strong willed Independent Practical Decisive Efficient

- How others may see youCommunication, Influence and Relationships



• DiSC describes behaviour does not measure behaviour

• Your DiSC style is based on interpersonal psychology and influences how you interact with people

• Not for labelling, but for understanding

• There are no good or bad styles

• All have strengths and limitations

• Everyone is a mixture of styles

- In SummaryCommunication, Influence and Relationships



Trusted Advisors - teams and individuals manage behaviours – each individual manages his/her own behaviour and

helps others manage theirs

Your behaviour, your communication and your relationship development approach

is like the tip of the iceberg because this is what people experience of you




By first understanding how and why we behave as we do, we can then begin to understand

others and build better teams and more effective relationships.

This is critical for an effective Internal Audit Service and team moving toward Trusted

Advisor status.




YOU Knownto Others

Not Known to Others

Known to Self

Not Knownto Self

Open

Hidden

Blind

Unknown

- Johari’s WindowCommunication, Influence and Relationships



A CONTEXT OF - GROWING COMPLEXITY

A recent study by IBM identified the number one

concern of CEOs worldwide as: ‘Perpetual

Whitewater’ characterised by a global economy that

displays:



“There are no boundaries anymore.”

• Jeff Barnes, Head of Global Leadership, General Electric



MAKING SENSE OF THE VUCA WORLD

We need perspective



Perspective – the Integral Framework

• Andrew Brown and I present the Institute of Internal Auditors ‘soft skills’ programs. We tailor consulting and development programs for organisations informed by the Integral Framework.

• Integral thinking and application is a holistic perspective on organisational life is one of the more significant frameworks capable of taking into

account the rapid rates of change and complexity emerging in the global marketplace

It has significant application for career, leadership and organisational development. Important in looking at how to navigate within organisations as we progress toward Trusted Advisor status.



Systems (Its)• Strategy• Structures• Technology• Policies• Finance


Behaviour (It)• Capability• Performance• Language• Accountability• Results

Intentional (I)• Attitudes• Engagement• Perspective• World View• Awareness

Culture (We)• Relationships• Politics• Culture• How we do

things here

Majority of Audit Focus



IND

IVID

UAL

COLL

ECTI

VE

INTERIOR EXTERIOR

LANGUAGE OF:

THOUGHTS & FEELINGS

LANGUAGE OF:

BEHAVIOUR & ACTION

LANGUAGE OF:

RELATIONSHIP & MEANING

LANGUAGE OF:

SYSTEMS & STRATEGY Majority of Audit Focus




TRUSTED ADVISOR

Displays Passion

Understand Client Needs

Is Reliable

Is Authentic

Gets Close and

personalConnects

Emotionally

Is Credible

Long term Relations

Puts Client First

Displays Genuine Interest

Growing into a Trusted Advisor – 10 behaviours



Growing into a Trusted Advisor

If you have the desire to move toward Trusted Advisor status in your organisation, there is a personal and collective development

commitment required for both horizontal and vertical development. This would involve both formal experiential learning programs, on the job action learning, coaching and mentoring as well as specific

stretch assignments over time.




How will you know when you are there?

Your customers will tell you!



In the final analysis of assessing your desire to grow toward Trusted Advisor, it fundamentally depends on

one statement.

This statement underpins all of the learning programs myself and Andrew Brown present, both for the

Institute of Internal Auditors and otherwise.

‘For things to change, first I must change’It is a simple and as complex as that!




So the question for each of you:



Beginning the Journey:

1. Self-Awareness & Authenticity2. Communication and Influencing3. Taking an Integral Perspective4. Growing Through Goals5. Building Effective Relationships

On the Journey:

6. Values Based Leadership7. Negotiation & Courageous Conversations8. Adapting to a changing workplace & world9. Knower/Learner 10. Victim/Responsibility11. Developing other People

Consolidating the Journey:12. Overcoming Your Immunity to Change13. Authentic Dialogue14. Whole Systems Thinking15. Partnering for Value16. Influencing Across Boundaries

Audit, Risk & ComplianceTrusted Advisor Development Program Overview



Interested in exploring the Audit, Risk & Compliance

Trusted Advisor Development Programfor your team?

[email protected]

0408 549 092

mailto:[email protected]



[email protected]

0408 549 092

mailto:[email protected]