For my taste, the book is a little too heavy on the stories. However, some of the stories are quite compelling. (For example, the role nonspecialist Gunpei Yokoi played in Nintendo’s success. You want to know what that role was? Then you’ll need to read the book.) And he has included ample research-based evidence to support his theses.
Oh, one more thing. Every internal auditor should read this book.
In case I am being a bit circumspect, let me drive the point home. I give this book two thumbs up, five on a scale of five, No. 1 with a bullet, three Michelin stars, 100% on Rotten Tomatoes, an EGOT, a green light, an okey-dokey, a standing ovation, a woot woot, a laurel, and a hearty handshake. Read … this … book!
Now, why would I recommend a book that I am only two-thirds of the way through and that I feel may be a bit heavy-handed on the story side?
Because there are two extremely important lessons here for internal auditors. The first relates to what makes a successful internal auditor.
Internal auditing is a unique profession … for a lot of reasons. But one reason we don’t often recognize — and one of the reasons I jumped in and never looked back — is that, when it is done correctly, we never know where we are going to be next. And it is a profession that, if you are bored, then you are doing it wrong.
We have to constantly move among multiple disciplines; we have to provide varying products depending on the situation; we have to develop new solutions for areas where we are not experts; and we have to dance among all the alternatives, ideas, concepts, and decisions at a moment’s notice.
And, perhaps the biggest challenge, we never have the time needed to be experts in any area we audit. In other words, we have to understand enough about an area to speak intelligently and provide relevant input without spending too much time becoming too intelligent.
The successful internal auditor is the one who can learn quickly, learn broadly, and apply that knowledge in as many different ways as possible.
And that is a point Epstein mercilessly drives home. Specialists are not the answer; generalists are. Internal auditors would do well to listen and apply this idea.
If you have read some of my previous ramblings, you have heard me go off at great length on the idea that internal audit’s focus on hiring accountants will, if not corrected, be our downfall. I’m not planning on going down that rabbit hole again, except to say that such specialization is exactly what this book is speaking against. Successful internal auditing occurs when the auditors come to projects with a breadth of knowledge, not a well of specialization.
Sure, some degree of specialization may be necessary in any project, in any department. But pure specialization leads to thinking that is embedded in immovable concrete — an inability to see new, different, and better ways to get things done. And that leads to auditors and audit departments that cannot change when necessary. I spoke with one individual who was, effectively, a career compliance auditor. He liked the work, he liked the approach, it was what he wanted to do for a living … forever. Yet, he was so embedded in “The Way Things Have Always Been” that he even had trouble changing when the regulations changed. Specialization at its worst.
Full confession: I have an accounting degree and, until my semi-retirement, I had a CPA registered with all the appropriate authorities. At the surface, it would appear that I was one of those specialists with a depth of knowledge. (One look at my grades would bely that supposition, but I still got to wave the initials like a bladeless sword.) But any success I’ve had in my career did not come from my knowledge of accounting. In fact, shy of trying to figure out a few T-accounts every once in a while, I probably used specific accounting knowledge three, maybe four, times in my career. No, my success came from broadening my experiences and my understanding of the business.
And then there is the history of successful people I had working with me. A few years after I started in the Farmers’ Internal Audit department, the requirement for auditors to have accounting degrees was lifted. And the floodgates opened. We were able to bring in people with experience in claims, marketing, underwriting, human resources — all with no regard to the degree that got them their jobs in the first place. And those degrees ranged from accounting (yes, we still let them in) to economics to communications to statistics to computer programming to art history to animation.
The search for (and development of) successful internal auditors needs to look for the experiences, hobbies, and interests that show a breadth of knowledge and (tangential but, perhaps, most importantly) an inquisitiveness about things.
When hiring, quit looking for accountants with a 4.0 average. Quit looking for individuals mindlessly dedicated to one specialization. Start looking for people who changed majors — more than once. That doesn’t show indecisiveness. Instead, it may be an indicator of someone emotionally intelligent enough to understand they were going in the wrong direction and, rather than continue down that fruitless road, branched to something new and beneficial. Or it may show someone who just has more than one interest and got the opportunity and wherewithal to pursue those interests. (For example, getting an archaeology degree and then going back for that accounting degree — not that I’m talking about anyone who might be writing this blog.)
It is the breadth of experience, the range of learning, and the ability and desire to explore and learn that is the hallmark of success. And we have to recognize the need to find auditors who generalize, and to support that generalization throughout our departments.
Now, as mentioned at the very beginning of all this, there is a second reason I think this book is so important to internal auditors. And it has to do with marketing the internal audit department, as well as some of the points about customers/clients I’ve made in the last couple of blog posts. I’ll try to bring this all together next time.
Until then, feel free to pick up a copy of Range and start your reading. I think you will find it worth your time.
