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A Change Would Do You Good

Blogs Mike Jacka, CIA, CPA, CPCU, CLU Oct 14, 2021

Whew. Been a crazy year, hasn't it? And crazy times have brought about a crazy amount of pontification on what has and will be happening.

Don't know about you, but I never again need to hear the phrase "unprecedented times," "new normal," or any of the other recoined cliches we are seeing and reading everywhere.  However, fearful that the pitchforks and torches will be brought out with the spouting of another cliche, let me throw out another bromide.

"The only constant is change." Sick of hearing it? Yes. Any less true for its over repetition? No.

So, if we all know change is constant, how were we in internal audit all caught so flat-footed?

Let's begin by admitting that, in the before times, we knew change was happening/going to happen.

There was much talk and discussion about it in internal audit circles. Unfortunately, we seemed to think such change was far enough away that we need not take immediate action. And change, when we did implement it, happened at what we now can recognize as a glacial pace.

And then this black swan — a black swan so black it made all others look gray — flew into our lives. And change not only became a reality but accelerated beyond our wildest expectations. It hasn't been pretty.

The good news is that these events forced some changes that we in internal audit should have been implementing all along. The bad news is that much of the change we are trying to accomplish is a function of us doing little more than just trying to catch up. As a result, we now stand lip-deep in the muck, trying to find our way back to solid ground.

In spite of the gloom and doom that may seem to permeate the previous, it is not my objective to slap our collective wrists for not being ready. Yeah, we knew changes were coming (were happening) and we should have already been moving in the right direction. And, yeah, change rushed upon us so fast we did our best deer-in-the-headlights imitation. And, yeah, we need to dance as fast as we can to catch up.

However, we also need to learn lessons from our failure. There is a future beyond what is now occurring and, while we address our current predicaments, we must also prepare for the changes still to come. (Change does not stop just because it happened so quickly in the past.) While it is hard to focus on that future right now, we have to remember that the time to prepare for change is not when it occurs, but before it comes a-calling.

And therein lies the important point. We could not have predicted the specific changes we are now going through. All we could have known was that change, of some sort, was going to occur. Similarly, we cannot really predict the specific changes that will come. We can only know that change will occur. And that is why the concept of "managing change" really doesn't make sense. You cannot manage the unknown. Instead, rather than try to manage change, we must focus on using change, current and future, as an opportunity for growth and improvement — to prepare ourselves to ride the wave of change.

(And at this point I need to give you a reference. Some of the concepts I'll be talking about, including the prior discussion of managing change, come from the Harvard Business Review article, "A Futurist's Guide to Preparing Your Company for Constant Change" by April Rinne. You should be able to access it, but HBR does put a limit on how many articles you can view, so keep that in mind.)

The first thing every internal audit shop needs to do is change the mindset related to change. Too often, change is perceived as a risk. So, the department focuses on trying to mitigate that risk, ultimately removing the value any change might provide.

Don't believe me? Think about what it took/what it takes to implement any change in your department. How many questions are asked? How many approvals are required? How many "changes" are reformed and reformatted to the point where no change is recognized? And how many suggestions actually make it through?

This is the attempt to manage change. And it is why we do not take advantage of the opportunities that change provides. And it is why we are unprepared when the world changes around us.

This change in mindset has to start at the top. (Thank you, Captain Obvious.) It has to be preached from the top. Everyone has to understand this new mindset and be told again and again by leadership that the department wants to look forward, that it wants to prepare for what is to come, and that it now wants to accept change as something to be embraced rather than avoided. And then, the most important aspect of any mindset change, it has to be supported. Another cliché I hate, but one that is true: You must talk the talk, and then walk it. Our profession's history of risk-aversion and change-squelching means that even the slightest wobble in support may make all efforts moot.

As part of these efforts, leadership should be looking for change agents. Lurking within the department are people already chomping to be let loose — to make things better and different (not necessarily in that order.) They have to be given the freedom they need to do the things they dream. Some may not believe a different mindset has arrived and may hide. But they have to be given the chance to come forward and lead the department into new and valuable areas. Watch carefully. Leadership comes from anywhere.

Finally, the article discusses the concept of having someone assigned to "change-readiness." As you find those who want change, you will also identify people who can see the broader pictures — the ones who are looking at the future of internal audit within the perspective of your department; the ones who are seeing the tools, techniques, and adaptations that will make your department more effective; and the ones who can help the department prepare for a change-heavy future. Find that individual and give him or her the authority to start making your department change ready.

Let me note that I have addressed much of the foregoing to audit leadership. But change seldom comes from the official leaders; it comes from those who can see the work that is being done while seeing the opportunities. That means that this message is really for every auditor in every position. Change can be driven from anywhere. Yeah, it's a lot easier if leadership is right there with you. But a leader can come from anywhere. And you can be that leader.

Ultimately, this all comes down to a phrase that internal auditors have thrown around for years — internal auditors as change agents. But we have talked a lot and done very little about it. In fact, many professionals don't buy into our role as change agents. They see it is a violation of our independence and objectivity. 

Sorry, but it is not a violation. (And I'm not going into that can of misinformed worms right now.) But becoming change agents — embracing change and looking at it as an opportunity rather than something that must be "managed" — is the way internal audit can remain relevant, not only watching for change, but leading change in our profession, in our organizations, and in our industries.

Mike Jacka, CIA, CPA, CPCU, CLU

Co-founder and Chief Creative Pilot, Flying Pig Audit, Consulting, and Training Services (FPACTS), based in Phoenix.