agile audit
合规财务税务和会计08 四月, 2021

Leading for agility: Key behaviors of an agile-minded internal audit leader

By: Mark Williams

Being more agile-minded will help you capitalize on the collective skill and capabilities of your department – and help you become a better leader. 

Based on the experiences of coaching internal audit executive and leadership teams over many years, this brief article explains the mindset and behaviors of a truly agile-minded leader.

#1. Agile-minded IA leaders build rapid feedback loops

The myth: Our world, business and organization are predictable. For those with this mindset, everything can be planned in advance, cause and effect is known, and it’s unwise to deviate from the plan once made.

The reality: Our environment contains a lot of complexity. Full of unknowns and unpredictability, cause and effect is often random and unpredictable. Rather than predict the unpredictable, agile leaders build rapid feedback loops.

Agile-minded leaders actively practice and promote:

Rapid feedback loops

To deal with unknowns and complexity, we need to be responsive to change and course correct. Agile-minded leaders make this real by building and incorporating rapid feedback loops. It’s more than regular engagement and collaboration; think of it as a repeatable loop.

Do some work, pause:

  1. We’ve done this <share>
  2. We’ve learned this <share>
  3. Therefore, based on one and two above, this is what’s next <share>

Repeat

Undertaking work in cycles helps enable rapid feedback loops. For example, working to a monthly update or refresh on the department’s audit plan, or audit delivery teams working in timeboxed iterations (Sprints). You’ll see this throughout my examples below.

Food for thought: Some of the world’s greatest inventions and achievements have only been made possible due to this iterative approach.

Example behaviors:

  1. Undertake rapid feedback loops with stakeholders (audit committee, senior management, risk function, etc.) on the department’s audit plan on a real-time or continuous basis (away from a monthly, quarterly, or annual frequency). Note: The frequency of these feedback loops is a healthy debate as we are in such a dynamic and volatile environment with many uncertainties and new risks emerging. Is what you’ve always done rapid enough for an ever-changing environment? Is a monthly or quarterly feedback loop responsive and rapid enough to highlight changes and challenges so they can be fed into your plans and audit delivery?
  2. Conduct a rapid feedback loop with first and second-line management on a continuous or rolling monthly frequency (not on an ad hoc, quarterly, or annual basis).
  3. Participate in a rapid feedback loop with the audit delivery teams on their observations on a weekly or bi-weekly basis (not at the end of the audit).
  4. Ensure audit delivery teams have a rapid feedback loop with stakeholders to share their observations on a weekly or bi-weekly basis (not at the end of the stages of the audit or at the end). Iterative working or work cycles (Sprints) will help enable this goal.
  5. Participate in a stakeholder feedback loop incorporated at the end of every audit (a less than 30 percent response rate is common for many internal audit departments).
  6. Implement a rapid feedback loop with the Professional Practices & QA leads to continuously improve and ensure that feedback and learning is incorporated into audit methodology and other working practices.

#2. Agile-minded internal audit leaders build high-performing teams

The myth: People are resources. The best, most efficient way to get the most from our people is to split them across multiple audits and teams, focusing on maximum utilization.

The reality: People are humans and work best in a team. Stable, focused, and longer-lived audit delivery teams are the best way to capitalize on the skills, motivations and capabilities of your internal audit department. We should be focused on the value of our work.

The myth: Moving people around allows us to rescue late audits. It’s common practice to move people from audit to audit in a bid to make up lost time or hit department targets.

The reality: Breaking up teams and moving people around only makes late audits later. Adding people to a late project only makes it later.

Agile-minded leaders actively practice and promote:

Stable, focused, and longer-lived teams

  1. Stable. Keep the teams together and intact for the whole audit. Stable teams have the opportunity to become high-performing teams. See Tuckman’s team maturity model.
  2. Focused. Give your teams the benefit of focus by allowing them to focus on one audit at a time, or perhaps two. No more.
  3. Longer-lived. Not long-lived - ideally for six months, so as not to reduce development opportunities. Then, bring the work to the teams.

Example behaviors:

  1. Undertake detailed and collaborative team design every quarter or six months. Design teams around core and complementary skills. Create “Teamsheets” (who’s on the team and which audits) and then take the work (the audits) to the teams (not the “resources” or people to the work).
  2. Keep the teams together. It’s the most efficient way of working - and only break up a team as an absolute exception (play less resource Tetris!).
  3. Don’t break up a team to rescue another audit – it’s an inefficient way of working. See Brooks’ law: Adding people to a late project only makes it later. It’s primarily the inefficiencies of stopping the late audit to bring new team member(s) up to speed and then continuing. What I often see in internal audit departments is a disproportionately large amount of resource having to be added to a late audit to counterbalance the impact of Brooks’ law, and also underplaying the disturbance to the donor team and the context switching for the people involved.
  4. Do not stand teams down at the end of an audit (avoids having to build them back up again in a different team (it’s 20 percent more efficient)).
  5. Ensure that no team ever works on more than two audits at a time (rather than inefficiently context switching across multiple audits).
  6. Help promote Kanban’s widespread adoption among teams by using a Kanban board with the leadership team and for visibility and transparency of all work at the department level.

#3. Agile-minded internal audit leaders are servant-leaders

The myth: To be a great leader, "I lead." Often interpreted as a command and control management style.

The reality: To be a great leader, "I serve." I serve because I am the leader, and I am the leader because I serve.

The myth: Change is for others in my department.

The reality: A great leader strives to continuously improve and be a role model for continuous improvement.

Agile-minded leaders actively practice and promote:

Servant and intent-based leadership

  1. Encouragement, support and development of your people
  2. Enable, remove blockers, resolves conflict
  3. Intellectual authority, foresight
  4. Collaborates, shares, coaches
  5. Listens, trusting, humble and self-aware
  6. Sets intent rather than micro-manages

Example behaviors:

  1. Encourage and coach teams to use a team-level Agile framework (it’s basically an enforced rapid feedback loop). Give air cover and safety to those looking to work in a more agile way.
  2. Ahead of each audit, signpost new ways of working to stakeholders (support the teams to make this important step rather than leaving them to do it).
  3. Ensure that Professional Practices support greater agility and new ways of working. Participate in a rapid feedback loop with the Professional Practices and QA leads to continuously improve and ensure that feedback and learning is incorporated into audit methodology and other working practices.
  4. Set the intent and value proposition for every audit. Before the audit has started, provide your insights and strategic horizon scanning to audit preparation and getting “audit ready” (rather than during or at the end, when it might require rework).
  5. Remove blockers to help the team deliver and address stakeholder engagement issues for the teams.
  6. Attend stakeholder reviews each week or bi-weekly (not at the end of audit).
  7. Reduce wordsmithing the final report by being engaged throughout the audit and promoting incremental reporting, where possible.
  8. Ensure rapid feedback loops are in place for the leadership team to hear what can be done to help the teams deliver work of the highest value.
  9. Deep listening to feedback to understand and improve (not to respond).
  10. Coach and support your people on a rolling and regular weekly or monthly basis.

Conclusion

We need a new playbook for Internal Audit. One part of the solution is to work in a more agile way.

Being more agile-minded requires new behaviors and for people to think differently about what they work on and how they work on it. For greater agility to be highly successful, leadership needs to actively practice and promote this new way of working. It’s not hard to get started. Try any one of the examples I’ve provided here. Start small, learn fast.

I’d welcome your feedback. It’s my rapid feedback loop! Email: [email protected]

Finally, frequently asked questions on this topic:

Q. Does greater collaboration or rapid feedback loops impact our independence?

A. Maintaining independence does not mean working in isolation or breaking our code of ethics.

Q. Does working in a more agile way stop us from meeting the IPPF?

A. Working in a more agile way enhances, not removes, our ability to meet IPPF, code of ethics, or regulatory obligations. Being more agile is about ways of working (and thinking: mindset).

Q. What’s a good metric of success for agility?

A. Reduce the time taken to deliver value to our stakeholders (not being overly focused on the number of audits completed against annual or quarterly targets). Watch this space. In the coming months, I’ll be talking about the range of success metrics for more agile ways of working.

Mark Williams
Mark Williams
Business Agility Coach and Trainer

Respected and industry-recognized coach and trainer for 8 years. Over the last 3 years, he solely coached IA and Assurance functions. Founder of Agile Outside IT, business agility specialists. Agile auditor and leading for agility in IA classes.

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