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[thoughtnodes-blog]

Why would I ever join Internal Audit??

The mention of “Internal Audit” often conjures images of a “policing” organization, populated by cold-eyed individuals dressed in black, focused on finding fault, oftentimes in smaller, low value-added things, and who seemingly are paid by the finding, deriving great pleasure from “writing people up”. Most of us normally have somewhat of a challenge picturing this area when thinking of how to develop our careers. It is a fair question that tends to come up when the subject of spending some time in Audit comes up. So I decided to write this to share my thoughts in light of my own experience. The Call Before my current role as head of the Audit function, I was deeply immersed in “the business”, working as CFO for large units in the pharmaceutical industry- very close to the “heart beat” of the company, part of the decision making process for things that up to a few years before I was reading in business magazines, along for the exhilarating ride of creating new revenue streams and defining long term strategy. When Finance decided to transform itself- quite successfully- to improve service delivery and materially reduce cost, I was asked to play a very active role. I was continually challenged and stretched; never a dull moment. I was also on the receiving end of many audits. Audit was not a consideration. So when I was called upon to join Internal Audit as the Chief Auditor for Philips Healthcare (when Philips was organized into sectors, before it split into Health Tech and Lighting), my first response was “no thanks”. I had a strong prejudice based on the limited value-add I had perceived in most of my experiences to that point. But still I ended up running Internal Audit! Why? The surprise During the approach and conversations along the process, one of the first things I noticed was the reporting line. The function reports directly to the CEO and to the Supervisory Board, a very clear sign of the seriousness, importance- and expectations- that the company places upon Internal Audit. The CEO and CFO of the company quite successfully described their reliance on Internal Audit as a change agent, driving excellent execution, exposing and helping manage risks to the company’s objectives. I learned about the team itself- key talent from across the organization, very bright, highly energized, with great business acumen and fantastic energy. I saw the clear impact they made through some exciting audits touching key projects, initiatives, and aspects of the business. And, I observed their track record of providing a window and entry into different businesses across the world, helping its alumni land in key high impact roles for the company: CFOs for businesses, Heads of Marketing, Country Managers, etc. So I joined, and have not looked back. The value-add To be sure, basic controls- three-way match, access controls, and the like- are extremely important, and Audit certainly plays a central role ensuring the first and second line of defense (simply put, all operators and management) have them in place and optimally functional. However, the main contribution Internal Audit makes is providing an independent assessment of whether execution is on track to deliver on strategies and long term goals, helping determine in an objective, data based way, whether things are in place and on track to successfully deliver on them. There is a clear link to top and bottom lines, and to business growth. The Talent Factory In the case of my organization, our success depends upon establishing and nourishing an active and enriching talent “churn”, where key contributors from all areas join engagements in all aspects of the business across the world. We actively promote this rotation, designing a path that lasts between three to five years, in which we expose them to the most senior layers of management in all functions and businesses, and have them participate in impactful- and sometimes, tough- conversations that affect the business in a positive way with global effect. The breadth of business situations and the exposure audit teams get is quite unique. We actively push, help, and encourage our colleagues to “move out”, taking impactful roles their Audit contributions. We have focused quite strongly on continuing to attract, stretch, and develop talent for the organization. We continue pushing them to come up with new analytical tools and approaches, leveraging all the data at our disposal, with better ways of working, and enhancing their effectiveness in Senior Leader interactions. The team constantly has the necessary interactions to identify key risks with colleagues at all levels throughout the organization, helping them leverage best practices from across the company, determine the root causes for issues identified during audits, and facilitating the development of effective action plans to manage- i.e., identify and mitigate- risk in their plans, projects, and operations. Our focus on becoming trusted and impactful to the business, best in class, and a great place to work, has helped us consistently attain engagement scores at or near the top, company-wide. So, again, why would you ever join?... Audit colleagues travel around the world, diving deep into diverse aspects of the operation and strategy, and discussing them with Top Management. They bring their knowledge of the business and operations, and the richness of their backgrounds, and use it to further develop a very rich knowledge of the company and how things are done in different places. This typically arms them with a very rich set of skills which they bring into- and which helps them find- their next career steps. The systematic, hypothesis-driven approach to problem develops good analytical discipline that enables them to “hit the ground running”. The talent profile makes for very animated, productive, energy charged interactions among team members across the world. This is what Internal Audit gives you- it is a great place to have an impact on the business, a great talent developing platform and a springboard for future growth. Senior leadership teams of several world-class companies contain a high number of Internal Audit alumni. Now I know why. So this is what’s in it for you. This is how come I ended up joining this great organization, and some of the things that put significant wind in my sails. I have found this job to be a great window into the business, and a fantastic opportunity to network and interact with all Senior Leaders in the organization, pushing us as a function to remain relevant and knowledgeable about the business. The opportunity to lead and keep on building a team of high-caliber colleagues has been a fantastic and very formative experience that should be a part of everyone’s journey at some point. So consider this when evaluating where to go next. An Internal Audit stint enables you to not only create significant value for the company, but also for you, which you can add to your toolbox and take with you to your future career, wherever you decide to take it.