Brain-Dead and Branded

A Servicing Company had appointed a branded internal audit firm for four years continuously. Next year, the partner of the firm became Chief Internal Auditor of the Company who was managing its internal audits for all these years. The Managing Director was somewhat satisfied with his services. However, looking at the latest internal audit report, Managing Director became very concerned as it raised only the pending issues of the last year.

Managing Director knew that his line managers were performing reasonably well even during the bad times. After discussing with his line managers and the Chief Internal Auditor, he realized that all the recommendations, though got implemented in spirit, had not been implemented in the form as suggested by the Internal Auditor.

Internal Auditor was a knowledgeable person but he was not able to add more value with any newer perspective since long. Managing Director realized that they have been always basically washing themselves with the same dishwasher i.e. all ideas of his have been listened to and there have been no fresh perspective from a newcomer who could have brought new insights about the business.

Managing Director immediately decided to change working of the internal audit function to make it more meaningful for the business. He resorted to bring rotation of duties with in the organization to change the leaderships. He thought it's not the branding which is essential as much as the competency to provide innovative and frank views without fear and favor. Thus, he worked with new risk consultants and not any branded consulting firm to change the way Internal Audit had been functioning. This ensured that they did not all go brain-dead talking to each other on the same topic just using latest buzz words which are not capable of bringing any new insights.

Simply, in most of such situations there is a need to change the entire IA function i.e. IA organization, IA leadership, IA strategy, IA technology, IA culture, Business Control Framework and Management Accounting System. Not for sake of bringing newness but to connect it with business results.

What is difficult to change is the thinking of these so called experienced top nuggets who say that there is nothing new or rocket science. These are the people who have not yet changed their ways. They have actually gone brain-dead.