It’s become common practice at many companies to conduct internal audits of the company’s culture. Auditors assess leadership, tone at the top, ethics, and the general emphasis on doing the right thing, among other aspects. Culture audits can be completed as part of a stand-alone assessment of the entire organization’s culture or as part of other assurance projects to consider how culture affects a particular unit or function.
But what about internal audit’s own culture? Who is auditing that? Who is ensuring that internal audit is modeling the right values and operating as a beacon for the company? It may be time for internal audit to take a long look in the mirror and ensure that it is practicing what it preaches and setting the right example on matters of tone, ethics, and positive values.
“Unhealthy cultures lead to poor performance, lost talent, and likely poor relationships,” says Scott Newman, senior vice president and general auditor at Columbia Bank. “A strong department culture that is aligned with a strong company culture allows for conversations that go beyond just risk and control.”
Yet, assessing the culture of your own department is no easy task. And influencing it to achieve the culture you want in your internal audit department is even harder. Certainly, the pandemic hasn’t helped. Working remotely can strain relationships, create added stress, and foster misunderstandings, since face-to-face, in-person meetings are still uncommon.
In the past when you sensed there were forces at work negatively effecting the culture of the team, a common response would be to plan a team-building session. Off you would go, into the woods somewhere for some trust falls, a scavenger hunt, or other bond-building exercises. Regardless of the activity, the point was to humanize relationships with each other and work on the internal audit department’s culture. Unfortunately, whether those worked or not, they are mostly off the table in our current reality.
So, how do you assess your internal audit department’s culture? What do you do to keep your finger on the pulse of the culture? And what can you do to improve it in these dynamic times? We set out to consider some of the tips and tools for assessing and improving internal audit’s culture.
Elements of Internal Audit’s Culture
Attitudes – While subjective in assessment, the attitudes of the folks in your internal audit department are not hard to determine. Is there one person always complaining? Is there someone with whom no one else wants to work? Are clients throughout the organization telling you there are staff members they would prefer to not have in their area? Are staff members embracing new opportunities and challenges, or do they “pooh-pooh” anything that is not consistent with what they have always done in the past? You have barometers as to the attitudes in your group. But do you act on the attitudes that are negative and not what you want to see, or do you let it go? How often have you told yourself you should have addressed something sooner, applying hindsight?
Engagement with Mission, Vision, and Values – Your organization has (or at least should have) the strategic pillars of a mission, vision, and corporate values firmly established. Each organization is different, though, in how it goes about promulgating these pillars and getting engagement with them. When it comes to your internal audit staff, are they leaders or followers when it comes to engaging with these strategic pillars? Do they care, and does the rest of the organization think they care? You want your staff to be setting the example for the organization, and having these pillars affect all their work, and their approach to the work and each other. And, if they are not setting the right example for the rest of the organization, why not?
Demand for Advisory Projects and Desire to do them – All internal audit functions aspire to be a trusted advisor to the organization. As Richard Chambers, senior internal audit advisor for AuditBoard and past CEO of the Institute of Internal Auditors, states in his book, Trusted Advisors: “Becoming a trusted advisor involves not just what you know but also how you get things done.” It is the “how you get things done” part that moves you from being smart to being in high demand. For example, someone who knows a lot, but is difficult to be around will not be in high demand for their services. So, is the phone ringing for requests to do advisory work and advisory projects, especially in areas of rapid change in your organization? Are your staff members routinely asked to participate in projects? While what they know might be the ticket to gain entry, it will be how they get things done (their attitude, relationship acumen, and positive approach to the work) that will get them invited back for encore performances.
Assessing Internal Audit’s Culture
Surveys (formal and informal) – Most internal audit functions have mechanisms in place to gather feedback after audits and other projects, typically a survey. Such feedback can provide a good indication of how team members approach their work and how auditees view the performance of the audit staff, providing a window into the culture of the department.
While helpful, formal surveys aren’t always the best at gathering subjective feedback on the attitudes of your internal audit team members and their interaction with each other. In addition to surveys, I encourage talking with one or more of the audited area’s departmental leaders before, during, and after each project. Discuss how the internal audit team members interacted with each other and with those at the unit or process being audited. Were the auditees impressed with the caliber of the individuals? How about the professionalism, approachability, integrity, and the “way they carried themselves?” Informal feedback, over successive projects, will speak volumes as to whether your staff are engaged, are good ambassadors of the organization’s culture and values, and are upholding your expectations of them in how they interact with the rest of the organization.
Staff meetings – Staff meetings are typically structured so that leaders share what is going on in the organization and, in turn, staff give project updates. All good and important stuff. But how much time is dedicated to asking how internal audit team members are doing? The more personal these interactions can be, the more people will speak openly. If internal audit leaders really want to understand the culture of the group, just shut up for a bit (as hard as it is to do sometimes) and listen. Pay attention to those who aren’t talking and ask them questions. Provide time to talk about non-work topics and let the team ask you questions. Staff meeting are valuable tools (even when they are done on Zoom calls) for assessing the team’s culture.
One-on-one discussions – Group staff meetings are good for assessing how team members interact with each other. It’s also likely internal audit leaders plan one-on-one meeting with direct reports to get assessments how their reports are doing. But are you having one-on-one meetings with those who are one or more levels below on the departmental hierarchy? How else will you get a real feel for what is going on, how people are really doing, and what is on their collective minds? It will take time, and quite a few iterations, to get people fully trusting that they can talk to you about anything, but that freedom will open an especially important and insightful information channel. A finger on the pulse of what is really going on!
Team meetings away from the office – You do not have to always use formal team-building sessions to create a shared sense of purpose and work on your department’s culture. But it does take continual interaction and sometimes getting away from the office is necessary to create a more relaxed and informal environment. With the pandemic, there have been less opportunities to do that, and remote work and remote groups that are physically distant create challenges. That doesn’t mean you shouldn’t try. Even if it takes having someone other than internal audit leadership facilitate one or more sessions of your group. As one internal audit leader told me recently, as he is in the process of trying to merge two groups into one: “We’re holding several workshops as we plan for 2022 in hopes that if we align our plans, we’ll have less conflict early and start to see the value in working together as one team.”
Improving the Culture of Internal Audit
Discuss company values openly and explicitly – Every organization, at least every single one I have run across, has a mission, a vision, and a set of values. These core values are supposed to define the desired culture of the organization as it fulfills its mission and pursues attainment of its vision. As famed leadership author Patrick Lencioni articulated in a 2002 Harvard Business Review article “Make Your Values Mean Something”: “Core values are the deeply ingrained principles that guide all of a company’s actions; they serve as its cultural cornerstones.” Yet, within your own internal audit function, when was the last time you specifically talked about the company’s core values? When was the last time you explored what you do and how you do it in relation to those core values? When was the last time you assessed the perceptions of your group of professionals throughout the organization as “ambassadors” of the core values and, consequently, of the culture?
For more on internal audit’s role as an ambassador to the company, See “Add Another Role for Internal Audit Leaders: Company Evangelist”
Discuss what needs to change within the function – When it comes to identifying and introducing change within the internal audit function, all eyes fall on the chief audit executive. Leadership bestows on them an obligation of identifying the need for change. Since they have strategic perspective as well as the ability to see the big picture, they will likely see the need for change before others. But internal audit leaders also have blinders on, right? They come to work with their own set of biases, and there are things they just miss or misinterpret. When was the last time you asked your team members, what needs to change in our department? Why does it need to change? And, most importantly, what would you suggest we do to change it? What would you do if you were me?
Put people in charge – When people have some autonomy, can be creative, and are empowered, they are much more committed their job, to their team, to the mission, and to the company. As Rosabeth Moss Kanter expresses in her 2001 book, Evolve!: “When time with a company comes to mean something that resonates with the human quest for a higher purpose to life … [It’s about] making employees proud to work there and giving employees the chance to do more than just their job.” So, beyond the duties expressly outlined in someone’s job description, are you also giving your staff opportunity beyond the defined role? Are they routinely and often able to be autonomous, creative, and empowered, and help move the department and the organization forward in ways that they are specifically interested and well suited to excel?
Conduct “stop, start, and continue” exercises – Sometimes the path to improving a department’s culture is not just toward doing something new or different, but it might include stopping something entirely. A great method to consider is doing a “stop, start, and continue” exercise. Get everyone on your team to list out the three things the group needs to start doing, three things the group needs to continue doing, and, importantly, three things the group needs to stop doing. And, then have a team-building session around it. You will identify some remarkably interesting things, some very actionable items, and, in the process, might improve your departmental culture collaboratively and inclusively.
Mirror, Mirror
It’s likely that the difficult circumstances of the last two years have had an impact on the culture of the organization and on the culture of the internal audit department itself. As we hopefully begin to emerge from the pandemic and attain some normality to our working lives, it might be a good time to take the figurative temperature of the organization.
Before you do, it makes sense to get a better perspective on the culture of the internal audit team itself. Remote work and the stress of the pandemic has likely impacted internal audit’s culture too, negatively and maybe positively as well, as internal audit sought new ways of working. Before you can ask the organization to change its culture, you must first hold up a mirror to yourself and ask the difficult questions. Are you happy with how we approach the mission, vision, and values of the organization?
We must expect from ourselves anything and everything we expect from others. And that starts and ends with our attitude to the job, our values, and how we uphold the culture.
Then, work on the team culture and position your staff not only for greatness, but to be the department everyone in the organization admires for living the organization’s values. In fact, who knows, they might even look forward to that next audit. 
Hal Garyn is Managing Director and Owner of Audit Executive Advisory Services, LLC based in FL.