GE Capital's CAE of Internal Audit, Joseph Pizzuto, knows the value of development and training when it comes to staff recruitment and retention. GE's employees are considered valuable assets to the company, and are invested in as such.
The internal audit department is no exception. Using a rotational model and a specific training curriculum, GE's auditors have a broad understanding of the business and are poised to address the myriad risks the organization may face.
What makes GE's leadership philosophy unique?
What sets GE apart is that we believe every employee is a leader. Whether they manage people and regardless of career stage, they are empowered and expected to lead. In a culture like GE's, leaders inspire others to be their best. When one person grows, we all grow. Leadership development has been integral to GE's culture since the company was founded more than 130 years ago. We believe that leaders at GE never stop learning, developing, and growing. Today, GE invests US$1 billion in employee development every year.
At the IIA's All Star Conference, you'll be presenting on best practices in developing innovative capabilities in your human capital. What does GE's internal audit training program entail?
Our philosophy is that you learn by doing. Eighty percent of training happens on the job through challenging assignments, stretch opportunities, and a good deal of exposure to executive management. We also developed a specific training curriculum for internal auditors called "Audit Academy." The training program is rooted in a comprehensive skills competency model designed to ensure we maintain and develop the audit skills necessary to evaluate the full spectrum of risks at GE. Our Audit Academy focuses on four specific areas of training: technical audit skills, business/product knowledge, personal development/leadership, and professional certification.
An important part of our job as auditors is to effectively communicate the results of our work to key stakeholders. We provide regular opportunities for our early-career talent to prepare updates to executive management. Their challenge is to deliver clear, concise, and insightful messages on audit results, themes, and root causes. Feedback is provided to employees to further sharpen their messaging. As employees advance in their career, we even provide direct exposure to board members.
What are some of the benefits you've seen at GE with a multi-year rotational model for internal audit?
Internal audit has used a multi-year rotational program as a talent accelerator, fast-tracking our best talent for GE leadership. The Corporate Audit Staff program is more than 100 years old and has served the company well. Many of the company's business and functional leaders have come through this program. This experience provides an early foundation in the importance of effective internal control and risk management that they take with them as they advance within the company. Because so many of the company's leaders have spent time in internal audit, it has served to elevate the stature of the function. It also ensures leaders understand and appreciate the work that audit does and the value it adds. This helps eliminate a lot of the anxiety associated with our work and keeps appropriate focus on effective remediation of issues.
What are some of the specific talent challenges you've faced at GE?
The demand for audit professionals in the financial services industry is particularly strong. As such, competition is tough and attracting and retaining top talent is a challenge for GE. Banks and accounting firms have been aggressively recruiting experienced auditors. In recent years, financial services regulators also have published renewed guidelines that define heightened expectations for internal audit functions. Among them is an expectation that internal audit will maintain the requisite skills to audit the full spectrum of risks facing the organization, including key technical areas like capital planning, model development, and model validation.
Recent surveys have identified shortcomings in internal audit's technology-related skills. How does GE meet its technology-specific training needs?
Technology audit resources are in high demand in the financial services industry. Aggressive recruiting, staff development, and retention programs are essential to ensure that the audit function is staffed with the right skills. Increasing cyber threats are driving the need for specialized skills to work with management and the board to ensure organizations are well protected. We have invested in training and development opportunities for our IT resources including individual training, group training, using industry vendors, and a program that supports key certifications (such as Certified Information Systems Security Professional or CISSP). We also use a system of internal networks to enhance on-the-job training.
Joseph Pizzuto will present "Best Practices in Developing Innovative Capabilities in Your Human Capital: A World Class Training Program" at The IIA's All Star Conference on Oct. 20, 2015, in Ft. Lauderdale, Fla.