Whether we as members of the profession like it or not, the word auditor typically does not elicit warm, fuzzy feelings. And while we've made great strides toward improving the profession's image, most practitioners would likely agree that it falls short of where they'd like it to be. This reality, while unfortunate, is important to accept — particularly when it comes to assessing the department's brand. In fact, acknowledging the stereotype we carry with us is the first step toward brand improvement.
Using this acknowledgment as a jumping-off point for change, internal auditors can develop a solid strategy by following several steps aimed at improving the audit function's brand and communicating it with stakeholders. These steps can be used to turn the brand around, or to establish a brand if one does not already exist. When implemented correctly, the process should result in a more positive image for the department, and improved relationships throughout the organization.
Identify Your Customer
Who, realistically, is the audit function's primary customer? Who will the department focus its energies on ensuring is satisfied? Is it the board/audit committee? Senior leadership? Or is it some other layer in the organization? Internal auditors' natural inclination might be to say they want to serve everyone, but attempting to serve everyone will result in serving no one.
Identifying internal audit's customer may be as simple as looking at the function's reporting relationship, but often it's not that clear-cut and, of course, no two organizations are alike. For example, while the CAE frequently reports to a member of the C-suite or the audit committee, not all organizations are structured this way. Moreover, if internal audit is supporting a lengthy implementation, its primary customer may be different during that time frame — even though it retains its organizational reporting relationships. Accordingly, internal auditors must do their homework to correctly identify their primary customer.
Define Your Brand Ambitions
Regardless of how internal audit perceives itself internally, the department should define what it wants its brand to be. This process should involve consideration of the department's primary customer, the department's strengths, and what it is striving for but hasn't achieved yet. The bar should be set high.
Do You Have a Branding Problem?What we do, as auditors, is valuable work. We carry a unique role and have a unique visibility into the organization that many others do not possess — and this simply comes from doing our day jobs with no additional effort. Quite simply, if an internal audit department is not adding value to the organization, and especially if it is perceived as not adding value to the organization, it may have a branding problem.
Evaluate Your Existing Brand
Some internal auditors may think they know where they stand with clients, but in reality I'm not sure any department really does. Why? Most audit functions likely receive feedback via one or two mechanisms: formal customer satisfaction surveys and informal meetings. While these can be useful sources of information, each has its drawbacks:
- Client surveys. Although clients may complete the questionnaire forms, what real information do they provide beyond the measurement scale (i.e., a rating of some sort)? If the comments field is blank, internal audit is not getting the feedback it needs.
- Informal meetings. Auditors may not necessarily be getting true, candid, constructive criticism in their informal face-to-face discussions. More likely, auditors learn what's on the client's mind in that moment, without much consideration of everything the department does.
Internal audit can't know where it stands without asking. With that in mind, I recommend a couple of approaches.
Confidential, 360-degree Feedback Surveys Practitioners should cast as wide a net as they can, but ensure that the target customer is well-represented — even if it's the board/audit committee. The human resources function can often provide assistance with survey efforts.
In my experience, 360-degree feedback surveys represent all tiers of stakeholders — including the audit function's peers, its direct reports, and organizational leadership. The survey is tailored to each group, and results are aggregated by group, inclusive of some overall higher level commentary as well. It provides an excellent means of candid, constructive feedback. To optimize results, the survey comments fields should be made mandatory, not optional. Open-ended comments usually represent the best, most useful form of response.
Candid Feedback at Meetings The audit team should consider inviting a key stakeholder to one of its staff meetings to offer both positive and constructive, critical feedback. I find this to be the most divisive recommendation among people I speak with, mostly because of concerns about what stakeholders might say to the team and the pressure of receiving potentially negative news. Following some ground rules can help alleviate these concerns:
- Select someone the team knows and trusts. This rule is certainly not absolute — for example, if the audit committee chair or a board member or senior leader attends but is unfamiliar to the team, the stature of these individuals will still capture the auditors' attention. Otherwise, familiarity with the stakeholder will, in particular, support constructive feedback.
- Meet with the stakeholder in advance. The chief audit executive (CAE) should discuss openly and candidly with the stakeholder what the audit team is doing well, and what it can do better. The CAE should also ask the stakeholder to request feedback from his or her team, as the leader may have an incomplete picture of internal audit's strengths and opportunities.
- Ask the stakeholder to provide examples the audit team can relate to. The CAE should coach stakeholders on sharing constructive feedback in a way that facilitates discussion, as opposed to simply delivering criticism. Stakeholders should be encouraged to cite concrete examples to illustrate key points.
- Make sure the team agrees on actions to address. The actions can support development of the audit function's branding goals.
Establish Goals and Communicate Your Efforts
After defining the department's brand and receiving stakeholder feedback, internal audit should set measurable goals and deadlines. Even though branding may seem like a structurally loose process, internal audit can still craft meaningful, concrete goals around it. The goals can be focused around metrics and data gathering (interviews, feedback sessions, surveys, etc.) as well as measuring the change in these metrics over time to ensure progress is made.
The CAE needs to ensure the audit team's thorough commitment to the branding process at this stage. The amount of time and organizational resources devoted to branding can be significant, and those efforts should not go to waste. A naysayer on the team who doesn't support the branding effort could undermine any progress made, and consideration must be given to how this risk would be addressed.
Internal audit should also make sure stakeholders are aware of the branding initiative. The department doesn't necessarily have to label the process as "branding" — instead it could be described in terms of goals, areas of focus, etc. Moreover, stakeholders should be informed that internal audit expects them to provide feedback on the departments' progress.
A Solid Commitment
Committing to a branding effort can help change, or establish, the perception of the audit function and enhance stakeholder relationships. To succeed, internal audit must invest sufficient resources and be prepared to encounter challenges along the way — all of which can be overcome. Audit functions that haven't embraced this effort should ask themselves, "What's holding us back?"