Consumers now look for instant gratification, whether via a constant push of information, instantaneous transactions on smartphones, or online shopping experiences enhanced with artificial intelligence. Email is already dated as it is replaced with the velocity and simplicity of text messages and tweets.
In his 1996 book "The Road Ahead," Bill Gates wrote about a future global economy based on friction-free capitalism — an economy where business, the internet, and networked devices work together to not only simplify the consumption experience but to increase consumption by providing businesses and consumers with real-time information for decision-making while minimizing barriers to the consumption process.
Think of the impact to the music industry. In a relatively short amount of time, we went from searching for CDs in massive retailers to sampling songs, making a decision to buy (the song or the whole album), and instantly being able to listen to what we just purchased. The "middle man" has been eliminated, greatly reducing friction in the consumption process and completely shifting consumer behavior to expect frictionless processes and instant satisfaction.
As internal auditors, it is important that we remember that our stakeholders are consumers as well: consumers like I described above, but also consumers of the information and recommendations we provide. As their expectations have shifted into this developing, frictionless world, are we keeping pace? Below are six tips for removing friction from the audit process:
- Do your homework. Before you engage your client in an audit, make sure you have done as much homework as possible to know as much as you can. Online research; networking and sharing with auditors from other organizations; and tapping into external resources with the right expertise are all things you can do before you interact with your client. Showing up at your entrance conference prepared and armed with sufficient knowledge goes a long way to demonstrating that you are a competent auditor. It also reduces some of the back and forth with management, reducing friction.
- Simplify communications. It is human nature to want others to understand the amount of effort spent on a given activity, behavior carried over from youth that juxtaposes "Hey! Look what I did!" and "I've spent so much time on this, it must be great." This often manifests itself in long, highly-detailed communications throughout the audit process up to and including audit reports. The reality is that individual attention spans are dependent upon a combination of the consumer's willingness to engage and the appeal of what is being delivered. In other words, find a way to connect your audit to something the stakeholders find important and deliver that message simply and directly without clouding it with unnecessary detail. Audit reports should be the genesis of positive change, not an exhibition of the volume of work performed.
- Prioritize and focus audit work. Without proper guidance, many auditors give equal weight to each of the areas covered in a given audit. It's important that risks are assessed at the engagement level and work plans are adjusted to focus efforts on higher risk areas while backing off (not ignoring) other less risky areas. An audit work program should never be set in stone. It must be adjusted throughout the audit as new information is gathered and auditors gain more insights into what they are auditing. Empower your leads to question and adapt throughout the audit.
- Gather your own data. Internal audit functions should have the knowledge and ability to directly access the data they need to support their audit. Getting access to your organization's ERP and other critical systems should be a top priority not only to reduce friction during an audit but also to ensure the unfettered access to the data you need, when you need it. Too often data access cripples audits and creates friction when multiple requests are made to get the data you need.
- Emphasize relationships. Personal friction occurs when there is a lack of trust. To build strong, professional relationships with those we audit, we must be trustworthy. That way, our customers will trust that we will always do the right thing. There is a thoughtful TED talk from philosopher Onora O'Neill on "What we don't understand about trust" in which she describes three key characteristics that make up being trustworthy: competence, honesty, and reliability. Competence involves the possession of required skill, knowledge, qualification, or capacity. Honesty is the quality or fact of being honorable in principles, intentions, and actions; upright and fair. Reliability is the ability to be relied on or depended on, as for accuracy, honesty, or achievement. These three traits are critical to reducing, or perhaps even eliminating, personal friction during an audit.
- Embrace innovation. Perhaps most important is to embrace innovation. I'm not talking about disruptive innovation that completely shakes up the audit activity and the organization (although that might sometimes be necessary). Instead what I mean is that we need to constantly challenge how we do things and why we do them. In other words, the same professional skepticism we use during audits should be used on ourselves. For example, if you ask, "why does it take 30 days to deliver an audit report?" and the answer is "because that's how it has always been," you might need to step back, reevaluate and consider the amount of friction in your report development process.
The world is more connected every day and information is everywhere. New technologies are emerging and existing technologies are maturing as organizations leverage vast amounts of data to deliver instant satisfaction to consumers. Consumers feel more empowered than ever and their behaviors and expectations are shifting with this change. While you don't necessarily need to be an early adopter, it's critical to be an early adapter.
That's my point of view, I'd be happy to hear yours.