My apologies. When I started this blog post it all began with the paragraph that follows. And then I got to typing, and typing, and typing, and next thing I knew I’d gone on, shall we say, just a little longer than is comfortable for a blog post. All this to say, you can expect a few more posts on this subject throughout the week. Yes, I’ll be nice and spread it out. But I beg you to indulge me as I go on about what I consider an important subject — getting the right people to do the right kind of job in internal audit.
Moneyball. Have you seen the movie yet? I haven’t, but it’s waiting in my Netflix queue. However, I have read the book, I greatly enjoyed the book (I have yet to read anything of Michael Lewis’s that I did not enjoy), and I was taken by two things.
The first (just as the word of mouth has indicated): It is hard to imagine this being translated into a movie. The story of a should-have-been-great ballplayer achieving short success and quick failure, who then goes on to become the Oakland A’s General Manager and, in a rather idiosyncratic way, uses number crunching in one of the most statistics driven sports in existence as a way to “cheap” his way into the playoffs, while compelling as a book, does not appear to be the stuff of cinematic greatness.
Of course, if critical acclaim and box office dollars are any indication, the results of the movie have proved otherwise.
The second: The really intriguing part of the story is the idea of Billy Beane taking conventional wisdom, turning it on its head, and grandly succeeding in spite of what the naysayers…nay said. In particular, I found it engrossing watching him prove that conventional wisdom regarding the statistics and gut feelings that everyone knew were central to choosing those ballplayers who would succeed appeared to be smoke, mirrors, crystal balls, tarot cards, and haphazard statistical sampling.
And I read it thinking to myself, “There is a lesson for auditors here.”
I am firmly convinced that we are choosing, evaluating, and determining the future of internal staff with little more in our arsenal than gut feelings, poor measures, and our natural prejudices. And it is time for us all to step forward, just as Billy Beane did with the A’s, and say “this is all ca-ca, we really don’t know the skill sets needed to succeed as an internal auditor (as the type of internal auditor that needs to succeed in this new generation), we don’t know how to evaluate those people, and, at its root, we really don’t even know how to evaluate our own success.”
Let’s start with that last point. In the February issue of Internal Auditor, I wrote a short piece about the need to better understand our customers — what they want from us and what they think constitutes a successful internal audit department — and, from that, redefine what we see as success. I got some interesting comments from various sources on this article; most were in the “Amen, brother” category. In other words, I don’t think I’m alone in wondering what we are doing wrong when it comes to measuring our success.
I will not go into it to right now. Suffice to say that I think the problem is we do not have a single measure that is of interest to our customers, and we do not have an understanding of what our success looks like to our customers. Our constant search for the holy grail of measurement shows we don’t have this under control.
Not a problem that Billy Beane faced. Figuring out success in baseball is easy — you win games. However, Beane was forced to change that definition because his customers (his bosses) cared more about the bottom line. And so he redefined success. It was not winning at any cost; but winning at a lower cost.
And therein lies our first challenge. No, not winning at a lower cost, but redefining success away from our audit-centric mindsets to the way our customers understand it.
Which then leads us to the nasty question, how can we determine what a successful internal auditor looks like if we have misdefined what makes a successful internal audit department? Which brings us back to the first points; we only pretend to know what the skill sets are for a successful auditor, and without that we don’t know how to hire and develop those people.
But, as I warned, this turned into a long write-up, and so we will begin to tackle those questions in the next couple of days.
Feel free to tune back in. And feel free to drop me your thoughts before we even get started.