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The Convergence of Internal Audit and Entrepreneurism​​

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I’ve spent the better part of two months (yes, it’s really been that long) using this blog to talk about competencies that I believe are important for any internal auditor. The basis for these posts was a blog post from the Center for Creative Leadership titled “7 Competencies for Freelance Success.” And the voluminous information I have subsequently produced all started with the simple idea that there are parallels between being a successful internal auditor and being a successful entrepreneur.

Now, when it comes to the competencies internal auditors need for success, the seven that have been discussed (flexibility, learning agility, relationship management, resilience, risk-taking, self-awareness, and tolerating ambiguity) only scratch the surface. They are not the end all and be all of competencies every auditor needs to succeed. (The Center’s original blog post echoes this sentiment in the final paragraph. “This is a selective list, so by no means is it exhaustive or definitive.”) The competencies that have been discussed are only a beginning. But I find them valuable because they are not the kinds of competencies we often think of in the internal audit world.

And that is kind of the point.

In seminars, conferences, blog posts, articles, and any other communication method within the internal audit world, I seem to be constantly hearing that the future is not only catching up to the profession but may have already passed us by. To ensure we keep up, we have to think differently, act proactively, and wrap it all in a creative and innovative package.

Taking a new look at the competencies we use to define success is an important step in changing our antiquated mindsets, readying us for the leap into that future.

Because, the one thing I think I really want everyone to take away from this — the thing that may be more important than each of these competencies and all the underlying ideas and concepts that can surround them — is that we cannot continue to think like “internal auditors.”

We have to start thinking like entrepreneurs.

And at this point, (and, actually, way too late in this discussion) we should probably come to some kind of agreement about what we mean when we say entrepreneur. There are a lot of different definitions that go a lot of different directions. But I like the one from dictionary.com: “A person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.”

Because, this is the kind of mindset internal auditors need to have if they are really going to be a part of the future. We have to organize and manage our departments (nothing new there), but with considerable initiative (driving for something better) and risk (we may fail, but if we do not try, an even worse failure is a foregone conclusion.)

And, maybe, I’ve been using the wrong phrase all along. It could be that what I’m really talking about can be better defined as entrepreneurial spirit. A great explanation of what is meant by entrepreneurial spirit — and part of the reason I think it may be the better phrase — is contained in an article from Inc. titled “5 Characteristics of Entrepreneurial Spirit.”

The good news is that I am not going to go on, ad nauseam, about these characteristics. You can read the article yourself. All I’m going to do is list what the article calls “Five indicators that the entrepreneurial spirit is alive and thriving in someone.” These individuals are in tune with their passion, are always questioning how it can be done better, are optimistic about all possibilities, take calculated risks, and, above all, execute.”

I’m hard-pressed to think of a better set of qualities for any internal auditor. In fact, I’m hard-pressed to think of a better set of qualities for any individual.

When internal auditors have passion for the work they are doing, when they constantly question the way things are done in the organization and perhaps more importantly, in the department, when they optimistically see the possibilities for the profession, when they take calculated — not crazy; calculated — risks, and when they, above all else, execute on all the above — not just executing an audit or an audit schedule, but executing toward ​something new and better for the profession — that is when internal audit will position itself to be a part of the future.​

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