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​The Perfect Plan

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Mike Jacka

​Welcome to the new year. I'm sure you're prepared, pumped, and primed for what's to come. Your laptops are fired up, your Zoom backgrounds are polished and perfected, your pencils are sharpened to a deadly point, and your best laid plans have been planned — planned schedules, planned audits, and even plans to plan for planning in 2023.

Let me tell you a story about those best-laid plans. I was the Phoenix Regional Auditing Supervisor, it was about mid-year, and we were starting to drown. In simple terms, our projects were getting later and later, and our schedule was getting more and more tattered. Lots of excuses; no good reasons. The pressure was on, and I was frantically trying to find a way to dig us out of our hole. Then I got a call about an agent in Gallup, New Mexico. Within short order we determined that this was going to be our largest fraud ever.

And, with that simple realization, all the pressure was off. There was no way we could get any of our other work completed on time. All our planning and scheduling was blown sky-high. And it was incredibly freeing. The plans, the schedule, and anything we were trying to do in an attempt to "get everything done" no longer mattered. The cold, hard smack of reality shoved things in a different direction.

"Everyone has a plan until they get punched in the mouth."  ~ Mike Tyson

Of course, my simple story is nothing compared to that funny little incident from a couple of years ago, the one where we all knew exactly how the year was going to proceed and, next thing we knew, we were all working from home and learning how to use technologies we probably should have been using long ago, and determining if we could actually survive being cooped up with our families, and discovering the opinions of our various friends, neighbors and co-workers regarding science and a deluge of other impacts we don't have time for right now. With that one event, more than a lot of audit departments came to the realization that all prior planning was irrelevant. Unfortunately, I know of some internal audit shops that didn't really learn that lesson, even as it was unfolding around them — internal audit shops that made little-to-no adjustment to their schedules.

Let me tell you a story about inflexibility — another one that isn't pandemic specific. I was working with a client that was knee-deep in supporting SOX testing for the external auditors. The CAE told me that one of the tests being required had no bearing on the organization's situation. He explained this to the representative of the firm; he explained that any numbers produced would make no sense, would not match anything, and would provide no value. The representative nodded sagely, agreed, and then explained that the CAE would still be required to complete the test because it was required as part of the plan.

"We plan; God laughs."  ~ Yiddish proverb

If this is the way some people approach their plans — holy writ that is sacrosanct and immutable — then we should not be surprised these same people could not force themselves to make changes during the more seismic situation of a pandemic — audit departments frozen in fear and frozen because they did not know how to change.

There's an important aspect of planning that many of us, because we are so enmeshed in that planning, sometimes forget. A plan is only the start. An important start no doubt, but just the beginning. We let people know what that plan is — the clients, the audit committee, the audit department — in order to inform them how we plan…plan…to accomplish our objectives for the year. But the statement of a plan is no guarantee that those stated deliverables will match the deliverables we present at year end. Our plans have to be couched in terms that let everyone understand there will be the need to adjust/adapt/improvise as the year goes on.

For the person described in the previous story, the individual requiring those SOX tests, the need to adjust, adapt, and improvise were foreign concepts. And to some audit departments — the ones that went blithely on with their schedule in the face of a risk-changing, process-changing, event-changing pandemic — the plans were chiseled in stone and change was considered sacrilege. But, again, it is a problem that existed long before the pandemic. One team I spoke to in the "before times" explained that they could not change the schedule after it was presented to the audit committee because, if they changed it, members of the committee would question why changes were occurring. The inference was that such questions would mean the committee members felt internal audit failed in its initial planning and the department would look incompetent. (Note that if that was the department's fear, they probably were, indeed, incompetent.)

And even those audit departments who recognize the need to change face another issue. Many do not recognize how fast change needs to occur. We are not a quick-moving, agilely-adapting profession. And, as the world has moved faster, our ability to change must come faster. Changing and adapting are a good start. But real success comes with the ability to immediately improvise as events go rushing past. We must move quickly or be resigned to always doing nothing more than catching up.

And here's the positive spin on all this. When we shift our focus away from the risks inherent with change and start looking at the similarly-inherent opportunities, we are ready to improvise and quickly pivot to those opportunities.

"To succeed, planning alone is insufficient. One must improvise as well."  ~ Hari Seldon in Isaac Asimov's Foundation

This week we lost Betty White, a queen of comedy. You've probably seen the memories posted by the famous and unfamous. Her work on "The Mary Tyler Moore Show" and "The Golden Girls" only scratches the surface. And, while "The Mary Tyler Moore Show" will always be one of my favorites, I'd like to share a clip from "The Golden Girls." Watch her comedic skills closely, but also watch how she handles the story she is telling.

The Great Herring War

The story about this scene is that, as it went along, Betty White began improvising. She saw the reactions of her co-stars and built a better and better story. The fact that her co-stars cannot maintain their composure as Betty's character innocently tells the story speaks to the power of how she adapted the original plan.

Comedy is rife with examples of successful improvisation. Watch "Whose Line Is It Anyway?" and you watch skilled professionals looking at opportunities and then improvising to make something better/funnier. Any plan they have goes out the window as the situations progress.

An important skill in successful improvisation is the ability to say "Yes, and…" Accept the premise that has been given and, rather than shoot it down, build on it. And that ability to not only accept but embrace change is exactly what any internal audit department requires in order to succeed.

Look at the stories I've shared. The story of the Gallup, New Mexico fraud is an example of embracing the coming change and, rather than fretting about how things were going wrong, looking for what might be next. The story of the individual who required the SOX test is an example of the exact opposite — of someone who was not accepting change nor trying to determine what is next.

And let's look at the example we are currently most familiar with. A lot of people, when blindsided by the pandemic, rolled up their tents and snuck away on the next train out of town or hunkered down in those tents hoping that this, too, would pass. However, the successful audit departments were the one that saw the pandemic and accepted it (said "Yes"), then decided how best to work with, in, and forward with the situation. (said "Yes, and…")

I like to think (I desperately hope) that the coming year will not be filled with the catastrophic transformations that have been occurring. However, transformations are and will be happening. A plan is a good start, but be ready to throw it out the window. And that means being ready to change all plans great and small. Maybe it's a test that has made you realize there is a lot more going on than was first suspected and the test should be abandoned for new research and testing. Maybe it's an interview that you started as a part of fact-finding, only to see it point the way to a fraud investigation. Maybe it's a scope that, after digging in, you find is too restrictive and will not allow you to accomplish the audit's objectives. Maybe it's a schedule you developed in the third quarter of the previous year that, by December, is so tied to the past that it has no bearing on reality.

Or maybe it is just that things change, and plans are nothing more than plans. They are not chiseled into rocks, but sketched out in sand, waiting to be altered as necessary with the changing tides.

"Remember, if plan A fails you have 25 letters left."  ~ Anonymous

 

 And now a postscript.

I did a rough draft of this post last Thursday. Then on Friday, we lost Betty White. Among the various memorials and fond memories, comedian Patton Oswald posted the scene I've shared with you.

I saw it, enjoyed it, and then realized it was an important part of — a positive spin on — what I was trying to say. That is how the last portion of this post came into existence.

Then I thought back to my post from the previous week. While a good portion of that post was about the use of intuition, it also discussed how intuition, creativity, and flexibility require inputs — inputs of all kinds from all different sources. And I realized that this current post was an example of just the kind of serendipitous information input I was talking about.

I got the idea while rereading Foundation by Asimov and discovering the Hari Seldon quote. The other quotes fell in place, along with the requisite stories about internal audit. Then I saw the Betty White clip and that gave me the more positive aspects of the issue that I knew were missing.

We never know where our ideas will come from. And we never know how innovation and improvisation will get started. But they have their best chance of success when we take in as many inputs as possible. And not just volume, but also variety. Take in as much as you can, take in as many different things as you can, and let them all spend their time percolating in your brain. Someday you're going to need an idea/an innovation/an improvisation, and those inputs will combine into an output that will catch everyone, even you, by surprise.

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