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David [email protected]
Internal AuditLeading as theTrusted Advisor
voice of the profession
© David Mallard Consulting Pty Ltd
1. Are you perceived as a Trusted Advisor?2. Love Internal Audit?3. Recent Research4. What Trusted Advisors do that others don’t5. Capability Development6. Communication, Influence and Relationships7. Increasing Complexity8. Navigating Complexity – the Integral Framework9. Growing into a Trusted Advisor
Road Map for our session
voice of the profession
© David Mallard Consulting Pty Ltd
Requires higher levels of
‘systems and people’ thinking
• D. Goleman, Emotional Intelligence: Why It Can Matter More Than IQ (Bantam Books, 1995)
EQ is twice as important as
technical competence*
Are you perceived as a Trusted Advisor?
voice of the profession
© David Mallard Consulting Pty Ltd
Internal Auditors have the opportunity to significantly influence the vitality,
wellbeing and the success profile of the organisations and the people they work
with
DON’T YOU LOVE BEING ANINTERNAL AUDITOR?
Internal Auditors are very fortunate.They are in a unique and privileged
position at or near the apex of the places they work with direct access to Directors
and Senior Executives
voice of the profession
© David Mallard Consulting Pty Ltd
• We bring many strengths to our role – Professionalism– Objectivity – Business acumen etc• Like all professions, we also face our challenges.
Being ‘audited’ for many people can be perceived as an uncomfortable
experience.
Who of us really likes being reviewed/assessed/audited?
DON’T YOU LOVE BEING ANINTERNAL AUDITOR?
voice of the profession
© David Mallard Consulting Pty Ltd
Do you thinkInternal Auditors are sometimes seen this
way ?
PEOPLE SKILLS?
voice of the profession
© David Mallard Consulting Pty Ltd
DON’T YOU LOVE BEING AN INTERNAL AUDITOR?
voice of the profession
© David Mallard Consulting Pty Ltd
The question is:
• How do we not take this personally ?• How do we build trusted and mutually beneficial relationships
with our clients?• How do we build our personal and collective capability to
cultivate, maintain and leverage relationships• How do we navigate Internal Audit toward Trusted Advisor status
DON’T YOU LOVE BEING ANINTERNAL AUDITOR?
voice of the profession
© David Mallard Consulting Pty Ltd
There is regular research published about the state of
Internal Audit around the world.
Within the context of growing global complexity and
increasing challenge for Internal Audit let’s
examine a few highlights of this
research.
Recent Research into Internal Audit
voice of the profession
© David Mallard Consulting Pty Ltd
2. An integral part of a complex web of relationships
1. Internal Audit is a relationship and communication business
3. Requires high levels of Emotional and Social Intelligence to be successful
5. In a complex, volatile and changing environment (VUCA) our experience tells us that the ‘softer’ attributes of Audit performance are increasingly critical to the success of Internal Audit functions
4.Mastering interpersonal and communication skills is among the most important capabilities that successful internal auditors need.
6. As the role of internal audit evolves and stakeholder expectations rise, internal audit increasingly requires competencies that exceed the more traditional technical skills
7. The most effective Internal Auditor possesses a broad range of non-technical attributes in addition to deep technical expertise.
8. People skills are vitally important to internal audit’s ability to stay close to company leadership and remain aligned with the key strategies and priorities of the organisation.
Recent Research into Internal Audit
voice of the profession
© David Mallard Consulting Pty Ltd
Techn
ically
Strong
Big Pi
cture
Perspe
ctive
Busin
ess Ac
umen
Coura
ge & C
onfid
ence
Custo
mer Orie
nted
Initiat
ive
Communi
cation
Skills
0
5
10
15
20
25
30
35
40
45
Majority of Audit
Development focus
What Trusted Advisors do that others don’t
voice of the profession
© David Mallard Consulting Pty Ltd
What does this research tell you?
Moving toward Trusted Advisor status involves personal and collective growth into many of the ‘soft spots’ identified in the research
voice of the profession
© David Mallard Consulting Pty Ltd
What does this research tell you?
Moving toward Trusted Advisor status is not about adding
another ‘App’ to your technical toolkit. It is more about
investing in your communication, influencing, relationships and strategic
capabilities - extending beyond traditional analytical thinking
voice of the profession
© David Mallard Consulting Pty Ltd
Capability Development Takes Time
Horizontal Learning = Competence DevelopmentMore information, skills, competencies. Increases what you know and strengthens technical expertise.• Typical Audit, Risk, Compliance training• Essential for using known techniques to solve clearly
defined problems• Develops functional knowledge, skills, and behaviours
that strengthen your current level of capability
voice of the profession
© David Mallard Consulting Pty Ltd
Capacity Development Takes Time- Leading as a Trusted Advisor requires more
Vertical Learning = Mindset TransformationMore complex and sophisticated ways of thinking. Improves how you think and how you interpret any situation.• Essential to address complex problems, cultivate high-
stakes relationships, and navigate rapidly changing, uncertain circumstances
• Develops your mental complexity and emotional intelligence, literally upgrading your internal operating system for more wisdom and care
voice of the profession
© David Mallard Consulting Pty Ltd
Capacity Development Takes Time
voice of the profession
© David Mallard Consulting Pty Ltd
Capacity Development Takes Time- The Complexity Gap
voice of the profession
© David Mallard Consulting Pty Ltd
Vertical Development
Capacity Development Takes Time
voice of the profession
© David Mallard Consulting Pty Ltd
People Development Research andInternal Audit
Creative and Relationship Attributes
‘Compliance, Control, Protecting’
Task and Reactive Attributes - often
where Internal Audit is perceived as ‘living’
voice of the profession
© David Mallard Consulting Pty Ltd
Research highlights a high correlation between individual development maturity, ‘creative’ leadership attributes and personal effectiveness, particularly in dealing with
the increasing uncertainty, ambiguity, volatility and complexity of interconnected global business markets. Capabilities necessary for Trusted Advisors.
Relating, Self Awareness, Authenticity,
Systems Awareness, Achieving
This i
s parti
cularly
releva
nt for t
he role of In
ternal Audit
People Development Research andInternal Audit
voice of the profession
© David Mallard Consulting Pty Ltd
TRADITIONAL AUDIT/COMPLIANCE
People Development Research andInternal Audit – left and right
voice of the profession
© David Mallard Consulting Pty Ltd
The
#1problem in most organisations
is that….
Communication, Influence and Relationships
voice of the profession
© David Mallard Consulting Pty Ltd
eople
ommunicate
oorly
‘Communication is Everything’
Lee IoccocaNominated as one of the greatest
CEO’s of all time by Portfolio
Communication, Influence and Relationships
voice of the profession
© David Mallard Consulting Pty Ltd
- Common examples in the workplaceCommunication, Influence and Relationships
voice of the profession
© David Mallard Consulting Pty Ltd
Communication, Influence and Relationships
voice of the profession
© David Mallard Consulting Pty Ltd
Communication, Influence and Relationships
voice of the profession
© David Mallard Consulting Pty Ltd
- Where do we begin?Communication, Influence and Relationships
voice of the profession
© David Mallard Consulting Pty Ltd
Developing more effective communication and relational capability begins with the recognition
that each of us is unique and different
Communication, Influence and Relationships
voice of the profession
© David Mallard Consulting Pty Ltd
As individuals, we each have a communication and behaviour style which we use on a daily basis often
with varying degrees of effectiveness
Our communication and behaviour style is based on our individual needs
Communication, Influence and Relationships
voice of the profession
© David Mallard Consulting Pty Ltd
Behaviour/Communication
ThinkingFeeling
ValuesBeliefs
Needs
- The Whole Person ConceptCommunication, Influence and Relationships
voice of the profession
© David Mallard Consulting Pty Ltd
So, what are your needs?
Communication, Influence and Relationships
voice of the profession
© David Mallard Consulting Pty Ltd
A needs driven Behavioural and
Communication model
DiSC® - A User Guide to People!
Understanding peoples needs is a key to
developing and effective relationship
Communication, Influence and Relationships
voice of the profession
© David Mallard Consulting Pty Ltd
There are two basic needs that influence how people behave in relation to one another
Need for Affiliation Need for Control
Communication, Influence and Relationships
voice of the profession
© David Mallard Consulting Pty Ltd
DiSC® is a doorway to communication
It identifies the uniqueness in ourselves and others
Communication, Influence and Relationships
voice of the profession
© David Mallard Consulting Pty Ltd
Dominance Influence Steadiness Conscientiousness
Control Specialist
Social-Recognition Specialist
Relationship Specialist
Analytical Specialist
Pushy Severe Tough-minded Dominating Harsh
Manipulative Excitable Undisciplined Reacting Egotistical
Conforming Unsure Pliable Dependent Awkward
Ambitious Stimulating Enthusiastic Dramatic Friendly
Supportive Respectful Willing Dependable Agreeable
Critical Indecisive Stuffy Picky Moralistic
Industrious Persistent Serious Exacting Orderly
Strong willed Independent Practical Decisive Efficient
- How others may see youCommunication, Influence and Relationships
voice of the profession
© David Mallard Consulting Pty Ltd
• DiSC describes behaviour does not measure behaviour
• Your DiSC style is based on interpersonal psychology and influences how you interact with people
• Not for labelling, but for understanding
• There are no good or bad styles
• All have strengths and limitations
• Everyone is a mixture of styles
- In SummaryCommunication, Influence and Relationships
voice of the profession
© David Mallard Consulting Pty Ltd
Trusted Advisors - teams and individuals manage behaviours – each individual manages his/her own behaviour and
helps others manage theirs
Your behaviour, your communication and your relationship development approach
is like the tip of the iceberg because this is what people experience of you
Communication, Influence and Relationships
voice of the profession
© David Mallard Consulting Pty Ltd
By first understanding how and why we behave as we do, we can then begin to understand
others and build better teams and more effective relationships.
This is critical for an effective Internal Audit Service and team moving toward Trusted
Advisor status.
Communication, Influence and Relationships
voice of the profession
© David Mallard Consulting Pty Ltd
YOU Knownto Others
Not Known to Others
Known to Self
Not Knownto Self
Open
Hidden
Blind
Unknown
- Johari’s WindowCommunication, Influence and Relationships
voice of the profession
© David Mallard Consulting Pty Ltd
A CONTEXT OF - GROWING COMPLEXITY
A recent study by IBM identified the number one
concern of CEOs worldwide as: ‘Perpetual
Whitewater’ characterised by a global economy that
displays:
voice of the profession
© David Mallard Consulting Pty Ltd
“There are no boundaries anymore.”
• Jeff Barnes, Head of Global Leadership, General Electric
voice of the profession
© David Mallard Consulting Pty Ltd
MAKING SENSE OF THE VUCA WORLD
We need perspective
voice of the profession
© David Mallard Consulting Pty Ltd
Perspective – the Integral Framework
• Andrew Brown and I present the Institute of Internal Auditors ‘soft skills’ programs. We tailor consulting and development programs for organisations informed by the Integral Framework.
• Integral thinking and application is a holistic perspective on organisational life is one of the more significant frameworks capable of taking into
account the rapid rates of change and complexity emerging in the global marketplace
It has significant application for career, leadership and organisational development. Important in looking at how to navigate within organisations as we progress toward Trusted Advisor status.
voice of the profession
© David Mallard Consulting Pty Ltd
Systems (Its)• Strategy• Structures• Technology• Policies• Finance
Perspective – the Integral Framework
Behaviour (It)• Capability• Performance• Language• Accountability• Results
Intentional (I)• Attitudes• Engagement• Perspective• World View• Awareness
Culture (We)• Relationships• Politics• Culture• How we do
things here
Majority of Audit Focus
voice of the profession
© David Mallard Consulting Pty Ltd
IND
IVID
UAL
COLL
ECTI
VE
INTERIOR EXTERIOR
LANGUAGE OF:
THOUGHTS & FEELINGS
LANGUAGE OF:
BEHAVIOUR & ACTION
LANGUAGE OF:
RELATIONSHIP & MEANING
LANGUAGE OF:
SYSTEMS & STRATEGY Majority of Audit Focus
Perspective – the Integral Framework
voice of the profession
© David Mallard Consulting Pty Ltd
TRUSTED ADVISOR
Displays Passion
Understand Client Needs
Is Reliable
Is Authentic
Gets Close and
personalConnects
Emotionally
Is Credible
Long term Relations
Puts Client First
Displays Genuine Interest
Growing into a Trusted Advisor – 10 behaviours
voice of the profession
© David Mallard Consulting Pty Ltd
Growing into a Trusted Advisor
If you have the desire to move toward Trusted Advisor status in your organisation, there is a personal and collective development
commitment required for both horizontal and vertical development. This would involve both formal experiential learning programs, on the job action learning, coaching and mentoring as well as specific
stretch assignments over time.
voice of the profession
© David Mallard Consulting Pty Ltd
Growing into a Trusted Advisor
How will you know when you are there?
Your customers will tell you!
voice of the profession
© David Mallard Consulting Pty Ltd
In the final analysis of assessing your desire to grow toward Trusted Advisor, it fundamentally depends on
one statement.
This statement underpins all of the learning programs myself and Andrew Brown present, both for the
Institute of Internal Auditors and otherwise.
‘For things to change, first I must change’It is a simple and as complex as that!
Growing into a Trusted Advisor
voice of the profession
© David Mallard Consulting Pty Ltd
voice of the profession
© David Mallard Consulting Pty Ltd
So the question for each of you:
voice of the profession
© David Mallard Consulting Pty Ltd
Beginning the Journey:
1. Self-Awareness & Authenticity2. Communication and Influencing3. Taking an Integral Perspective4. Growing Through Goals5. Building Effective Relationships
On the Journey:
6. Values Based Leadership7. Negotiation & Courageous Conversations8. Adapting to a changing workplace & world9. Knower/Learner 10. Victim/Responsibility11. Developing other People
Consolidating the Journey:12. Overcoming Your Immunity to Change13. Authentic Dialogue14. Whole Systems Thinking15. Partnering for Value16. Influencing Across Boundaries
Audit, Risk & ComplianceTrusted Advisor Development Program Overview
voice of the profession
© David Mallard Consulting Pty Ltd
Interested in exploring the Audit, Risk & Compliance
Trusted Advisor Development Programfor your team?
0408 549 092
voice of the profession
© David Mallard Consulting Pty Ltd
0408 549 092