Thanks to all for the feedback regarding last week’s apparently popular post. We seem to get a lot of reaction to the Recon whenever we publish a “tell like it is” type post. Most of the feedback has been supportive, although some people were indignant that we were “giving people ideas” about how to destroy internal audit careers.
One point of clarification we would like to make is that we don’t make any judgments about whether these items are fair or just. To do so would be tantamount to entering into a discussion about whether “life is fair.” Our objective is to inform prospective IA Leaders, CFOs and Audit Committees about the traits required to be successful in a very difficult job.
Without further introduction we now complete our discussion of, “5 Easy Ways to Destroy Your Career” in Internal Audit.
Vote for Logic
Someone once told me if you understand the politics of an organization you can get a lot done. The converse is also true; not understanding the company’s politics will frustrate even the most technically savvy internal auditor.
Now before we go on, we should clarify what we mean by politics. We are not talking about the smarmy gossip that goes on regarding who did what to whom and if they were good at it or not. This type of office politics is for the most part meaningless and paying attention to it will only detract from any potential success.
The type of politics that we should be very concerned about are the answers to the following questions:
- How are decisions made by the company?
- Who is the most powerful person in the organization?
- Who doesn’t make any specific decisions but heavily influences the final outcome?
- Who has the ability to block, or render meaningless, decisions that have already been made?
In essence, we are talking about the classical definition of politics. We once again quote Wikipedia. Our emphasis has been added.
Politics is a process by which groups of people make decisions. The term is generally applied to behavior within civil governments, but politics has been observed in all human group interactions, including corporate, academic and religious institutions. It consists of “social relations involving authority or power” and refers to the regulation of a political unit, and to the methods and tactics used to formulate and apply policy
Many people fail in their political analysis because they answer these questions with what they think should be the answers rather than seeing the situation for what it is. For example:
The most powerful person in the company is the CEO right? And decisions are always carefully considered at the Corporate office and then clearly communicated to operating units where directives are followed to the letter…anyone with me?
To be successful you have to ignore conventional wisdom and sacred cows. For example, titles are meaningless. The most powerful person in the company could be the CEO, the VP of the operating unit that makes the most money, the CFO or the General Counsel. Every company is different and you have to understand who is calling the shots at your company in order to have any hope of enacting positive change.
Fortunately this is not hard to do if we open our eyes. When decisions are made follow the flow of events. Where was the decision made? When was it made? Was the decision implemented or ignored?
Understanding the politics of your organization will allow you to better identify control, governance and risk issues and formulate workable solutions to these problems that will get implemented. Ignoring this very important aspect of your job will render you a mere footnote in the decision making process.
The Stalk of Wheat
An uncle of mine once advised me that in business negotiations you cannot be too stiff or you will be broken and you cannot be too soft because then you will be folded. You have to be like a stalk of wheat that has the strength withstand the high winds but also the flexibility to bend and stand up again when pressure is applied.
Moderation in business is a skill that is acquired through experience. Knowing when to stand like a rock and knowing when to compromise requires an IA Leader to draw upon a vast database of prior experiences and outcomes. This is perhaps the most difficult trait for IA Leaders to obtain for it cannot be learned; it can only be acquired through experience.
The job of the IA Leader is to improve the control, risk and governance processes of the company. These improvements rarely take place linearly but rather occur in fits and starts. Knowing which improvements are critical for the organization and which are minor points separate the professionals from the neophytes.
Have a great week,
Michael Bechara, CPA
Granite Consulting Group Inc.