“We’ve always done it this way” and “This method always worked successfully in the past” don’t cut it anymore.
The business landscape is littered with wounded — or terminated — organizations and individuals who failed to challenge existing methods and practices; and internal auditing departments and internal auditors are no exception. Internal auditing departments that do not stimulate and reward creative endeavors are more likely to be threatened by outsourcing, budget cutbacks, and staff turnover. On the other hand, internal auditing departments that do promote innovation and creative problem solving are more likely to give their organizations the kind of help they need to succeed in an environment that has never been more challenging and competitive.
Creative Auditors — An Oxymoron?
We’ve all heard it. Whenever it’s implied that auditors have an ounce of creativity, someone will invariably ask, “Isn’t that an oxymoron?” And it’s not always outsiders who make the joke. Even some auditors apparently share the view that auditing isn’t creative, that it’s, well, boring — which helps to explain why so many talented individuals leave auditing, never become auditors, or wish they were no longer auditors. Of course, there are some internal auditors who genuinely like all aspects of their jobs; but the profession loses far too many innovative thinkers and future leaders.
A recent IIA survey revealed that the number one ethics issue facing internal auditors is “undue reliance on prior years’ audit programs and workpapers.”(1) Why do auditors rely so heavily on old workpapers? Why are the same audit programs automatically repeated each year? Why are the workpapers organized the same way? Why aren’t auditors more imaginative?
One explanation for the dearth of creativity in auditing is that most auditors have had minimal, if any, training in creative thinking. In fact, the auditing culture usually encourages opposite behavior. Auditors are taught to learn and enforce the rules, such as those governing internal controls, policies and procedures, laws and regulations. Although this work is clearly challenging, it does not usually involve creative thinking.
Creativity is not an innate talent that one either has or doesn’t have. Creative thinking can be taught and learned, just like sales or public speaking. Of course, some people have more natural ability than others, but that’s true of almost everything in life.
Creative approaches can be applied to almost everything internal auditors do. For example, creative techniques can help in finding new ways to:
* Strengthen the quality of audits.
* Improve efficiency.
* Provide value-added service to operating departments.
* Increase service to management and the audit committee.
* Enhance professional credibility.
* Improve working conditions.
In Michael Hammer and James Champy’s best-selling book, Reengineering the Corporation,(2) they state that “Redesign . . . demands imagination, inductive thinking, and a touch of a craziness. In redesigning processes, the reengineering team abandons the familiar and seeks the outrageous. Redesign asks the team members . . . to suspend their beliefs in the rules, procedures, and values that they’ve honored their whole working lives.” If auditors want to participate in this process, the traditional auditor mind-set must be abandoned, and audit approaches must be continually reexamined to ensure efficiency and quality.
The Creative Process
A self-assessment of strengths and weaknesses can help auditors and others who want to improve their creative skills. According to creativity guru Roger von Oech, the creative process involves four stages:
1. Explorer. The Explorer searches for new ideas — good or bad, rational or outrageous, serious or silly. Many, many ideas are needed to find innovative solutions to problems and challenges. As a famous philosopher once said, “Nothing is more dangerous than an idea when it is the only one you have.”
The Artist takes existing ideas, provided by the Explorer, and molds or transforms them into entirely new and unique ideas.
The Judge weeds out bad ideas and attempts to find workable, feasible solutions.
Finally, the Warrior implements the new ideas. Armed with a game plan, persistence, and diplomacy, the Warrior leads the battle against the many forces that resist change.
Each of the four steps is required if innovation is to occur. The most successful persons excel in all four areas, or they find others who complement their weaknesses.
Auditors often consider themselves weakest in the first two categories — the key ones for producing new ideas. Conversely, most auditors rank high in the “Judge” category. Auditors are skilled in evaluating different alternatives, shooting down unworkable ideas, and playing devil’s advocate, which means that, for most auditors, skills need to be improved in the other three categories.
The Creativity Toolbox
“Flashes of inspiration” seem to occur unexpectedly, and not always at the precise moment when you need them. When the auditing budget has to be reduced by 30 percent — without sacrificing quality — the ideas are needed now. A systematic method for stimulating new ideas can help.
Every auditor should build a personal “toolbox” to use whenever new ideas are needed. This figurative “box” should contain tools (idea stimulators) of all shapes and sizes. Some should be easy to use; some may be more sophisticated and require training.
The toolbox can even be used in one’s personal life. The same concepts that work in the business world can be applied to almost any situation. For example, a few fantastically clever costumes — the kind that win the Best Costume awards — always seem to show up at Halloween parties. Where do these ideas come from? Are the wearers just naturally creative? Possibly, but it’s more likely that they used creative toolboxes.
A Halloween toolbox might include a dictionary, for example. Each October, the toolbox’s owner might spend an hour scanning the pages in search of ideas. If a word leaps off the page, it’s written down (Explorer). Once a sheet of paper is filled, the person reviews the list and combines words to produce new ideas (Artist). Then, options are narrowed, based on factors such as cost (Judge). Finally, after reaching a decision, he or she purchases materials and prepares the costume (Warrior).
The result? On one Halloween, several friends dressed as Mount Rushmore. They walked together under a large, white sheet. Their faces, sticking out from four holes, were painted white, and each wore a powdered wig. The costume was a huge hit, and the idea didn’t require a visit to North Dakota, just the use of a simple tool, the dictionary.
An endless variety of tools can be stored in the auditor’s toolbox. Those already in use, such as prior audit workpapers, audit programs, and discussions with peers and other groups should not be discarded; but the toolbox needs to be bigger and better. It might include brainstorming sessions, process flow mapping, outsiders’ opinions, and other options.
Brainstorming certainly isn’t new; but not everyone knows that brainstorming sessions produce optimum results when they are divided into two phases. In the first stage, ideas must be solicited and recorded without judgment or criticism. Under normal conditions, auditors may be hesitant to suggest new ideas that could appear stupid; but in the brainstorming environment crazy ideas are encouraged, since a dumb idea may spark a great one (the piggyback concept).
Once this phase is completed, participants should then focus on practical solutions. This is typically viewed as the “Judge” phase, but “Artist” possibilities should not be overlooked. In other words, as objections are raised, participants should search for ways to address them if the fundamental idea has potential. Many objections can be overcome if the team is determined to find new approaches.
While brainstorming may work best in groups, individuals can also “self-brainstorm.” To increase the odds for success, the individual must discipline himself or herself to produce ideas. For example, if the self-brainstorm is geared at rethinking the approach to achieving an audit objective, the auditor might commit to writing 10 completely different ways to accomplish the goal. Even when the task seems impossible and some of the ideas seem ridiculous, the determined brainstormer persists.
Sometimes “opposite thinking,” where the brainstormer lists 10 ways to achieve the opposite objective, can be productive. These ideas can lead to breakthroughs because the thinker has to explore radically different thoughts.
Process Flow Mapping
Since most audits are comprised of processes, this technique is an excellent tool to improve quality, efficiency, and service. The process flow map can be executed on a large sheet of paper or a blackboard.
Each step in the process and the estimated completion time should be listed, and the steps that add value and those that do not should be identified. Most participants are surprised at how often extensive effort produces little, if any, value.
What adds value in an audit? Activities that provide audit evidence or increase service levels — nothing else.
For example, the Exhibit illustrates the basic process for sending confirmations. Which steps add value? Just one: evaluating responses, or performing alternative procedures. No other step provides audit evidence or improves service.
So, can these steps be eliminated? Obviously not. But, these are examples of the kinds of areas that should be targeted when reduction of hours is under consideration. Using process flow maps in groups will almost invariably stimulate discussion and new ideas.
The saying “It’s difficult to see the picture when you’re inside the frame” illustrates a valid point regarding creative thinking. In Reengineering the Corporation, the authors write “It would be asking too much to expect [insiders], unaided, to overcome their cognitive and institutional biases and to envision radically new ways of working. Left to their own devices, a team made up of insiders will tend to recreate what already exists, with perhaps a 10 percent improvement. They will remain within the frame of the existing process, not break it. To understand what is being changed, the team needs insiders; but, to change it, the team needs a disruptive element. These are the outsiders.”(3)
Outsiders, such as audit efficiency consultants, can bring fresh perspectives and specialized expertise in areas such as benchmarking to internal auditing departments. Outsiders can also serve as a catalyst for action, unencumbered by office politics. The views of outsiders can provide the impetus for staff members to begin to look at old problems in new ways.
There is room in the creative toolbox for many other resources, including more advanced techniques such as time compression studies, synectics, and mind mapping. A variety of books, software, training seminars, and audiocassettes can spark innovation. Simple tools, such as trade magazines or newspapers, can be powerful, too.
Just as a carpenter selects the appropriate tools for a project, auditors must choose the appropriate tools in each situation. The choice of tools depends on many factors, such as the nature of the problem or challenge, time constraints, and the availability of other persons and resources.
Overcoming Resistance to Change
Innovative ideas are useless if they are never implemented. To enact change, creative auditors must be determined to overcome frequent roadblocks. Anticipating and identifying obstacles are the first steps in conquering them.
Time pressure is a major killer of creativity. Just think about it. Will a better audit program be devised in five minutes or one hour? Robert Kriegel, in his book If It Ain’t Broke, Break It,”(4) points out that “As a result of our time famine, we go for early closure on important issues, grabbing at the first ‘solution’ and running with it.”
This is a real concern because many auditors do face enormous time constraints. These pressures explain why critically important functions, such as planning, are often neglected. First, planning is a nonurgent task and can usually be delayed. Second, it is difficult to devote sufficient resources for planning, including the time required for generating ideas, when reports must be delivered, phone calls returned, workpapers reviewed, and other tasks completed. So, even when time is allotted for planning, the process is often rushed and effectiveness is limited.
To combat this problem, auditors should be passionate, even obsessed, about planning. Unfortunately, most auditors do not naturally possess this enthusiasm, so adequate time needs to be budgeted for planning, and performance evaluations or incentive programs should reward those who devote time to planning, especially when time is limited.
The fear of various forms of punishment stifles innovation. Fear of failure also prevents many auditors from trying new ideas. Thus, the best auditing departments and audit teams promote a culture that removes such fears. Risk-taking may not be appropriate during fieldwork, but it should be encouraged, for example, in brainstorming sessions.
When change is proposed, egos are often at stake. Auditors must, therefore, polish their diplomacy skills. If an auditee is threatened and can hinder progress, he or she should be allowed to save face, which is sometimes an exercise in creativity itself. One technique is to stress how the current situation is different than the past and therefore requires different actions.
Lack of Cooperation
There are some who resist and fight change for selfish reasons. Creative ways must be found to overcome such resistance. Just as common are situations where others are simply not interested or are too busy to help.
In these circumstances, the auditor must be determined and persistent. No magical formulas exist. The only recourse is to rely on a can-do mentality. Creative auditors do not make excuses — they find ways to get the job done!
Creative auditors have a huge advantage over those who lack this expertise. Internal auditing departments should train auditors to be creative and promote a culture where creativity flourishes. On an individual basis, auditors can distinguish themselves by proposing new and innovative approaches to many aspects of their responsibilities.