What Internal Auditors Can Learn from Pixar Number 2

 

Following is a quote from Ed Catmull's new book Creativity, Inc. To see why I'm quoting it, take a look at Monday's post.
 
"Believe me, you don't want to be at a company where there is more candor in the hallways than in the rooms where fundamental ideas or matters of policy are being hashed out."
 
Did you read this with a knowing chuckle, a small smirk, and a sad sigh? Unfortunately, while managers and leaders of organizations constantly lament that no one will tell them the truth and they hate being surrounded by yes-men, their actions and reactions tell all those around them a completely different story.
 
I'll bet you can count on the fingers of one hand the number of times you've been to a meeting where participants actually spoke their minds without worrying about office politics, the enemies in the room, and making stupid mistakes. (And you will probably have fingers left over.) The actual analysis and candor occurs after the meeting when people rant and rave in the privacy of hallways, instant messages, and IHAteMyJob.com. 
 
Two lessons for internal auditors.
 
First, if audit management is serious about making a top-notch, A-1, head-of-the-curve audit shop, then it better ensure that candor is appreciated, supported, and rewarded.   You cannot find how to make things better if no one will speak frankly.
 
The second lesson has two parts. The first part of the second lesson is a reminder that auditors need to listen everywhere, not just in meetings. By listening to the frank discussions that occur in the hallways, auditors may get the first hint of a significant risk that is brewing beneath the surface.
 
And the second part of the second lesson is that, if internal audit really wants to provide value, maybe that whole issue of candor only existing in the hallways is indicative of the lack of communication in the organization. And, while it might be tough getting it sold (see yesterday's point), that is a finding worth reporting and solving.

Posted on Mar 18, 2014 by Mike Jacka

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