A Business Radar Tool to Help Engage and Collaborate
- Bob Merrill
- Apr 3, 2020
- 9 min read
Updated: Nov 24, 2020
There is a PowerPoint file at the bottom of the post you can download for your use. If you have any problems downloading, send an email to Bob.Merrill@gopacelinellc.com.
As I mentioned in the previous post, oftentimes there can be frustration because we are wanting to be prepared and plan but with so much uncertainty, the dynamics of the situation, and being bombarded with questions without answers can feel overwhelming. You want to be engaging and proactive, but you may not be sure where to start and some of the normal tools and processes at your disposal may feel stale or less effective in this challenging environment. The information here is a tool I developed when I was struggling in a new role trying to get alignment and collaboration with a broad cross section of stakeholders, while also working with the team to improve financial and quality performance. The team was doing very good work, and had the competencies and desire and had many tools and processes at our disposal. However, we lacked a platform or language within our team to help us proactively engage within our own unit as well as with other groups. For simplicity I am calling this a tool, but it can be a process, technique, template, whatever works best to match your style and organization. I believe it will be helpful for me to provide you some insight and context on the situation and how I initially used it. I had done various iterations in some form in the spirit of doing my job, but this was the first time I had put a framework around it for a team. I have used it in its similar frame of form in many different ways. For me, the key purposes is scenario and options planning with the team. Whether it is relevant to business delivery, the strategic journey, a new innovation, change management, the underlying purpose for me is transparency in thinking for both me at the team. In addition, it improves the probability of having the right resources in the right place at the right time to deliver the necessary business results, both near and long term. I am confident a significant group of you can jump ahead and it will make sense to you immediately, but the next section will provide the background.
After over a decade of working in revenue generating, customer facing and focused business units, I was selected for a rotational role as the Global Head of Internal Audit of Downstream and Trading. This was a functional role within the Finance organization for one of the largest Oil/Energy Companies in the world. I was replacing an individual that had left the organization a few months back and the team was being managed by a competent, experienced finance profession who was also double-hatting, as most interims do. It was a good team but the entire function was under pressure around cost, this was around the credit crisis, and restructuring from a regional to global model. As I onboarded, I met with the leadership of the various business units that were under the audit program for which I would be accountable. They did not hold back and had a laundry list of issues, and most of it had to do with disruption of their resources or priorities as they were also under cost and resource pressure. I then got my group of Audit Managers together and they did not hold back either on the challenges they were facing and some of their concerns. When I compared the two lists, there were some fundamental differences, but there was one glaring similarity. No one was happy with the audit planning process. The business units were irritated at what they perceived as late notice and the impending inflexibility of adjusting the dates of audits to be executed, as well as the lack of coordination within our own department (such as Financial and IT audits that had separate scopes). Audit Managers were frustrated by the poor response time from business leaders, allocating access to resources during the audit, and getting the business to help in finalizing the actions so the reports were issued in line with expectations. This all came to a head within weeks (I actually think it might have been the second day) of me starting the role. In the plan approved by the Audit Committee there are certain ones that carry extra weight. They were deemed critical. Two of my Audit Managers walk into my office, closed the door and say that they just met with the Director of the business (he worked for the CEO) to finalize the scope and wants to cancel the audit. It is scheduled to start next week and is considered critical, but there are changes coming so, in his opinion, it would be a waste of his time and resources. Concurrently, I receive an email forwarded by my boss from the Director requesting him to cancel it so he was seeking my input. In the end we did not cancel it, but postponed it to a later date since it was critical. This high stress situation reveled a real issue. We were in an environment that was reactive and not proactive.
Whether I was in sales, marketing, doing JV portfolio divestments, and I rely on process. Do not use the mental model of an impersonal computer process – the stuff that happens inside the box. It is also the user interface of engaging with people, handling the emotional parts of change management, dealing with personalities are all part of the process, but built on a series of tasks and actions that need to get done and within a timeframe. You can have the most amazing registration system in the world, but if ‘just a moment’ shows up on the screen for too long because the background processes are inefficient, it won’t be a sustainable value driver. Said another way, “A plan without action is a speech.” One glaring issue was the audit plan was usually constrained around the budget year. But auditing is a continuous and dynamic process of building and testing assumptions and processes mitigating the risks to the business – both people and financial. They are each little projects and most are connected and linked to others and frequently overlap budget years. We were thinking inside the constraints of the budget process, primarily driven by an external timeline versus our own. In addition, there we so many groups that had to be engaged during development and if one group forget to pass along information to their stakeholder, everything would come crumbling down with a flurry of emails. However, we could control our program. In addition, this was expensive in terms of reputation, morale, quality, and money. Changing audits at the last minutes put valuable resources on the bench, wasted money in travel changes, and oftentimes risked quality in not having the right people on the audit at the time it was executed. When we did an analysis we found that 32% of our audit plan was changing each year. So, out of 100 audits, 32 were added, deleted, rescoped, or postponed. It was a good team, we just needed to find a different way to work the plan. After a couple years, this was reduced to roughly 5%, so 95 went off as planned. We were not dogmatic at driving to zero as this would risk necessary and appropriate changes, such as an emerging risk or an incident in a particular country or location that created new risks. As the following year’s Audit Plan had been set before I arrived, I knew there was going to be a little more of the same before we could see improvements. You could be draconian and say, no changes, but that rarely leads to progress and sustainable improvement. As my direct reports would meet as a leadership team, I introduced an 18-24 month “rolling” audit program. We already had the next 12 months and, quite frankly, the audit managers were already in this mindset and had most of the next audits in their possession from planning meetings and discussions with the stakeholders. However, it was not visible. As it was the oil industry, rather than just create buckets of zero to six months, six to twelve months, and twelve to twenty-four months, I respectively named them granite, shale, and sand in terms of the difficulty of making changes.
The time period was from the day we were discussing the plan. The best way to describe it is each audit is a mini-project, all contributing to the never ending operation of assurance. There were many players in this space, and one of the frustrating things for my team was we would present all of this information to various assurance groups at meetings that were attended by the business leadership. However, in many instances, it would never make it to the staff that was actually going to be part of the audit. So the first notification is an email saying, congratulations in a month or so, we are going to be auditing you and I need you and your staff to supply all this material, make themselves available during these weeks of fieldwork. Most were annoyed right out of the gate. We had lots of tools and the managers and administrative staff were talented at resource
allocation and building audit teams. This was dynamic and constantly changing and with a turnover model due to staff rotation, you would lose an auditor that had four years of experience, but the replacement was brand new, so this was not a like for like trade on the team. Both the business units and audit had spent a lot of time in developing their business plans and did not like surprises or changes. However, there is variability in how flexible rational people can be based on the timing. So, within our team, we created a guideline and ways of working. Pretty straight forward that the closer to the actual execution of the audit, the more risk there was to our deliver to make the change. The business had low to no risk to delay.
So how does this look in practice. The simple animation below will show you. First, you start out with your matrix of Audits (or for you this could be events, project workshops, milestones, whatever). It is something that is part of your accountability to deliver and also requires collaboration, or at a minimum, engagement with other stakeholders, partners, peers, etc. For this illustration you can see how the Audit plan is laid out by business and by date. In addition, there is a line preceding and following each audit to indicate pre-work and post work. This highlights engagement is just not when the Auditors show up at the door. Next, there are two frames that show the Audit Plan you are working under – current year or following year. This is important as delivery is usually by the planning year, as are expenses but there is usually overlap at the end of the year. Note, in this example the plan has not even started for the following, but the team is already framing up projects in the future. The red, yellow, and green frames that come in next are the granite, shale, and sand ranges for making changes and risk to delivery. It is an easy way to prioritize as well as give authority to the management team to make changes and adjustments. Granite is hard to reshape, sand is easy.
Example for Event Portfolio:
Though this was designed as business as usual, you can also use it to help you in your business planning post crisis. Example, your organization will most likely have set a block of time for events to be cancelled, products and services do not have the ability to generate revenue due to the disruption, and people are working from home. This would be in the red area – again you can decide the time period. The yellow area is things that may be up in the air, but execution is going to be a challenge as it depends on the ability to recover. The green has some risk, but you can adjust (e.g. push later, hold off on expenses and resources, but minimal disruption).
Think About Other Resource Demands
Now, consider all the activities your team and staff have to do and put those in the same grid, let’s use a maximum of 18 months. Instead of using Business A, Business B, Business C, etc. and then filling in with Audits. Maybe list the staff person’s name. Or you can build categories like: Compliance Training, Development Training, Skills Training, New Logo Development, Intranet Redseign and/or Updating/Refreshing, etc. The intention is to put something up on the screen, yours or with your team, colleagues, and peers, and build a collaborative environment.
What about pulling forward end of year compliance training and tasks that staff could complete now rather than right in the middle of the recovery?
One closing comment on transparency and judgement. There were always good discussions about how much to share when collaborating with groups that are essential to plan delivery (e.g. other assurance providers and the business in audit, or marketing and volunteers in events). Whether telegraphing a pending audit that could lead to a proactive clean up, or adding a particular event to the calendar and getting hopes up but having to remove it in final budget discussions, there needs to be intentionality and a shared accountability for proactive engagement. The next post will be a tool that will allow you do a visual risk assessment based on the “Go Live” date of a specific initiative or action. Again, this is about engagement and communication as we continue to navigate the challenges and opportunities associated with this crisis to develop various scenarios and options.
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