2013 – Will Thirteen Prove Lucky?

All my readers – Wish you and your loved ones a happy, prosperous and peaceful new year. I hope that 2013 will prove lucky for all of you.

Big thanks to all of you for your faith and commitment to my blog and making it a success.

Of course, you must be wondering how we did last year. The blog had 99,121 page views. Damn! Missed the six figures by a few hundreds. I missed the target so no bonus for me. I shall not go on a shopping spree today.

Seriously speaking, the reader statistics are amazing. In 2011, the blog had 51,556 page views. In 2012, the number has nearly doubled, as was the case from 2010 to 2011. I wrote 71 new posts in the year, and now there are 242 posts in the archive. Majority of the readers are coming from India, US and UK. What is simply awesome is that during the year, visitors came from 184 countries. Wow, I can’t even list so many countries. It is a time to celebrate! I shall again aim at doubling the numbers in 2013.

Let me share a couple of tips that I learnt during the year with my fellow bloggers. Hope they help you out.

1. Be Original

The most popular posts for 2012 were the ones in which I viewed an old subject from a different lens. Putting different perspective to things, challenging the status quo and discussing new topics makes the posts popular. For instance, the most popular post of the year – “Why auditors fail to detect frauds?” I challenged the basic expectation that auditors are more capable than others to detect frauds. Look at the top five and see for yourself.

a) Why Auditors Fail To Detect Frauds?

b) Adidas India Euro 125 Million Fraud Story

c) Fraud Symptom 12 – Unethical Compromises by External Auditors

d) Highlights of Ernst & Young India Fraud Survey 2012

e) Re-branding Risk Management and Audit Function

2. Write Research Posts

Research posts have a long life as these help readers. For instance, the posts that I wrote in 2010 and 2011 are still getting hits. Here are the top five old posts that were hugely popular in 2012. Write posts that last over a time.

a)    Pre-employment Background Screening Verification Program  July 2010

b)    Impact of Organization Culture on Internal Controls October 2010

c)     Risks of Doing Business in India  September 2011

d)    Mother Teresa – An Inspiration For Social Responsibility  August 2010

e)    Risk Management Strategy of Virgin Group November 2010

I hope you had a good time reading the blog. Your feedback is valuable; please share with me to make this blog better.

I dedicate to all of you Whitney Houston’s “One moment of time” and once again wish you a very happy new year.

Building Trust Between Auditors And Business Teams

As we know, management is about formal authority, whereas leadership comes from moral authority. Leaders derive moral authority when followers trust them. Hence, the crux of people management is building a relationship of trust.

Auditors and risk managers face some serious challenges in building trusting relationships with business teams. Frequently, when the business teams hear an internal auditor is coming to meet them, the reaction is – “Why is he coming? When will he go?” Auditors are unwelcome, as business teams view them suspiciously. The relationship is as healthy as that of a divorced couple sharing parenting responsibilities. Aha, we base marriages on trust and it reminds me of this one.

A man took this beautiful finance to his attorney to sign the pre-nuptial agreement. The attorney looked her over, smiled and asked the man – “Do you trust her?” The man replied – “With my life, but why bet my money on it”.

As is obvious, the trust levels are deteriorating in most relationships. However, auditors and risk managers cannot use that as an excuse.  Internal auditors enjoy very low confidence level with business teams. A recent PWC State of Internal Audit survey stated that just 45% of the respondents were comfortable with internal audit’s management of critical risks, though 74% had enterprise risk management in place. Another point to note was less than 50% believed that their internal audit function was well coordinated with risk management functions. The scenario is dismal; there are communication gaps with business teams and risk managers. The focus has to be on building better relationships.

Auditors must look at David Maister’s trust equation. According to him:

Trust = Credibility + Reliability+ Intimacy

                                 Self-Orientation

Let us see how the four elements affect auditors’ relationships with business teams. More important is to determine a way to build trust-based relationships instead of transactional relationships.

1.  Credibility

 Establishing credibility is about meeting technical and emotional aspects. The technical knowledge of auditors and risk managers qualify them guide the business teams. If they lack relevant qualifications, experience and knowledge, the relationship of partner, mentor and advisor is doomed. However, all the knowledge and experience will fail if the business teams believe that auditors and risk managers do not walk the talk.  An auditor cannot pile on the free launches offered by business teams, and in the same breath talk about ethics. Here, to build trusting relationships, each auditor and risk manager in the team has to establish personal and professional credibility.

 2.   Reliability

People need to know where a person stands on various issues to develop a comfort level. They need to perceive the person as predictable, just, fair and ethical in his/her dealings. The business teams fear auditors and risk managers; a politically motivated report can build up a storm. The principle of issuing accurate, apolitical and balanced reports goes a long way in building a reliable reputation.  Without it, there is going to be a fight, us against them mentality with prevail between business teams and auditors. The win-lose situation created will result in  business teams viewing auditors and risk managers as the bad boss archetype.

3.   Intimacy

 This is about sharing confidences and deepest darkest secrets about the professional life.  This is not about personal life. An auditor and risk manager delve into the negative side of business – identify shortcomings and high-risk scenarios. Depending on the organization culture, these findings have an indirect impact on career development, promotions, compensation and hiring and firing of business teams.

Hence, business teams will stay silent and it is not enough for auditors to say – “I have an open door policy”. Ethan Burris in his research found that – “employees who speak up and challenge the status quo are viewed as less competent, less dedicated to the organization and more threatening compared to those who support the way things are. They are also rated as worse performers, and their ideas get less support.” No one is going to open up and identify the real risks and concerns, unless some level of intimacy is established. Hence, auditors and risk managers need to show emotional honesty to break down the barriers of communication.

 4.  Self-Orientation

 When people view a leader entering into relationships primarily to serve his/her own self-interest, then this denominator will wipe out the positives of the three elements in the numerator. The use and discard policy of transactional relationships causes engagement and commitment to plummet. In this case, as Burris says – “It can be scary to open up the lines of communication, because you don’t know what’s going to come out of it.” Thrusting relationships will not form when business teams perceive risk managers as serving their own agendas at their cost to win brownie points and laurels. They need to be transparent, altruistic and balanced in their approach.

 Closing Thoughts

 An auditor went to do a stock take of a weapons factory. The inventory manager hated the auditor. In the previous report, auditor had made many disparaging comments about the manager’s work. This time, the inventory manager in a pleasant voice said to the auditor –“Please don’t touch this, it is dynamite. The manager held the next bin and the manager said – “Oh that is just anthrax”.

Rather than face a similar situation, it is much better to follow Blaine Lee Pardoe’s advice – “When people honour each other, there is a trust established that leads to synergy, interdependence, and deep respect. Both parties make decisions and choices based on what is right, what is best, what is valued most highly.”

 References:

  1.  PWC- State of Internal Audit Survey
  2.  David Maister – Trust Equation
  3. HBR – What is really silencing the employees – Ethan Burris

Celebration Time -100K Views in 2 Years

On the day of Venus transit, this blog crossed 100,000 page views, a couple of weeks before the second anniversary. For a subject as dry as risk management, that is an achievement. My sincere thanks to all the subscribers and readers whose smallest click on the post motivates me to write more. I didn’t start of as a writer, but the slow and steady growth in readership has made me one. With an average of 8000 page views per month, it is time to celebrate.

Since I started this blog with the aim to build awareness and  change perceptions about risk management, specially in India, the song “Winds of Change” is dedicated to all my readers. For the next generation, we definitely need to bring changes in practices of business ethics, corporate governance and risk management.

In the last two years, I learnt a few personal lessons from blogging. These lessons are not about how to blog better, but life in general. So here goes.

1. Don’t give up your hobbies

Sounds simple, but with age we generally give up our hobbies due to various constraints. However, the hobbies of our childhood in some ways define us and one never knows how the dots connect in future.

My mother encouraged me to write from childhood. In my teens I wrote poems and essays. Most were deeply tragic, outrageously wicked or completely radical thoughts. My father got perturbed on reading them, since he believed I was going to implement my creative ideas. I was that mischievous! Over time, as the focus on career increased, I stopped writing. I picked up writing again with this blog after a 20 years break. It was an absolute challenge. My writing is still not as decent as I wrote during my teens. It is an art one forgets with time without practice.

Now blogging is the in-thing and being able to communicate well is the key to success. No one told us that during our school days, the focus was on qualifications. In the present environment technical skills have become secondary. Times change. The best way forward is to integrate hobbies with career aspirations.

2. In adversity, persevere

Blogging is a humbling experience. There is a lot of sales talk about how good and easy it is, but it takes a lot of persistence.

I think most bloggers start for two reasons – either they love writing and sharing ideas or they wish to build a name for themselves in their chosen field. The initial idea is we have got it made and can crack it easily. Nobody tells a new blogger that they will be publicly making a fool of themselves,  consistently, till they get the hang of it. Moreover, with all the competition, most readers will ignore you. In real life, we target a deal with at least 60:40 odds in our favor. In blogging world, less than 1% read the post, let alone appreciate it.

It taught me one big lesson. In adversity, I must not count what I don’t have. I must focus on the goals I wish to pursue and doggedly work on it. Every time I failed, I attempted to understand the reasons for failure and restarted. Hard work makes one luckier.

3. Be authentic

Blogging is about personal branding, hence be authentic. What I write is what I am. There is a lot of advise given on building a personal brand and developing a social persona to get an audience. The problem with that approach is that my personal brand is not different from another’s image. Hence, how will the readers differentiate and respect me?

For instance, my thoughts are uniquely mine, if I try to mimic someone’s writing style or thoughts, then it isn’t me. If I like to be someone else, who is going to be like me? It takes courage, because putting radical thoughts in open forums is sometimes equal to begging to be killed.

However, my authenticity determines my credibility. For example, if I value honesty as a trait, then not only my friends but my worst enemies should vouch me as honest. The measure of my success on personal branding is when I stand for certain values and traits, my competitors and enemies acknowledge those traits. A well packaged public persona goes only so far as most readers see through the game plan sooner or later.

Closing thoughts

I started writing this blog on my parents marriage anniversary. As I have lost them, this was my way of thanking them. I wanted to share some of the ethical values they inculcated in me. It gives me a sense of satisfaction that there are still some takers for it. I hope in the years to come, I can learn something more from blogging, career and life, and be able to share it with you.

Thank you once again for your continued support and faith.

Best wishes,

Sonia

Program Change Management Risks

Organizations invest huge amounts in running numerous programs to improve operations, culture and profitability of the company. For instance, programs cover technology implementation, building social networks, improving employee engagement and corporate social responsibility initiatives. Some programs give good return on investment while others dwindle without much success.  The success and failure of a program appreciably depends on effective change management.

Even for information technology programs, various survey reports show success-failure ratio as 50-50 percentage. Failure results in cost overruns and delay in project schedule besides low employee morale. A few reports indicate just around 20% of the programs are successful in the first effort in all respects. The differentiating factor, with technology and implementation capability being the same, is change management skills. Lack of focus on change management risks results in program failure.

Before discussing some key aspects of program change management risks, let us understand the reason for the same. Change causes insecurities to surface, hence sows the seeds of conflict and discord. On start of a program, people do not understand the reason for change. They are unable to assess what is at stake and what success looks like. Moreover, people respond differently to change. Idea of change gets supporting, skeptical and scornful reactions. If not handled carefully, different groups within the organization prepare battle plans to sabotage the program.

Hence, change management strategy is an essential component of program implementation. Given below are some of the risks on the same.

1.   Senior Management Involvement

For approval of the program, the program manager shakes hands with all the senior managers to get their buy-in.  Managers assume that the senior management commitment will continue after approval. However, this is rarely the case. With time, commitment will wane if senior managers do not understand the direction of the program and/ or start giving priority to other programs. Hence, program managers need to monthly/ fortnightly update the senior managers through review meetings and reports on the status and plans of the program.

Additionally, users and employees need to see senior managers demonstrate commitment to the program i.e. walk the talk. Program managers need to leverage opportunities to show senior management support for the program. Develop a leadership plan to ensure senior managers become champions of the program.

2.   User/ Employee Adoption

The program managers gear most of the programs activities towards adoption by the users. For example, in building a risk culture, adoption of risk assessment template is a milestone. The point is change agents view program activities in isolation for pre-go-live stage without considering the overall impact on the organization. Programs influence strategy, process, technology, and people. Without synchronizing the four aspects, even with user acceptance, the program will be unsuccessful in the long run.

Second aspect to consider is the handholding and support after the go live stage. After implementation of a program, the users may still face some challenges or new problems and risks may arise. For continued success of the program a team is required to support it, else it will fizzle out.

3.    Multiple Communication Channels

A program requires a good communication plan and failure in communication jeopardizes the program. Communication messages must be clear, straightforward and from the heart. The corporate jargon and meaningless mantras does not get buy in from senior management or users. For example, do not have a mission statement for an ethics program that sounds like this:

The company’s mission is to be the most ethical organization in the world by adopting best practices, making it a great place to work and rewarding meritocracy

Employees will roll their eyes on the above statement and consider it as management hyperbole. There is nothing actionable or measurable in the statement. Neither are the steps linked to ethics.

Another risk is failure of communication from senior management. Program managers assume that employees understand senior management commitment from strategy and other generic documents. However, adopters need to hear from senior management, their views and aspirations regularly.

Moreover, when programs run into problems, the initial reaction is to hide the bad news from the adopters. Clear concise communication on challenges being faced by program managers and support required, gets the program back on track. Communicate more often when program is running into trouble.

More importantly, change agents sometimes fail to listen to the adopters. Adopters’ feedback is critical for the success of the program. Understand their angry reactions, criticism and challenges. Develop plans to address them and not ignore them.

 4.    Training Plans

 Standard training material is the bane of most programs. Change agents believe that once the training is imparted, their job is done. Some pieces are overlooked in training plans and I have mentioned these before in a post. These are:

  • People have different learning patterns.
  • People are at different stages of learning – beginner, learner, manager, and expert.
  • People do not remember the training for long unless they start using the information in practical work.
  • Old habits are hard to break; hence, people revert to old patterns of working if not monitored.

Last but the not least, is the content of the training. For example, fraud awareness training is a double-edged sword. The users, who didn’t know a word about fraud, now have some idea on how frauds are conducted. The information can be misused. Moreover, an overload of information may create panic reactions in users. Hence, when to deliver training and what information to give are critical decisions for successful program implementation.

 5.     Reward & Recognition System

For a program to be successful, set up a clear system about reward and accountability for the adopters. Failure to establish a system will result in rewarding mediocrity rather than meritocracy. Further, without implementing a penalty criterion, there is no downside for wrongdoing. Hence, maintain a balance between reward and punishment.

For instance, in an ethics program, build a system of bonus points at time of appraisal for meeting business objectives in an ethical way. If a manager had the option of choosing an unethical means to achieve an objective faster but selected an ethical way though had to work harder, award him/her bonus points. On the other hand, award penalty points to a manager who chose unethical means.

6.    Dealing with Failure

Sometimes, despite best efforts the program team stares at the face of failure. People adopt inflexible approach and refuse to acknowledge the logical benefits of the program. They foresee their personal and political agendas negatively impacted, hence refuse to contribute to the shared purpose of the organization. The situation reminds me of an old joke.

A man bought a parrot as a pet. To his dismay, the parrot had a bad attitude and spoke foul language. The man tried to teach the parrot to behave but the parrot refused to change. One day in a fit of anger the man put the parrot in the freezer. He heard the parrot screaming and abusing for a couple of minutes, then there was silence. The man opened the door of the freezer, the parrot trotted out and said – “I beg your forgiveness for speaking rudely. I promise to behave properly.” The man was amazed at the transformation. Then the parrot said – “May I ask, what did the chicken do?”

To avert sudden failure periodically conduct organization surveys to understand the acceptability of the program and organization readiness for the next stage. Measure the behavior and sentiment change due to the program. Do not rush to the next stage without ensuring that adopters connect with the program in the existing stage.

 7.    Awareness of Retaliation

Situations can get out of hand when people start retaliating against the program manager and his/her team. Some programs are launched for appearances sake. For example, senior management may approve a program for business ethics, diversity or employee participation. However, when the change agents sincerely attempt to run the program to bring about a cultural change in the organization, they get mobbed by the employees. In this case, the junior employees start complaining that the change agents are pressurizing, bullying and forcing them to change. This impacts the heart of the program and the change agents spend most of the time defending their actions. The senior management doesn’t really want change, hence looks the other way or gives tacit approval to derail the program and mob the change agents.

In such cases, the change agents have to pay a high price, but the seeds of change are sown. People recognize that there is a better way of doing things, and gradually move towards light.

Closing Thoughts

 Change is difficult. We ourselves find it difficult to change, so getting others to change is an obstacle race. As Mahatma Gandhi said on leading the non-violent Indian independence movement – “First they ignore you, then they laugh at you, then they fight you and then you win.” Being a change agent is a test of stamina, perseverance, discipline and sacrifice. There are no low hanging fruits to pluck, no short-term rewards, no personal glory, however, in the end organization benefits.

 

1 Jan 2012 – A New Begining

I am feeling on top of the world. This blog in its first full year got 51,556 page views. More than doubled from last year (11,299 page views in six months). I have nearly twisted my arm from patting myself on the back for being such an incredibly brilliant writer. With great difficulty I have managed to reign in my egoistic enthusiasm and have decided to be a humble Level 5 leader.

Sincerely, my heartfelt gratitude to all my readers, who came again and again, to read, comment and share my blog posts. For keeping silent when I floundered, and giving me constructive feedback and encouragement to continue learning and growing. I owe it to you all  to share the lessons I learnt in blogging this year. Before I declare the top 10 posts of the year, there are two stories I wanted to share with you.

1. The Audience

Writers give one solid piece of advise – “write for your audience”. For new bloggers, this amounts to asking them to be James Bond when they haven’t read a spy novel.  Nevertheless, since I decided in blogging world the faint hearted can’t succeed, I devised a strategy. My blogging aim was to share my knowledge and experience with the younger risk managers to make a positive difference in their work. So I wrote on topics that I felt passionate about and felt risk managers approach should change.

Six months down the line in June 2011 I got a shock on reviewing audience statistics. To my utter amazement most of my subscribers are in the age group of 44-64 years.

I had missed my target group entirely. I realized most of my readers are more experienced than me. Phew, that discovery was very nerve wrecking. Gen Y seems to be reading entirely different topics. Since I already have over 300 Gen X and Boomers subscribers, I have changed my strategy and will continue to write topics for them. Lesson learnt was do better market research to match products with your own skill set. By the way, are any of my subscribers single men over 44 years of age?

Resolution for the year: Understand audience tastes better. Reading Only.

2. The Blogging Etiquette

Another advise given is be careful what you write on the blog, in the internet world all is visible. Ha, have you every heard of a risk management blog going viral. With my first few subscribers, I was hardly worried.

Till it suddenly dawned on me, my ex colleagues, bosses and clients were following my blog. None of them informed me, as they quietly used Risky Secretive Subscribers (RSS) feed. Have you ever imagined what you will feel when all your bosses, boy-friends and the not so friendly guys all are in one room. Here, they are not only in one room, they are invisible to each other and me.

Sob, sob, sob. I identified a couple of my posts where I had nicely put my foot in my delicate mouth. Wondered seriously, should I continue to chew the nails of my toes, or take my foot out and put my fingers inside my mouth.  Political correctness was never my strong point, but this. Me, the poor little baby.

Resolution for the year : Be politically correct. Seriously.

3. The Good Posts

As is the blogging tradition, I shall list down the top posts for the past year. Surprisingly, some of my 2010 are still going great guns. So, here are the top five from each year. Hope you enjoyed them.

2011

1. Key Performance Indicators for GRC Departments

2. Rs 300 crore CitiBank Fraud

3. Fraud Symptom 5 – Insufficient focus on Organization Culture and Processes

4. Enterprise Risk Management V/s Strategic Risk Management

5. Reflections on Definition of Corporate Governance in India

2010

1.  Impact of Organization Culture on Internal Controls

2.  Deviant Organization Culture

3.  Pre-employment Background Screening Verification Program

4.  Risk Management Strategy of Virgin Group

5.  Mother Teresa – An Inspiration for Social Responsibility

Resolution for the year: Write only good quality posts.

Wishing You A Very Happy New Year

Finally, once again a big thank you to all my readers. This song is my tribute to all of you. May our relationship grow and prosper in this year. And you enjoy the journey as much as I do.

Hope you are successful in achieving all your ethical dreams in 2012.

Best wishes,

Sonia


Auditors and Accountants – Humor

The weekend is starting and here are some jokes that I found on auditors and accountants. Hope you enjoy them.

1.  What did the auditor say at the vampire stock take?  Count Dracula

2.   Did you hear about the cannibal Audit practice? They charge an arm and a leg.

3.  What do cannibal auditors do after their Office Christmas Dinner ? Toast their clients

4.   If an accountant’s wife cannot sleep, what does she say? “Darling, could you tell me about your work”

5.  A guy in a bar leans over to the guy next to him and says, “Want to hear an accountant joke?” The guy next to him replies, “Well, before you tell that joke, you should know that I m 6 feet tall, 200 pounds, and I m an accountant. And the guy sitting next to me is 6 2″ tall, 225 pounds, and he’s an accountant. Now, do you still want to tell that joke?” The first guy says, “No, I don’t want to have to explain it two times.

6.  A patient was at her doctor’s office after undergoing a complete physical exam. The doctor said, “I have some very grave news for you. You only have six months to live.” The patient asked, “Oh doctor, what should I do?” The doctor replied, “Marry an accountant.” “Will that make me live longer?” asked the patient. “No,” said the doctor, “but it will SEEM longer.”

7.    A young accountant spends a week at his new office with the retiring accountant he is replacing. Each and every morning as the more experienced accountant begins the day, he opens his desk drawer, takes out a worn envelope, removes a yellowing sheet of paper, reads it, nods his head, looks around the room with renewed vigor, returns the envelope to the drawer, and then begins his day’s work. After he retires, the new accountant can hardly wait to read for himself the message contained in the envelope in the drawer, particularly since he feels so inadequate in replacing the far wiser and more highly esteemed accountant. Surely, he thinks to himself, it must contain the great secret to his success, a wondrous treasure of inspiration and motivation. His fingers tremble anxiously as he removes the mysterious envelope from the drawer and reads the following message: “Debits in the column towards the file cabinet. Credits in the column toward the window.”

Have a great weekend and hope it refreshes you for Monday’s work and meetings. :)

References:

1. The Alternative Accountant.

2.  Funny Jokes

If I Were An Auditor

I am dedicating the song “If I were an auditor” to all the auditors who are working overtime and weekends to finalize financial statements for the year ending 31 December 2010. Audit life is tough, involves a whole lot of hard work and sacrifices, including from family and friends. Just remember your better halves and thank them for their continuous support and love. There is another life waiting for you after the year-end.

Have fun and a nice weekend. :)

Sonia

We All Have A Bad Boss

I was going through the various groups of Linkedin and seeing the updates of my connections. The one thing which hit me hard was the number of topics about bad bosses and how to manage them. Every person had some experience on how CXO’s/ bosses behave negatively and how to deal with the situation.

I did not see any comment from a CXO saying- “I am a bad CXO and this is my suggestion on how not to do the same mistake”. I didn’t see any message from a regular boss (senior/middle) saying that “Hey, these are the mistakes which I made while being a boss”. Or any person saying “Hey, my boss is nice but I am a bad subordinate”.

With my tongue firmly in cheek, I kind of wondered. Except for fresh employees all of us are someone’s boss and have some subordinates. So how come we have a bad boss and are such good subordinates. And the surprising thing is our juniors are saying the same “My boss is bad, I am a good subordinate”.

I think most of us haven’t reached the CXO level nor are likely to reach. Hence the HR industry is focusing on the rest by showing empathy and sympathy for dealing with the bad boss. This is a good branding exercise by the HR industry to rope in new customers for coaching and mentoring. Nobody likes someone else having authority over them, as kids we didn’t like our parents telling us what to do, and as adults we don’t like our bosses telling us what to do. It is a universal emotional thought process which HR industry is exploiting by giving us a shoulder to cry on.

I am not going to give you 10 steps of how to manage a bad boss. I would recommend reading Scott Adam’s book – Dilbert The Joy Of Work -Guide to finding Happiness at the Expense of your Co-workers. It is one of the books which give profound meaning to working as a subordinate. 

Watch the clip to understand the true meaning of a hardworking employee who has a really bad boss. My heart goes out to him.