“I just wish the internal auditors understood the business better!” I can’t count the number of times I have heard this lament from company executives during my years in the profession. While they may have been speaking about their specific business, they were often alluding to what they viewed as a lack of strong business acumen in general. While I believe a great many internal auditors do bring sound business acumen to their roles, we can all be better.
When I set out to write my fourth book, Agents of Change: Internal Auditors in an Era of Disruption, I asked chief audit executives around the world to identify the traits that internal audit change agents share in common. Not surprisingly, being innovative, strategic and relationship-centric were on the list. But the leading attribute was something of a surprise: The CAEs surveyed were emphatic that, to be agents of change, internal auditors must possess strong business acumen.
I knew business acumen was important. After all, I addressed its value in an earlier book, Trusted Advisors: Key Attributes of Outstanding Internal Auditors. In that book, published in 2017, I observed:
“In recent years, an increasing number of companies have designated the chief audit executive position as a rotational assignment. Seasoned executives from within the company are often asked by the CEO or audit committee to assume the role for what is often a three- to-five-year assignment. The CAE role is often seen as one that prepares executives to assume positions of greater responsibility within the company in the future. However, the candidates who are asked to take on the CAE role are often tapped based on their business acumen. They assume their new role with years or even decades of experience in the company or industry. In that regard, they are seen by other executives in the company as being prewired as, or to become, trusted advisors.”
Results of the Agents of Change survey were enlightening because they clearly conveyed that business acumen isn’t a skill essential to only the CAE. Instead, it is seen as critical for all internal auditors – particularly those who aspire to drive change within their organization.
After decades in our profession, I have come to appreciate the value that business acumen brings in differentiating good internal auditors from great ones. Internal auditors who have a deep knowledge of their organization, its industry and broader business principles are often respected, admired and sought out for advice in the organizations they serve.
When considering what business acumen entails, I boil it down to some important traits:
It is not enough to understand what business acumen is. Great internal auditors must understand how to leverage it. I believe there are at least 10 ways we can do that:
Strong business acumen enables us to go beyond the traditional assurance/compliance-focused approach and become more insightful and trusted advisors and change agents. We elevate our value when we clearly grasp the bigger picture and align our efforts with business objectives contributing to the organization’s overall success.
To be sure, business acumen doesn’t happen overnight. It is an ongoing process that involves continuous learning, real-world experience and a willingness to adapt to changing circumstances. And, as I mentioned, it’s a valuable skillset for internal auditors at all levels, from entry-level to CAE.
Never stop learning, and never stop developing your business acumen.
What are your thoughts? Please share with me on LinkedIn or Twitter, or drop me an email at email@example.com.