In an era of sophisticated data analytics, Larry Harrington, chief audit executive (CAE) of Massachusetts-based Raytheon Co., relies on a relatively old-school key performance indicator (KPI) to monitor how his internal auditors are helping the business become more successful: telephone calls from business partners asking for assistance.

Harrington references a call he recently received from the head of one of Raytheon’s larger business units. The general manager explained that an upcoming reorganization would eliminate several management positions, and he wanted to make sure the changes would not adversely affect internal controls and risk management processes. The general manager asked for internal audit’s help reviewing the plan before it was implemented, and Harrington obligingly dispatched a team to assist. This type of proactive request is a sign that business partners recognize the value internal audit can provide, Harrington notes.

“I’m going to get a lot more calls if I’m hiring, training, and developing the right kind of internal auditors,” he says. “We need people who are innovative, creative, thoughtful, and analytical — and who can help colleagues quickly get to the root cause of problems and get them fixed.”

Establishing internal audit as a go-to resource requires building credibility by continually demonstrating the value of internal auditors’ technical skills, in addition to several other capabilities. Internal audit executives and industry research suggest that while technical auditing proficiency increasingly qualifies as table stakes, the most effective internal auditors also possess a broad range of nontechnical attributes. These include communication skills, risk-management savvy, and critical thinking, according to the 2013 global Pulse of the Profession survey conducted by The IIA’s Audit Executive Center. As Harrington asserts, “Soft skills are the new hard skills.”

Discussions with numerous CAEs, in fact, indicate that internal audit leaders place growing value on nontechnical attributes (see “Seven Nontechnical Attributes” at right). And while the specific combination of nontechnical attributes CAEs are seeking varies by organization, a growing consensus suggests that CAEs and their direct reports should take a more deliberate and structured approach to developing these capabilities. That approach requires leaders to adjust nearly all of their management activities, including recruiting and selection, training and development, and performance management approaches. The following five steps outline how successful internal audit groups are ensuring their team members possess the nontechnical attributes auditors need to thrive.

1. Build Your Internal Audit Brand

CAEs emphasize that their function’s individual reputation serves as a foundation that enables them to more effectively recruit, retain, and develop highly talented internal auditors who possess the nontechnical attributes they seek. “You want candidates to view your internal audit function as a development opportunity,” notes Karl Erhardt, senior vice president and general auditor at New York-based insurance giant MetLife. “The function has to have the right tone at the top. It has to be respected by senior management. And it needs to be seen as a place where internal auditors have major opportunities to strengthen all of their competencies.”

Developing an internal reputation as a profession that adds value to the business helps strengthen an individual function’s recruiting hand by making it an attractive destination for individuals who excel in nontechnical areas. “The term internal audit often has a negative connotation because many people think that audit reports focus on what’s wrong,” Harrington explains. “As internal audit leaders, we need to put forth a more accurate description: The audit report focuses on what the company can do better. As internal audit leaders, we should strengthen our brand image as a function that makes the company better.”

At a practical level, this brand-management work requires internal auditors to demonstrate their knowledge about the part of the business with which they’re working and how internal audit can help that group operate more effectively while adding more value to the company.

2. Use Rigorous Recruiting and Selection Techniques

While many CAEs agree that nontechnical attributes are important, they emphasize different qualities and also articulate them differently. Kelly Barrett, vice president–internal audit and corporate compliance at Atlanta-based The Home Depot, says she and her hiring managers seek candidates who are naturally inquisitive, intellectually agile (i.e., they quickly understand and respond to new experiences and frequent changes), and resilient (i.e., they can hold their ground with business partners when necessary).

Gregory Grocholski, the former CAE at Michigan-based Dow Chemical Co. who now serves as the company’s business finance director for new business development, says that when he was in the position of hiring new auditors, he sought passion and courage (i.e., fortitude to stand up for what’s right in the face of criticism). Both Grocholski and Barrett say that their evaluation and hiring processes consider these and other nontechnical attributes along with consideration of more traditional technical-auditing skills. For example, Barrett and her team put candidates through a demanding selection gauntlet that tests everything from collaboration skills to financial calculations.

Audit experts agree that recruitment and selection approaches should both identify the technical and nontechnical attributes the function needs and ensure that candidates who possess these qualities are hired. To this end, the audit functions at both MetLife and Raytheon use competency lists (or “success profiles”), which include nontechnical attributes, to screen candidates.

Raytheon also developed a questionnaire interviewers use to help determine the extent to which internal audit candidates possess each of the attributes contained in the success profile. This approach broadens the initial candidate pool and also leads to better hiring decisions. “For instance, we’ve hired people with music backgrounds,” Harrington says. “It’s not because they have a music background per se, but because they possessed many of the same attributes that we know the most successful people in our company have.” These recruits possessed the relationship-building, communication, and continuous-learning competencies (among others) that Harrington seeks; the fact that they possessed untraditional backgrounds did not prevent them from being hired. That said, Harrington also emphasizes that new hires “need to quickly learn the internal audit methodology — that’s a given — but we’re looking at those things beyond technical skills as well.”

3. Commit to Training

Formal training programs can strengthen technical skills as well as nontechnical attributes, Grocholski asserts. More than 70 percent of Dow’s internal audit staff has earned a certification, such as Certified Internal Auditor or Certified Fraud Examiner. The company covers the cost of these programs and related training. “This investment is a must,” Grocholski says. “It really gives our internal auditors a lifelong skill set, enhances their resumes and professional development, and also benefits Dow.” Grocholski also points out that much of the certification curricula exposes auditors to technical skill development as well as opportunities to strengthen their qualitative attributes.

At MetLife, senior-level internal audit managers receive leadership development that focuses on how to work effectively on teams. Within Raytheon, the portfolio of internal audit training offerings includes formal programs and informal assignments. All Raytheon internal auditors must read at least two business books each year and write five- to seven-page summaries of the books to share with colleagues. This assignment helps strengthen writing skills while creating a large library of book summaries (featuring leading business thinking) that internal auditors can read to sharpen their business acumen. Additionally, Harrington and his senior staff work closely with their teams to help them write more effectively and efficiently. This work includes specific guidance, such as reducing word count and reading their drafts aloud.

The average internal auditor in most industries receives roughly 40 to 80 hours of training annually, Harrington estimates, while emphasizing that this amount is insufficient. “I contend that you are becoming obsolete with 40 to 80 hours of training,” he asserts. Raytheon internal auditors receive three to four times that amount of training annually and are expected to accumulate additional training or education (including obtaining professional certifications) on their own time.

4. Expand Development

Activities In addition to demonstrating a strong commitment to training, leading audit functions tend to cultivate both technical and nontechnical attributes through a wide range of development opportunities, including rotations, mentoring, and stretch assignments that challenge workers to extend beyond the scope of their current job descriptions and skill sets. At MetLife, for example, the development plans for every internal auditor are continually updated. Managers then use these plans to decide which auditors to assign to various projects. Dow’s rotation program ensures that internal auditors participate in an average of eight to nine projects each year.

​Raytheon’s formal annual learning plans include assessments of how individual auditors are performing against specific technical and nontechnical competencies. The assessments are conducted by managers and peers, and learning plans are adjusted based on those assessments. For example, if an auditor needs to improve his or her performance in two competency areas, he or she might be assigned to a mentor with strengths in those areas. The function’s mentoring program also assigns mentors from outside internal audit. These relationships can help internal auditors learn of job assignments outside the internal audit function, Harrington says.

The Home Depot’s internal audit development program doubles as the company’s primary leadership development program. The purpose of the program is to impart an intensive and broad education of the entire business to younger associates and to equip participants with an accelerated track to management. When participants complete the two-year program, they either accept a position in the business (as a manager in most cases) or commit to another two-year stint within internal audit, where their subsequent development centers on managing other people. As a result, the internal audit function turns over roughly half its staff each year.

Among other components, The Home Depot’s leadership program includes project rotations (participants move on to new internal audit project teams each quarter), mentoring, and exposure to all levels of the company. The development internal auditors receive also includes a heavy dose of training on how to manage others and conduct presentations.

“You get a ton of feedback, coaching, and exposure in the program, and that goes for our senior managers and director-level auditors as well,” Barrett says. For example, a director or senior manager will have the opportunity to present to the company’s CEO and executive vice presidents at quarterly meetings. And manager-level internal auditors report on a quarterly basis to the chief financial officer (CFO), who generously sits through some duplicate presentations for the sake of development. “That’s a big deal,” Barrett says. “Few people at the director level in a larger company even see the CEO. And it’s a really big deal if you are 26 or 27 and getting time with your CFO.”

The developmental program qualifies as a significant benefit to Barrett from a brand perspective. “We have to be successful in how we develop our people because we’re only as good as the last person we promoted into the business,” Barrett says.

5. Integrate Nontechnical Attributes Into Performance Management

CAEs emphasize the importance of integrating nontechnical attributes into performance management processes. They accomplish this primarily by developing a set of competencies that describe the nontechnical attributes that determine performance success in their organization or audit function. These competencies are then used as the basis of ongoing performance evaluations and the promotions and incentives that are linked to those evaluations.

Erhardt says that MetLife internal audit managers use a document that contains a set of 22 competencies for performance reviews and the annual development plans assigned to individual auditors. “Those competencies are pretty much all ‘soft’ — they include critical thinking, influencing, and leadership,” he explains. “Everybody has different technical skills, so we don’t list out all of them [in the competency document]. But we do list the nontechnical competencies we expect all of our auditors to possess as they progress through different levels of the organization.”

While Dow’s internal audit function adheres to the company’s performance management process, internal audit managers also provide performance feedback to their direct reports following every engagement. This approach, Grocholski reports, ensures that performance management remains part of the ongoing discussion within the function.

The Home Depot also tracks its own hiring performance. In rare instances when an internal auditor is forced to leave the company for performance reasons, Barrett rounds up her team so they can examine the original assessment of the employee who departed. “I ask them what we missed and what that means in terms of how we might change the assessment going forward to avoid repeating this type of oversight,” she says. That process takes hours (and elicits some groans), but Barrett does it because it directly affects the function’s brand. “We cannot afford to have anyone not do well in our program because they’re out there representing us. We need every internal auditor to be spectacular.”

Return on Investment

Many CAEs report that they have invested significant time and effort to ensure that considerations of nontechnical attributes occur throughout every step of the recruiting, retention, and talent development life cycle. This investment appears to deliver excellent returns. CAEs also say that when their internal audit function implements the brand-management, selection, training, development, and performance management steps necessary to achieve a balance between technical and nontechnical attributes, many of their most important KPIs improve dramatically — even some untraditional measures.

“If you do everything you need to do to develop a strong internal audit brand,” Harrington adds, “your phone is going to ring off the hook.”