By Richard Chambers | December 8, 2014
As internal auditors, we know it’s essential to win consensus. We work hard to create a shared understanding of risks, and to gain buy-in for our recommendations. But blindly striving for consensus is not always healthy for our organizations. When important business decisions need to be made, it is important to express our opinions, and to encourage and listen to contrarian voices, rather than to risk the impact of “groupthink.”
Groupthink often results from an uncompromising desire for harmony or conformity. It’s more common than you may realize, and it’s especially prevalent in groups with dynamic leadership. The energy and passion that drive an organization to success can subtly shift conversations. Group members may hesitate to express disagreement or even point out alternatives. They also may agree a little too enthusiastically without considering the consequences. Management may actively suppress dissenting viewpoints, as well. The results: dysfunction and ineffective decision-making.
You’d think internal auditors would be immune to groupthink. After all, we’re trained to keep an open mind and to exercise professional skepticism. But it’s easy to fall into the trap, especially if you are a new internal auditor or have just attained a “seat at the table.” Comments that might have raised red flags in a one-on-one audit interview may go ignored or unchallenged in a larger setting. We want to be team players and build relationships, and if nobody else seems to have doubts, we can doubt our own judgment.
Over the years, I have noted several examples where CAEs sat quietly by while their companies made what proved to be damaging decisions regarding new business strategies. These CAEs often possessed deep industry expertise, and their views would have been relevant, had they been shared. However, I have also witnessed courageous actions on the part of CAEs who refused to sit quietly when senior management was implementing strategies that pointed the company straight for a cliff.
We must also encourage dissent by management and others during our internal audit engagements. That may not be easy, but it can be more difficult to guard against groupthink by our clients. The internal audit process is intimidating to some, and if we don’t encourage others to air their views, we might miss out on important information.
Internal audit’s reputation also can suffer in this scenario. There is a big difference between wholehearted acceptance of our recommendations and grudging-but-silent acceptance. When we’re too enthusiastic with our opinions, a reticent client might believe we are ramrodding through our ideas or glossing over theirs. In some cases, subdued objections will resurface — after the internal audit report is issued, during meetings with senior management or the audit committee. At this point, no one benefits.
There are no simple solutions for avoiding groupthink, but it can help to refrain from presenting your recommendations to clients until after you have asked for theirs. Then, after you do offer your solution, ask again for possible alternatives. In some instances, you may point out that there’s time to review important decisions while the engagement report is still in draft form.
Groupthink isn’t limited to fieldwork. It can occur during risk assessments or workpaper reviews, and throughout the various meetings internal auditors attend every day. It also can occur within an engagement team, so team leaders need to encourage other internal auditors to raise any concerns. At times, you may even seek an opinion from an outside expert, such as an experienced internal auditor who is not part of the engagement team.
Every internal auditor needs to know how to look for hidden objections and how to express their own views tactfully but clearly. There are few roles in which independent, critical thinking is as important as it is for internal auditors. In the words of Gen. George S. Patton, “If everybody is thinking alike, then somebody isn’t thinking.” We can’t afford to let that “someone” be the internal auditor.