A lot of people are advocating auditing culture. Problem is, it’s very swishy and difficult to objectively audit. A much more practical approach is to utilize some newer research around Personality System Interaction (PSI) patterns and utilize the Organizational Personality Framework which provides new, innovative levers for change, based on analyzing the organization’s preferred personality system interaction patterns.
In this #jammingwithjason #internalauditpodcast I am joined by Barbara Siegenthaler, a pioneer in a systemic approach that combines business expertise and PSI theory into a 360° degree testing and thinking grid for human factors – across the organization. She is the founder of The Organizational Personality Framework and the Personality-based Internal Auditing PBA® methodology.
Both approaches leverage the explanatory and predictive value of the Theory of Personality Systems Interactions. PSI Theory is a meta model from the domain of personality and motivation psychology, considered by academic psychology in Germany as “groundbreaking” and “highly innovative”.
This is an episode when I had the opportunity to geek out with Barbara and show how we can improve what we do as #internalaudit when we apply principles from other disciplines into how we audit.
Learn more about Barbara and these principles at: https://www.personality-based-audit.com/ and https://www.savanteon.com/
Transcript
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Jason Mefford: Well, Welcome everybody to another episode of jamming with Jason. Hey, I have got a fabulous guest on with me today. Barbara Seguin tada
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Jason Mefford: Actually in from Switzerland. I remember I you actually live in Switzerland. Right.
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Barbara Siegenthaler: Yes, I live in Zurich, Switzerland. Yes, thanks.
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Barbara Siegenthaler: Yeah, it’s
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Jason Mefford: It’s a, it’s a rough place to live, you know, Switzerland is actually one of my favorite places I love, I love that place, but
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Jason Mefford: We’re going to talk about something interesting today that again, maybe a little groundbreaking for some of you, we might say some things that piss, a few of you off. That’s okay. That’s what we’re. That’s what we’re here for, but also to give you some encouragement.
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Jason Mefford: On how we really need to change from an internal audit perspective, if we really are serious about wanting to be more future oriented and changing with the times, because the reality is, folks.
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Jason Mefford: Most of you are doing the same kind of stuff that’s been done for 100 years and that’s not how organizations operate anymore so
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Jason Mefford: Barbara, let me bring you on maybe you know explain just a little bit about what you
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Jason Mefford: Do because you add a different perspective. You know, I thought I was the only crazy one talking about psychology and internal audit.
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Jason Mefford: But this is your lane as well. So maybe kind of explain to people a little bit about what you do and how you’re trying to help organizations and in turn, a lot of groups.
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Barbara Siegenthaler: Okay, so thank you very much. So some some words about my background I’m Swiss grew up in burns the capitals and move to search for work. I’m coming from a family of lawyers. So I did law school first and eventually
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Barbara Siegenthaler: Maybe not the right thing for me. I love the concise language, the logic in legal work. I also have the admission to practice as an Attorney at Law, but eventually I went to Syria and joined a large insurance company.
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Barbara Siegenthaler: Where I was first in in house consulting and I entered global European and global projects. And then I went to outsourcing.
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Barbara Siegenthaler: And where I established a governance model and behold behalf of my organization for global outsourcing contract and all did and risk as well as legal food. It was kind of a best practice approach globally and generous. They asked me if I wanted to try and cope with it.
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Barbara Siegenthaler: I my thought was, oh my goodness, no.
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Jason Mefford: Why would I want to go to internal audit right
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Barbara Siegenthaler: No, I just had one touch point at this time was internal audit. It was actually an external resource, but yet the reputation of, you know, coming, coming to our, our office is always at the wrong time asking strange questions.
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Barbara Siegenthaler: Totally disruptive in a negative way. And eventually we got to be for these findings we already knew.
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Barbara Siegenthaler: But so I thought, okay, let’s give it a go and
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Jason Mefford: So, so it’s not not to interrupt, but let me just kind of stop here because this is
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Jason Mefford: You know, I’ve, I’ve done things outside of audit as well. And as you described your career path, right, you did a lot of other things before you came to audit.
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Jason Mefford: But everybody that’s listening. I want you to listen to what Barbara just said about how she viewed that internal auditor right
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Jason Mefford: Because that’s how most of the people are viewing is right, showing up at times that are inconvenient asking us weird questions, taking a bunch of our time and then lobbying or report to us at the end, I kind of got that right. Didn’t I that’s kind of what
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Barbara Siegenthaler: It was an external resource that has
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Barbara Siegenthaler: The department at this time. So,
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Barbara Siegenthaler: Okay, like I said, it’s got really fantastic offer to join Google bought it at this time. And it sounds like a fairy tale. So I said, let’s give it a go.
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Barbara Siegenthaler: And I loved it. I really, really love to professional. I think it’s the most in most underestimated professions. It’s for people who love logical thinking
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Barbara Siegenthaler: Who always want to want to have a new challenge. It’s beautiful. So I kind of fell in love with internal audit and stayed with the Department for six years until 2015 okay
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Jason Mefford: So now once you left that because, because again, kind of, so explain now kind of what you’re doing and how all of this kind of comes about because you you are bringing kind of the psychology side into
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Jason Mefford: What you’re doing now. Right. And I know before we started hitting record. We’re talking about how auditors are usually very binary in our thinking are black and white zero white or you know 01 right
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Jason Mefford: And and there’s not a lot of gray area, but the reality is, I mean, the older I’ve gotten
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Jason Mefford: There is no black and white. There’s just Shades of Grey. There’s no right or wrong, there are, you know, varying perspectives and circumstances and
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Jason Mefford: Ways that people think because of how they’re conditioned none are necessarily right or wrong. So, you know, let’s jump into the gray hair a little bit
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Barbara Siegenthaler: Just, just be pre curling that I just gave a speech to to the Swiss internal auditors, whereas the key message was actually coming from the definition of internal auditor to unlocking objective assurance and consulting services.
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Barbara Siegenthaler: But that’s this is highly subjective highly subjective, so I’m
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Barbara Siegenthaler: Very quickly, going back to 2015
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Barbara Siegenthaler: So I left Grupo that I would, I was at a time in my life where I was intellectually bought. I was looking for a new challenge didn’t know what to do. And since it was a coincident I was reading an article in a newspaper an article about
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Barbara Siegenthaler: upcycling psychological meta theories that sounded so interesting that I booked the first training course. It was a three day training course. And then I was surrounded back in 2015
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Barbara Siegenthaler: Surrounded by shrinks by psychologists by professional coaches in this training course and started digging into personality psychology and this was so interesting for me. So I said, it’s kind of a sabbatical for me. So I’m like,
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Barbara Siegenthaler: Yeah, let’s let’s learn more about it and eventually I came to a point rather sooner sunlight to wear said, Hey, hold on a minute. So, what, what does this mean
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Barbara Siegenthaler: What does this mean in the context of internal mood and then I took it from there. So I started at some point I said I want to be an expert in this model.
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Barbara Siegenthaler: That’s how I would like to work. That’s what I would like to do in life and basically crafted myself a job profile. It was developing a new model and your approach of how to look organizations organizations using this method theory.
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Barbara Siegenthaler: Um, and also got in contact with the professor who’s research and using. So this was in 2017 and he thought it’s absolutely realistic with them. Do I came out to send meeting having him as collaboration partner. Yeah, maybe a few words about some model if this if this is helpful.
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Jason Mefford: Yeah yeah cuz you’ve you’ve kind of created this is the organizational personality framework.
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Barbara Siegenthaler: That you’re
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Jason Mefford: Kind of developing right
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Barbara Siegenthaler: So it’s a model from academic psychology based on more than 30 years of academic research. It has an extra also reputational it said to be groundbreaking unique and highly innovative and series even
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Barbara Siegenthaler: The term Psychological Society even said that psychology has virtually no comparable theoretical frameworks or dynamics theories. So what does it say does it say it’s a model that looks at personality from the perspective of personality systems.
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Barbara Siegenthaler: So it says as a focus Rs. The interconnectivity. These are the interconnection patterns between this personality systems sets are characteristic for human personality.
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Barbara Siegenthaler: And then I said, Okay, this all sounds good. So what about two people.
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Barbara Siegenthaler: Could the challenges, for example, that a couple have all could also be caused by these personalities instances and connectivity patterns and eventually said, Okay, what about the group.
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Barbara Siegenthaler: concern is that, what about the department. What about in organizations and then I decided that I would like to learn this model.
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Barbara Siegenthaler: Become an expert in some model and also in the personalities cancer diagnostics that goes along with it said I can reverse engineer is a process. I don’t, I can identify the patterns at an organizational level.
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Barbara Siegenthaler: And that’s what I started doing
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Jason Mefford: Well, and so, you know, because a lot of people that don’t have a psychological background may not be that familiar with personalities, this, this whole term right there’s there’s some different tests that are out there like Myers Briggs desk. I know you give it a big thumbs down. Right.
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Jason Mefford: Those are, those are in, and they all all of those kind of things have
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Jason Mefford: Have some of their challenges.
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Jason Mefford: Right, because any way they have their challenges but but the idea behind them is right. If you’re a certain Myers Briggs personality type, like I’m an iron TJ right
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Jason Mefford: Is now by understanding more of kind of what my personality is I understand better how to interact with myself right what my personal motivations are
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Jason Mefford: How I choose to or prefer to work with other people. But then as I start to understand other people’s personality types. Now I can adapt myself to be more successful at working with them.
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Jason Mefford: Right. I mean, kind of, kind of at a high level, in my you’re more the expert on this, but I’m trying to kind of make it so that the people that are listening without
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Jason Mefford: A big background kind of understand what we’re meeting by personality types and then how we can kind of relate that to organizations as well because I think people forget organizations have personalities. Just like people do.
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Barbara Siegenthaler: And we forget. Exactly. And that’s, that’s where I’m coming from and what we can use from the model and the name of the model is the theory of personality systems interaction. So, psi care.
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Barbara Siegenthaler: And what we can use from psi care or the motifs its power achievement affiliation and freedom and we can use
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Barbara Siegenthaler: For fundamentally different ways how humans process informations. And if you combine this motives and the information processes will already end up with 50
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Barbara Siegenthaler: interaction patterns between personality systems. And so it all comes down to what do we see, and you can apply to this actually to the entire work of internal auditors starting from, who are you hiring.
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Barbara Siegenthaler: What risks and I addressing what kind of risks are these and what kind of finding, do I have, what’s the strategy of the organization.
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Barbara Siegenthaler: And how do I
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Barbara Siegenthaler: How do I talk about the results customizing the audit insights to the audience. So it’s basically am playing around playing around with this and I have a nice or is it
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Barbara Siegenthaler: Yeah, I have a nice definition of a farmer. Cool. It is basically the focus of my work is the complex interplay between content.
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Barbara Siegenthaler: Activation level and system connections of personality systems at the individual auditor engagement functional and organizational levels. So it’s all together. And of course, you must you really must know what you’re doing. I’m its personality psychology and
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Barbara Siegenthaler: Where I was wrong. I thought I would study the model. And since start working. I never expected it to take a after five years really to be able to play around with it so
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Jason Mefford: Yeah, it’s, it’s, I mean this is I’ve done the same thing with developing different frameworks or models over time.
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Jason Mefford: And it takes it takes a lot of time because what you’re doing is you’re looking outside of your particular area.
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Jason Mefford: Right, and then trying to it takes it takes time. First off, to get the knowledge and the skills associated with that.
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Jason Mefford: Then you’ve got to assimilate it and kind of create abilities or ways of thinking and applying it back to yourself.
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Jason Mefford: And then you actually have to work through it a few times to make sure that it actually works and it does take years. Right, so
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Jason Mefford: So, so I I totally understand. It’s like, you know, I’ve got some little pretty pictures that I’ve developed and it’s like, it looks nice, but you would. You’d be surprised how many years or time goes into it.
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Barbara Siegenthaler: You know, I once heard the quotes that. Do you know someone said, I’m writing. I think it was Oscar Wilde I’m writing your lovely letter because I don’t have time.
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Jason Mefford: Because I don’t have time to read a short when
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Barbara Siegenthaler: It goes, I don’t have time to write it and yeah
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Barbara Siegenthaler: So, um, yeah, no, it really took a lot of time but it works. Also, when I started my first clients.
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Barbara Siegenthaler: It absolutely does. What I envisaged it to do back in 2015 it works perfectly. It gives a lot of new insights and it is very, very fast because I’m working on the background of systems theory I can leverage. Plus, it is extremely elegant
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Barbara Siegenthaler: Important is so it’s still a model. So we’re not talking about the one and only truth and it’s a model, you must know what it can do what it comes so I’m adding additional models and additional
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Barbara Siegenthaler: Knowledge to my to do my work, for example, HIPAA systemic so
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Barbara Siegenthaler: I’m Milton Erickson approach. Yeah, so I’m adding this as well. So I think at some point gets a an individual combination or from
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Barbara Siegenthaler: The work you’re doing.
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Jason Mefford: Well, and this is some of this stuff again. I mean, you talked about different levels, you know, kind of at the individual level, maybe a team level.
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Jason Mefford: You know department organization, there’s there’s different levels where these interactions actually happen. Right. And so what I thought would be interesting is, is maybe let’s go back and just talk about internal audit or internal auditors in general.
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Jason Mefford: BECAUSE I CAN’T MEMBER we mentioned this since we’ve recorded or if it was in the pre talk, but some of the some of the things that came up that I figured we should make sure
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Jason Mefford: And talk about in the end. The first one you just made a, you know, you made a reference little while ago to in the definition of internal auditing. We are an independent and objective assurance and consulting function. Okay.
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Jason Mefford: And again, those, those few words took took committees like 10 or 20 years to argue about what words to put in there.
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Jason Mefford: But a word that we like to use all the time is objective we like to believe that we are objective, but at the core. We’re humans, right.
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Jason Mefford: And because we’re humans can we ever truly be objective and the answer is no because of all of these things that kind of come into our personality. Right. It’s our motives. It’s the
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Jason Mefford: Way that we want to process things right.
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Jason Mefford: So maybe let’s let’s talk about that a little bit, because this is one of those, you know, folks. I told you. Sometimes I’m going to reach reach through and shake you a little bit
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Jason Mefford: And I think this is one of those things, you’re not as objective as you think you are. There’s a lot of subconscious biases that you’re that you’re doing that, you’re living through
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Jason Mefford: In. So, you know, but now that we know that now we can start to try to look at it and peel these things back
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Jason Mefford: To. So let’s talk about that. Maybe a little bit. And some of this stuff because I know you said you were you just gave a speech on that right
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Barbara Siegenthaler: Yeah, subjective.
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Barbara Siegenthaler: Yeah, maybe I have different ways how look at the topic of objectivity. I can give you a little it’s different for different cycles. I can give you. So the first one is if we differentiate between living systems and best systems.
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Jason Mefford: Because what do you mean by that living living versus
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Barbara Siegenthaler: Like a machine a dead system like that. No, a machine o’clock.
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Barbara Siegenthaler: Or a train engine, you know,
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Barbara Siegenthaler: Okay, but maybe hundred years ago, you know, without turning so
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Jason Mefford: No trains and trains and Switzerland very until
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Barbara Siegenthaler: They are. Yes. No. But the point is, as soon as you have a human involved. It’s a living system. It’s a living systems are we’re talking about complexity.
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Barbara Siegenthaler: And we talked about the different variables that are interconnected and say that influence each other so you don’t get anywhere with binary sinking.
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Barbara Siegenthaler: This will be a first first point, if I take it from psi care. I would say if an auditor has as a look at a topic. He brings his knowledge and he brings his experience.
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Barbara Siegenthaler: To the, to the project and he brings his thinking and behavior patterns so he can’t really do do some magic. At some point, what he will see we’ll be a reflection of what he knows and how he says he or she thinks
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Barbara Siegenthaler: I can also take it from that from happening. Systemic person a prospective saying and reality doesn’t exist perceived reality is a construct
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It is
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Barbara Siegenthaler: It doesn’t mean it’s a result of attention.
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Barbara Siegenthaler: Yeah. And then if we if we can also take it from an information processing and perspective, saying,
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Barbara Siegenthaler: Humans have different ways how they process information and
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Barbara Siegenthaler: The analytical ones. It’s just two out of the four ways. And it’s kind of a control, illusion, because all that second process is one or two moments of consciousness.
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Barbara Siegenthaler: So from whichever angle. I take it from my professional and expert expertise and experiments have to say, I don’t think we are objective and we should be fair enough to say that’s what, that’s this is the case.
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Jason Mefford: Well, because we come with, you know, like you said, all of our all of our learning all of our context, you know. And again, this is going to be, it’s a it’s a little mind blowing. For some people that haven’t really research or thought about this, but there is
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Jason Mefford: No specific reality, other than the reality that we see. And so, you almost have to think about it like you’re walking around holding up a mirror and we view the world the way we view it because of our personality because of our experiences because of the conditioning.
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Jason Mefford: You know that that that we have come up with. Right.
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Jason Mefford: And we won’t get too esoteric or we’re going to lose everybody on this. If we start really philosophizing even though I’d like
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To
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Jason Mefford: But
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Jason Mefford: It wouldn’t I would be tempting, you know, we’ll just go on the
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Jason Mefford: hour to hour, and I’ll go put my thinking cap on, literally, I have a British thinking cap. I’ll get into that at a different time. The story behind that, but
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Jason Mefford: So, so let’s think about, because again, like you said, we, we are not as objective as we think we are, because we bring all of these things and our, our subjectivity comes into this
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Jason Mefford: And this is one of those areas where most auditors have a bias for certain types of risk and we are fearful in our nature.
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Jason Mefford: We don’t want bad things to happen. We’re trying to not have bad things happen. But we focus on certain risks that we believe are important and we exclude everything else. And again, this is
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Jason Mefford: I’ve got lots of stories behind this, but I kind of want to hear your take on
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Barbara Siegenthaler: On this because using psi see every one of the for information processing.
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Barbara Siegenthaler: The ways how humans process information is analytical it’s part of elementary cognition and it is on the experiential access and it has a characteristic of looking exactly at one item.
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Barbara Siegenthaler: It’s a discrepancy focus. It’s a focus on mistakes is focus on on such a part of the patterns that doesn’t set doesn’t fit in. And I think internal auditors are
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Barbara Siegenthaler: Probably pretty strong in this in this type of processing processing information. And I think what can be typical for an internal auditor.
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Barbara Siegenthaler: who’s new to the professional that he or she does deal with it. And then they end up with a huge number of individual insights and they can’t get a picture out of it.
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Barbara Siegenthaler: And that’s exactly the thinking this thinking way. So it’s, it’s beautiful, it’s like a like.
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Barbara Siegenthaler: It’s a beautiful way to think, but it’s just one out of four ways to process information and what what
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Barbara Siegenthaler: Every individual who’s strong in this information processing way should be able to do is to to distinguish between, you know, dig go very deep and look at at one detail and said, go and have a look at the whole again.
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Barbara Siegenthaler: So it’s a it’s a mother say it’s moving between these two ways of processing information. So I think at some point it’s really ingrained in in internal auditor is to have to be fearful and to be outrageous and then on the other hand, on the other side you have
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Barbara Siegenthaler: You have all the teasers think what kind of crazy bureaucratic insights are they giving us know
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Jason Mefford: Well, and I see this show up. So here, here’s just kind of a real life example of that, right, because again, kind of our biases.
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Jason Mefford: Having us focus in on one particular thing auditors love fraud anything related to fraud. They just get all excited about. Right.
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Jason Mefford: But again, and so, but if you if you were the lens of. There’s a lot of fraud happening in my organization, all you’re going to be looking for is fraud at that very narrow level.
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Jason Mefford: When you step back and look at it at the bigger picture. The reality is less than 5% and it’s probably only 1% of the people in your organization are actually committing any kind of fraud.
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Jason Mefford: 95 to 99% of the people are just trying to do the best they can with what they have. Right.
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Jason Mefford: But again, if we get so focused on that fear or just on certain risks, then that’s all we’re going to focus on
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Jason Mefford: And we’re going to have these blind spots and and and just totally not even see other things, is we’re, we’re so close to just looking at the tree we forget that we’re in the forest.
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Barbara Siegenthaler: Yeah, that’s a good. That’s a good examples is proverb, you know, you can’t see the forest anymore because of the trees, looking at a tree is the information processing that focuses on one on one item and the forest is the whole the whole
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Barbara Siegenthaler: And so we call the emotional dialectic is moving from one to the other information processing processing system. I’d like to bring another element into it. If we look at the future, for example, we take the World Economic Forum’s global competitive and Erasmus less report.
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Barbara Siegenthaler: And they talk about disruptive technologies they talk about novel value creation and say, see that’s the factors that will grow and significance, our human capital agility resilience and innovation.
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Barbara Siegenthaler: And the question is what can auditors bring to the table.
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Barbara Siegenthaler: They provide assurance regarding these topics and that early assurance. It’s about embracing foresight to they have a predictive element.
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Barbara Siegenthaler: And what’s interesting, you know, last year, the internal audit services of the European Commission, say you have a conference and annual conference and the name was from hints from hindsight to insights and by young how internal audit may contribute to for side.
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Barbara Siegenthaler: So the topic is basically
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Barbara Siegenthaler: Saying know something has to be done.
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Jason Mefford: Well, it’s and it’s funny because I you know I it’s
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Jason Mefford: It’s that’s that’s a big conundrum. For most of us, to, to kind of get through because
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Jason Mefford: You know, again, as we’re talking about personalities like within audit groups, right, if you look at most internal audit departments, they’re fairly homogenous.
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Jason Mefford: And the personality types, they choose to hire right and and a lot of those are kind of historical again because we focus so much on the hindsight, right, we’re looking backwards.
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Jason Mefford: All the time.
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Jason Mefford: And we get people that are very check the box compliant binary thinking of was it right or was it wrong in the past, but to turn around and try to have foresight or insight about the future requires a totally different skill set.
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Jason Mefford: That honestly auditors have not been taught
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Jason Mefford: Because even if we go back to something as simple as risk management and i know i probably piss people off when I say things like this but internal audit does not understand risk and risk management as well as they think they do.
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Jason Mefford: Because the way that the lands that internal audit thinks about risk is very narrow in its focus back to our discussion before and it’s very low level in the organization, we’re not spending much time talking about or thinking about
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Jason Mefford: strategic level risks.
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Jason Mefford: Which are more about the things in the future.
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Jason Mefford: We’re worried more about the system or the process breaking instead of things like
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Jason Mefford: Innovation and how, how can we be innovative in the future as an organization that’s totally different.
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Barbara Siegenthaler: Way of looking and strategic risk for me is basically will. It’s kind of a prediction. What can we do to help the organization survive. I mean, times will be tough.
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Barbara Siegenthaler: And I think that a traditional auditors’ that maybe does business audience is kind of going to disappear. It will be all around it and around psychology
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Barbara Siegenthaler: This will be my my my my gut feel how the profession should
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Barbara Siegenthaler: Shouldn’t it should evolve and if I if I bring my work in. I mean,
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Barbara Siegenthaler: I would like to see mature organizational personality and the mature organization personality and can recruit personality systems that are best suited for the task.
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Barbara Siegenthaler: So I would like to see internal auditor. If the work with some model lines have been developing
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Barbara Siegenthaler: And give it given assurance, like what ours is thinking and behavior preferences of the organization right now. What are the pros and
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Barbara Siegenthaler: The cons. Is it fit for purpose. What’s the, what’s the organizations doing if it’s one sided then
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Barbara Siegenthaler: The drawbacks of the patterns that are in place currently are risks that could be metric could materialize.
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Barbara Siegenthaler: And I think the biggest the biggest advantage of of the my work is really set this organizational personality framework. It’s like a 360 degree thinking and revelation. Great for human factors across the organization.
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Barbara Siegenthaler: So from strategy culture innovation. Change Program recruiting leadership governance assurance. You can use it and you can you get insights that you can compare
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Barbara Siegenthaler: Is it’s a one and only truth. Of course not. It’s a good. It’s a pair of glasses, you can look down and saying, you know, okay, now I’m having a look at
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Barbara Siegenthaler: The odd dairy or the organization from the perspective of the organizational organizations. The
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Barbara Siegenthaler: Organizational personality framework and then you have other other methodologies and frameworks in place. Have you seen Jason. Have you seen the latest the April edition of the Harvard Business Review
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Jason Mefford: Not actually read that one. Yeah.
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Barbara Siegenthaler: I think
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Barbara Siegenthaler: April. Yes. April.
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Barbara Siegenthaler: Okay, there’s an article in there it says how banks are using behavioral science to prevent scandals.
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Barbara Siegenthaler: It’s an insight from the behavioral risk teens that some Dutch and UK companies I’ve been playing. So it’s the img ABN AMRO and the Royal Bank of Scotland.
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Barbara Siegenthaler: They have small teams organizational psychology, anthropology forensics maltings
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Barbara Siegenthaler: And they start looking at these topics as well. So I think there are, yeah.
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Barbara Siegenthaler: Professions kind of evolving a little bit fair
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Jason Mefford: Yes, well, and it’s funny because, you know, again, as you mentioned, the World Economic Forum kind of the future, those, those words that you put out there like, you know, innovation and some of these other words
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Jason Mefford: What we’re seeing in business, in general, is a difference in the value proposition, if you will. Okay. And when I was back at Arthur Andersen, you know in the in the late 90s.
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Jason Mefford: We were actually doing some research and trying to figure out, like the value of human capital in organization.
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Jason Mefford: Because you look at some of the, the, the cap rates on companies, you know, you’ve got a company like Apple that has over a trillion dollars market capitalization.
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Jason Mefford: But if you look at the assets on their balance sheet. It’s nothing in comparison to that.
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Jason Mefford: And the gap has something to do with the human capital. The human this living system within the organization that’s where most of the value is in today’s organizations.
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Jason Mefford: The production line the, you know, once the systems are set up from an IT perspective, unless it’s something like an algorithm which again was developed by whom.
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Jason Mefford: Human Capital the living system that’s where the value in organizations is and is going to be going forward. So
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Jason Mefford: If we’re still just focusing on these subsystems that really don’t add that much value to the overall organization, then we’re missing a big mark. We need to start understanding and getting
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Jason Mefford: More into this and this is where again psychology comes in because it helps to explain why humans do the things that they do because we’re irrational. We’re not binary
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Barbara Siegenthaler: Predicting what they might do, and how the story might go on and you know i mean it’s know maybe a little bit of horse picture.
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Barbara Siegenthaler: Or too hard too harsh with have from using but I think going on with how it used to be as kind of like the entire professional committing suicide.
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Jason Mefford: I don’t think it’s that harsh.
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Jason Mefford: I don’t think so.
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Jason Mefford: Yeah, cuz I’ve been saying, Yeah, I haven’t used that analogy before but I might have to kind of use that
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Jason Mefford: Because if you know as our organizations are changing.
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Jason Mefford: If we don’t change. Eventually, we are effectively committing suicide. We’re working ourselves out of a job because we’re not changing as our organizations are changing.
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Barbara Siegenthaler: And, you know, also not
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Barbara Siegenthaler: You know, not being progressive enough at not adding value because at some point, I expect
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Barbara Siegenthaler: Many of the controls that are currently being being reviewed by internal auditors might end up being reviewed automatically
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Jason Mefford: It will. That’s where the that’s where the bots in the
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Barbara Siegenthaler: coming in right now nation will tell us what’s what’s what’s remaining and then it’s basically the human factor is knowing how humans.
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Barbara Siegenthaler: Behave and and how the story will go on and you know it’s also topic like ethics, not from a food perspective, what is important as well. But, you know, ethics, it’s, it’s, um,
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Barbara Siegenthaler: Yeah.
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Barbara Siegenthaler: Well, it’s, it’s very interesting times. And then I really left the profession. You know, I heard your, your, your podcast that a touch of grey send me
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Barbara Siegenthaler: A touch of
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Jason Mefford: To hear me sing.
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Barbara Siegenthaler: Well, we can start seeing is
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Barbara Siegenthaler: Just growing up. So, and you really said that you care about interludes years and the internal audit profession. I mean, I spent a lot of time, not only working as an internal auditor, but basically creating a new a new way to work for internal auditors and through reception is
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Barbara Siegenthaler: Even when I’m actually trading except
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Barbara Siegenthaler: For internal auditors and
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Barbara Siegenthaler: Sometimes even when I say
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Barbara Siegenthaler: interconnectivity patterns between personality two systems, the systems already shut down. People say, we don’t understand this.
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Jason Mefford: Well, it’s about time, they start understanding it.
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Barbara Siegenthaler: And it’s actually complexity, it’s, it’s about, you know, having more than three elements, you’re playing around with, you know, I mean this binary thinking is a beauty.
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Barbara Siegenthaler: I love, I love it. Well, analytical thinking it’s great. But we have to know what it can and what it comes and when to switch it on and when to switch it off.
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Barbara Siegenthaler: And when to use. Are there other things. And so we should, in my view, we should be come experts in human behavior, combined with our knowledge that we have today, but this would require an entirely
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Barbara Siegenthaler: Or a partly different
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Barbara Siegenthaler: Formation and training.
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Jason Mefford: Yeah. And maybe that’s another you know because like you said when you start saying things like
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Jason Mefford: You know, organizational personality and you start talking about, you know, some of these different things. People just kind of zone out right
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Jason Mefford: And maybe people do too. When I just even use the words psychology, if they’re like, all, all you know well okay if you don’t like those words. How about human behavior.
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Jason Mefford: Hey everybody, you need to understand human behavior better than you currently do because I can guarantee you, most, most of the problems you’re having
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Jason Mefford: Even like with an audit client. Let’s say you’ve got an audit client that’s just a pain in the butt. Right. Well, it’s because you don’t understand human behavior. You don’t understand what you’re doing and how that’s affecting that person.
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Jason Mefford: And how, what they’re doing is actually mirroring back
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Jason Mefford: To you actually some of the stuff that you’re you’re that you’re doing. Right. And so we have to we have to learn. We have to get into the human side of it because
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Jason Mefford: Like you said, most of the stuff that we’ve been auditing for 100 years is being automated and and we don’t need people
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Jason Mefford: To do what audit has done for the last hundred years. We got computers that can do that. So if you want to stay relevant. You’ve got to understand and learn how human behavior goes and how we need to start tying that into what we’re doing as auditors.
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Barbara Siegenthaler: Absolutely, yes. I, I fully agree.
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Jason Mefford: Well, and with that I just kind of looked at the time we got we’re going to end up having to kind of cut it off. Now, like I said, I think we could both
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Jason Mefford: Geek Out for a couple hours just talking about all this stuff, but
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Jason Mefford: You know, maybe any, any final thoughts that you that you have for people that just kind of, you know, wrap up a little bit of what we’ve been talking about here for half hour 40 minutes
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Barbara Siegenthaler: Um, any foods. Um, yes. Have a look at my page.
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Barbara Siegenthaler: I felt that pay child tears that explains my work really good. It’s kind of almost a gift to the internal only profession and you can find it at personality miners based minus audit.com personally t minus baseline is already.com
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Barbara Siegenthaler: And if you wanted very short and sweet. Go to my web page for non auditor’s
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Barbara Siegenthaler: That’s 70 m.com
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Jason Mefford: How do you spell that serve it and
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Barbara Siegenthaler: Sad. Oh, I’ll let you know. Okay.
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Jason Mefford: Well, we’ll do is we’ll put it, we’ll put it in the show notes. So that way people can just go down, click on it and you’ll actually be taken.
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Jason Mefford: Out there.
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Barbara Siegenthaler: And it’s really, we need more psychology and internal wanted to remain and stay relevant we need predictive insights and we should be aware, set it is subjective. Yeah, we give subjective assurance.
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Jason Mefford: A lot of people. Well, the reality is, like, like we said before, we believe we’re giving objective, but it’s really subjective because it’s all based again on our biases and that of our group as well.
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Barbara Siegenthaler: And admitting that it’s subjective. That’s where the power of the profession is because then you can start talking
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Barbara Siegenthaler: That’s where the power of the profession is
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Jason Mefford: Very true.
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Jason Mefford: Very true. Well, thank you, Barbara for taking time with me today. I always a
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Barbara Siegenthaler: Pleasure. Thank you.
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Jason Mefford: I always love finding that there’s other people in the world that maybe you’re just as crazy as me.
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Jason Mefford: So, thank you.
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Barbara Siegenthaler: You’re welcome.
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Jason Mefford: And everybody so go out and you know again go back. This is a good episode for you to even go back and listen to, again, because I know some of the things that we may be said the first time.
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Jason Mefford: If their terms that you’re not really familiar with, you know, because Barbara and I have both been in this in this area for quite a while talking about some of these things that go back, listen to it again take some notes.
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Jason Mefford: And and again go out to her website look up the information that she has out there, she’s giving you a gift. So, go get the gift. Okay. Click on the in the show notes down below.
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Jason Mefford: And actually go out and get it because it’s going to help you to understand human behavior better because that’s what we’ve got to start understanding better and start incorporating into what we’re doing in the future. All right. So, Barbara. Again, thank
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Barbara Siegenthaler: You. Thank you very much.
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Jason Mefford: And everybody. Have a great week and we’ll catch you on a future episode of jamming with Jason. See ya.
