As the world changes, we have to find new ways of doing things … and this is definitely true of #internalaudit that has been operating relatively unchanged using a traditional approach for decades. What will our relationship with the board, management, and the #chiefauditexecutive be like in this new brave world?
I’m joined by Mike Smith to discuss finding new ways to thrive in this #jammingwithjason #internalauditpodcast. We discuss this as well as how to be your whole self at work.
Listen in at: http://www.jasonmefford.com/jammingwithjason/
Mike Smith is the U.S. Intelligent Automation and Solution Lead for Internal Audit at KPMG.
Transcript
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Jason Mefford: Hey everybody, I have a special treat. Today I have my friend, Mike.
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Jason Mefford: Smith with me and Mike is actually with KPMG I’m going to get let him give a little introduction here but KPMG used to be one of the firm’s I worked at too so
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Jason Mefford: You know, we have that that in common as well. But, you know, Mike. Welcome. Why don’t you just give a brief kind of discussion about your role. So people kind of get a context for who you are.
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Jason Mefford: Here and then we’ll just start talking and jump in because I know pre pre hitting the record. We don’t know exactly where this is going to go. But we’re going to have a fun time because there’s a lot of stuff that we have in common, or to talk about. So
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Mike Smith: Yeah, great day. Thanks for having me excited to to share perspective and have a dialogue with you and and your listeners. So I guess longtime listener first time join her today.
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Mike Smith: Eric, so thanks for doing what you’re doing. By the way, I did mention that before but thanks for doing what you’re doing for for all of us, especially the younger folks that are
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Mike Smith: Kind of getting into this profession and navigating their way through how to become even even greater impact. So, so for me I am
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Mike Smith: I am our US internal audit solution leader, which is kind of a our internal tournament title for
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Mike Smith: Our innovation development product development where we’re heading, who do we want to be when we grow up as internal audit I split my time.
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Mike Smith: Doing that and delivering internal audit services to clients predominantly where I live in Dallas have got to spend some time and all over the, over the US but
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Mike Smith: In New York and Dallas mostly but take takes me around and I get to lead a team of people much smarter than I am.
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Mike Smith: That have all kinds of different backgrounds. We call it the CEO ears and of excellence run into a lot of reimagined so I get to do that and partner with our colleagues across, across the US and the globe. So come on stuff.
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Jason Mefford: Very cool one, as you were talking about it because it actually reminded me. I mean, we can talk about whatever we went to on here. Right, so
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Jason Mefford: No it’s, it’s funny because it’s, you know, life, life takes us on different pathways.
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Jason Mefford: Right. And so when I was
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Jason Mefford: I was still at KPMG and I gotten to that point in my career right where you have to kind of decide, okay, I was in a smaller market. It’s time to either, you know, go back to New York.
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Jason Mefford: Kind of in the professional service group.
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Jason Mefford: And do a stint there or move to one of the bigger offices and so I did a big 4000 mile trip one year.
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Jason Mefford: In Dallas was one of them. That was on the list. So I went to Dallas to see what Dallas was like so. Yeah. Who knows had had one of my clients not approached me like you know
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Jason Mefford: Four months later and hired me to start their internal audit department. I might have transferred down to Dallas. So we might have been
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Jason Mefford: Right in the same office really knowing each other for a while so
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Mike Smith: Whoa.
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Jason Mefford: Whoa, whoa, whoa, whoa, whoa, you know, Anderson before that. Right.
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Jason Mefford: Yeah, it was Anderson before
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Mike Smith: I pass. I don’t think our paths cross there if I
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Mike Smith: Recall, but that my five year stint before KPMG it Anderson.
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Jason Mefford: Okay, so you transition, just like I did, then going from Anderson to KPMG with
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Jason Mefford: The whole sinking of the ship. Wow. Alright.
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Jason Mefford: So many sorry Lucy amazing how and, you know, folks. Well, this is one thing is, I’ll bring up to just real quick and then I want to get into kind of the discussion because they’re
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Jason Mefford: Got some great things that we can talk about. But I know there’s been a lot of people
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Jason Mefford: Worried about well how am I going to develop relationships virtually when I can’t see people. Okay, folks. Here’s here is a real life you just heard it. Okay, I, you know, even though we worked at to have the same firms are very big firm. So we didn’t know each other when we were there.
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Jason Mefford: Right. We got connected on LinkedIn. I don’t know, two or three years ago, I don’t know when it was exactly i sent Mike some messages he’s kind of seen what I’ve been doing and he
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Jason Mefford: starts listening to the podcast we send messages back and
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Jason Mefford: Forth. We’ve talked a few times. Right. And even though we’ve never physically been in the same room together. We’ve built a rapport with each other.
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Mike Smith: We’ve
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Jason Mefford: We’ve learned we’ve gotten to know each other and find where those commonalities are so anyway.
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Jason Mefford: That’s not the purpose of this podcast. But like I said, I just, this is a real life example of, you can do this.
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Jason Mefford: I can I, I’m going to use the word friends. I hope I can say that word, and our
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Jason Mefford: Absolutely, there were actually friends, even though we’ve physically never met each other.
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Mike Smith: Right. Well, that’s the thing. I mean, I didn’t think about
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Mike Smith: The factor on zoom. I know we’re all submitting spar more time on the zoom than we probably have accumulated our lifetime, or would have thought we had. But even on a personal side LIKE MY BROTHER LIVES IN FLORIDA. My sister lives in Colorado.
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Mike Smith: And we would, you know, we would occasionally. I’m the youngest of three we occasionally connect. But now we’re seeing each other and deepening the rapport.
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Mike Smith: And friendship and kinship and family every Sunday right after an hour with my dad and my siblings and
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Mike Smith: But it’s effort. I have to set aside that time, which is, I’m glad to do, but I think we’ve, we’ve got to get away from the barriers that are preventing us whatever those may be personally and professionally.
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Mike Smith: Be able to spend the time that matters. I was telling you before I had my first audit committee meeting in person, this week. Thank you to my client that said we come on out. And after we cleared all the hurdles internally for free it to my
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Mike Smith: By checking on personality.
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Jason Mefford: Or check and all that. Yeah.
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Mike Smith: Because it’s expensive, but appropriate I totally makes sense. But it was really fun. And so I think one of the things that are minded me of is that you gotta, you’ve got to
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Mike Smith: It’s more important now than ever to find sometimes to go spend time individually with people and even in this forum to so
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Mike Smith: Yeah, take advantage of it.
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Jason Mefford: Well, yeah. And it’s, you know, so let’s kind of get in and talk about because like a, you know, it’s, I love having these discussions. Regardless, but to try to
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Jason Mefford: Maybe give some things for people to take away and learn as well. Right. So you know I know one of the one of the terms that you kind of throughout finding new ways to thrive.
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Jason Mefford: I think is a great, I love, I love that.
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Jason Mefford: Term in general. But you know, I think as we’ve been talking even though you know we both got lots of experience, technically, ultimately, I think we share a common
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Jason Mefford: Desire to help our profession in general, more than just from a technical standpoint. And so that’s why you know you hear me talking about some weird things sometimes
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Jason Mefford: But maybe, maybe we can kind of get into some of that a little bit because I know you kind of have a passion as well around helping people.
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Jason Mefford: In the profession.
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That’s right.
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Jason Mefford: So yeah, what are, what are some things I guess that you know as you did you think about to try to help people.
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Mike Smith: Yeah, let me frame it just for a second, even further, you know, I
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Mike Smith: There’s so much challenge with currently right now listen to the environment we’re in unemployment levels, we’re blessed all have
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Mike Smith: Employment. Right. And for those around us. I think we’re responsible as leaders to continue to nurture them care for them. Personally, professionally.
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Mike Smith: You know, I have a one of my best friends that chief in the fire department and his adage is if you’re great at home, you’re probably gonna be great at work.
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Mike Smith: So the union of those things is important. So as we think about how we serve with others. Well, I think having a frame framework and I’m an optimist, as I shared with you. Right. I think the glass is always half full. And if it’s not just get smaller glass.
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Jason Mefford: Or it’s always full.
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Jason Mefford: Yeah, there’s the ratio of liquid to air.
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Mike Smith: So I think, I think having that perspective and being very appreciate the balance of all of this is the reality we’re facing but
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Mike Smith: I get really excited when I can get. And I call it the trifecta together to realize what great internal audit means for our profession.
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Mike Smith: The Trifecta to me is the board level executive level of across the enterprise and that audit leadership. Right.
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Mike Smith: And I say audit leadership, not just, CAE. Because I think we all know there’s times when that ca is really
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Mike Smith: Challenged by the connection with his or her direct reports and so having a not only a great vision.
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Mike Smith: But a great team and so that clearly starts with a strong CEO and what they’re doing to develop themselves, their teams, etc. They know you do a lot of that as well. But I get really excited when we can get those folks together to figure out, you know, to use the phrase, new ways to thrive.
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Mike Smith: And so if you look across what we do in the mandate, we have, if you go academically to, you know, to preserve value and to create value organizational value.
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Mike Smith: I think now, more than ever, we have an opportunity to really think through what that means to the organization today versus what it meant you know last year and
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Mike Smith: Most you know most agencies have some strategic vision strategic documents. Did you plan, right. That’s kind of table stakes, I’d say, but they were playing it down or
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Mike Smith: They haven’t really kind of refresh from a what I’d say a customer standpoint, like what is the customer of the value chain that we create.
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Mike Smith: An audit committee executive management, your own team, right, there’s a lot of stakeholders regulators for those industries, etc. And how does that and what should those individuals be thinking about as they recast what their vision is to be before
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Jason Mefford: Yeah, and I think it has I think it’s been changing in general. But I think this situation we’re going through just accelerates certain things. It’s almost like a porous gasoline on the fire a little bit
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Mike Smith: More peaceful probably
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Jason Mefford: More specific.
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Mike Smith: So I guess.
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Mike Smith: Probably
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Jason Mefford: For those that are you know i know it’s usually audio, but you get you miss the cowboy hat. Okay. All right.
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Jason Mefford: Love a Deep in the Heart of Texas. Okay, anyway. We got to get back right now the
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Jason Mefford: But yeah, because I think, you know, like you said about thriving thriving is such a great word and and I think there’s a lot of different you know pieces to this, like you said, the trifecta the board management audit right audit leadership.
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Jason Mefford: Right and and you know a lot of times, it depends on the organization each each group is kind of different, right, sometimes there may be a relationship issue with the board, sometimes there may be a relationship issue.
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Jason Mefford: With management, sometimes there may be a relationship issue within the audit leadership as well. Right. And so, you know, just like you said, you know, your, your friend who’s the fire, Captain. You know, if it’s good at home, it’s good at work. I think that’s
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Jason Mefford: And if it’s not good at work, it’s usually not good at home.
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Jason Mefford: If it’s not good at home. It’s not going to be not, it’s not going to be good at work, and I think this goes you know into one of our
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Jason Mefford: passions that both of us have is kind of the work life and the human aspect to it, but also as you were talking is
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Jason Mefford: You know when you, when you think of it kind of from a Trifecta standpoint if audit leadership is not going good.
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Jason Mefford: Then the relationships with those two groups is not going to go good as well. Right. So you think about it, even within the organization. If you’re having trouble with your team. If you’re having trouble managing yourself.
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Jason Mefford: Right. Well, good luck folks with trying to help manage the board and management, you know, as well.
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Mike Smith: It’s going to be dead.
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Mike Smith: That’s exactly right. And so one of the things I think about is
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Mike Smith: Is we all tend to shy away sometimes from a full kind of health perspective and and there’s plenty of views on whether it’s mental health emotional health spiritual health, physical health. And I think people gravitate mostly towards the physical health.
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Mike Smith: I’d say and but they’re all connected. And you can you can argue different ones have different levels and the individually organization, but I think you
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Mike Smith: Have to step back and think through
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Mike Smith: And how we’re doing across those different dimensions and I love the connection right of the health of one branch of the trifecta
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Mike Smith: And it being a mashed right being influencing influencing rather those other two. So I think for
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Mike Smith: For your listeners, I really challenge individuals to step back and see where they are kind of do a bit of a health check. Right.
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Mike Smith: And that could look personal that could look as a team, and where are we as a team. We just had a conversation with one of my team this morning that felt like we because of the code, we’d stopped meeting kind of allowing
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Mike Smith: Our the whole staff to get together.
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Mike Smith: Talk about what’s important to them and considering the social injustice is going on, considering the pandemic, considering the recession, considering
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Mike Smith: You know riffs that are with some of our friends like there’s a lot of burden, much less. By the way, we still have to deliver high quality product.
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Jason Mefford: But, but do at home alone.
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Jason Mefford: Do at home, not surrounded by anybody right or or the three plus roommates. You have all around the dining room table.
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Mike Smith: Right, or
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Mike Smith: Her you and I in our house and my daughter walks in and my dog. I mean, that’s just
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Mike Smith: Fine right but i think i think we need to spend just a little bit more time there and equip as leaders, the right tools for those individuals to drive forward. And so I think some of that may look
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Mike Smith: You know there’s there’s plenty of let me step back
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Mike Smith: So if you look at
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Mike Smith: How our colleagues and finance it HR name of function or think about how they are transforming their agenda that probably not thinking about the mental health as
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Mike Smith: As much, perhaps, which is maybe they are maybe they aren’t. But arguably that the operating model, they’re thinking about has, you know, at least a handful of dimensions and we tend to think people process technology.
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Mike Smith: I know
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Mike Smith: But what about the delivery model been
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Mike Smith: Working virtually. What about working in different locations. What about
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Mike Smith: What about the metrics and insights and what are we doing around data and how are we measuring ourselves or what about governance is the governance, the same as it was before, as it is now. And so I think we kind of
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Mike Smith: Expand Our
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Mike Smith: The aperture from people process and technology to think more broadly around like how to how to our other colleagues thinking about
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Mike Smith: Apart from this environment, how to transform how to create more value, how to deliver how to be purposeful, how to care for people. And I think you got to have
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Mike Smith: You know those three or four other dimensions added to your repertoire as you’re thinking through, where are we, how are we doing, what do we want to do differently. What’s the new way we want to
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Mike Smith: Thrive right in the near term, what actions do we want to take and how do we want to call them out.
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Jason Mefford: Well, and I think that’s important too, because it’s
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Jason Mefford: You know, like you said, you can take something like an HR function. Okay, they’re probably always
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Jason Mefford: Going to have been thinking about people’s well being a little bit more. Hopefully, because maybe that’s why they went into HR right were
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Jason Mefford: In internal audit finance compliance, you know, we’re, we’re kind of mainly get her done kind of, you know, rule. Check the box, whatever kind of thing, stay within your lane.
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Jason Mefford: And and that’s, that’s one thing that you know looking at some of these other dimensions.
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Jason Mefford: And just being honest and realize that you can’t fully separate your personal life from your business life. Hopefully, hopefully this, you know, like you said, if your daughter walks in.
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Jason Mefford: Whatever. Right. I mean, again, it’s like, well, oh my goodness, Mike, you have a daughter right i mean it’s it’s who you are right and
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Jason Mefford: And the personalities that people have, and in that whole idea behind because there’s been a lot of scientific research, most, most
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Jason Mefford: A lot of to most of the actual physical health symptoms actually have some mental or psychological and emotional basis to it. Right. And so if we
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Jason Mefford: You know, think that we’re audit robots and we just kind of, you know, we don’t have to deal with, or think about emotion, because we’re not supposed to do that right
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Jason Mefford: I said a webinar on this, folks. It’s like
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Jason Mefford: 95% of your decisions are made by the back subconscious part of your brain seven seconds before you consciously recognize it.
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Jason Mefford: You know you can argue with me. But there’s a lot of scientific research that proves it. So it’s like just admit that we’re emotional beings and allow people to be emotional, but to
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Jason Mefford: Know how to have emotional intelligence and regulate it to have resilience and teach people how to do some of that stuff.
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Jason Mefford: Because if not, honestly. Our job sometimes can get pretty pretty brutal
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Mike Smith: Well, I think that’s where you have to come back to, you know, for our
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Mike Smith: Our values have been distilled down to, and I’m from Texas, so I
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Mike Smith: This reference you might appreciate it more, but it’s the, the acronym. I remember is for better iced tea.
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Mike Smith: Because I’m in Texas, so
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Mike Smith: We all are here for better. Like, what are we going to do that drive something better. And the I integrity clearly having ethical decision making. See courageous.
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Mike Smith: Right, having the willingness to go into battle and and my one of my mentors used to say listen to client be empathetic about
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Jason Mefford: Their clients.
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Mike Smith: Whether, whether it be for the listeners, you’re
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Mike Smith: The oddity right
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Mike Smith: Or whoever that might be
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Mike Smith: And stand in the breach. Like, you may not be the person
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Mike Smith: To church all all their issues around that risk domain or that process or that step or that
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Mike Smith: Or at least be willing and courageous to stand in the breach. And then there’s is the idea of excellence right i mean
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Mike Smith: Clearly, we all want to be better. We want to contribute, we want to add value.
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Mike Smith: And then ultimately the tea together like there’s no one that’s going this profession. I love this profession because it, it requires you to work with.
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Jason Mefford: Others.
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Mike Smith: And that’s what
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Mike Smith: That’s encouraging to me. That’s how I’m wired and
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Mike Smith: There’s plenty of individual work and you can be an integral contributor
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Mike Smith: Magic is when you get
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Mike Smith: A bunch of individual contributors together. So as you go through this journey of like work and life and all these things. I think being anchored into the right values that those are the ones for me and for us but
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Mike Smith: Whatever those values are enterprise. It allows you
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Mike Smith: I think to frame up how to make those decisions. Better to move forward.
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Mike Smith: I mean that that notion of being task oriented.
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Mike Smith: Can agree with you more.
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Mike Smith: Like, that’s, that’s an
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Mike Smith: That is both a blessing and a curse like
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Mike Smith: Everything blessing of the detail and awareness and the connection with the curse of
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Jason Mefford: Kind of the balance of
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Mike Smith: Being only in that and then having kind of that top down reminder of what are we
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Mike Smith: What is the enterprise trying to accomplish.
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Mike Smith: For all the stakeholders.
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Mike Smith: Right, whether it’s be the growth agenda values agenda social responsibility agenda ESP image tons of things.
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Mike Smith: But let’s anchor into those things as
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Mike Smith: We move
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Jason Mefford: On especially kind of from a leadership perspective right you know because again that’s part of that.
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Jason Mefford: Trifecta is the leadership themselves and
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Jason Mefford: You know, realizing or being able to kind of set that vision, the strategic plan explaining to people, you know, that are that are working with us how what we do actually impacts.
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Jason Mefford: The organization, how it makes it better because because so many people, one of the one of the biggest complaints that people have at work.
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Jason Mefford: Is that they don’t see how what they do actually contributes, you know, they feel like they’re just kind of given a task and
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Jason Mefford: You know, it’s like mushrooms right you feed them shit and you put them in the dark. That’s what I was told. Right. You know that a lot of employees get treated like mushrooms.
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Jason Mefford: Right and and the problem is is after a while you don’t you don’t understand how you’re contributing it leads to some
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Jason Mefford: Dissatisfaction disengagement at work and then eventually people end up going off and doing something else, right, because
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Jason Mefford: They don’t understand how they fit into the bigger picture. They don’t feel appreciated and, you know, without having some of that in there. You know, it’s incumbent upon the leadership to actually help share that, you know, and be honest and real with people.
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Mike Smith: Right.
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Jason Mefford: As well.
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Mike Smith: I mean, you got to be able to bring your. I mean, let’s go back to the
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Mike Smith: Concept of the whole thing in my words like the whole self bringing your whole self to work like whatever that means. Right, let’s let’s focus on
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Mike Smith: Not just the diversity inclusion Jeanette, which I think is critical is overlooked in most organizations for a variety of reasons.
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Mike Smith: But clearly, one of them is because if we have different backgrounds. We’re going to have different origin stories that drive different perspective.
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Mike Smith: That’s what we need. And so if that’s the case, what does that mean for our profession specifically. So if we had Let’s present the idea of an internal audit generalist, is that the future. Well, we have even more generalists. I think that’s
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Mike Smith: Likely not the case. I
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Mike Smith: Agree. Right, we will have these levels of expertise. And so what if, as we think about our whole self. What about your personal interests, you know, auditor Joe or Joanna. Right. And those personal interest, maybe in
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Mike Smith: A risk domain or a way of interacting with the business. Perhaps you’re more emotionally intelligent than another person. Maybe you’re having a different role and so
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Mike Smith: I really am excited about the idea that if we do this right, we’re actually tapping into expertise that we don’t really recognize is the value and then I’m thinking about, you know, we were helping a CA with the auditor of the future program. I was really interesting.
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Mike Smith: And we all know about bias, but the similarity bias that was penetrating the team, meaning they were hiring themselves.
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Jason Mefford: Over
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Mike Smith: And over and over
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Jason Mefford: That’s been that’s been going on for a long time, that’s not new. That is no
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Mike Smith: No, but but while not being new. How many people have really shifted from that, how many people are doing their assessment centers, totally different.
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Jason Mefford: And I really
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Mike Smith: Not enough. Yeah.
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Jason Mefford: I don’t think it’s even probably very many. I don’t know if you have any more evidence, but
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Mike Smith: Nothing statistical but supposition would say few
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Jason Mefford: Yeah. Few, few
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Mike Smith: premise was like listening to them. And these are some it was really interesting to hear some expertise again outside of just internal audit but applying it to our professional needs around if these are the types of
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Mike Smith: Future capabilities and expertise that we need to complement the core of who we are is in Toronto capability.
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Mike Smith: Then we need to think about how we assess them differently. How we search for candidates. How we screen candidates who screens candidates. How we get back together and challenge each other.
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Mike Smith: To contribute differently to that’s the right person. That’s not the right person. I think all if we can bring as leaders like that perspective together around the future auditor. Right. The, the idea of rethinking recognizing some gender bias, but actually doing something about it.
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Mike Smith: I mean, even just case studies.
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Mike Smith: But what if we just required case studies for every new hire I it seems like a pain in the ass. If you got to look at a bunch of case studies, but at the same time.
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Mike Smith: Maybe need to be doing that because you’re allowing people to create something and don’t we want people to be creating something problem solving and being critical thinkers like those are basics and can you do that in a
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Mike Smith: In an interview where you say, Tell me about your past and what’s the three things that you really require either, you know, those kinds of questions.
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Jason Mefford: Well, you can’t. And it’s interesting, too, that the when you go back to the recruiting process. I would actually advocate that any resumes have the name and any personal information removed from it because even the name
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Jason Mefford: That’s right, biases people unconsciously, they don’t they don’t realize it. And so if you’re going to assess someone, you know, like you said, certification where they went to school all that stuff may not
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Jason Mefford: Probably never has been, as important as we make it. It’s just an easy binary way of screening candidates.
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Mike Smith: That’s right.
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Jason Mefford: But like you said, you know, doing something like a case study, you know, even the difference of
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Jason Mefford: You know in the in the interview questions right there’s there’s situational
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Jason Mefford: There’s traits based interview questions. There’s attributes kind of
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Jason Mefford: based ones, you know, where it’s like, you know, you hear some of the stories of it’s, it’s something that that nobody would know. I think at Google question that I heard was
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Jason Mefford: Okay, imagine that you’re a washer, a little metal washer in the bottom of a blender and the blender gets turned on and the wheel, you know, the blades are going, how do you get out of the blender.
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Jason Mefford: Well, there’s, there’s no one answer to that.
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Jason Mefford: That’s that’s more of a of a reason to, you know, see how well somebody can take something that’s ambiguous actually apply it, understand it and kind of come up with an answer, right, it’s, it’s kind of similar to like some of the old IQ questions. How high is this guy.
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Jason Mefford: Right. Well, it depends on how you define this guy. Are you talking about the atmospheric pressure. Are you talking, you know, it’s like
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Jason Mefford: Hey, you want people that that are going to be able to think more but that’s going to mean that we do. We have to change our recruiting process, but we also have to change and not continue to hire
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Jason Mefford: The same people over and over again because I agree with you. I think the general auditor.
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Jason Mefford: While some are needed, there’s going to be more and more specialization.
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Jason Mefford: Which is going to also mean that there’s going to be more and more diversity within the audit team.
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Jason Mefford: And again, I’m not talking about diversity, you know, from an ethnicity standpoint but but diversity of personalities of ages of, you know,
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Jason Mefford: The social construct that we all bring based on our experiences and and the more, the less homogenous. The group is the more emotionally intelligent, we have to be to get along with everybody.
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Mike Smith: Right.
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Jason Mefford: And and to to use the strengths from everybody. Right.
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Mike Smith: Well, and people look at that and go, that just sounds hard. Right. Because now we had a bunch of people. And oh, but where are they located, they are they in person, but they were based here and
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Mike Smith: And and you got to go back to the adage of nothing and nothing good is easy, right. So, I mean, you get to. It’s going to take effort so
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Mike Smith: Why would we, if we see things that are valuable and the way you know, again, just the our teams are structured. Why, why wouldn’t we spend the energy because the things that are hard.
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Mike Smith: Could be exactly the right answers for what you want to do differently and so
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Mike Smith: You know, I don’t know if it was jobs or Google, but the old so at 70 2010 like how are you spending your energy around change and innovation, you know, 70% is around the core things are what you do, perhaps executing your
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Mike Smith: audit function. The 20% or Jason and the 10% are aspirational. And so I think we could apply that to all the dimensions, we’re talking about
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Mike Smith: What are the investment dimensions around everybody thinks we should go digital. So where are we going to spend all our dollars on technology and digital, how are we thinking about people.
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Mike Smith: How are we thinking about the types of risk for focus on. I think there was a study that
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Mike Smith: I don’t have the stats in front of me, but the premise was you know 96% of the risk functions were focused on 14% of the risk domain is that caused the biggest issues.
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Mike Smith: Right, and so the higher we rationalizing focus investments in time, effort, people to be able to do the things that really matter. It’s going to take some some energy
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Jason Mefford: Well, it is. And I think, you know, kind of back to that study that you’re saying if
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Jason Mefford: A lot of that again was probably unconscious bias by the risk people because they were more comfortable or they
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Jason Mefford: Understood, those, those 14 or 16% of the risk they had no idea that the other 80% of risks actually exist.
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Mike Smith: Right.
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Jason Mefford: Right. And again, it’s nothing about them. But if you’ve got a very homogenous team that thinks the same way has the same personality.
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Jason Mefford: You’re not going to have the best results. And like I said, it’s hard.
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Jason Mefford: But you know again studies on diversity of boards, right, the more women that are on and more minorities that are on those companies actually perform better in the long term than a homogenous boards.
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Jason Mefford: So there’s empirical evidence that it’s actually true. Right. But like you said, it’s hard. We got to actually do things consciously. It means, you know, we might actually have to develop relationships and get to know people on our team, instead of just treating them like some machine.
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Jason Mefford: You know, here’s your task list, you know, putting your 70 hours this week and
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Mike Smith: Right.
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Jason Mefford: We’ll see you next week. You
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Jason Mefford: Know,
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Jason Mefford: Right, that, that ain’t going to go over well.
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Jason Mefford: In the future, because
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Jason Mefford: The world consciousness, if you will, is kind of changing and this this whole maybe we can kind of talk as you know a little bit at the end here about this whole self at work, because I think that’s
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Jason Mefford: That’s something that’s coming. It’s been coming this way, we have to be more open and accepting of it because if we’re not will, you’re not gonna, you’re not going to succeed in the future.
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Jason Mefford: If you don’t allow people to be their whole self.
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Mike Smith: Yeah, that’s right. Well, and, and I’ll just tell a quick story about myself. You know, I’m a big cyclist like I love. I’ve been reading, reading, reading
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Mike Smith: Writing done a lot of reading, but I think racing bikes for about 30 years and during this crisis. I’ve been writing more because you know what, I don’t have to commute, you know,
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Mike Smith: 30 minutes each way.
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Mike Smith: That much time but I found it interesting. I did a few weeks where I take a lunch break and I go ride that listen to your podcast or somebody else’s podcast. There’s several I mentioned earlier.
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Mike Smith: And I found that I came back really recharge like the afternoon.
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Mike Smith: And it was similar to those times, and we would all go to lunch, right, we go to lunch and just we have a little business conversation, but maybe a little bit of personal conversation or something, expanding your just
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Mike Smith: Reset. And I find that to be able to bring our whole self story not promoting the everyone that needs to go ride a bike at lunch.
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Mike Smith: Especially when it’s 100 degrees in Dallas, but here it’s a lot of fun right to be able to find ways to recharge yourself. And that’s one of the ways I do it.
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Mike Smith: And it’s been great, because of the flexibility we have, but that allows me to have a different perspective to listen better to my team to listen better to oddities and clients right to
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Mike Smith: Lead better through and influencing my thinking little different and having a different perspective. And so I think is, is we really challenge ourselves, what does that whole self mean
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Mike Smith: Is it okay for me to tell people I go ride my bike at lunch. There’s a day when can’t believe you do that, why aren’t you doing X, Y AMP z.
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Mike Smith: So I think even in that conversation, you start to think about are we willing to explore what the merge of work life is it’s it’s kind of work life sometimes. Now I will get online. To be honest, I will get online. Last night I got one and send a bunch of emails like 1030 last night.
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Mike Smith: To no one that I expected return from but I had some time. I wanted to get some things out. It was really focused and alert and it made sense for me.
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Mike Smith: A couple hours earlier doing some other things from finance. So I think we’re gonna have to realize that
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Mike Smith: We’ve none of us have had an eight to five or nine to five or whatever job for more than two decades. Right. And this professional requires you to
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Mike Smith: Really gives you an opportunity to lean in at different times in different ways and contribute value in that way. So I think it’s important to think about the diversity which we use our own energies and how we recharge, to be able to be better and doing that.
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Jason Mefford: Well, yeah, because we have to do it ourselves right we you need to be responsible for doing it for yourself. But we also have to
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Jason Mefford: Allow others in the organization to do it as well. Right, so I participated in the mindful workplace summit, a few years ago.
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Jason Mefford: And, you know, the whole idea again that you know 20 years ago, people would have been aghast at this but large companies actually setting aside workspace.
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Jason Mefford: You know, for people to go in for a quiet room. Right. You know, in the old days. It’d be like, you don’t need to take a nap during the middle of work right or you don’t need to be quiet. You need to be out here working right.
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Jason Mefford: Or, you know, doing allowing somebody to do like yoga. You know in in premises during the lunch hour for those who wanted to go and do yoga together right little things like that that actually help recharge energize people
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Jason Mefford: In fact,
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Jason Mefford: I’m going to get the study wrong and which book. It’s actually from. But again, they’ve they’ve done a lot of research on productivity and you’re better we can only concentrate every about 20 minutes 20 to 30 minutes solid anyway.
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Jason Mefford: And so you’re better off to work in like a 15 minute increment with a 10 minute
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Mike Smith: Break right
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Jason Mefford: And so whether that break is getting up walking around going outside riding your bike for 10 or
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Jason Mefford: 15 minutes or whatever or, you know, reading a book.
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Jason Mefford: Right, doing, doing a Rubik’s Cube, you know, I actually have a Rubik’s cube on my desk, because it literally stopping and taking two minutes to manipulate that Rubik’s Cube actually
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Jason Mefford: Changes the hemispherical connections in my brain and kind of recharges and then allows me to actually get back to doing what I’m doing.
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Jason Mefford: Yeah.
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Jason Mefford: And so it’s it’s all these little things and to realize that it’s okay to be yourself. It’s okay to bring your whole self to work because actually, that’s what makes us stronger to
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Jason Mefford: When it when everybody when we, when we rely on everybody’s strengths. Right.
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Jason Mefford: That’s, that’s how we become a better team.
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Mike Smith: And you realize where the challenges are, I think people become more open around where there are challenges and you find that
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Mike Smith: As we look and one of the another reason I love this profession is we get to serve right when we get to serve the board management, our teams at the breadth of impact we can have is if done right. That’s why I love what great internal, it can be for a company
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Mike Smith: It’s phenomenal and that that means that their strengths and weaknesses, opportunities and threats and all the strategic perspective, you may have, but to be able to make a list. I will make it so I’m a college dropout. Right. I don’t know if I’m going to tell you this, but
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Jason Mefford: What, how can you work at KPMG if you’re a college dropout.
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Mike Smith: I did go back actually
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Mike Smith: Drop Out drop in maybe
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Jason Mefford: I’ll get there we go there.
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Mike Smith: Like more of a V. Maybe you really know
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Mike Smith: But I find there so Kevin Farley was a roommate of mine, back in the day at Southeast Texas and and I’m sure he’s listening today but
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Mike Smith: He
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Mike Smith: He and I would have these, like, We gotta go study. Like, I know I can both of us, in essence, we’re dropouts, but we were back in and we were full tilt and we were getting this thing done and get it done well and works great, and
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Mike Smith: I got a job and all that kind of stuff. Rest history, but we used to do that like set the alarm. We did 45 minutes. By the way, because we we had short attention spans, but
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Mike Smith: 45 minutes and then like 15 minutes we dork around for, and it was amazing. Like we both did a heck of a lot better on our pursuits academically. And by the way, had some fun, you know, although not really quiet in the library at Southwest, Texas, we’re
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Mike Smith: In trouble. Occasionally, but it wasn’t quite well. But I think that’s really right and but what I find is that people don’t apply that outside of academics.
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Mike Smith: I don’t think people are applying that that professional aspects. So if you’re going to go write a report we reporting is, in my opinion, overrated.
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Mike Smith: And an overcome like overweight and from a like this is what we’re doing we’re writing a report. This is the most important thing that we do.
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Mike Smith: Is to way too heavily into it’s usually takes way too long. It’s a pain the ass like that’s that’s the stigma of reporting.
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Mike Smith: Reality is like when you’re going through challenges of you, whether it be whatever philosophy you have on Agile and all the different ways, you’re going to get work done ultimately we’re trying to drive an impact.
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Mike Smith: Like you’re trying to drive an impact how, how do you bring your best self, how do you, how do you collaborate with a business owner, how you do it real time.
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Mike Smith: How do you take breaks, let’s let’s really work on you know this one item really be the down for an hour or 45 minutes applying. That’s right. I think that’s really important to step back from especially for our
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Mike Smith: People that are earlier in their career. They’re being led by people that have been in this career for a long time and maybe there’s this dissonance barring a tournament, you were using previously.
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Mike Smith: Around
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Mike Smith: Kind of how people are driving and to be led when reality is there’s a much better way to work that they probably had in their academic environment, but they haven’t applied that professional
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Jason Mefford: Well, it’s funny because, you know, and be in our profession in general, most people’s personality is we don’t like change that’s that’s kind of what we were gravitated to this field. Anyway, right.
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Jason Mefford: Yeah, is is risk averse don’t like change.
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Jason Mefford: And and so much of the time, like you said, we
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Jason Mefford: We have a hard time understanding why there needs to be changed, right. So again, you know, like when when we both got into public accounting. I’m sure your experience was like mine right I worked a lot of hours. So I was an external audit.
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Jason Mefford: You know, to begin with, and
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Jason Mefford: We’re talking, you know, 8090 hour weeks. Some we’re right and that was just expected that was what history said that’s what we did. Right.
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Mike Smith: Side, by the way, my first project was like nine of us.
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Mike Smith: In a room and no one in this podcast or not this is maybe except for you with micro fish machines.
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Oh, yeah.
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Jason Mefford: Yeah. Uh huh.
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Mike Smith: And it was all invoices and we, our job was to look through each one of those pages on a micro fish and then put it back in a box. We challenged
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Mike Smith: And find sales tax. That was our job. It was okay. And we were working seven days a week, to your point, like it’s, it was, it is hard work. That was kinda lame, in my opinion, but it was long hours for sure.
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Jason Mefford: Well, and in the, the idea that just because that’s what we experienced. I think that’s where as a writer great leaders are those who realized that the world is different now than it probably was before.
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Jason Mefford: And that have the courage to actually do things different and and and and be that positive change.
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Jason Mefford: You know, there was no reason like we had a stupid requirement, you had to come in on Saturday. And I remember one week I literally work 90 hours in the five days. So you do the math, I didn’t sleep very much that week.
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Jason Mefford: And then the manager still told me I had to come in on Saturday. And I’m like, are you kidding me, you work 60 hours. The last five, and I still have to come in on Saturday.
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Jason Mefford: Things like that, that just are silly. They’re silly stories that we’ve told ourselves of the way the world is most of the things that we believe that way, are actually not really true.
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Jason Mefford: And so having the courage to actually, you know, stand up and say, hey, we, we don’t have to do it this way. Hey, you know what, it’s okay if you take a 10 minute break every hour, I would encourage you to do it, you’re going to be more productive. Right.
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Jason Mefford: I would encourage you to, you know, go ride your bike during lunch or whatever it is.
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Jason Mefford: Right. Right. Or if you’re if you’re not a morning person. Sure, you can come in at 11 right but you’re still going to be working later. I mean, it’s
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Jason Mefford: You know, I’ve got one guy on my team he he sleeps during the day. Usually, so it’s almost like you know
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Jason Mefford: He’s, he’s halfway around the world. So we know that
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Jason Mefford: You know, I require that there has to be a certain amount of my working hours in his working hours to overlap.
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Jason Mefford: But that’s just from a training perspective, but he gets stuff done, you know, a two or three in the morning when I’m asleep right and and to realize that things like that are okay. Going forward, right.
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Mike Smith: So let me ask you this, we may be getting keep me honest on our time, but
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Mike Smith: Ca is what’s the biggest challenge you guys you’re hearing and I’d love to compare notes for seems like in all all this aside, like this. All we’re in, we’re in right. You and I are in
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Mike Smith: But there’s all these practical realities constraints, etc. What’s, what are the top couple that you hear most persistently leaders.
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Well,
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Jason Mefford: I think probably the, the two especially kind of in this
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Jason Mefford: Arena right now is we we tend to be victims of our circumstance.
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Jason Mefford: And so these two things that I that I hear over and over again are more people playing victim without really realizing it. And I know this is a harsh reality for a lot of people, but
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Jason Mefford: We all play victim more than we realize it. If you stop and think about an objective thing.
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Jason Mefford: But the ones that you always hear is I, you know, my budgets cut nobody will give me any money, blah, blah, blah, blah, blah. They don’t value internal audit. I can’t hire people, most of the people that are doing that are are in that victim mode.
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Jason Mefford: The reason why they’re usually not getting it is because they don’t know how to make a sales pitch. They don’t know how they haven’t developed relationships with people.
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Jason Mefford: And and know how to actually use emotion. They’re not emotionally intelligent, they don’t understand how decisions are made.
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Jason Mefford: It’s so that’s that’s one that I i hear from almost everybody
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Jason Mefford: I mean there’s there’s rarely a chief audit executive, it goes, wow, I get paid way more than I should be and I have all the budget that I ever need. Right.
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Jason Mefford: Right, that’s so that’s one. Another one that I’m hearing to now, especially in this environment is
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Jason Mefford: You know, how are we going to do audits virtually, how am I gonna, how am I going to develop relationships, how am I gonna get to interview people and you know all this stuff that’s virtual now.
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Jason Mefford: Well, again, for the most part, folks. It’s just a different medium, you’re still doing the same things. I know you can still develop a relationship with somebody like we talked about at the beginning.
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Jason Mefford: Right. Mike and me right
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Jason Mefford: Exactly. You can do it. Yeah, but, but, so don’t don’t fall into that victim mode of thinking, oh, it’s different. I can’t do it. Blah, blah, blah, blah, blah. The medium just changed the principles are the same, just go out and do it right.
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Mike Smith: Right. You know, I think.
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Mike Smith: I hadn’t thought about those two from the standpoint of this this victim kind of the idea that victim like these are. I have a view of the constraints only versus if you ever seen Ender’s Game, which is
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Jason Mefford: A
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Mike Smith: Fun little movie about
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Jason Mefford: Fabulous movie and book.
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Mike Smith: And book right and whether it be audible or in print.
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Mike Smith: And it’s just like that, if, if, for those who haven’t watched it, it’s worth you know if you got some spare time and you like sci fi, but the premise is there’s clearly unexplainable constraints and victim scenarios with someone trying to basically address
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Mike Smith: Fear a global genocide and the sci fi dystopian future and he accomplishes that. But my point is that it was interesting because if you think about that. That was youth, right, that was individuals that were young, that were weren’t tainted in essence by
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Mike Smith: Adopting constraints of their environment. Right. And so that was the one. Those are the ones that are able to think faster.
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Mike Smith: Be more abstract and how they resource solutions, etc. And so what if that applied this now and to say that what if our younger generation.
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Mike Smith: Are early career auditors were given the challenge. Say, listen, this is the budget constraint, you have right or this is the
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Mike Smith: Permission constraint, you have or whatever the constraints are. That’s why these are just not good. So solutions. Let’s around focusing on the constraints and more about
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Mike Smith: We want to deal with the, was it the four mix. I think was a form x and Ender’s Game babies.
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Mike Smith: But dealing with that in goal. And so I think one of the exciting things about right now is we
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Mike Smith: As leaders have the ability to empower our teams to pull all this together right to be their whole self to bring a different perspective to use their
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Mike Smith: Perhaps fresh perspective in a way to solve a problem, recognizing fully the constraints that are time budget scope, whatever they are.
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Mike Smith: To be able to format from the virtuality standpoint, to be able to solve a problem. So I think that’s just
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Mike Smith: I hear those a lot to you, Jason. So I, I couldn’t, I couldn’t have accurate in and clear. But I think there’s something there that if we pull this together could create a much more exciting outcome.
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Jason Mefford: Well, you can actually because Ender’s Game was a great example of gamification to
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Mike Smith: Oh, yeah.
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Jason Mefford: The kids didn’t actually know they thought they were playing a game. They didn’t realize I
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Jason Mefford: Don’t want to give too much away from people, they’re going to read the
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Jason Mefford: Book, but I think
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Jason Mefford: The kids, the kids didn’t know what they were actually doing.
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Jason Mefford: Right, but they they used gamification as a way as well. Right. So just like you said, you know, here’s our constraints, how are we going to, how are we going to
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Jason Mefford: You know, do this play a game with, how can we best use this because, because sometimes I’ll still get people that that you know I
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Jason Mefford: I mean, I’ve been through all the executive ranks and now I’m really a CEO okay and and I get some people sometimes it say well you know internal audit should just have an unlimited budget because we’re so important or risk management should have an unlimited budget and it’s like
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Jason Mefford: You folks have never run a company
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Jason Mefford: If you think that because there’s always constraints on resources.
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Jason Mefford: That’s right. And so you always have to make make a decision that’s in the highest and best use for the organization and from an investment perspective, the return so
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Jason Mefford: But yeah, you can do some things creatively, to be able to make the most of it. Show your stewardship.
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Mike Smith: To the board into management by
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Jason Mefford: How well you’re taking taking care of those resources and actually start thinking of yourself as an investment center instead of a cost center.
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Jason Mefford: You start thinking of yourself as an investment center right you start acting like an investment center and showing the results, then the CFO is going to start seeing it was an investment center. That’s right.
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Mike Smith: Yeah, the tagline for my team is this internal audit reimagined
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Mike Smith: What if
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Mike Smith: Imagine if like as a way to introduce ourselves as a mantra to to kind of move towards something that could look very different, but I love the storage should come it doesn’t matter, its internal on insert HR it
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Mike Smith: Anybody Georgia business unit Korean but whatever it is, like we all have to be good stewardship idea like, what’s the best way to steward your resources personally and professionally your time, etc. But be willing to move forward. Yeah.
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Jason Mefford: Great stuff. Great stuff.
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Mike Smith: Yeah.
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Jason Mefford: And all week. I can keep talking all day but
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Jason Mefford: People got to get back to whatever they’re doing
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Jason Mefford: We are, we do as well. But Mike. Thanks for coming on and talking I every, every time we talk, it’s, it’s kind of fun because like I said
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Jason Mefford: We we’ve
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Jason Mefford: I think I think view, a lot of this stuff and the whole the whole whole self at work is to me. It’s an important thing. That’s why I know you’re still doing a lot more of the practitioner, you know, stuff of actually
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Jason Mefford: You know, helping actually get the audit plan done. I know get shit done at work.
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Jason Mefford: Right, we’re now I’m focused more kind of on that whole self and more of the psychology and mindset and the leadership and the transformation and growth from a, from an individual perspective.
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Jason Mefford: But yeah, just love love the discussion today so
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Mike Smith: Fun stuff fun stuff. Thanks. Jason for letting me share some thoughts and then just been hearing your views as well. And this time has been helpful and
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Mike Smith: I think all of us are, have a great opportunity. And today, tomorrow. The next week. It’s just a matter of finding those things in there that really can can move the needle personally and as a team.
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Jason Mefford: Well, I can and is if you can reimagine it
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Jason Mefford: Mm hmm. You can make it happen.
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Jason Mefford: Right, because everything that is is created in physical form is first created mentally because every everything in this world is mental
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Jason Mefford: And maybe I’ll get into that on a deeper podcast later.
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Jason Mefford: We don’t have time for that today, and it might take a couple, a couple to get through. But anyway, but it’s it’s
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Jason Mefford: Yeah, so just like you’re trying to help you know reimagine what internal audit could look like everybody
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Jason Mefford: Out there that’s listening. Try to reimagine what it could look like or how things could be different, where you’re at, to just start thinking about it ideas will come to your head and then start taking some action and make it different.
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Jason Mefford: Yeah. Good stuff. Alright.
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Mike Smith: Alright, man.
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Jason Mefford: Well, thanks Mike.
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Mike Smith: Yeah, thanks for the time today. Appreciate it.
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You bet.
