01 Dec What Do Marcus Lemonis and Internal Audit Have in Common?
It’s no secret that the word “audit” conjures up negative feelings in most people. The dread of a horrible experience where someone interrogates you, looks over your shoulder, checks up on your work, and says you are doing something wrong. Who wants that? As my daughter would say “no fanks”.
Now I really can’t blame people for having that impression because that is what it has traditionally been. It is usually associated with taxes and that’s scary. Or maybe you have undergone an external audit, possibly required by a bank or insurance company. It can be a nerve wracking experience because those audits are designed to make sure you have done things correctly and the end result can cost you if you haven’t. My first job out of college was as an internal auditor. I felt grown men be afraid of a young, naive girl at the whopping age of 23. Why? Because they assumed that my purpose was to bust them for something. But, it wasn’t. No really, it wasn’t.
For the sake of argument, let’s try not think of audit in that sense. Clear your brain of all those previous negative experiences and horror stories. Relax. Breathe in, breathe out…ahh. Now we can start over with an open mind and new attitude to understand how internal audit can truly help your business.
There are very few, if any, businesses that don’t have some degree of internal issues that can be improved upon. It doesn’t matter if you are a small, family owned business or a large corporation. Each has it’s own uniqueness, just like people. No two are exactly the same and that’s what makes all of us so interesting. I am a huge fan of the TV show “The Profit” on CNBC. If you haven’t seen it yet, I highly advise watching. The reality show stars Marcus Lemonis, the multi-millionaire CEO of Camping World. In each episode Marcus goes into real small businesses that are struggling. He evaluates them, decides if he wants to invest, and then uses his knowledge to make incredible improvements to the business.
I absolutely love this guy. He is a straight shooter with a no-nonsense approach. He is great at spotting very simple concepts that the business is missing and generally offers simple solutions. His explanations are concise and normally on point. He cuts through the noise to immediately work on the issues that people know are hurting them, but don’t want to confront. I’ve seen him tackle conflict, miscommunication, disorganization, growing too fast, over buying inventory, lack of sales, partner problems, cash mismanagement, and many others. You know, problems that commonly occur in many businesses. He generally stays very calm and organized, though a few people have ruffled his feathers.
Granted, most people aren’t so lucky as to get a Marcus Lemonis angel to swoop down and ignite their business with cash, but the advice he gives is based on his own first hand observation of the problem and sound judgment. That’s exactly the point of internal audit. To find the root causes of whatever is holding you back and offer smart, simple solutions for positive change. The process is not much different than what Marcus does. It starts with some honest conversations about what worries the owners and then looking into the main areas for something that can be tweaked. And um…uh, actually making changes. That’s the hardest part and where there is the most resistance. Everything sounds good until people have to start acting differently. That’s why you have to continuously follow up to make sure its really happening. Habits don’t die easy.
The official definition from the Institute of Internal Auditors is “Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.” Simply put, the fundamental purpose of internal audit is to have an independent person evaluate areas of the business systematically and objectively to help improve operations or manage risk.
Therefore, Internal Audit = Help. And who wouldn’t want that?