Stakeholder: noun, a person with an interest or concern in something, especially a business.
Conflict: verb, be incompatible or at variance; clash.
Put the two together and you have the vital stuff of audit life. From regulators to the board of directors and the audit committee, from internal to external audit and, at the micro level, from yourself to your line manager and your own wider team, surely auditors deal with virtually the widest range of stakeholders possible in an organisation? And the conflict side of the equation is equally fraught; while we may not be talking active combat here, the scope, at a fundamental level, for divergent objectives and incongruent values, is immense and complex.
Effective stakeholder management is integral to effective audit and, as an auditor, is it also going to be equally essential to your career success and personal well-being. But effective stakeholder management doesn't happen by accident; it is a process and requires a conscious methodology, developed by critical reflection, consideration and planning. All of this requires tools, techniques and strategies to anticipate and deflect conflict on a routine basis but also to manage it when it becomes unavoidable.
Here’s our 6 step guide:
Step 1 - Identify your stakeholders - think quantitatively
Understanding who comprise your stakeholders is actually easier said than done. A stakeholder is anyone - individual, group or organisation which has a 'stake' in what you are doing. And a stake is an interest, influence or the potential to affect or be affected or think they might be affected by your work. So that really is a very broad group. You need to brainstorm, think big, think laterally, think outside the organisation - and don't forget the most important stakeholder of all - yourself!
Step 2 - Understand your stakeholders - think qualitatively - make the connections - appreciate their world
Once you've created your huge map of interested parties, you can start to whittle these down to those that actually could have an impact on your objectives on a job by job basis. It may not necessarily be a direct impact so it may be useful to classify your stakeholders into spheres of influence/impact. You need to understand the flow of connection so you can fully appreciate the effect that your priorities, findings, recommendations or use of resources may have on them and why. The simple question to address for each stakeholder is: what might be important to them? What financial or emotional benefit or concern, positive or negative might they have with the progress or outcome of your work?
This is upfront anticipation and it is an important tool in spotting the potential for discord before it turns into conflict. Work through your map and consider how each stakeholder might feel about the implications of what you are doing or what you have found. How might they react? What might be the implications for them? Who are their stakeholders and how might they view the work you are doing? And are these people actually your stakeholders in their own right?
Step 3 - Engage and communicate - create positive relationships – just talk!
Engaging and communicating follows step two but also runs in parallel - after all there's a limit to how well you can understand your stakeholder's world if you are not effectively communicating with them! The communication process is a vital thread that runs through your whole stakeholder strategy and it is key in managing the risk of conflict. Use a variety of channels to engage on an ongoing basis and meet the needs of different personal preferences and styles. Periodic, formal face to face meetings go without saying but you can also engage on a group or team basis, use regular written activity reports and briefings, as well as informal, adhoc catch ups by telephone or email. Communication feeds relationships, so it is important to start the dialogue well before your findings make it imperative. Your aim is to maintain a three hundred and sixty degree awareness of issues and sensitivities and this calls for dynamic communication. Regular contact is good for everyone but it’s not always easy and it can be tempting to procrastinate. Make sure you plan ahead and build it into your process from the outset.
Step 4 - Communication is a two way process - do your stakeholders understand your needs?
You, after all, are the auditor, independent, objective but with a clear purpose and the official protagonist of compliance. Do your stakeholders have a clear understanding of who you are, where you are going and your intent? This aspect of communication is critical in managing expectations and proactively anticipating and deflecting conflict. And this is where that upfront, ongoing dialogue and clear communication comes into its own. Not only in understanding your purpose but also your plan for meeting it; what you will need in terms of time and data, how and when you will feedback and how you will manage issues and disagreements.
Step 5 - Conflict resolution
Conflicts do arise - variances, incompatibilities, clashes - just as the definition suggests! They are the bread and butter of the corporate world and the staff of life for auditors.
In this article we concentrate on building a process to avert stakeholder conflict but when it does (and it will) arise check out our article on conflict, Disputes and Deadlocks: The Auditor’s Guide to Conflict Resolution for tips and techniques for a smooth resolution.
Step 6 - When to bring in the big guns
As auditors, we represent the epitome of ethics, integrity and impartiality. Audit brings value to the organisation and its stakeholders when it delivers objective assurance. Independence and objectivity are delivered by evaluating stakeholder issues and making difficult decisions. We have to be independent; we can’t concede under pressure and we have to be prepared to manage conflict. Sometimes we need help. Confiding, discussing and exploring all play a key part in being an audit professional. You probably already do this on an informal basis but there is a lot to be said for developing your own ‘master mind’ group of confidantes to contemplate your options in dealing with conflict, communicating difficult messages or even whistleblowing, so you can truly operate with integrity. In the therapy professions they call this ‘supervision’ and it is set up regularly and routinely to make such exploration proactive. As an auditor this is what you should be doing too – setting up support mechanisms to explore issues with fellow professionals to help you determine when and how to bring in the big guns – or an arbiter at the very least!
And the moral of the story is…
Of all the articles that I have written for CareersinAudit, I think this is the one that truly captures the versatility, the transferability and broad skill set of the auditor. While I hope you have learnt something new, I suspect that you may already be applying many of these techniques daily, without even thinking about them. And I also have a hunch that you have no inkling of the value of your skill set. Take heed – does your CV really do you justice? Is it time to check it out against your full worth?
Which topic would you like to read about next month? Look over the list of topics in the original Audit Advantage article here and let us know your choice for the next topic we should cover.