004 managing for compliance - creating a teamwork based culture within an audit

7/27/2019 004 Managing for Compliance - Creating a Teamwork Based Culture Within an Audit

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Creating a Teamwork Based

Culture Within an Audit

Environment

Presenter:

William P. Cullen Jr.

Audit Manager IFTA/IRP

Arizona Department of Transportation


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My Goal Today is to:

Share with you the steps that I took toimplement a new management philosophywith our team.

Challenge you to examine your currentemployee management practices. Do aself assessment.

Select at least one item you plan toimplement when you return to your office.


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Management Style Considerations

Results of recent employee survey

Employees are changing

Management tools have changed, butmanagement theory is basically the same.


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Harris Poll

Recently polled 23,000 U.S. residencies, employed

full-time, in key industries- banking, finance,education, public administration etc.

Only 37% said they have a clear understanding of what

their organization is trying to achieve.

Only 1 in 5 was enthusiastic about their teams and

organizations goals.

Only half were satisfied with the work they have

accomplished at the end of the week.

Only 15% felt they worked in a high trust environment.

Only 10% felt their organization holds people accountable

for results.


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A Few Disclaimers About the Book

Before I Begin

I cant cover everything in the book during thispresentation; therefore, I suggest that you buythe book.

Microchip technology is production oriented andoperates in the private sector. We (Audit) areservice oriented and operate in the governmentsector.

Steve manages 3,900 employees and I manage10.

What Im saying is that liberties were taken to fitour situation.


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Some brief background about the

company would be helpful: When Steve Sanghi took over at Microchip Technology,

the company was in dire straits.

The company was losing money

Its technology was outdated

Surveys to employees showed they distrusted management

Employees had low job satisfaction

Steve decided to hire consultants to evaluate thebusiness process and come up with recommendations:

Need to focus on cycle time reduction

Quality improvement

Implement statistical control

Outsourcing


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Aggregate System

The purpose of the Aggregate System is tosystematically align and integrate every aspect of thebusiness around a set of core values. Producing a self-perpetuating, continuous-improvement culture designed

for world class excellence.

The Aggregate System attempts to unite employeesthrough shared workplace values and guide employeestrategies, decisions, actions, and job performance.

The company policies and management practices thatinfluence employees were aligned and integrated tocompany values.


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Aggregate System

Managers serve as role models of this

philosophy through decisions and actions.

Improving all aspects of the enterprise is

accomplished by designing the system topromote continuous improvement. It involves

training, equipping, empowering, and requiring

all employees to improve their areas of

responsibility.

The ultimate goal is establishing a self-

perpetuating system that will yield extraordinary

results from average employees.


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Conditions Suggested to

Implementing the Aggregate System

1. Inspire leadership

2. Create a culture of continuous improvement

3. Promote empowerment

4. Encourage teamwork5. Utilize a Systems Approach

6. Provide continuous training

7. Promote professional development and succession

planning8. Insure effective communication

9. Establish a fair appraisal system

10. Model a balance with work and family


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1. INSPIRE LEADERSHIP


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Received some help from Louzes and Posner

in their book The Leadership Challenge. The

book discusses 5 practices of exemplary

leadership:

A. Model the Way

B. Inspire a Shared Vision

C. Challenge the Process

D. Enable Others to Act

E. Encourage the Heart


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John Maxwells

21 Qualities of a Leader1. Character

2. Charisma

3. Commitment

4. Communication

5. Competence

6. Courage

7. Discernment

8. Focus

9. Generosity

10. Initiative

11. Listening

12. Passion

13. Positive Attitude

14. Problem Solving

15. Relationships

16. Responsibilities

17. Security

18. Self-Discipline

19. Servanthood

20. Teachability

21. Vision


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Inspiring Leadership

The success of this program depends on the

leadership ability of the managers.

Outstanding leadership is the most critical

element in this mix. If leadership is

ineffective or the actions and management

style dont reflect the firms core values,

the results will be mediocre.


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2. CREATE A CULTURE

OF CONTINUOUS

IMPROVEMENT


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Culture

Governing values

Policies and norms

Attitudes

Degree of employee empowerment

Prevalent management style

ITS HOW THE WORK GETS ACCOMPLISHED


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The Aggregate System promotes a culturethat has a relentless striving for continuousimprovement, which engenders:

Employee empowering and involvement

Honest, Free flowing communication

Problem solving

Innovation

Merit

Frugality

Systems thinking Continuous learning and improving

Results orientation


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Most discussions on management never reference thecorporate culture or assume it cant be changed so you workaround it.

The Aggregate System views culture as a system, and as

such can be designed, influenced, and controlled.

The culture must reflect an attitude that employees are giventhe responsibility and authority to improve their jobs.

Historically, employees had little input in defining systems andprocedures that govern their work.

Power must be appropriately distributed throughout theorganization, rather than accumulating at the top of themanagement rank.

Culture continued


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3. PROMOTE EMPOWERMENT


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To authorize and enable

The empowered employee must have:

Information (Data, Technical knowledge)

Resources- Funds, material, space, time

Support- Backing, approval, legitimacy

Must believe there are opportunities toperform in an empowered way.

Must accept ownership

Managers need to act as coaches, developers, facilitators, and teambuilders.

Instead of micromanaging, they need to remove barriers thatobstruct employee performance.

Employees must be more involved in problem solving and strategydiscussion.


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4. ENCOURAGE TEAMWORK


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What makes a team?

Individuals who are not equal in talent, experience, oreducation, but equal in commitment.

It is not realistic to think that we can live or work with

others without conflict. However, by communicatingabout the differences, focusing on the common good, wewill make great strides.

A team is not just people who work at the same time andsame place.

A managers job is to remove the teamwork killingbarriers.


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Lucy to Linus (Who is watching a TV show): Change the channel.

Linus: Do What?

Lucy:Change the channel.

Linus: What makes you think I should respond like that?

Lucy (Showing her hand): You see this? These are 5 little fingers, butwhen they are rolled together into something called a fist, they

become a weapon that is formidable to behold.

Linus (After contemplating Lucys fist, changing the channel, andlooking at his own little fingers): Why cant you guys get organizedlike that?

When people come together for whatever the reason, the question thatoften surfaces as people try to work together is Why cant we get

organized today? Why cant we become something which althoughweak independently, becomes formidably strong when we put it

together?


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5. UTILIZE A SYSTEMS

APPROACH


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1. Defined desired improvement (work papers,

supporting documents)

2. Get a buy in from all concerned (ownership)

3. Established improvement teams

4. Outline project details, goals, plan

5. Present solutions to the group

6. After approval- implement7. Evaluate, follow-up, modify

8. Maintain, monitor (continuous improvement)

Systems Approach to Audit Quality

Issue


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6. PROVIDE CONTINUOUS

TRAINING


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In Arizona, we have two basic

components of training:

1. Training for new auditors

2. Advanced training for all auditors


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Advanced Training Consists of:

Monthly team meetings

Semi-annual internal training

Formal outside speaker training

Conferences

Internal Training Has Included:

1. Streamlining the work process

2. Auditing of new tax types3. Refund training

4. IRP rewrite


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7. PROMOTE PROFESSIONALDEVELOPMENT AND

SUCCESSION PLANNING


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During our monthly team meetings, I try to integrate outside disciplines intoour discussions. The past year we have discussed:

Innovation at the workplace

Managing employees from different generations (Baby Boomers; X; Y)

Time management

Auditing ethics

Creative problem solving, thinking outside of the box

Succession planning could have some problems, but it should be done.


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8. ENSURE EFFECTIVE

COMMUNICATION


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Communication must be honest and free-flowing. Allemployees want to know what is expected of them and

how they are doing.

I try to communicate with our staff in a few different

ways:

Make sure that job expectations are clearly defined when

they are first hired and are constantly reinforced.

Give feedback, both positive and negative on each audit.

Have planned quarterly and annual evaluations for at least

30 60 minutes.

One minute manager visit every day

Open door policy- walk the talk Lunch with the boss

Monthly team meetings

Quarterly staff meeting

Share information with the staff, both good news and bad

news.


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9. ESTABLISH A FAIR

APPRIASAL SYSTEM

Th l l f i h ld fl t


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The annual employee performance review should reflectprior discussion and should just be a recap of theprevious four quarterly reviews.

Hopefully the process will be positive and promotecontinuous improvement. With that being said, you aredoing the employee a disservice by not pointing outareas that need improvement.

I try to recognize accomplishments as well as intangiblesas supporting team goals, teamwork, passion,generosity, etc.

Since turnabout is fair play, once per year I give my

employees an opportunity to evaluate me.

The evaluation is completed by the staff and given to oursenior auditor who summarizes and recaps the findings.I never see the evaluation. I handout the results at the

following team meeting.


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10. MODEL A BALANCE WITH

WORK AND FAMILY/FRIENDS


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I try to follow Steven Covey The 7 Habits

of Highly Effective People which does a

wonderful job of presenting a holistic,integrated approach for solving personal

and professional problems.

I especially appreciate the emphasis on

promoting the balance of values relating

to: Physical

Mental

Social/Emotional

Spiritual


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In Summary The aggregate system represents the next evolutionary step in the

study of business management.

It shifts the focus from examining the various pieces of the businessto viewing the enterprise as a total system.

Its approach views company culture and employee performance assystems that must be optimized in order for the firm to realize itspotential improvement.

The key to the success of the aggregate system is itscomprehensiveness. It promotes a congruity and harmony betweenemployee performance and the desired culture.

Improving all aspects of the enterprise is accomplished by designingit to perpetuate continuous improvement. This involves training,equipping, empowering, and requiring all employees to improve theirareas of responsibility.


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In Summary continued

By designing and managing the totality of factors thatinfluence employee behavior and performance, you canexpect exceptional performance from averageemployees.

As you can see, audits increased 220%; audit hourswere reduced by 35%, and assessment dollars wereincreased by 266%.


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In Summary continued

Its difficult to assess quality. I can say that the recentIFTA Peer Review was very complimentary. Theywere nice enough to include in the report that Thenew audit manager reviewed the results of the lastpeer review and immediately implemented changes to

affect the problem areas of:A. Sampling

B. Examination standards

C. Evaluation of internal controls

D. Verification of Licensees records

E. Audit file contentF. Communication of audit findings

G. Audit reports

The only non-compliant area was a signature line onthe auditor report, which was added that same day.

Fi ll I h t h d t f t


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Finally, I have two handouts for you toreview at your leisure.

1. Ten Behaviors of Managers who Excel2. Common Management Mistakes.

Both are from a seminar I attendedcalled Ten Behaviors of Managers WhoExcel.

The name, address and phone numberof the presenter is at the end of thepresentation.

THE END


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R f & A k l d


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References & Acknowledgments1. Driving Excellence: How the Aggregate System turned Microchip Technology

from a Failing Company to a Market Leader. Steve Sanghi and Michael Jones.

2. Liberating Passion: How the Worlds best Global leaders produce winningresults. Omar Khan

3. The Fourth Turning: What Cycles of History tells us about Americans nextrendezvous with destiny. William Straus and Neil Howe.

4. Fired up or Burned out: How to reignite your teams passion, Creativity and

productivity. Michael Lee Stallard.

5. The Effective Executive. Peter Drucker

6. The 7 Habits of Highly Effective People: Powerful Lesson in Personal Change.Stephen R. Covey

7. The 8th Habit: from Effectiveness to Greatness. Stephen R. Covey

8. 21 Indispensable qualities of a Leader. John C. Maxwell

9. The Leadership Challenge. Kouzes and Posner.

10. Ten Behaviors of Managers who Excel.- Seminar, Penny Altman (HSCworkshops (602) 674-0911, [email protected])

004 managing for compliance - creating a teamwork based culture within an audit

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