By Phil Bertram, Principal, Bertram & Associates LLC
I’ve been an operational auditor for over thirty years. Asking questions in the proper sequence and combination often determined how effectively I performed an audit and generated value adding solutions. Therefore, as I prepare to offer a seminar entitled “Operational Auditing – Discovering Value and Improving Your Business”, I’ve been thinking about how to transmit this knowledge effectively.
A poem by Rudyard Kipling provides the basis through which to transmit that knowledge. Mr. Kipling wrote the following:
I Keep Six Honest…”
“I keep six honest serving men, (They taught me all I knew):
Their names are What and Why and When and How and Where and Who.
I send them over land and sea, I send them east and west;
But after they have worked for me, I give them all a rest. …”
In the excerpt above, Mr. Kipling highlights key questions all internal auditors need to ask when performing any audit. He also suggests that once one asks the questions, one must listen and think about the answers received before taking action.
As internal auditors, we use these questions daily. However, many of us forget we can gain significantly more insight and perspective when we ask these questions in proper sequence and combination.
Gordon Smith, founder of CanAudit, taught me this almost twenty-five years ago. In his early 1990’s seminar, “Auditing for Profit“, Mr. Smith shared that all auditors have the keys to understanding a business process fully. After teaching us how to prepare a process flow chart properly, he challenged us to use these questions to learn the processes we review thoroughly.
He indicated that to obtain facts about a process, we ask the following questions in the order presented:
- What is done? What is the purpose of doing it?
- Where is it done? Where is the best place to do the detail? Where else could it be done?
- When is it done? When is the best time to do the detail?
- Who does it? Who should do the detail? Can less skilled people do the job?
- How do they do it? Can we make the detail easier and safer to do for both personnel and equipment?
When we want to obtain ideas to improve the process, we then ask:
- Why is it done?
- Why is it done there?
- Why is it done then?
- Why does this person do it?
- Why is it done that way?
He then shared Kipling’s poem and showed us how using the questions in sequence and combination helps identify business process improvement opportunities. Specifically, he highlighted the following combinations as the questions we can use to drive specific changes:
- Combine “What and Why” to identify non-value adding activities to eliminate. Expanding this combination further and asking “Why” five times, helps one identify a problem’s root cause and find a solution that eliminates that root cause. It also helps eliminate the related “Make Ready” and “Put Away” steps.
- Combine “When, Where, and Who” to combine operations and eliminate time and cost. Combining operations also eliminates the associated transportation and storage costs.
- Combine “Where, Who and When” to find the best place, time, and person for a job. This combination permits the auditor to suggest changes in place, sequence or person performing tasks.
- Use “How” after the prior three combinations to eliminate every other improvement possibility and develop a simple, straight forward solution that further simplifies a process. When we ask this question, we begin to question how the entire process operates and determine the best approach, person, and equipment to do the job or may help eliminate the entire process.
Combining the six key questions as proscribed, an operational auditor can discover what process steps to eliminate, what steps to combine or change in terms of sequence, place, or person, and ultimately helps identify the root causes of problems and discover solutions for those problems.
If you are an operational auditor, I encourage you to practice using these questions in order and in combination when you perform your operational audits. You may be pleasantly surprised with what you find and the solutions you produce. Then, you too can answer the article’s title question affirmatively.
If you wish to learn more about how your internal audit function can add value by designing and conducting more effective operational audits, I can help. Visit the Bertram & Associates LLC web site: www.PBertram.com to learn more. If you wish to discuss how I might help you, please contact me through this blog, at Inquiry@PBertram.com, or call me at 224.735.7472. I look forward to serving you.
© Bertram & Associates LLC Published: January 23, 2015 on www.InternalAuditLeadership.com