Make the most of your multiple internal audits

Many organisations have their own plants perform internal audits, with a scope that may include manufacturing, warehousing and / or distribution.

This is often thanks to these companies implementing their own management system standards or internationally recognised ones for which internal auditing is a requirement. This is absolutely perfect and key to continuously improve the processes and systems in place. Internal audits are indeed an effective tool for determining the levels of conformity of the organisation’s management system to its criteria. They provide valuable information for understanding, analysing and improving the organisation’s performance.

There is an area though where organisations could do even better and more for their sustained success. When having multiple plants whether locally or globally, not many companies have a process in place to review all internal audit reports in order to identify trends that can require organisation-wide corrective actions or opportunities for improvement. This is a missed opportunity for the entire enterprise to learn, share and improve as one.

Organisations should encourage improvement through learning and collaboration. Internal and external audits outputs are examples of multiple inputs to learning. In order to foster the latter, the organisation should definitely consider multiple factors including its own culture, top management’s support, maintaining systems for sharing the knowledge acquired through audits, and rewarding sharing initiatives.

What is said in the room often stays in the room

At a basic level of management system’s maturity, internal audits are usually performed reactively in response to problems, recalls, customer complaints, etc. The collected data are at this stage mostly used to resolve problems with products and services.

It is often when organisations start to implement management systems that internal audits are performed on a regular basis, in a consistent manner, by competent personnel who are not involved in the activity being examined, and in accordance with an audit plan. Problems, nonconformities and risks are identified and analysed comprehensively to determine weaknesses in the management system. At a more advanced stage of maturity, internal audits do even start to focus on the identification of good practices as well as on improvement opportunities.

However, it is not frequently that outputs of the internal audit programme are shared outside the audited organisation. They are mainly kept confidential and for internal use only. The same is valid for results of external audits performed by customers or certification bodies. While not sharing them externally without a specific purpose can be understood, I came during my career across several situations where sharing internal audit results was not recommended or even not allowed by the management of the organisation. This was in fact creating a counter-productive culture of secret which was preventing the entire organisation to learn as a whole.

The entire organisation learning from its internal audits

Learning and improving from internal audits should not be limited to the audited organisation itself. There are examples of companies having put robust systems in place to promote learning and improvement from internal audits beyond the borders of the audited organisations.

One global company I worked with created a network of internal auditors performing audits at manufacturing plants. These very competent people were meeting on a regular basis to exchange the findings, including good practices detected during audits. These individuals were then playing the role of ambassadors when coming back to their own organisation and were sharing all the knowledge acquired. Because the internal audit process was consistent across the entire organisation, auditors could leverage easily the outputs of the multiple audits taking place. The network of internal auditors became rapidly known within the company as a great source of knowledge. Internal auditors were often asked to share and present on audit findings for the purpose of learning and improvement. The audited organisations had no fear of sharing their internal audit results with sister companies as the return on investment through learning was very high.

Being open and transparent always pays

Promoting a culture of transparency with regard to internal audits can even have benefits beyond expectations. The example of this global company collaborating  with their suppliers on the topic of internal auditing is a very good one. They helped their suppliers to develop the internal audit capabilities, to calibrate auditors on requirements, and to encourage the sharing of internal audit results with them. Through this process and a relationship based on trust and transparency, they were able to go more easily through the Covid’s hectic times during which performing supplier audits was made impossible. Reviewing the internal audit results and discussing them with suppliers made the process of remote auditing much more easy and effective. How many organisations would be ready to do the same and share their internal audit results not only internally but also externally? Not too many in my opinion.

Reaching such level of maturity takes time and efforts. Top management should demonstrate leadership and commitment within the organisation by promoting a culture of trust, openness and learning from successes and failures. Only then can learning be embedded as routine activities across the whole organisation, including through the sharing of internal audit reports and results.

A culture shift might be required to succeed

Top management should understand the barriers in its culture which prevent the sharing of internal audit results across the organisation.  They need to assess the need to change it and then communicate the change internally so that the process of learning can start and be deployed to its full. Audited organisations and their management need to understand that sharing helps and when working together, the company as a whole will go further and stronger. For this to happen, top management needs to support and reward sharing initiatives.

Is your organisation ready to share its internal audit results? What changes do you need to implement? Are you willing to try and collect the low-hanging fruits?

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