Join Richard Chambers for a new episode of his Agents of Change video series, featuring conversations with internal audit leaders from some of the world’s most prominent organizations about innovation in the profession. In this episode, Richard sits down with Zack Weatherspoon, Director, Global Internal Audit at John Deere, to discuss how his team is changing perceptions of internal audit to show the value audit can add, including:
- Developing and retaining a high-performing audit team that takes pride in how they contribute to the organization.
- Marketing audit’s consultative services to earn a seat at the table and make positive change in the organization.
- Leveraging AuditBoard’s connected risk platform as a “game-changer” that saved the team thousands of hours.
- Adopting agile to provide meaningful, real-time feedback during audit engagements.
Watch the full conversation, and read the can’t-miss highlights below.
Changing Perceptions of Internal Audit With Consultative Services that Drive Value
Richard Chambers: Zack, in my book, Agents of Change: Internal Auditors in an Era of Disruption, I take the position that internal auditors should seek to drive change in their organizations and in the profession, and those are the internal auditors who are catalysts for transformation that creates value within the organizations they serve. Does that sound like a view you might have for internal audit?
Zack Weatherspoon: Absolutely. From my perspective, I think internal auditors and the accounting finance function as a whole, all fall in that definition of being agents of change.
Richard Chambers: Yeah. In the organizations that you’ve served, do you feel like that’s a wide-held view? Do you think others within the internal audit function at John Deere see internal audit as having that opportunity?
Zack Weatherspoon: Yeah. I think some do, in the function. I think that with auditors, some think it’s a very defined, “check-the-box” type of function, but as we’ve evolved and people get more time and more experience with us, I think they start to see the true value and influence we can have within an organization.
I like that idea of a “catalyst for change” that you talk about in your book. I think stakeholders may see it as, “Hey, audit can go and issue this report or finding, and that’ll drive change.” But I think your definition is a bit more nuanced than that — where we are catalysts for that change.
Richard Chambers: Right, the idea that we had with the term “catalyst” is that internal auditors are out there in the business every day, and we pick up great ideas. We bring business acumen to our roles so we can take these ideas and plant them like seeds throughout the organization, where they take root and they blossom. So, do you think your stakeholders value assurance or advice more? Or, does it vary?
Zack Weatherspoon: I think it varies. At John Deere, we have just started going on this journey of what I’ll call advisory work. I think, historically, audit’s been thought to do audits and issue findings, and that’s the way it goes. I think we’ve started to tell the business that we can be much more than that. We can be more consultative, have a seat at the table, and help the business solve some of their problems.
Gaining Alignment Across the Three Lines to Identify and Monitor Potentially Disruptive Risks
Richard Chambers: You know, these last two years have been incredibly disruptive, starting with COVID and continuing with supply chain disruptions, inflation, war in Europe, and everything else that’s been going on. How does John Deere’s internal audit function ensure that it’s identifying and monitoring the kinds of risks that could be disruptive to the company going forward?
Zack Weatherspoon: What’s nice about John Deere is that we have a very good ERM function. We just overhauled it to make it, from my perspective, best in class. It’s part of the internal audit function, and I work very closely with our ERM leader to make sure I understand what those risks are. Then, my team will go in and ask where can we add some value and do some assurance work to help provide guidance that management is properly mitigating those risks.
Richard Chambers: It sounds like that close relationship, almost integrated relationship there with ERM helps a lot. I talk a lot about the importance of collaboration, and it’s much easier to collaborate when you’re integrated.
How John Deere Develops and Retains Top Talent to Audit the Risks that Matter
Richard Chambers: One of the top challenges facing the profession in 2022 is talent management. It’s really, really challenging for internal audit departments to recruit and retain the talent. There’s just so much demand out there, especially for some of the specialized risks, like cybersecurity, and some of the other risks that companies are facing right now. So, how does Deere go about identifying and retaining its internal audit talent?
Zack Weatherspoon: I think you hit the nail on the head. Everybody’s experiencing challenges with talent. I think what’s unique about Deere is that we all see ourselves as accounting and finance professionals overall, and as a function we try to tackle that together. How do we get over that hurdle? We try to first show the value that we provide as an organization, and make sure our employees understand that. In addition to great benefits that we offer our employees, I think it’s about training. You talked about cyber security, and ESG is another hot area. If the talent’s not out there, how can we develop the talent within? I will say that at Deere, we’re really good at retention. It’s not uncommon to find people there 20 or 30 years, and they don’t want to leave.
Richard Chambers: That’s great. And from an HR strategy standpoint right now, are you flexible with remote working? How are you adapting to the post-COVID workplace environment?
Zack Weatherspoon: That’s definitely a loaded question — what I’ll say is, guidance has been that it’s really a decision between an employee and their supervisor. I think at most places you’ll find a mix. You see some people coming in every day, and others, remote is what works best for them at the time.
Integrated Risk Technology as a Game-Changer
Richard Chambers: One of the terms that I’ve used over the years to describe the kinds of things that internal audit can do to gain greater efficiency are “capacity multipliers,” the kinds of tools, techniques, and technology that internal audit can adopt that allow for a smaller department or fewer resources to have even greater impact. Are there capacity multipliers that you guys use that you’re particularly proud of?
Zack Weatherspoon: This is not a plug, but we did implement AuditBoard a couple years ago, and I’ve got to be honest — it’s been a game changer for us. Our IT Manager who helped implement it shared that we saved thousands of hours. We had older tools before that just were not as efficient. Putting the AuditBoard system in was a big deal for us in regards to being more efficient with our time.
Richard Chambers: Would you say that the kind of technology and solutions that AuditBoard and others provide helped you guys get through the pandemic a little more efficiently?
Zack Weatherspoon: Absolutely. My CAE actually just made that comment a couple days ago, that without AuditBoard it would’ve been impossible. It was one thing to have everybody sitting in the same office together and to deal with some of the challenges with our systems, but once everybody went remote, we really needed this more advanced technology and these workflow tools for us to be able to do our work.
Adopting an Agile Mindset to Engage Business Owners and Deliver Real-Time Feedback
Richard Chambers: I’m often asked about my views on the future for internal audit. If I ask you to pull out your crystal ball and say, “What do I see happening, maybe, for the internal audit profession and the years ahead, maybe the next five to 10 years?” What would come to mind?
Zack Weatherspoon: Yeah, I think a couple things. From a challenge perspective, it’s going to be the same that it’s always been, right? How do we stay relevant, and how do we ensure we’re constantly adding value? I think that’s always going to be an ongoing challenge we need to think about as auditors. One hot topic right now is ESG, and I think there’s a big opportunity for us to come in and not only help the accounting and finance function, but also the functions who aren’t used to having internal auditors or that type of controlled environment.
Finally we implemented agile auditing recently. I know a lot of others have as well, and I think that is going to be also a very important thing. Like your other book, “Speed of Risk,” having an agile mindset is going to be the big change that’s going to allow us to provide the kind of value that we need to.
Richard Chambers: What feature of agile auditing that you’ve implemented that you think has been the most powerful?
Zack Weatherspoon: I would say first the sprints. Those timeboxed two-week sprints really focus the team on the most important things that we have to get done. Another thing that’s great is the real-time feedback after two weeks. I know you’re fully aware of the 6-12 week audit cycle where we wait to the very end to provide everything. I think the business owners are very engaged, they like the shortened timeframe, and are just more receptive overall.
Richard Chambers: That’s great, it sounds like you guys are very progressive and adding a great deal of value there at John Deere.
Check out more audit leader interviews with Richard Chambers on our Agents of Change video series channel.