One of the most misused and misunderstood words in business is “audit.” The noun definition in Webster’s Dictionary is: 1 a: a formal examination of an organization’s or individual’s accounts or financial situation; b: the final report of an audit; 2 a methodical examination and review.
The word found its way into the process management and quality management lexicons for lack of a more descriptive term for proactive assessment and the subtle changes words like “audit” and “continual” take on when translated in to other languages. While those who use proactive process assessment a foundational tool for continual improvement, the stigma of the dictionary will always detract from its potential efficacy.
The verb form of audit is even more punitive and detrimental to a beneficial outcome. 1: to perform an audit of or for <audit the books> <audit the company>; 2: to attend (a course) without working for or expecting to receive formal credit. There is some sort of poetic irony in the second definition, in my experience from having conducted more than 2,000 “process assessments” over 47 years.
Each definable activity within a business is a process. It has a start, an end and can be assessed for effectiveness. Interdependent processes can similarly be assessed for the combined output of their work product. The entire organizational operation is a series of interdependent processes that produce a product or service. Over time, process, quality and risk “experts” have obfuscated this simple concept into complex tools and constraints such as Six Sigma, FMEA, and the implementation guidance of hundreds of ISO standards.
Also, the stigma and potential costly outcomes attached to financial auditing will be forever burned into our subconscious minds as we attempt to proactively assess processes and their outcomes with the objective of making them more effective, efficient and profitable. It’s time for those professionals who are, by avocation, necessity or passion, working in minimizing operational risk to adopt new paradigms around process auditing as a profit center.
Standards, codes, statutes, ordinances, regulations, covenants, laws all exist for a reason. Enlightened leaders who are willing to take a bold approach to proactive standards implementation and find in each “requirement” an opportunity to improve processes, enhance KPI’s and create an environment of personal and group accountability are destined to be best in class in their industry. Adoption of that radical approach to risk avoidance is the future of rebuilding the infrastructure of American manufacturing and service industries.
Purging the stigma of “audit” from our approach to ensuring conformity is also critical for replacing overhead activity with measurable positive contributions to KPI’s and the bottom line. Creating businesses based on interactive processes that are free from defects is the new paradigm. It will only happen when we learn to lead people and manage processes. It will only happen when process operators take ownership of their work and are accountable to one another, to the organization and to the customer.
Proactively assessing conformance of every process, within every interactive system of processes within each organization is the first step. The outcome of those assessments is invaluable data for moving one step closer to no defect ever reaching a customer. Acting on that data by strategic thinking at all levels is the key to becoming best in class.
Avoiding the perils of auditing is documented in my latest two books, Foreseeable Risk and It WAS Rocket Science. Take the bold step to think outside the globe as you pursue excellence.