A brief guide to business relationship management
You can add real value to your business by developing and managing mutually beneficial business relationships.
Principles and approach
To achieve a mutually beneficial business relationship, both parties need to value the relationship, understand how it benefits them and have shared goals.
It benefits the auditor by improving your knowledge of the business area and making you aware of business plans, changes and risks that will impact internal audit plans for assurance and/or the assignment.
It enables you to develop strong advocates of internal audit, which improves the chances of successful audits.
Improving risk management
It provides you with the opportunity to influence the manager to improve their risk management, which is a shared goal that’s beneficial to the business.
It benefits the business manager by improving their understanding of what represents good control, which leads to them managing their risks better (a shared goal). It also provides them with the opportunity to influence the timing of audit work in order to maintain smooth operations and provide you with the support you need.
An audit is also an opportunity for a manager to apply the pressure necessary to get the resources, remit or funding to manage a risk which they’re unable to manage effectively.
In order to create mutually beneficial business relationships, there needs to be effective contracting. Agree what they need from you, when and what you need from them and when. Understanding why you both have these needs is vital, as is delivering against your promises. This contract can be formal or informal.
For a relationship to be effective, you need to build trust and demonstrate mutual respect. To achieve this, be open and honest with each other and demonstrate integrity in all that you do. Share information that will be of benefit.
Both parties’ time is valuable and limited, so target the key relationships you need to work on most and develop a relationship management strategy for each person. A stakeholder map is a useful tool to identify the relationships that will benefit you most:
- The y axis represents the stakeholder’s ‘Importance’, and
- the x axis their ‘level of advocacy'.
Focus your attentions most on those with high importance and low advocacy and least on those with low importance and low advocacy.
Everyone is different so you should think about the most appropriate communication method and frequency for each relationship. These communication ‘tools’ include:
- face-to-face meetings;
- attending their team meetings;
- an informal ‘catch up over coffee’;
- phone calls; and
- email updates.
Don’t forget to use your soft skills effectively: break the ice at the start of the meeting; maintain good eye contact; demonstrate active listening; and summarise to check understanding. Understand what motivates them and what annoys them.
Manage conflict effectively by being clear on the shared goal, sticking to the facts and removing any emotion. Understand their view. Be objective not personal.
Get feedback on the relationship, both formal and informal, so you can develop it.