One department is kept in a state of permanent audit readiness, with a steady stream of evidence requests and drills that consume the same senior people who should be running its strategy.
An example
Eight senior people ran the specialty polymers division of a chemicals company, and in its first year under a new group president it was asked for evidence on four hundred and twenty control items, against an average of about ninety for the other divisions. No incident had prompted any of it. The requests came from internal audit, the corporate controls office, and environmental compliance, each on its own schedule and each framed as routine readiness. The division president spent most Fridays in walkthroughs. The plant manager ran two mock regulatory inspections in one quarter. A planned capacity expansion slipped two quarters because the people who would have scoped it were pulling records. At the year-end review the chief executive noted that polymers had gone quiet on its growth plan, and the head of corporate strategy, who had argued for selling the division, proposed a strategic review.
Why it works
Both effects fall on the target. Productive work looks worse, because the department's output drops: launches slip, hiring stalls, and the accomplishments that would have built its case arrive late or not at all. Every hour spent in walkthroughs, evidence pulls, and remediation tracking is an hour taken from the department's own agenda, and refusing to cooperate looks like an admission of weakness. It works when the audit function is legitimate and answers to a body the target cannot easily reach, the same few senior people run both audits and strategy, and the requests are varied enough to look routine.
The thinking behind it
Herbert A. Simon Simon's Designing Organizations for an Information-Rich World (1971) argues that information consumes the attention of its recipients, and that in an information-rich world attention is the scarce resource. Evidence requests consume the attention of a department's few senior people. A department under constant audit loses the attention its strategy needs, which is why measuring the hours spent on mandatory process is the first defense.
Oliver E. Williamson Williamson's Markets and Hierarchies: Analysis and Antitrust Implications (1975) explains why organizations build controls against opportunism, which gives audits and evidence requests their legitimacy. Nobody can comfortably refuse a control request, because refusing looks like hiding something. The defense accepts each request and contests the total, asking each function what risk triggered its demands and benchmarking the load against peers.
Warning signs
One department's evidence-request volume runs several times that of its peers, with no incident driving it. Requests come from several control functions on separate schedules, each described as routine. Senior staff spend their weeks on audit cooperation and drills. Strategic work slips, and the department head calls the team unusually busy without naming a cause. Someone with a stake in the department's future remarks on its lack of progress.
How to defend yourself
This is hard to see from inside, so measure it.
- Count the hours senior people spend on mandatory process each month, by requesting function, and benchmark them against peer departments or industry norms.
- Ask each control function what risk or event triggered its requests.
- Take the figures to whoever sets the audit cadence, or to the audit committee or an independent director, and ask for a coordinated schedule or an independent review of process loads.
- Keep cooperating fully while you do it. Pushback without numbers looks like something to hide.
Name the strategic work that slipped, and why, in writing, so the record of your year includes the cause.
How a leader shuts it down
Coordinate audit and compliance requests across functions, publish each unit's request volume against its peers, and rotate the authority to set audit cadence. Ask for a stated trigger when one unit's load rises sharply. Senior attention is among the scarcest things a company has, and anyone who can consume it at will should have to account for how they spend it.