Are you prepared for new growth in emerging markets?

84% of CEO’s who participated in the 14th Annual PricewaterhouseCoopers LLP  2011 Global Survey report they are changing their focus to “bridging skill gaps to meet emerging growth opportunities”.

Because new markets are presenting new challenges, businesses, including the internal audit function, must shift to adapt to increased and complex risks, international acquisitions and partnerships, and varying country regulations.

Interestingly, many internal audit functions are not involved in the strategic changes of their companies when it comes to the emerging markets and new technologies.  Yet this is not only where most business growth is predicted, but also where risk management is most needed and can potentially add the most value.

From my own experience in the emerging and exploding Asian markets, the cultural considerations, language translation issues, and differing approaches to business negotiation all represent areas where your business can be at risk in international transactions.  Internal audit functions can and should play a multi-faceted role in minimizing risk and maximizing success in these and several other areas of your world-wide strategic plan and implementation.

 

Readying your internal audit team for the new world

Here are some areas where you can make the best possible use of your internal audit function in a shifting international market:

  • Include your internal audit team into the early stages of planning your international business ventures.  By involving the team from the start, internal controls and systems are initiated before problems occur.  You’ll want to be examining cultural norms, political situations, regulations. and talent management in order to assess the risk-benefit and to plan for entering or expanding in the international market.

Emphasize and strategically focus your internal audit team on emerging markets, even if it is seemingly disproportionate to your current business operations.  Indonesia, China (see my previous postings on this market) and India are all predicted to grow substantially above the average global growth rate, according to the International Monetary Fund forecasts.

  • Utilize information from internal audits on your international functions in a coordinated way so that you can identify common themes among emerging market countries.  This means you will need your audit team to give you blended reports and information flow so that you can make key strategic decisions.
  • Ensure that your internal audit team has the skill sets necessary to enter the new markets and if not, either out-source the assignments or  obtain the right training for your team.  This also means identifying international talent and partners who are knowledgeable about the market you are entering or expanding.
  • Involve your internal audit team in emerging market and international acquisition activity from the initial planning, through due diligence, and into the integration phases.   Your team can provide incredible value in assessing risks, advising and facilitating best practices in post acquisition activities.

 

You may need external consultation

Not all internal audit teams are prepared for or involved in the emerging market experience.  This means that you can begin the process of developing and using your team strategically now.  As a CEO and business leader, you likely know that change within an organization can be challenging.  Shifting the role and function of internal audit may require some external assistance from a professional auditor that understands the culture of the emerging Asian markets.

My experience in these markets has played a major role in the human resource and full audit functional successes of companies in the past. I can consult with you to share more about those experiences and how they will help your company and audit team shift and grow to adapt to the global economic environment.

By employing internal audit to play a major role in your emerging market initiatives, you are reducing your risks, identifying potential successes, and entering these markets from a place of clarity and good common sense so that your business is a leader in this brave new world.

 

If you need to implement this in your business we highly recommend that you have a complimentary strategy session with me, contact customerservice@lourdesgant.com

Share Your Comments and Feedback

*