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Perspectives
Using a Hybrid Mindset to Disrupt Internal Audit
As published in the Risk And Compliance Journal for The Wall Street Journal
Goldman Sachs global internal audit analytics and tech transformation leader Ivan Martinez has built a thriving data analytics team from the ground up.
Trained as a technologist who later became an auditor and prompted by an ongoing transition at the firm toward a next-generation internal audit model, Ivan Martinez had a vision to help transform the internal audit function at Goldman Sachs using data analytics and automation. He started small and initially conducted his projects on a part-time basis, but with the trust of divisional leadership and a strong dose of perseverance, he eventually became managing director and the global internal audit analytics and tech transformation leader, who now fully devotes his time to digital transformation.
Marrying internal audit with technology and engineering under one cohesive strategy, Martinez leveraged data analytics to make internal audit more efficient and created a life cycle platform for audits. In his role and with the help of a growing team, he continues to find ways to streamline the internal audit function.
“Questioning the status quo and group thinking is crucial to bring innovation to the forefront,” says Martinez. “Every year we had a better story to tell, and once the stakeholders understood the road we were taking and realized audits would become more efficient, it took off. Now it has become a real mindset change for audit.”
“These kinds of transformation strategies for data analytics and the internal audit life cycle require a lot of forward thinking as well as understanding what peers are doing, the tools available to achieve these goals, and the internal strengths of the team,” says Malik Dzirlo, a managing director with Deloitte & Touche LLP who leads U.S. and global transformation efforts in several areas including strategy, innovation, operations, technology, and risk.
Martinez speaks with Dzirlo about the importance of having a culture of innovation and informed risk taking and what leadership qualities are needed to transform a function like internal audit.
Dzirlo: What role has the firm’s culture played in fostering innovation and facilitating the implementation of such widespread transformations in internal audit?
Martinez: Goldman Sachs has a very particular approach to risk management and wants employees to take risks in a measured way. With that approach, we mitigate surprises because the risks are small at the beginning, and once we can prove the value of what we are developing, we build consensus and aim to take greater risk. That strategy tracks with the increase in our investment. The data analytics team started in 2015 with a handful of people, and has experienced a steady, demand-driven growth since, more than tripling in size, which is a testament to the trust the firm and the division have in the program and the fact that our strategy has demonstrated value.
How have these digital transformation projects helped you hire people and make it attractive for data analysts to come and join your team?
Initially, we developed methodologies that laid the foundation. When new hires come in, they already know the standard methodologies and technologies we are using such as Agile and Python, so they quickly become familiar with our product development process, and structurally, there’s very little learning in terms of subject matter. What may be more challenging for them is understanding the intricacies of Goldman Sachs’ specific processes. The other important aspect is to empower people early on and to give them responsibilities, which not only motivates them but also tests them. Because I am a technical professional in addition to being a manager, I was able to build credibility as a leader, which has been very important.
How would you characterize your leadership style, especially with respect to encouraging an innovation mindset?
I would not want somebody to do something I wouldn’t be willing to do, so leading by doing is important to me, and so is recognizing people’s success and giving them credit for what they do. I generally start with the big picture in mind as opposed to the details, which I believe makes people feel more connected to a project. I am also a big proponent of removing layers within a team. If I have a technical issue to solve, I might give the project to an analyst who just started rather than a vice president, for example. That allows me to see how that person thinks and whether a junior analyst can solve the issue. It gets people interested and motivated.
What would you say are the qualities that you brought to the role and that are necessary to achieve the transformations you’ve conducted?
The transformations are true disruptions and I benefited from being persistent and taking informed risks. Hard work is also essential because in the initial days when I was still an auditor, I spent weekends building prototypes to illustrate my ideas. I was stubborn about not giving up, which prompted me to put time and effort into demonstrating to stakeholders and leadership what I had in mind. My career path from technologist to auditor explains my hybrid mindset and approach to data analytics in internal audit. I am wired as a programmer, which was essential to our digital transformation, especially in the early days.
Did you have allies or mentors within the firm who helped you achieve your goals?
Many people on the technical side were very helpful, but my manager, the chief operating officer of internal audit, as well as our global director of audit helped me polish the message to present my projects and understand the leadership structure I had to navigate. Being willing to be coached was also important because as a disruptor, I am usually trying to present concepts that are either highly technical or don’t exist, which can make it challenging to sell. A disruptor needs a good communication coach. Having colleagues who act as sounding boards is vital because their counsel is a reality check for untested ideas.
—by Marine Cole, senior writer, Deloitte Services LP, Deloitte Insights in the Wall Street Journal
Disclaimer and Copyright
PUBLISHED ON: March 3, 2023 3:00 pm ET
This article is part of an ongoing series of interviews with executives. The executives’ participation in this article are solely for educational purposes based on their knowledge of the subject and the views expressed by them are solely their own. This article should not be deemed or construed to be for the purpose of soliciting business for any of the companies mentioned, nor does Deloitte advocate or endorse the services or products provided by these companies.
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