In late 2023, this was the situation faced by Internal Audit Director Jan Murry and Senior Manager Matt Kohls. They knew their highly talented team could do better, and they were already immersed in a long-term transformation of their Internal Audit function. So they dove in, embracing the Kaizen process to halve their reporting lag. They repeated the process in 2025, with the goal to ultimately reduce the average lag to 30 days — a remarkable reduction. 

Jan and Matt generously shared their team’s story in an Internal Audit Collective webinar. Their approach offers a blueprint you can use to improve any Internal Audit process.

THE BIG QUESTION: How Can You Identify and Drive Meaningful Process Innovation? 

Many Internal Audit teams struggle with laborious, inefficient processes that take up time and focus better spent elsewhere. These processes also waste our stakeholders’ time and focus.

We all grasp the need to innovate our processes to better meet the needs of the modern age. But we don’t always know where to begin or why, and our solutions don’t always work or stick. 

THE BIG TAKEAWAY: Any process can be improved. The need: Deciding to do it, and committing to positive change that solves real problems. That requires ensuring that solutions provide needed value — and cutting or minimizing any parts of the process that don’t.

THE MISSION: Increase Value While Cutting Waste

What audit process is your biggest bottleneck, time-suck, or value vacuum?

Pick a process that matters. Use Kaizen to drive meaningful improvement over time.

Kaizen brings together the Japanese words for “change” (kai) and “good” (zen) to convey the concept of “change for good” — aka continuous improvement. It suggests that businesses can achieve significant positive results through the cumulative effect of many small improvements over time. 

Kaizen originated in Japan to optimize production systems. Toyota adopted Kaizen, popularizing the process. The concept has become core to lean business practices, which focus on “creating needed value with fewer resources and less waste.” 

THE FRAMEWORK: The Kaizen Process

Kaizens often take the form of a weeklong event. The objective is to end the week with a new process you can start immediately. 

Here’s how Jan and Matt used Kaizen to change the game.

Step 1: Define the Project Charter

What specific problem do you want to solve? 

• Describe your subject process from its starting point to its ending point.
• Clarify what’s in and out of scope.
• Establish your initial goal.

This sounds basic, but these guardrails help you avoid getting sidetracked by other problems you uncover along the way. 

Jan and Matt’s team wanted to reduce the average days it took from final findings to issuance of the final audit report. Only the reporting phase was in scope. Their goal was 40 days. 

Step 2: Do the Pre-Work

Are you solving the RIGHT problem? Have you prepped the right team to solve it? 

Answering these questions requires focused pre-work before the Kaizen event. 

1. Gather data on your current process to reinforce that you’re focused on the right problem. Initially, the team didn’t have exact figures. So they compiled data showing how long it was taking from pencils-down on fieldwork to report issuance — 99 days. They also sent customers surveys to gauge their pain points and invested time preliminarily mapping the current state, detailing all differences and inconsistencies across the team. 
2. Assemble the right team of process experts, including:
   
   • The people actually performing the process — here, the staff/senior auditors drafting the reports and managers/directors reviewing the reports
   • The “voice of the customer” — the people who receive/read the reports, because it’s only the right solution if it meets the customer’s needs and solves their pain points
   • “Fresh eyes in the room” — someone with zero association to the process who can provide a truly objective perspective
3. Set expectations. Train your team on how Kaizen runs and the role they’ll play. Create an environment of psychological safety, ensuring everyone feels comfortable speaking up. Effective solutions presuppose honest input.

Step 3:  Map the Current State (The REAL One)

The weeklong Kaizen event kicks off with current-state mapping. Gather your team and pre-work data to create a current-state map the full team agrees on.

Don’t map the process as it’s “supposed to” work. Map how it ACTUALLY works, however messy. 

This enables the team to identify the right areas for improvement.

Step 4: Analyze Current State for Waste and Problem Identification

What process steps are unnecessary or not providing value? 

Analyze the current state and discuss:

• Can any activities start sooner? 
• Are some stakeholders involved early/late who can instead be involved throughout?
• Are there excessive handoffs? 
• What areas require the most rework?
• Can similar tasks be combined?
• Which steps are truly necessary?
• Which steps provide value to the customer? Which don’t?

Explained Matt, “If the step is necessary but it’s not necessarily adding value, we want to minimize the amount of time those steps take. If the step does add value, we want to emphasize it.”

Step 5: Perform Root-Cause Analysis

You can’t create the right solution without identifying the right root cause. 

Jan and Matt’s team used root-cause analysis techniques such as the:

• 5 Whys, repeatedly asking why something occurs until you reach the true root cause
• Fishbone Diagram, helping identify different categories of possible causes

For Jan and Matt’s team, the biggest root-cause categories included:

• Too many handoffs overall
• Too many internal reviews, often without clear timelines
• Stakeholder misalignment, slowing progress and causing scope creep 

In other words, though they had hypothesized that the reporting process was the problem, it turned out that many of their problems originated during planning. 

Step 6: Identify and Prioritize Countermeasures

• Generate ideas for solutions — countermeasures — addressing the identified root causes. Engage everyone, encouraging creativity while reinforcing psychological safety. The more ideas, the better. 
• Rank countermeasures based on:
  
  • Level of effort to implement
  • Likely impact (e.g., on reporting days)
• Map on a matrix, combining similar ideas.
• Prioritize high-impact and/or low-effort efforts. Put aside high-effort, low-impact countermeasures. 

Step 7: Build, Define, and Test Solutions

• Mock up selected solutions, building out prototypes.
• Validate with the customer: “Does this still meet your needs?”
• If it doesn’t, iterate until you get a positive response. 

Jan and Matt’s team ultimately implemented several solutions across planning and reporting, including:

• Condensing the audit report review process and improving efficiency and alignment with:
  
  • Pre-close team meetings, including live report review/changes 
  • Closing stakeholder meetings, agreeing on issues/wording 
  • Post-closing team meetings to review management action plans
• Enhancing stakeholder alignment, accountability, and communication with:
  
  • “Accountable delegate” role for a member of senior management to help drive the audit process, remove roadblocks, enable more proactive action plans, and provide a standardized RACI matrix to ensure effective communication/escalation
  • Audit commitment letter that formalizes the accountable delegate role, expected timelines, and mutual accountability for issue resolution 
  • Audit report risk rating matrix that uses report severity to guide distribution
  • One-page executive summary providing key takeaways and Internal Audit’s perspective — ultimately doubling as audit committee reporting

Step 8: Map the Future State

Map the future state with the new process and solutions in place. 

For Jan and Matt’s team:

• Process steps were reduced from 25 to 22
• Handoffs were reduced from 105 to 30
• Cycle time was reduced from 90 to 62 hours
• Lead time (aka the reporting lag) went from 99 to 45 days

Step 9: Develop Sustainment Plan

Now the key is making it stick — and adapting when appropriate.

• Document and communicate the new process, training your team/stakeholders on changes.
• Measure and track results.
• Identify issues and iterate as needed. 

Step 10: Document Lessons Learned

• Reflect on what’s working and what still needs improving. 
• Document learnings, setting the stage for ongoing improvement.

Step 11: Continuously Improve

Again, Kaizen is a continual improvement framework. 

That means using your learnings to find new areas to improve. 

That’s exactly why Jan and Matt ran another Kaizen event in 2025 — further reducing handoffs to 20, identifying/removing 14 additional unnecessary, non-value-add steps, with a goal to reduce the average reporting lag down to a mere 30 days. 

WHY THIS WORKS: Starting Small Can Lead to Big Benefits

Kaizen provides a clear, consistent approach to driving continuous improvement. Starting small in one area ultimately lays the groundwork for big progress in other areas.

As Jan pointed out, even if you don’t take the weeklong, all-in approach, you can apply Kaizen concepts to more effectively identify the problems that need solving and develop high-value, low-waste solutions. Said Jan, “My best advice would be to just start somewhere… and start small. And just like an audit, make sure that you’re addressing the root cause instead of the symptoms.”

Jan and Matt also found that the initiative increased their credibility with stakeholders, who now know exactly what to expect and the role they play. 

Stakeholders also know their feedback is heard and respected — in part because their needs are center-stage in the improved process. 

THE LAST WORD: Innovation Is Imperative

Facing ongoing pressure to do more work with fewer resources, Internal Auditors have no choice but to innovate their processes. Anyway, nobody has time for waste, and everyone wants enhanced value. 

But you don’t have to fix everything at once. Fixing one thing thoughtfully gets you on the path to fixing more.

Kaizen offers a proven path for enabling positive change, whether you use its tenets to bang out a quick-win solution over a few hours or guide a full-week event. The key is starting somewhere.

Jan and Matt’s team started out trying to fix reporting. They ended up fixing reporting and planning, strengthening the team’s reputation internally — and nearly doubling their audit output. What successes will Kaizen enable for your team?