In our experience, even firms who take their compliance obligations seriously by going beyond a tick-box approach and investing in their internal culture face some difficult challenges. Here are a few:
- Retain Talent: Compliance programmes need to maintain intimate knowledge of the culture of the organisations. Losing good people often results in institutional knowledge going out the door. Compliance outcomes are particularly impacted because of the high amount of tacit knowledge involved in executing compliance well.
- Empowering Staff: Staff need to be aware of the policies in place but more importantly, be encouraged to work over and above minimum requirements set by legal or ministerial obligations. Compliance programmes have the challenge of encouraging changes in behavior whilst addressing increasing workloads.
- Succession: In today’s mobile workforce, employers need to find cost effective ways of attracting new talent to their firm.
- Cost and Benefit Analysis: Much like activities associated with Corporate Governance and Risk Management, compliance capability within a firm is often intangible and difficult to measure directly. Without a well-designed plan, it becomes particularly difficult to budget for and to prove its financial benefits. Too many business cases are written on the back of public pressure and looming reputation risks. This results in quick-fixes. Projects start up, spend money in a rush, and implement controls in an isolated fashion – resulting in increasing maintainance costs in the long run. It is important to be able to see the forest from the trees: take a planned approach to how compliance is managed across the organisation – from concept to implementation. It is equally important to deal explicitly with the challenge of tracking the overall expenditure in compliance activities and to evaluate its financial and non-financial benefits.
- Engage the Organisation: People naturally tend to work within their own areas of specialisation, focused on their core duties and deliverables. Compliance programmes have the challenge of engaging people in such a way that they feel that it is a priority for their jobs.
- Manage Procurement: Even when there is substantial budget established – defining the solution that is fit-for-purpose to the culture of the firm is far from easy. The entire solution has then to be specified in a manner, which ensures procurement processes select the best vendor at the best possible price. This factor appears particularly relevant in today’s market conditions and therefore, we will explore it some more:
- At a time when budgets are under pressure, organisations will be looking to ready-made products and solutions that “fit the bill”. Ready-made packages and IT solutions to deal with risk management exist. Some of these products and solutions are extremely sophisticated and capable whilst others are not. To get the best possible solutions that fits your needs, it is imperative for organisations to be proactive and to invest in an approach similar to the one we suggest below.
- From our experience in the field, the following features are key to true value for money in compliance programmes:
- All-of-Organisation, Muti-Disciplinary, Design-Led approach to Compliance: Compliance activities often have to address difficult issues across a range of perspectives. Commit to a design process that promotes excellence, leadership and collaboration. An approach that engages people across professional boundaries and achieves the buy-in of the entire firm. Investment in a broad framework based approach helps contain the complexity inherent within compliance activities.
- Invest in custom-design: While there are a lot of frameworks and standards out there, it is important to explicitly design one for your own corporate culture. This requires a balanced approach that on one hand – does not re-invent the wheel but on the other hand, does not take shortcuts. This means not being satisfied by the ‘low hanging fruit’ that ready-made frameworks appear to offer and to address roadblocks to success. We have seen that superficial adoption of frameworks only results in more frustration, cost and complexity for people all-round.
- Use expert and qualified practitioners: As always, success in developing a framework that suits a specific organisation boils down to strong practitioner skills and lasting professional relationships. Give your own staff the opportunity to work with external experts and find ways to empower your best in-house talent. Stay in control without being overly reliant on proprietary products and methods that no one understands well enough to maintain. While certifications are important, the real test of good design is measurable business benefits.
- Simplify: To truly address issues, your solutions have to scale. Heavyweight procedures and policies confuse and frustrate people outside the core working group. Strive to develop the simplest and lightest processes that can be operated and maintained over time – whilst at the same time, addressing ‘what – matters – most’ to the compliance outcomes needed. This is not easy to achieve and hence, an iterative approach is important.
While this sounds rather difficult – we have ourselves been surprised by how much was achieved by tapping the potential of our client organisations, working closely with stakeholders, across professional boundaries and dealing with the challenges head on. Organisations today have no choice but to deal with these challenges, in one way or another. The benefits of deep competitor advantage, a stronger brand and an all-round healthy and resilient organisation could well be worth the effort.