March 29, 2017

Day 21 of One Month to Operationalizing Your Compliance Program-Operationalizing Compliance at the Bottom

12 minutes

Even with a great Tone-At-the-Top and in the middle, you cannot stop. One of the greatest challenges of a compliance practitioner is how to affect the ‘tone at the bottom’. In an article in the Spring 2012 Issue of the MIT Sloan Management Review, entitled “Uncommon Sense: How to Turn Distinctive Beliefs Into Action”, authors explored the “often overlooked, critical source of differentiation is [a] company’s beliefs” and provided techniques on how to tap into these beliefs. The authors listed seven approaches that they have used which I believe that the compliance practitioner can use to not only determine ‘Tone at the Bottom” but to impact that tone. They are as follows:

Assemble a group. You need to assemble a group of employees who are familiar with the challenges of doing business in a compliant manner in certain geographic regions. Include both long-time employees and those who are relatively new to the organization. The authors also suggest that if you have any employees who have worked for competitors or for other organizations in your industry you include them as well.

Ask questions. You should ask the members of this group to articulate their basic assumptions about your compliance model, about the management model, about your company’s business model and the future of the industry in general. Ask them to do this individually and not as a group.

Categorize the responses. Now comes the work by the compliance practitioner or compliance team. These assumptions will usually fall into two groups. The first is assumptions that everyone agrees upon-the common beliefs. The second is those assumptions that only a few of the participants will identify – this is what the authors call the “uncommon beliefs”.

Develop tests for common beliefs. For those beliefs that are labeled common – you should consider how you know these to be true? The authors caution that simply because the group may believe that the company operates a common industry or that we “do it because it has always been done this way” is necessarily a “hard fact.” Consider what test you could perform to verify the common belief that you desire to test. The authors note that the purpose here is to “identify the ‘common nonsense’ beliefs that everyone holds that are not actually hard laws of nature.”

Develop tests for uncommon beliefs. Here the authors suggest that you need to consider why some people think that these beliefs are true. What is the information or experience that they have drawn upon? Is there any way for you to test these uncommon beliefs?

Reassemble the original group. You should reassemble the original group and have them consider the beliefs that were articulated by them individually in the context of your compliance model and how both your company and your industry do business. Lead a discussion that attempts to identify any assumptions or beliefs that ‘are quite possibly wrong, but worth experimenting with anyway.”

List of Experiments to perform. The authors believe that the outcome of the first six steps will be “a list of possible experiments [tests] to conduct” to determine the validity of the common and uncommon beliefs. These tests can be accomplished in the regular course of business, through a special project with a special team and separate budget. You should agree on the testing process and review your testing assumptions throughout the process. This process can and should take some time so do not set yourself such a tight time frame that it cannot be fully matured.

By engaging employees at this level, you can find out not

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