Compliance: Do People or Processes Guide Our Compliance Efforts?

Compliance: Do People or Processes Guide Our Compliance Efforts?

Recently I have been spending quite a bit of time researching into what ensures effective compliance programs and translates into lasting corporate cohesiveness. I’ve been studying general trends of discussion, attending compliance conferences, and consulting upper management groups on their compliance efforts. What I have found most intriguing is how differently each organization approaches their corporate compliance structures.

Compliance team structure widely varies;  I’ve consulted compliance teams with a designated compliance department with specific subcommittees appointed for different aspects of compliance efforts. Next are the groups that focus on compliance from an auditing perspective, where compliance officers have titles such as Directors of Internal Auditing and Compliance. Other groups have managed compliance from an HR perspective and tacked on the additional compliance duties at a HR level. And recently and most surprising, was a group that approaches compliance from an operational perspective — the operational directors are running compliance efforts in tandem with their traditional duties.

These structures have definitely make it confusing to navigate the world of compliance, but they also provide insight about the makeup of compliance groups across the nation. It has made me understand that compliance leadership can be achieved at all facets of an organization; it does not matter where the approach is coming from, as long as the approach is consistent, clear, and makes sense for the organization. The successful compliance team fosters a cohesive sense of organizational unity in ethics and decision making that is always consistent with the company’s mission, goals, and external regulations.

Compliance – A Social Movement

The aforementioned safety glasses example outlines the necessary element of the getting the right people on board within the compliance process.  At the same time and not so obvious — the underlying process communication was broken from the beginning. The process was not effectively communicated to upper management/sales associates that they also must wear glasses, and there was no context for adoption for safety glasses until management did.

Without the right people providing context, stories, and influence, policies and procedures are meaningless. Conversely if there are not processes in place, there is no cohesive sense of application. Instead there is a coexisting relationship behind these two principles that drive each other. This calls for a people based approach to process creation, or better put, people-driven processes.

The operational compliance structure mentioned above really hits home the idea of compliance cohesion from every level, even if it is not the most traditional compliance team structure. The operational directors have a hand in the day to day tasks where compliance happens. They physically see the regulatory demands on workers, and how well the workers are responding to the processes in place.

People-Driven Processes

Most compliance discussions can trace back to a dominating principle: Is it the people or the processes that guide our compliance efforts? Which these two efforts, people or processes, is more beneficial to spend time on? Most importantly, exactly how does compliance effort translate into lasting corporate cohesiveness?

I wish I could provide a tried and true ta-dah! answer for these questions, but in reality the question hits home on the idea that compliance is characterized by a social movement of people and change. At first glance, compliance seems like an easy concept to grasp, you are either compliant or you’re not. You either paid for the gas you just put into your car or you didn’t. Compliance gets tricky in that it is a behavior modification where the goal is getting consistent behavior from groups, much like getting everyone to pay before they pump gas.

“Compliance refers to a change in behavior that is requested by another person or group; the individual acted in some way because others asked him or her to do so (but it was possible to refuse or decline (Beckler)).”

Incentive is always a motive for behavior modification, but not everything can be incentivized in a budgeted business environment. There are other underlying social factors that contribute significantly to compliance support. People comply and change their behavior when they believe that they share something in common with the person making the request. This is why the operational compliance structure works so well for the latter organization mentioned earlier.

Group affiliation is an example of social compliance influence — the employee is quick to side with the group they identify most to. To illustrate: I previously worked in an environment that required the use of safety glasses in technical work areas. Sales associates often went to the technical groups for advice and to look at the customer’s products that were being fixed. For years the sales associates did not believe the safety glasses rule applied to them, as they weren’t considered technical workers. At one point, upper management decided to take a proactive stance on wearing glasses in the designated areas; magically all of the sales associates followed suit.

Collaborate, Then Create!

How can we further implement the idea of corporate cohesion? Compliance teams need to first go back to the roots of policy and process creation and consider input from the front line managers. Merely creating policies based on regulatory rules, while not including operational leaders is a recipe for disaster. This is more difficult than it seems, as operational leaders are typically never located in the same vicinity as compliance managers. Taking the time to physically meet is costly and disrupts the days of both groups. Instead this is where compliance leaders can look to technology to create a people based atmosphere for process creation.

Technology has transformed the way we communicate, why not apply these communication lines between operational leaders and compliance managers? By bringing the right people together in the collaboration process, you are setting a standard for higher policy acceptance and application. When the operational managers have a say in process and policy creation, they are much more likely to own the policy and ensure it’s application. Conversely by allowing operational managers in on the collaboration, compliance managers are making policies that are relevant to actual business conditions. This collaborative effort, regardless of where it takes place within the organization, is a major step toward towards lasting corporate cohesiveness.

How Do You Structure Your Compliance Efforts?

Conversation is the most powerful form of knowledge transfer and a precursor to innovation — let’s start one!

Tell us how you how are you implementing compliance structure into your organization — How do you achieve compliance collaboration? Failures? Successes? Stories?

Reference – Breckler, S. J., Olson, J. M., & Wiggins, E. C. (2006). Social Psychology Alive. Belmont, CA: Thomson Wadsworth.

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