Compliance Led Change – A fresh approach to business process reengineering

Ask most senior business executives what their experience of Compliance is and they’ll probably provide you with what is more or less the following answer – “a necessary but costly imposition”.    No-one tells you that they are strategically using compliance to support their process reengineering and to drive their business change programmes.

And yet…

When you look at the percentage of the corporate change budget dedicated to compliance and risk programmes it is the vast majority of a firm’s change related budget.   Compliance and risk programmes are routinely making changes to business processes without really delivering additional business benefits.

Since compliance programmes started hogging the corporate change budgets business leaders have tried to shoe horn their valuable business initiatives into the juggernaut sized compliance programmes – only to have the value laden initiatives shelved or watered down when the programmes’ primary compliance related objectives are threatened by a shortage of time, budget or lack of programme focus.

Somewhat frustrated, business leaders have often given up trying to piggy back on the utilitarian compliance programmes and instead have resorted to trying to prise a few crumbs of budget from the corporate purse to drive their own exciting business changes.

In the meantime compliance focussed programmes have continued to introduce technical controls, upgraded business as usual processes and implemented dry staff training.

This seems like it might be a significant missed opportunity.  If firms can find a way to deliver both effective, strategic compliance solutions and customer focused business benefits in the same change programme the opportunity for efficiencies is highly significant.

To be fair this is not a novel thought – no rocket science here.  So why is it seemingly so hard to weld serious business change and hardnosed compliance change together into the same programme.   I’m not sure we have any easy answers to that question and to some extent I’m not sure it matters.   But, what we do have is a considerable amount of recent experience working with businessses who have been compelled (because of time and regulatory pressures) to deliver real business value through compliance led change or face going out of business.   Compliance failures create real “burning platforms”.

So here’s what we’ve learnt about delivering successful business change through a change programme on a burning platform of compliance requirments.  These are our 3 top tips:

Ensure the business “gets” what Compliance is really about

The whole point of compliance is that, at it’s heart, it’s about ensuring that firms are putting their customers at the heart of everything they do.  It’s all about delivering customer centric products and customer centric services supported by customer centric marketing and sales processes, operational processes and technology.  And it means the real thing – not just marketing blurb. This is a positive message that needs to be understood and embraced by the leaders of the business and used to balance the “buring platform” messages.   Having business leaders share positive messages about the value of compliance to customers shifts a firm’s mindset and creates the base for a successful compliance led change programme.  A side benefit is that it also goes a long way to enable firms to demonstrate they are developing the kind of positive compliance focused cultures that regulators and customers are looking to see.

Utilise the framework of compliance to drive real improvement in business processes

At the heart of delivering business change is the analysis and reengineering of business processes.   Classically, many traditional firms have improved their processes by reengineering them from the customers viewpoint.  This works well in traditional, slow moving businesses that have developed their current processes over many years.   It does not work so well for those fast growing, small and medium sized businesses that have been founded on principles of customer service who are facing their first or second major wave of organisational change as they develop to be a serious industry player.   What does work really well for a business is using the lens of compliance to analyse and drive the reengineering of processes – so it still maintains a strong customer view but supplements it with the degree of discipline and rigour that is so often required to support the growth of these rising stars.

Demand more of the Compliance Function and then support it

Utilising compliance emergencies to drive business change will, of course, put the Compliance Function squarely in the spotlight and put it under a new pressure to provide significant business leadership.  However, if the compliance led change programme is to be successful then the Compliance Function will naturally need to step up and play a more significant role in leading the business.  This is actually a very positive thing – a positive catalyst for the compliance function to transform itself and take on a new strategic role.  Sometimes this requires new personnel and sometimes it requires organic growth.  Either way the function itself will often need support to ensure it can pass effectively through its own metamorphosis and effectively add leadership to the business change programme.

So there you have it.  Some simple thoughts, easy to say, hard to do.  But get it right and the quality of change can be phenomenal.  Let us know if you’d like to know more.