Opportunity Versus Responsibility: Finding The Balance

A major theme at this week’s IACCM Conference was the challenge of ‘alignment’. In today’s networked world, as businesses diversify and traditional organizational models fragment, how can controls be maintained?

As the Financial Services industry has vividly demonstrated, national laws and regulations are inadequate to handle the complex web of global relationships that typify today’s business. While transparency is increasing, so is overall complexity – and much can be missed.

“When it is a battle of rules versus culture, culture always wins” (a quote by IACCM Chairman, Tim Cowen). The latest debacle within the US airline industry is just another indicator that rules alone are not enough. Corporate behavior is ultimately driven from within, by people who care – people who are not driven by short-term measurements and operate as an independent source of management advice.

Audit groups and complaince officers have not shown themselves able to step up to the task, perhaps because their experience is typically too narrow. The same challenge faces the law department – their need to remain externally focused (to maintain knowledge and understanding of law) works against their ability to develop deep internal business understanding.

That is why at the IACCM event there was extensive discussion of the role of those in contract management (or perhaps commercial or commitment management) to perform such a role. They are typically the group that has extensive understanding of internal business processes and capabilities; they understand rules and practices; and – as their name implies – they have insight to the external relationships being formed by the business.

Arguably, therefore, they are ideally positioned to oversee the balance – not allowing ‘compliance and risk management’ to destroy opportunity, but at the same time preventing short-term greed or measurements to undermine responsible decisions.

One leading academic was so taken by the models that he discovered at the IACCM conference that he said: “You had better be ready – within 2 years this event will be attracting at least 2,000 people each time you run it”.

It does indeed appear that ‘commitment management’ is rapidly moving to the heart of the business. Exciting initiatives such as the Capability Maturity Model and the new concept of ‘Maintain, Manage, Initiate’ (MMI) that was introduced at the conference promise possible solutions that can sit alongside regulation and offer a more robust form of corporate management.