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The pernicious effect of compliance

February 27, 2020

These days, organizations invest heavily in compliance. It’s important, but done the wrong way can have disastrous results.

Compliance is a big deal, especially for many of those who work in commercial roles. Ensuring and monitoring adherence to rules and standards is a major part of their job and they perceive it to be of tremendous value.

Can others be trusted?

It is easy for this focus on protecting business interests to turn into a belief that others, even within our own organization, are less concerned or diligent. We have all heard the stories about those mavericks in Sales or the program managers who agree changes without proper approvals. Over time, it is common for skepticism to turn to mistrust – an assumption that our colleagues will behave irresponsibly unless they are carefully controlled and monitored.

An example of this mentality is frequently evident in the handling of contracts, where changes of any sort are subject to onerous review and approval. Ultimately, this may send the message ‘Not only don’t we trust you, but we don’t even think you are competent’.

Enable or control?

A recent article in Strategy+Business highlights the negative effect of such a message. It undermines collaboration; it is demotivating; it stifles new ideas and transparency. The best organizations are those that care about compliance, but assume their employees can be trusted and make every effort to equip them with the knowledge or tools that they need to be compliant. They also ensure strong feedback loops so that the rules and standards can be challenged, reviewed and updated.

So how do you approach compliance: are you a controller who assumes the worst in others, or an enabler who facilitates the right business decisions?

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