Moving to the Front Lines of Compliance, Part I

This week, Tom begins a five-part series on innovation in the compliance function. Seeing as the compliance space is in constant evolution, now is a good time to talk about some innovations and how companies can implement them in their own compliance programs. Today, Tom shares his insight on agile innovation methods that you can consider for your compliance program.In a Harvard Business Review (HBR) article entitled, “Embracing Agile,” authored by Darrell K. Rigby, Jeff Sutherland and Hirotaka Takeuchi, said that agile methodologies “involve new values, principles, practices, and benefits and are a radical alternative to ‘command and control’ style management.” The transition is then accomplished by strategically moving employees “out of their functional silos and putting them in customer-focused multidisciplinary teams."One of the most basic problems is that business executives know only the bare minimum when it comes to agile and its potential dangers. This impedes them from understanding the comprehensive approach that needs to be taken. In employing conventional management practices, senior management unwittingly undermines the agile process.A solution would be to have the executives learn the basics of the agile process and understand its conditions - what works for the organization and what doesn't. Start with a small test group and project, and let the operation spread organically.Here are some of the right conditions for the success of an agile initiative in the compliance arena:You should have the right market environment for the project.  You must be willing to innovate, particularly if there are complex compliance problems involved.  You will need to break down the solutions into digestible chunks, which might change the scope, but through cross-functional employee collaboration, you can have appropriate creative breakthroughs.  Breaking down the agile initiative process into digestible chunks allows for incremental developments. This allows you to gradually test the proposed solution, before rolling it out for employee base use. As your team uses these innovations, the work cycles can be broken down even further for more testing, and changes implemented without delays. This allows for a steady flow of feedback wherein late changes can be effectively managed, and interim mistakes become valuable lessons moving forward.Ultimately, the goal is to destroy the barriers blocking the development of the agile initiatives. The authors of the article list down 5 key pointers: 1) Get everyone on the same page. 2) Instead of changing the structures, change the roles so that the internal company disciplines can learn to work together simultaneously. 3) Name only one boss for each decision in the agile operating model, it must be clear who makes the final decision. 4) Focus on the team's collective intelligence and not an individual's. 5) Lead with questions, not orders.This agile exercise might not work in a compliance function in the corporate legal department. But for compliance functions that desire to practice comprehensive yet unexpected ways of doing compliance in their organization, the agile exercise might be the thing they need to anchor compliance into the very DNA of their organization.Ongoing EducationIf you’re a compliance professional looking for a convenient and effective way to fulfill your continuing education requirements, go to FCPAComplianceReport.com/Courses and choose from 4 hour-long training packages that will keep you up to date with the latest developments in the compliance field.