Innovation in Compliance with Tom Fox

George Serafeim is a Professor of Business Administration at Harvard Business School and author of the book, Profits + Purpose, How Business Can Uplift The World. His contribution to the compliance space is enviable, including advising many compliance professionals. He and Tom Fox discuss his new book and explore how it benefits businesses and compliance professionals.  A Strong Sense of PurposeTom asks George why he wrote the book, Profits + Purpose. George says that he noticed a trend that students, when he asked them why they chose to study business, often replied: “because of money”. In reality, however, most people venture into business because they have an interesting idea about a cool product they're passionate about. “Most people that go into business have a strong sense of purpose,” he tells Tom; “it is something I’ve seen in my students over time that has ended up doing incredible things.” Purpose-driven business leaders often create incredible and profitable organizations. It’s important to be profitable since profits make your business both sustainable and scalable. George points out that technology has changed the world, expanding transparency and choice. These changes add value to an organization, he says. A Balancing Act“Human, social, intellectual and natural capital are becoming increasingly important drivers in competitiveness around the world,” George remarks. “It’s all about balancing the act between how you view the ability to deliver, show short-term results that build credibility in the marketplace and also builds momentum inside the organization, but also keeping the eye on the long-term vision about how you deliver to stakeholders.” Purpose-driven organizations are able to make these tough choices because they have the proper systems in place.  The Role of Gen Xers and MillennialsTom asks George how he sees the role of Gen Xers and millennials in the discussion about profit. From his observations, George responds, younger working class generations view the world differently from their predecessors. “They have very high expectations about workplace practices…” Essentially, they are looking for autonomy in their jobs, being given ample opportunities to grow, and they expect their workplace to be transparent about their practices.  The Six Archetypes of Value Creation Tom and George discuss the six archetypes of value creation. These archetypes highlight the transformative things you can do inside your organization. On the one axis you have the potential value that you could create through your actions and on the other axis is the implementation risk. The higher the implementation risk, the higher the potential for value creation. ResourcesGeorge Serafeim | Harvard School of Business | LinkedIn | Twitter Purpose + Profits on Amazon

Will Robinson is a former investment banker, who now serves as the CEO at Encapture, a 20-year-old document management services company that pivoted into a SaaS product company in 2019. Tom Fox welcomes him to this week’s show to discuss how Encapture helps its customers attain data integrity through intelligent document processing.Intelligent Document ProcessingEncapture is a software company with a unique process called “intelligent document processing”. Will explains that this process makes it easy for organizations of varying sizes to collect incoming documents as a part of a business process. “Encapture’s machine learning can read the document and discern what type of document it is, then the system can extract data out of these documents and utilize the data for a variety of purposes,” he says. It can transfer data to another system as well as compare data across multiple documents. “We can automate a bunch of reporting on the compliance front,” he adds. Compliance and Intelligent Document Processing Tom asks Will to explain what intelligent document processing adds to the compliance aspect of Encapture’s customers like financial institutions. When discussing what values their services add to a bank, Will comments that "reduced compliance risk is honed into because it's mission-critical". Recently, more compliance regulations are being added, and the banks have no choice but to implement them because protecting customers and their data is the number one priority. Will explains that in any compliance initiative there's data that's being reported or there are processes that have to be well documented. Whenever a compliance regulator comes to ensure that the rules are being implemented this data has to be verified by about 5 different people, and this is a lengthy process. However, intelligent document processing can ensure that this process is done quickly and efficiently.Evolution of Data IntegrityTom adds that risk is always changing in the form of regulations and with data integrity, the new information will have to be vetted by every new regulation change. “Additionally there will be more requests for your information as the government and others may want it. However, if you have strong data integrity, you have that upstream problem solved and you can pull that data with a software update.” Your solution should be expansive enough to solve multiple regulatory changes. Will agrees and highlights that even though banks are usually late adopters of technology, “they recognize there's need for a change, there's need to update processes and update systems”. ESG: An Incremental ChangeBanks are more reactive instead of proactive when it comes to ESG, Will tells Tom. Most of the ESG changes being implemented are incremental; using a proven process and appropriate technology like Encapture, complying with new regulations can be seamless and often happen within a few days. This directly benefits compliance leaders who need a dynamic platform that evolves with the ever-changing real world, Will points out. Tom comments that banks usually already have the information they need to comply, but it’s siloed. Encapture is  “a very powerful tool” that can help them utilize the information to respond more nimbly and a lot more quickly. “We feel like everybody is better served if we can solve this compliance issue and solve it efficiently,” Will remarks. ResourcesWill Robinson | LinkedIn | Encapture

Ty Francis is a renowned compliance leader and the Chief Advisory Officer at LRN; he leads the company’s worldwide ethics and compliance consulting, ESG, and community outreach strategy. Tom Fox welcomes him to this week’s episode of Innovation In Compliance to discuss LRN’s new report, Assessing Corporate Culture. The Genesis of the Assessing Corporate Culture ReportTom asks Ty about the genesis of the LRN report. This is the second report LRN produced; the first one was about activating culture and ethics in the boardroom. Their previous research led the team at LRN to realize that most corporate boards did not understand the culture. Ty says, “Over the last 10 years, culture is so high on those lists, but when you look further into the survey and ask them what they’ve done to measure this culture, it's nonexistent.” Therefore, LRN sought to discover the general opinion on culture and ethics compliance and provide a roadmap on how to activate these skills within a company. Roadmap for Building Corporate CultureTom highlights how the report can be used as a roadmap to building culture. Ty says that building corporate culture starts with defining ethical culture. Ethical culture is the codification of what an organization stands for and the systems that support those beliefs; the core architecture should be reinforced by leadership in how they model desired behavior. The second step in building culture is getting to know the most valuable members within your company, in each department. Culture is extremely important for building relationships within a company and allowing people to hear opinions from all sides. The Relationship Between ESG and Corporate CultureThe culture within a corporate setting has always been an ESG issue. The governance aspect of ESG is directly related to culture as it is something that companies should have been implementing for years. Ty remarks, “It shows the company’s values across the board and I think when you have a mismatch of what the company says it’s doing and what they are really doing, that can fragment any ability for a company to demonstrate that it is really a forward-thinking, future-expanding company.” The governance is to be upheld by the board, stewards, stakeholders, and managers. He lists five key considerations for boards:  prioritizing culture on the board agenda,  challenging the board’s culture,  mentoring and monitoring,  articulating the desired culture, and  establishing clear communication. Looking AheadAcknowledging the new legal and regulatory requirements, public pressure, and the evolution of thinking surrounding corporate culture, Tom asks Ty if he believes that boards will maintain the corporate culture into 2025 and beyond. Ty believes these pressures will force boards to manage and maintain the corporate culture. ResourcesTy Francis | LinkedIn | TwitterLRN | LRN Report - Assessing Corporate Culture

Tom Fox asks Stephen Shapiro what makes him so passionate about innovation. He replies, “It is the key for economic growth for companies, for individuals and society.” Twenty-five years ago, Stephen launched a successful innovation practice at Accenture that focused on value creation and growth. He left Accenture in 2001, but his ongoing work is still all about innovation. Tom Fox welcomes him to this week’s show to discuss his patented FAST innovation process. FAST InnovationTom asks Stephen to describe his FAST innovation approach. Processes need to be repeatable and predictable, Stephen says. FAST stands for Focus, Ask, Shift and Test. People usually think of the mass production of ideas and suggestions when they think about innovation. However, true innovation requires you to determine where to focus your limited energy and resources on what is most important. Then, ask more goal-specific questions that would enable you to deliver better solutions. Finally, test these solutions to bring them to market.Culture of InnovationHow do you build a culture of innovation, Tom asks Stephen. How did you build it in a massive company like Accenture? Culture is important because that becomes the norms, beliefs, and behaviors that people take on, Stephen replies. Most companies are on one of three levels: they see innovation either as an event, a process, or a system. A culture of innovation allows employees to work more flexibly as they know the rules and how to execute them seamlessly.Asking Better Questions“Innovation isn't about the idea, it's not about the solution; it's actually about the value it ultimately creates,” Stephen tells listeners. He is passionate about creating something of value and then selling it in a way that people become excited about it. He tells Tom about the books he authored and highlights key takeaways from his recent book Invisible Solutions. The book is based on a tool that Stephen developed; “its purpose is to help people stop looking for answers and to look for better questions,” he remarks. The process of reframing allows you to look at the problem from a different angle. Better questions lead to better solutions.Talent Acquisition and RetentionStephen’s white paper, How We Created a 20,000-Person Culture of Innovation at Accenture… and You Can Do It Too, advocates training masters and having them push the innovation message throughout the organization. Innovation -and compliance- has to be for people by people, Tom and Stephen agree. Hiring strategy is part and parcel of this. Hire for divergent thinking, Stephen advises. “People have different perspectives, different experiences, different personalities and when we embrace that and appreciate what each person brings to the table, then we can create a powerful culture of innovation.” If your company creates a culture of innovation with strong values, you’ll attract and keep top-level talent. People prefer to work at companies where it feels like their work matters and their individual, unique talents are recognized and appreciated. They want to work for companies where they are evaluated based on their skill set and are rewarded appropriately.Read full show notes at Innovation in Compliance.Resources Stephen Shapiro | LinkedIn | Twitter Website | Personality Poker | Invisible Solutions White Paper: How We Created a 20,000-Person Culture of Innovation at Accenture… and You Can Do It Too

Simon Winchester is the Vice President of Advanced Technologies at Jumio Corporation. His responsibilities entail building the go-to-market strategies for newly acquired technologies within Jumio and then driving the adoption on a global scale. One of the company’s most recent additions is its AML (anti-money laundering) solutions. Tom Fox welcomes him to this week’s show to talk about current world events and the company’s AML solution. Money Laundering in 2022Tom asks Simon if money laundering schemes have become more ubiquitous since the Russian invasion of Ukraine. Simon replies that the recent events certainly had an impact. He says that money laundering is “criminals taking illicitly-gained funds and then turning them into legitimate cash or assets which are ideally free of suspicion.” At the core of this criminal process are three themes: placement, layering, and integration. Due to the digital environment we live in today, more people from all demographics are comfortable with digital banking, and criminals now find it easier to launder money, which makes it more difficult to detect. Fortunately, Jumio works hard to provide AML solutions and offer more effective compliance programs. Key AML RegulationsTom asks Simon what are some of the key AML regulations that Jumio advises clients on. It mostly depends on where your organization is located in the world, as local enforcement bodies drive AML regulations, Simon responds. These regulations will take a cue from international standards set by the Financial Action Task Force, which functions as a “global AML watchdog”. In the UK, the EU AML directives shape policy and provide guidance. Recently, they brought a new directive into effect which “increased the frequency of regulatory updates to the KYC and AML legislation, and brought a strict obligation to industries that were not previously subjected to severe AML protocol,” Simon tells Tom. Playing Catch-Up With Money LaunderersTom asks Simon what Jumio sees as the key components of a successful AML program. Ideally, a company providing AML solutions should have a well-defined plan, Simon says. However, that is not feasible given the current climate. The components of a successful AML program, Simon says, include three steps:  A dedicated compliance officer who is tasked with creating, monitoring and reviewing the compliance program, and staff training.  A written risk-based compliance program with comprehensive AML policies and procedures that are documented. This approach identifies and protects your business from financial crime and includes having the technology in place to support that framework.  An appropriate customer due diligence process, which means vetting your clients to avoid financial crimes.  The Role of a CCO in AML SolutionsSimon believes that “Chief Compliance Officers are the catalyst for the growth and innovation”. He acknowledges how CCOs often get the raw end of the deal and their role in the organization must be scrutinized and changed. With the right AML technologies, compliance team, and effective AML program, a CCO and their team can drive shareholder value through organizational growth. ResourcesSimon Winchester | LinkedIn Jumio Corporate | Website | LinkedIn | Twitter

Accenture provides top-notch services in strategy & consulting, and operations for its clients. Samantha Regan is Managing Director and Global Lead for the Regulatory Remediation & Compliance Transformation group within Accenture’s Finance & Risk practice. Tom Fox welcomes her to this week’s show to talk about the Accenture Compliance Risk Study Report. Accenture’s Compliance Risk StudyTom asks Samantha about the origin of the report. Samantha responds that each year, the team at Accenture gets together to observe and record what’s happening in the world of compliance. They seek to discover the key issues and concerns for compliance officers across various organizations. Developing a framework, conducting a survey and collating the data are the next steps. This is followed by “synthesizing those results and looking for the insights from the information that’s been provided and then developing the report off the back of that,” Samantha tells Tom. Primary Compliance Risks In 2022 Tom asks Samantha to discuss the primary risks that they identified through the study. She replies that the biggest area of focus for compliance folk in 2022 is cybersecurity, ESG, and privacy. Tom asks her to identify some challenges compliance professionals face when responding to and managing these risks. New pressures are constantly being placed on compliance professionals, Samantha explains. “Compliance functions continue to evolve at a speed and scale and force the compliance function to change from being reactive to what was going on in the environment, to needing to be more proactive, building a function that is able to adapt.” She believes that by using data, compliance officers can “build a future-ready and risk-proof compliance function”. Looking AheadTom asks Samantha how she thinks compliance professionals should respond to risks in 2025. Would the trends highlighted in the study be accelerated? “I think the warp speed at which companies are operating is going to require compliance functions to have accurate and complete visibility into risks and mitigating controls across the business,” she comments. Data from the study suggests that most of the issues compliance officials have can be attributed to the lack of data; there needs to be enough information available to assess risk exposure. She mentions that there is increasing concern surrounding third-party risk. Samantha believes that with the increasing speed and evolution of risks, “the compressed transformation of organizations and industries is just going to put increasing pressure on compliance functions to continue the transition.” ResourcesSamantha Regan | LinkedInAccenture | Compliance Risk Study - 2022

Erica Salmon Byrne is the President of Ethisphere and Chair of the Business Ethics Leadership Alliance. Ethisphere is a company that believes that companies that focus on building a sustainable business will outperform their peers that do not. Tom Fox welcomes her to this week’s show to talk about Ethisphere’s innovative new service called The Sphere. What is The Sphere?Tom asks Erica to describe The Sphere and why she is so excited about the launch. For more than 15 years, Ethisphere has been collecting data on the programmatic practices of the world’s most ethical companies through their questionnaire, called the Ethics Quotient, Erica explains. They realized a demand for solid benchmarking within the compliance space, and decided to democratize their data access. This was the birth of The Sphere – a subscription-based service that allows you to select the topic you are interested in getting data on and gain access to a multitude of resources. Peer Data: A Powerful ToolTom asks Erica what makes peer data so important and powerful for a CCO. Whenever you're going to make a business proposition, she replies, the first question you will be asked is ‘What are other people doing?’. Businesses want to compare their practices and progress to their peers’. This is to avoid being dubbed “a weak antelope” – you don’t necessarily want to be ahead of the pack, you just want to ensure that you have a functioning practice compared to your competitors. So how to determine you’re in that comfortable middle position of the pack? The answer is data analysis. When you present the relevant data to your CFO or compliance team, they tend to believe in your leadership and vision more.ResourcesErica Salmon Byrne | LinkedIn | TwitterEthisphere | The Sphere

Dr. Gleb Tsipursky is the thought leader and CEO of Disaster Avoidance Experts, a boutique future-of-work consultancy that helps tech and insurance executives drive collaboration, innovation, and retention in hybrid work. Currently, he is focusing on normalizing hybrid and remote work, which he further discusses in his book, Leading Hybrid and Remote Teams. Tom Fox welcomes him to this week’s show to talk about Elon Musk’s misinformed views on remote work and why working from home is better for productivity levels. Remote Work v. Working From the OfficeTom asks Dr. Gleb what drove him to write the article entitled, Elon Musk’s back-to-the-office order will undermine Tesla’s future. It was his response to Musk’s announcement to abolish remote work on the grounds that it made his employees unproductive, Dr. Gleb tells Tom. He has been researching hybrid remote work since the beginning of the pandemic, and found that remote workers are much more productive. A study at Stanford determined that productivity improved by 5% as office workers worked remotely. “They [workers] don't have to do the unpaid labor of the commute and they can focus more on productive activities because they're not interrupted,” Dr. Gleb explains. Authoritarian WorkplaceTom asks Dr. Gleb if he believes a top-down command and control approach to leadership would work in 2022 and beyond. Dr. Gleb replies that this kind of leadership can only be successful in narrow environments. He believes that it is most successful in environments like warehouses “where you don't need to be skilled, or a kind of manufacturing job where …you don't need to do much innovative work.” However, since Tesla is an innovative company, command and control will undermine Tesla’s future. It is a company that requires knowledgeable and creative thinkers and those types of people would suffer under micromanagement. He also points out that demanding his employees to return to the office because he believes they are not working remotely, signals a lack of trust which is a very dangerous corporate culture. The Fate of TeslaMany of Tesla’s employees are innovators and creators; these include research and development staff and software engineers. Throughout the pandemic, these employees have been successfully and productively working from home, but now they are being forced to go out to the office. Naturally, these accomplished innovators would seek employment elsewhere, where they have comfortable working conditions. This leaves Tesla with employees who are conformists, who are okay with the authoritarian culture being imposed on them, and these people are less creative and innovative. Over time this will cause Tesla to lose the edge that makes them unique, Dr. Gleb argues.ResourcesDr. Gleb Tsipursky | LinkedIn | Twitter Disaster Avoidance Experts | Book - "Leading Hybrid and Remote Teams" 

Jaclyn Schiff is the founder and CEO of PodReacher, a company that helps marketing teams transform their podcast into high-quality text content to increase impact. Tom Fox welcomes her to this week’s show to talk about her professional background, B2B marketing, and how PodReacher helps its clients. PodReacher and B2B MarketingTom asks Jaclyn how B2B content repurposing helps communications specialists and compliance officers. Marketers want to differentiate their product or service in the marketplace, Jaclyn responds. Podcasting is a growing B2B marketing trend because business leaders do not have time to personally create content that would captivate an audience. It became particularly popular during the pandemic as you can execute it remotely. Jaclyn states, “In any industry, a conversation is an easy way to get [your content] out there. Now taking that from the spoken word …and turning that into a good reader experience.” She explains that PodReacher turns audio into riveting content that people can use for marketing purposes. Why Repurpose ContentRepurposing your social media content on different platforms helps you to be more consistent with your promotions, Jaclyn tells Tom. For example, she will send out an email for a client, then use the email content to create a LinkedIn post on the same topic. However, it may be more difficult than it seems. “The key to repurposing content is you want to optimize for the channel,” she says. “So I’m not going to write an email the way I would write a LinkedIn post. I’m not going to write a script in the way I would write something that’s intended for people to read.” Looking AheadTom asks Jaclyn if she believes that her brand of repurposing content will become more popular in the future. Jaclyn agrees; she believes that podcasts are the best outsourcing tools for creating content. It is one of the easiest ways to promote your company and create brand awareness, she remarks. There is so much information and content hidden in a single podcast episode and it would be a marketing shame not to utilize it to the best of its ability.ResourcesJaclyn Schiff | LinkedIn | Twitter | Website   PodReacher

Richard Blank is the founder, CEO, and head bilingual trainer at Costa Rica’s Call Center, a business process outsourcing (BPO) telemarketing company. They offer outbound and inbound telemarketing solutions of the highest quality. Tom Fox welcomes him to this week’s show to talk about Costa Rica’s Call Center, how they help their clients, why he opened a call center in Costa Rica, and how to lead a successful call center in a foreign country. The Core of Costa Rica’s Call CenterTom asks Richard why he decided to open a call center in Costa Rica and how the term “Learning through the Proletariat” influenced his business model. Richard explains that as a CEO who works among people, you learn the importance of training and keeping your employees and customers. “One thing that I heard most sitting amongst people that are in a call center industry is that they feel expendable,” he tells Tom. To counteract this, he invests in his employees' careers by promoting them and teaching them English so that they have pride and security in their job. Additionally, he has several retro arcade game machines that allow the employees to meet colleagues from other departments, and to relax, “or even hang out with el jefe”. He explains that this creates a safe, enjoyable workplace culture and an atmosphere of trust and institutional fairness.BPO Telemarketing Outsource CompanyTom asks Richard to define a BPO telemarketing outsourcing company. BPO stands for business process outsourcing, and it is done in several parts of the world, including the Philippines where it is known as offshore. However, since Costa Rica is so close to the United States, it is considered a near-shore outsourcing company. “[That] could be either a blended or mixed center where they work on multiple accounts; usually it’s for overflowing and answering service,” he explains. Every one of Costa Rica’s Call Center’s agents is assigned to and works specifically for a client. He explains why having a brick-and-mortar call center is more beneficial for them versus being completely remote: problems like Internet redundancy and electricity failure plague remote workers, while at the in-person center, there are multiple tools and resources to hedge technical difficulties.Nearshoring and OutsourcingTom asks why Richard chose Costa Rica for a BPO center and what’s the difference in having a company in essentially the same time zone as the US. Richard describes Costa Rica’s ideal location, and that it’s a democratic society with no standing army. In addition, the country’s literacy rate is 95%, and it has the best infrastructure in Central America. They also have highly skilled and experienced workers, some of whom have lived in the US and have dual citizenship. Furthermore, clients like the fact that agents are attuned to the North American market. It is also a safe place to visit for tourism.Resources Richard Blank | LinkedIn | Twitter | Instagram | YouTube   Costa Rica's Call Center | Facebook