Getting the balance right on compliance

" Good compliance activities have clear and well-defined objectives. So why does it so often get in the way of outcomes?"
Paul Edwards, Manager, operations strategy at ANZ

The complaint generally goes along the lines of requirements “get in the way of us doing our job”.

Compliance activities are supposed to help by reducing risk and ensuring quality levels. Good compliance activities have clear and well-defined objectives. So why does it so often get in the way of outcomes?

Let’s look at three examples.

TOO MUCH COMPLIANCE?

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In this image we see roadwork with a sea of signs. But what is the intent of these instructions? How easy is it to get clear direction?

There are many signs. It is not easy to understand expectations. A closer look at the signs reveals there are two signs directing cyclists to dismount. Yet a person standing near the worksite would see this direction was rarely observed.

On questioning cyclists they all said there were too many signs to interpret quickly – hence they ignored the signs.

When I asked the relevant authority why there were two signs, I was told local council erected one as part of their requirements; the other sign was erected by the authority doing the road works as part of their traffic management plan.

Though the two different groups complied with their individual requirements, having two signs led to the exact outcome they were trying to avoid.

NOT ENOUGH PRAGMATISM

A friend of mine at a large organisation recently told me about an IT change request of his which was rejected. The request had made use of the acronym for his department rather than its full title.

The change management group at the business (quite reasonably) believes acronyms obfuscate and may have more than one meaning and therefore rejects any requests containing them.

Despite a well-formed and comprehensive request, it was rejected because of one acronym. To make matters worse, the change management group, all approvers and the requester all work in the same department.

The outcome: a two-week delay in getting this important change implemented.

GETTING IT JUST RIGHT

One infamous (and colourful) example of aligning compliance with outcomes is the “no brown M&Ms” rider in Van Halen’s tour contract.

Van Halen’s concerts were technically very complex, with precise requirements as to how the environment was to be prepared. Their tour contract specified a bowl of M&Ms is to be provided, with all brown ones removed.

If brown M&Ms were found in the bowl, this raised a flag the contract had not been carefully enough read. The crew would then perform a complete check of compliance with the contract, to ensure safety for all and an assured great outcome for the concertgoers.

OBJECTIVES

In all of these examples, compliance requirements are instituted to clarify intent and ensure an outcome is achieved to an agreed level of quality. Why is this often not the case?

Let’s examine the example which worked. The indicator was simple. It was clear. It was directly related to the required outcome.

It did not add any significant workload to the crew implementing the contract. Importantly, there was a clear and well-defined key objective for the compliance activity.

The cyclist signage example failed because the compliance was tied to individual roles rather than the project, combined with too many signs required just for compliance reasons.

Over-compliance stymied clear intent, which led to confusion for the targeted stakeholders. As for the change management example, there was too much focus on compliance, and not enough pragmatism!

I’m interested in your experiences with compliance– good and bad! How do you sanity-check compliance activities? What can you do to ensure your compliance activities don’t get in the way of outcomes? What have you done to strike a balance between achieving outcomes with appropriate risk management? Let me know in the comments.

Paul Edwards is manager, operations strategy at ANZ

(PLEASE NOTE: not Paul G Edwards, GM corporate communications at ANZ and Publisher of BlueNotes)