Giants Win WSLast week the San Francisco Giants won their third World Series championship in five years. This elevates them into the conversation of the Pantheon of elite teams over the past 50 years. Only the New York Yankees (1998-2000) and the Oakland Athletics (1972-1974) can top the Giants for Worlds Series won in such a time frame. Sorry Red Sox nation, 3 titles in 10 years does not elevate you to the Pantheon, only to the very good. So congratulations to Series MVP Madison Bumgarner, most especially former Astro Hunter Pence, the rest of the team and Giants fans everywhere for having a team for the ages.

One of the things that I love about sports is when a player has a streak, game or season for the ages. We had one from Giants pitcher Madison Bumgarner this Series. Initially it appeared that he would have three wins to his credit, with one earned run. That record would have put him in the company of fellow Giant (albeit New York Giant) Christy Mathewson, who in the 1905 World Series pitched three complete shut-out games in six days. I say it appeared that Bumgarner had nearly equaled Mathewson’s record after his relief appearance in Game 7 where he shut down the Kansas City Royals. However after the game the Official Scorer changed Bumgarner’s Win to a Save. This change dropped Bumgarner into a two with Cincinnati Reds reliever Rawley Eastwick who won two games and saved one in the 1975 World Series. While he did not equal Mathewson’s 0.00 ERA with 3 wins and no losses, he did have a 0.25 ERA with 2 wins and 1 save.

How is it that Bumgarner went from having a Win to being credited with a Save? In an article in the New York Times (NYT), entitled “Win or Save” A Rule with Room for Judgment”, Benjamin Hoffman reported that “In general, if a starting pitcher does not complete five innings, and the score is tied, a victory is assigned to the pitcher of record when the lead changed hands. The exception is when the scorer determines the reliever of record was ineffective. While guidance is given that an ineffective outing would involve a pitcher going less than one inning and giving up two or more runs, Rule 10.17(c) states that it is up to the scorer to determine ineffectiveness.” The Giants relief pitcher immediately before Bumgarner was Jeremy Affeldt, who came into the game with “with runners on base, and pitched well for two and a third innings”. The original Scorer’s ruling was overturned and Affeldt was credited with the Win.

I thought about the Giants win and Bumgarner’s near mythic World Series run as I read a couple of articles in the Houston Business Journal (HBJ) dealing with culture and strategy and their implications for the compliance practitioner. The first was on CEO leadership and it featured Ryan Lance, the Chief Executive Officer (CEO) of ConocoPhillips. He detailed a leadership style that is relatively straightforward. He called it DAM, which he defined as Direction, Align and Motivate. This is a good way for any compliance practitioner to not only think through the implementation of a compliance enhancement or task but equally it should give a manner to use with senior executives to help them to understand their role in the compliance function in your company. Interestingly in the same article, Keith Mosing, CEO of Frank’s International, was quoted for the following, “No. 1 is integrity. I just can’t stress that enough. There are guys who are smarter, but if you don’t have morals and ethics, it’ll backfire on you.”

I considered these two approaches as I read the second article, which dealt more directly with execution of strategies, often the bane for a Chief Compliance Officer (CCO) or compliance practitioner. Why a bane? Because at least since Peter Drucker it has been observed that “Culture eats strategy” where it is the company culture which dictates how and when something might get done. This second article was by Connie Barnaba, entitled “Don’t let company culture eat you”, where she stated “Many brilliant strategies have fallen prey to culture because they fail to recognize that persuading people to accept a new way of doing things is…complicated.”

Company culture is what gives employees clues to what is important and how to act. Business strategy usually means something to change that culture. In the compliance arena this can mean changing the cultural imperative in a country or region that may have existed far before the US Company, subject to the Foreign Corrupt Practices Act (FCPA), came to exist in that location. A big part of any best practices compliance program is to recognize that changes in a business environment will lead to changes in the compliance risk. This change can be in products or services that are offered; locations where they are delivered or a new client base which might include foreign governments or state-owned enterprises. To meet these new compliance risks, there may need to be changes or enhancements to a compliance regime. However, such changes could fail because “they fail to recognize that persuading people to accept a new way of doing things over what is familiar is complicated.” To effectively execute a business strategy change to accommodate a new compliance initiative, a CCO or compliance practitioner should have a clear understanding of not only your company’s culture but also the cultures of the specific business units or geographic areas where you are making the enhancements. You will also need to understand the expectations of the key talent who will assist the compliance department in making the changes.

Finally Barnaba cautions against surprise, about the most detested thing I ever saw in a company. She wrote, “The element of surprise and little or no enemy resistance are the two weapons that make culture a formidable adversary. A business strategy that understands culture and has a well-considered battle plan is likely to overcome the attack and achieve the strategic goal. At the end of her piece, Barnaba provided seven best practices for effective strategy execution, which I have adapted for the compliance function.

  • Identify the changes that are critical to the execution of the compliance strategy.
  • Determine the people, processes and technology that will be impacted by the compliance enhancements.
  • Predetermine how the compliance enhancements will be received by the people who will be impacted by the changes.
  • Manage the business units’ expectations by giving clear reasons for the changes.
  • Provide compliance support to those in the business unit who will be most heavily impacted by the changes.
  • Share your timeline for implementation, including any transition period and the clear expectation of when the business unit will be measured on any change in performance standards.
  • Establish the transitional goal and then exceed it.

I think the Giants showed that compliance and strategy can not only exist together but together they can lead you to succeed at the highest levels. The message is that you have to work to integrate both but if you do, the results can be nothing short of spectacular.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2014

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