People-ProcessIt is rare you are able to write about someone who directly changed the quality of your life. Rarer yet that you did not know about him, only what he created, until you read his obituary. That happened to me recently when I read about the death of Dr. Peter J. Jannetta in the New York Times (NYT). Dr. Jannetta discovered a rare medical condition that affects hundreds of thousands Americans. That disease is trigeminal neuralgia, which affects cranial and facial nerves. It can cause such intense pain that its nickname was the suicide disease because that was the only way for many of those afflicted to make the pain stop. Yes it is that bad.

What Dr. Jannetta discovered was that in those afflicted, the fifth cranial nerve becomes entangled with hyper small veins, arteries and capillaries would impinge on the nerve, setting off intense pain. Yet Dr. Jannetta did not stop there, as he hypothesized that if such impingement was the cause of the pain, by removing the impingement, it might end the pain. It turns out he was correct and he developed the surgery called arterial decompression.

Dr. Jannetta made these discoveries and surgical developments in the 1960s. No one in the medical profession bothered to tell me about the procedure until 2012 and I had been diagnosed with the condition in 1976. If the medical profession had been a bit more open to this diagnosis and surgical technique, perhaps I might not have suffered for so long. If you know of anyone with there condition, tell them there is hope.

I thought about Dr. Jannetta, his decades long fight for people like me against the lack of acceptance by the medical profession when I read an article in the MIT Sloan Management Review, entitled “Learning the Art of Business Improvisation, by Edivandro Carlos Conforto, Eric Rebentisch, and Daniel Amaral. In this article the authors explore the issue of improvisation and write that while it “may seem to be spontaneous, but managers can foster it in innovation projects through the deliberate development of certain processes and capabilities.” For what improvisation really comes down to is the ability to “create and implement a new or unplanned solution in the face of an unexpected problem or change.”

Compliance is certainly one area that requires such flexibility because of the ever-changing business conditions that exist in today’s multinational organizations subject to the Foreign Corrupt Practices Act (FCPA). Moreover, as we saw last week with the announcement by Novartis that its South Korean subsidiary is under criminal investigation for allegations of paying bribes to physicians, this less than 60 days after agreeing to a FCPA enforcement action which involved payment of a $25 million dollar fine for the companies actions by Chinese subsidiaries.

Whether deliberately or not, compliance departments must improvise. Such compliance “Improvisation can foster problem solving, creativity, and innovation, and it is becoming a requirement for many organizations. Although improvisation might seem to be spontaneous and intuitive, to do it well requires the development of disciplined and deliberate processes and capabilities. Managers working in dynamic, fast-paced, and highly innovative project environments should develop and refine capabilities in these three areas to create a project environment that will enhance a team’s improvisation competencies – ultimately with an eye toward improving project results and innovation.” I have adapted their piece for the compliance practitioner.

The authors believe there are three general areas which a company can improve upon to help advance its abilities to adapt and change. They are (1) Build a culture that recognizes and views changes positively. (2) Create the right team structure and project environment. (3) Provide management practices and tools that facilitate improvisation.

Build a culture that recognizes and views changes positively

Here the authors believe that change can come from teams that have a “positive attitude toward dealing with and accepting ambiguity and project changes.” Not surprisingly, this does not come from top down leadership but allowing “higher level of autonomy in making decisions.” Further, the farther out from the corporate office, the more “teams should be empowered to make decisions locally, be informed about and willing” to take make changes and provide enhanced compliance risk management, and not overly fear potential failure.

Clearly the ability to make changes requires a robust compliance regime to begin with. However, having such a system in place, particularly through internal controls, allows a compliance department to “help them to reduce uncertainty more quickly and effectively learn from their experiences. Teams equipped with a broad array of tools and techniques can use them to respond to different types of challenges. The focus should be on helping teams anticipate and recognize changing circumstances and make more rapid and accurate decisions.”

Create the right team structure and project environment

Not surprisingly a key to making improvisation work is that you have good communication between the compliance function and business unit. This is not a new concept and communications runs two ways. If the business unit sees the Chief Compliance Officer (CCO) as Dr. No from the Land of No, they will not likely be calling for assistance. Yet compliance does not always know what business opportunities arise without that information so they cannot craft appropriate risk management solutions. The authors suggest that weekly interactions between leaders and key stakeholders are good first step.

Perhaps counter-intuitively, the authors also note that smaller teams appear to have more and better success. The authors observed “greater levels of improvisation in smaller teams that displayed more self-directing and self-organizing characteristics, such as being responsible for monitoring and updating the status of their activities and deliverables.” This can allow the compliance department to play a key oversight and support role “on the aggregated information and on more strategic issues related to the project.”

Provide management practices and tools that facilitate improvisation

Finally the authors found that “teams with greater improvisation characteristics were more likely to use agile management approaches, techniques, and tools. In fact, teams that embraced an agile approach were nine times more likely to have high levels of improvisation compared with teams that used a more traditional (waterfall) approach.” This means that not only will a command and control structure not be able to move as quickly and efficiently but also you need to operate at a level of sophistication beyond simply spreadsheets.

The authors also found, “The agile methods we observed in the teams with higher levels of improvisation included iterative development, supported by recurring delivery of higher-value deliverables; constant interactions between stakeholders and the project team; the use of visual tools to collaboratively manage the project with team members; and active involvement with the client and/or user in the development process.”

The ability to be agile is an important component of any best practices compliance program. The need to respond to business changes is always paramount. Yet there is no end to the variety of corrupt schemes engaged in by company employees. The Novartis matter in South Korea allegedly involved bribery through excessive payments for articles published in medical journals. Just as the bribery and corruption scandals involving GlaxoSmithKline PLC (GSK) and others in China demonstrate new and creative ways to put pots of money together to pay bribes, the Novartis issues may show another area that bears compliance scrutiny. A compliance function must be ready to adapt. When you do improvise, be sure to document it.

 

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, 2016

0 comments