One thing every Chief Compliance Officer (CCO) will face is multiple stakeholders. The more compliance is operationalized the more sensitized this issue will become. Yet the centralized control that many business leaders have is usually not available to a CCO and this is certainly one aspect of the operationalization of compliance. This means one issue a CCO will face is “How to charge up the organization so that we’re maximizing the intellect of all our people?” That question was recently put to Bernard Tyson, the Chief Executive Officer (CEO) of Kaiser Permanente, by Paul Michelman. The resulting answer and much more became a part of the article published in the most recent issue of the MIT Sloan Management Review magazine in an article entitled “The Question Every Executive Should Ask”.

On executive leadership, Tyson called the challenge “multidimensional” by which he meant “Leaders are required to distill the complexities of all the forces, some of which are beyond their control, and then to guide the organization in making sense out of them and delivering on the value proposition, which requires executing on strategies within all this complexity.” His response is not to instruct but “to set the direction and performance expectations, and then to inspire and motivate people.”

Stay Focused on Your Values

Tyson said one of the best pieces of advice he ever received was to “Keep the main thing the main thing.” While for Kaiser Permanente, that mission is healthcare; for the CCO that mission is to do business ethically and in compliance through the prevention, detection and remediation of issues. Tyson said, “Everything we do is through the lens of that mission. The rest is subplot. Yes, there’s going to be a lot of turbulence. The broader conditions change continuously. We don’t control that. But one thing we do control is staying focused on the main thing.”

Interestingly Tyson incorporates the company’s values statement into the hiring process. He said, “That starts with recruitment. Wherever in the organization we are hiring, we need to ask if the employee’s personal mission in life aligns with the mission of the organization. My job is to maintain an environment conducive to attracting people who fit our culture. Making sure we are all clear on the mission is core to that.”

But its more than inspiration and motivation. Today’s employees are an integral part of success and can equally be a part of an ethical or compliance failure. Employees are part of the team that not only are doers but also thinkers. This means you should provide the tools to enable employees to come to the right decision, both in compliance training and compliance support. Yet this is the same message as operationalizing compliance. If you put the compliance system into the functional disciplines within an organization, the employees on the front lines should be able to come up with new and innovative ways of getting things done. By decentralizing both power and information you can benefit from the intellect of a wider variety of inputs from employees.

On Middle Managers

Tyson had some interesting thoughts around the role of middle managers. He believes they have one of the most difficult jobs in any organization, squeezed between being required to do the right thing culturally yet while making their numbers. Middle managers have to deal with both dynamics. Moreover, people usually make it to middle management because they were technically proficient and “When the primary job of a manager was to make sure the workforce had what it needed and did what it needed, these technical skills usually transferred pretty well. Now management is evolving away from directing and toward coaching, facilitating, and creating the right environment for people to excel in their space. Middle managers are again caught between two forces. We are asking them to move away from exercising hierarchical authority and still expecting them to deliver results.”

Tyson believes the company has to work more with middle managers as they are the key to the organizations success. This has led to different ways of training middle managers in the organization and to develop managers with different approaches. This translates into what a CCO should do in terms of overall compliance training for an organization. One of the techniques would be to bring business unit folks into compliance projects so that it expands the relationships of both the compliance function into the business and the business unit folks into compliance.

Freedom of Speech

Probably the most interesting thing which Tyson brought up is what might be termed a speak-up culture but he went far beyond this, calling it a “freedom of speech” culture. These are certainly words you do not hear very often in corporate America. Yet Tyson feels particularly passionate on this point noting, “I believe strongly that we live in a great country and that freedom of speech is, in part, what makes it great. We’re seeing it acted out every day right now in our country, and it’s a beautiful thing. The last thing I want is for individuals who exercise freedom of speech throughout the rest of their lives to feel any different about the freedom to speak inside the organization.”

This concept is about not only the right to tell the truth but also the responsibility to tell the truth. Tyson believes that when “people believe they will be respected for their views, they are more willing to contribute.” By doing so, the organization will benefit from the best thinking of its employees. Tyson puts his money where his mouth is on this issue. He related, “In senior management meetings, when one of my executives feels strongly about an issue and they want to take me on, sometimes they’ll ask, “Freedom of speech?” And I’ll say, “Yes.” And they’ll repeat, “Freedom of speech?” And I’ll say, “Absolutely.” And then they’ll come with it: “I think you’re dead wrong.” They don’t have to sugarcoat it. They just simply put the code out there: “Freedom of speech?””

Each one of the points discussed by Tyson has applicability for the CCO, both in terms of leadership and operationalization of your compliance program. The work which Tyson and Kaiser Permanente does to move decisions, literally around life or death, down to the functional level;  the use of middle management as a key component of a best practices compliance program can be a clear way forward for the CCO to use as a guide. Further, the ‘Freedom of Speech’ concept should point towards greater employee participation through engagement. Finally, staying focused on your core values can help move the entire organization forward at one time, even during choppy seas.

 

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, 2017

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