After having seen the Moody Blues feature Days of Future Passed last week, my wife and I caught John Fogarty in concert over the weekend (yes, it is beginning to look like the rock and roll compliance blogger is back). As you might expect they were very different experiences, with Fogarty clearly reveling in rocking out, most particularly with two of his sons who joined him on stage. He also told a story, which informs today’s blog post as well. It fits into today’s theme of greater success by obsessing on less.
After Fogarty’s band, Creedence Clearwater Revival, broke up in 1973, Fogarty literally gave away his favorite guitar, a Rickenbacker model 325 to a 12-year-old. This was the guitar that he had used on all the Creedence albums, he had taken around the world on tour and that he had played at Woodstock. Fogarty was quoted in a Rolling Stone piece by Andy Greene ““I was just detached and numb at that point. I think I gave it away to sort of end that chapter of my life.”” Some 40 years later, Fogarty casually mentioned to his wife he would like it back. Green wrote, “Without telling him, she launched an extensive search to track it down that ultimately led to Gary’s Classic Guitars in Loveland, Ohio.”
His wife, Julie, gave it to him as a Christmas present, wrapping it in one of his trademark plaid shirts. Green noted, “On his wife’s urging, he removed the shirt and began peeling back the wrapping paper, revealing a Rickenbacker guitar case. Tears began welling up as he realized what he was about to see. “I was immediately struck dumb,” Fogerty says. “I turned to my wife and said, ‘Am I about to get overwhelmed here?’” He opened the guitar case and began sobbing uncontrollably.”
I thought about that story when I read a recent On management column by Andrew Hill in the Financial Times (FT), entitled “A resolution to achieve more: try to obsess over less”, where he took the opposite tact of most professionals in their New Year’s resolutions. While many resolve to achieve more at the start of a New Year, Hill advised to try and take something away. His approach was more sophisticated than simply resolving to say ‘No’ more in 2018 but more efficiently manage the time you do have to get things done through refocusing and prioritization. Put another way, Hill suggested taking on less but obsessing more over it.
He presented a fascinating example which he pulled from the book Great at Work by Morten Hansen on the race to the South Pole. Englishmen and most Americans focus on Robert Falcon Scott and his tale of heroic failure, which of course is very English. Norwegian explorer Roald Amundsen who actually won the race to the South Pole is generally given short shrift in this tale. Amundsen beat Scott to the Pole, and on Scott’s return to his base camp, he and his team were caught in blizzard and all the team perished.
Yet Hill posits that Amundsen won the race to the pole because he simplified and obsessed over his transport. Scott, who had a larger crew, “set off with multiple options, including motorised sleds, ponies and dogs. But the complexity of the Scott approach — in an ominous insight, the naval officer referred to his “disorganised fleet” — proved fatal.” Amundsen focused on the best sled “dogs, best handlers and best training and was far quicker” to the pole than Scott. This allowed Amundsen to return to his base camp sooner. Hill quoted Hansen that when you do less, you must obsess more “because if you don’t obsess, you don’t have an advantage over people who do more things.”
In the compliance world, this is akin to what Dresser-Rand Chief Compliance Officer (CCO) Jan Farley often says, “Don’t sweat the small (compliance) stuff.” Farley often speaks about the need not to waste your scarce compliance resources on areas or matters that are low compliance risks. But to do this, you need to understand what are your highest compliance risks. Since you will not have additional resources to perform such an analysis, I would suggest now would be a very good time for you to assess your compliance program and your business model to see what are your highest risks. If you believe there are several, you can prioritize them. This exercise will give you the basis to deliver your ever-scarcer compliance resources to your highest risk areas.
While I do not believe the Department of Justice (DOJ) or Securities and Exchange Commission (SEC) will be sympathetic to some unsubstantiated claim along the lines of ‘I did my best with what I had’; they also made clear in the 2012 FCPA Guidance that “An effective compliance program promotes “an organizational culture that encourages ethical conduct and a commitment to compliance with the law.” Such a program protects a company’s reputation, ensures investor value and confidence, reduces uncertainty in business transactions, and secures a company’s assets. “A well-constructed, thoughtfully implemented, and consistently enforced compliance and ethics program helps prevent, detect, remediate, and report misconduct, including FCPA violations.” (emphasis supplied)
For 2018, this means focus on your highest compliance risks, risk-rank them, then prioritize them through a robust risk management process lifecycle. One of the key elements in this process is to put information developed in your risk-based monitoring into your compliance program through a feedback loop. By focusing on these highest risks and not worrying about trying to manage all risks, you will have a more robust compliance regime. Hill ended his piece with the following, “Sometimes, though, the best approach may be to simplify a process, cut the size of a team, or impose a new strategic focus. How can you and your team achieve more this year? Try taking something away.”
While the DOJ and SEC will not accept your bald-faced claims that our company simply did not have the money to spend on compliance, they will most-probably consider a compliance program where you have looked at your risks and delivered the compliance resources you do have to those risks. But the key is Document, Document, and Document your decision-making calculus and your implementation.
You might also explain to them about Julie Fogarty and her obsessive search for a 40-year-old lost guitar.
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© Thomas R. Fox, 2018