I continue my exploration of how an agile approach can bring innovation to a corporate compliance function. Yesterday I considered how agile concepts can be used to more fully operationalize a compliance function through coaching to and for middle managers. Today I want to explore how agile can more fully operationalize a compliance program by creating compliance teams. This series on using agile to more fully operationalize compliance is based up a recent article in the Harvard Business Review (HBR) by Peter Cappelli and Anna Tavis, entitled “HR Goes Agile”.

One of the key insights I received from the article was the focus on teams. When you think about that in the context of further operationalizing compliance, you can see such an approach will also help to improve overall corporate culture by imbuing a real sense of doing business ethically and in compliance as a business differentiator for the organization.

The authors suggested three separate scenarios where compliance teams could benefit from an agile approach. Each scenario more fully operationalizes compliance down to the business unit level and more fully engages a company’s front line employees in the first step of doing compliance. This approach is not only favored by regulators and prosecutors but will also work to create greater efficiencies closer to the business front lines and will give the company the ability to embed risk management strategies and techniques in a location where they can be employed the quickest to better manage risks as they appear.

Most of the consideration of a compliance program is focused on the individual, whether it be training, monitoring, incentives and discipline or risk management. While such an approach is not inappropriate, consider how much more powerful your approach could be if you could mobilize business teams into compliance teams. Such is the power of agile.

In agile nomenclature, such groups are called scrums where they create, execute and revise their goals and strategies that give them the ability to react more quickly as new information becomes available, which is to say, on an ongoing basis. Such compliance teams can track their progress against measurable standards, identify both compliance obstacles and compliance risks, assess the tools available or provided to them and provide insights on how to improve team performance from the compliance perspective.

The first area where team compliance can improve through an agile approach is with directional feedback. In an agile environment, peer feedback is essential to make course corrections. Such comments and information are usually shared between team members. It is important there also be upward feedback from the front line compliance team to middle management and through to the compliance function.

This approach can lead to a quantum of feedback, which needs to be captured, usually through a tool or app. This allows comments to be more thoroughly reviewed later and used for other purposes or projects. It also allows for more full and robust ongoing monitoring of compliance trends and issues. This type of feedback can be invaluable for a corporate compliance program to then deliver a more targeted or robust risk management solution if warranted or needed.

The second area where an agile approach aids compliance teams is in frontline decision rights. As compliance more fully operationalizes their programs and moves it into the front lines, it equips employees to operate more independently. Yet the authors note this can “be a huge behavioral change and people need support to pull it off.” Put another way, your employees may not be used to making what were thought of as compliance decisions. The answer is to embed a compliance coach closer to the front-line business folks to not only encourage such decision making and be present as a compliance resource; but also help structure an after-action review which can identify successes, failures and perform a root cause analysis, much closer to the time, place and event.

For the compliance coach role consider our discussion yesterday on agile and coaching. These compliance trained coaches are uniquely situated to bring exactly this type of support. You also see how both the coaches and compliance teams are tied together in a holistic approach which more fully delivers an operationalized compliance solution to the organization.

The third and final area around agile and compliance teams is complex team dynamics. In this capacity, companies should continually monitor compliance teams as learning mechanisms. You should identify your best performing compliance teams to understand their dynamics, so you can move their success techniques to other compliance teams in your organization. You can also use an organization wide tracking system to measure and then improve what the compliance teams are doing within specific business units, geographic areas and across the organization globally.

The use of agile to create compliance teams can be a very innovative and powerful tool to more fully operationalize your compliance function. However, this approach will take time and commitment from all involved, including senior management. There must also be a high level of trust within your organization which will allow front line employees who may not be used to voicing opinions to do so, in a way under which there will not be retaliation or even negative consequences for the compliance teams providing feedback.

Next, I will consider how an agile approach to other aspects of the Ten Hallmarks of an Effective Compliance Program can more fully help to operationalize compliance.

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, 2018