Red Schoendienst died this week. At 95, he was the oldest living member of the Baseball Hall of Fame; that honor now falls to Tommy Lasorda. Schoendienst played in the National League (NL), primarily for the St. Louis Cardinals from 1945 to 1963, before I had much of a baseball consciousness. He became the club’s manager in late 1964, after St. Louis had defeated the New York Yankees in a memorable seven game series. Schoendienst managed the club for 11 years, until 1976 when he was fired. My most vivid memories of Schoendienst were from his piloting the club to two consecutive World Series appearances, in 1967 and 1968. In the former, the Cards beat the Boston Red Sox in seven games; in the latter, the Cards lost in seven games to the Detroit Tigers. It is Schoendienst’s tenure with the Cardinals as a Manger which informs today’s blog post of a managing your middle act as a CCO.

One of the areas little commented on for Chief Compliance Officer’s(CCOs) is what to do in their ‘middle act’; meaning after they have come into an organization to deal with the issue(s) that brought them into the fold. This is well past the first 100 days and dealing with potential Foreign Corrupt Practices Act (FCPA) violations. It is usually down the road, several years into a tenure. The question is how you can continue the momentum you developed early on, perhaps even in the honeymoon period, of your tenure with the company. To help answer this line of inquiry, I recently read Harvard Business Review article, entitled “How Successful CEOs Manage Their Middle Act”, by Rodney Zemmel, Matt Cuddihy and Dennis Carey.

While the start and end of a CEO tenure has been fairly explored, the authors found “Very little attention has been focused on the time between those stages—on how chief executives can make the most of the middle years of their tenure.” So they set out to explore this middle ground through structured interviews with 22 long-term CEOs, “asking, among other things, how their priorities, mindsets, and approaches to leadership had evolved; what strategic and organizational moves they had focused on in midtenure; and what they wish they had done differently.” I found their responses and the authors’ analysis had some excellent insights for the CCO about moving forward during the middle of their tenure.

  1. Keep raising the level of your ambition

Even if you have been brought in to clean a prior compliance disaster and managed to successfully navigate through it, you will run the risk of sliding back into what former DuPont CEO Ellen Kullman called the “old normal.” Another way to consider this is that your early momentum may not last and you must “infuse people with the will to continue to focus on the changing environment”. Your business will certainly not sit still so your compliance initiatives must keep in step with your business initiatives.

This does not mean constant motion is required or even desired. Former Eaton CEO Sandy Cutler stated, “Organizations have to be careful at the top not to constantly change the game plan” and the same is true for the overall compliance function. All of this means “thinking ever more ambitiously means continuing to make strategic moves that will keep the company abreast of its changing environment—not engaging in perpetual motion for the sake of change.”

  1. Attack silos and broken processes 

Unfortunately, these two topics are the bane of almost every CCO. However, the middle portion of your CCO tenure can present an opportunity to begin to resolve them. Assuming you have sustained some early wins and built up both credibility and trust, now can be the time you take on more deeply ingrained structural projects. One way to do so, is to cross-pollinate your compliance initiatives with other key business unit leaders. If you can rotate some non-compliance/non-lawyer types into your organization, you not only bring fresh perspectives but you also can potentially create a long-term ally in the organization.

At the end of the day, your job is to help the company manage risk more efficiently and for greater profitability. You can more effectively do this and create a more robust compliance program and getting the system’s right to enable this can greatly enhance your organization. The authors reported on one example from Cisco which built playbooks for processes such as M&A. If everyone is working off the same playbook on your team, it means the business leaders do not have to intervene as often, creating far greater efficiencies and speed.

  1. Talent, talent, and more talent 

A key here is that you should continually evaluate your talent pool. You should consider other disciplines in your organization for talent in compliance. A rotation through compliance is a great way to not only create supporters in other corporate functions but also watch potential team members in action. Consider such questions as “Is this person able to help us carry the compliance ball going forward?” “Do you have the right mix on your compliance team?”

You can also take the opportunity for fuller and more focused reviews. This can facilitate another key part of any leader’s remit; to cultivate and then to unleash the talents of your team. You essentially move from “team captain to coach” in this process. It is also a good time to begin succession planning, thinking “two moves out”.

  1. Build mechanisms for dissent and disruptive ideas 

This would almost seem like the raison d’etre of a CCO, literally throughout the organization. Yet one of the things any leader must fight against is the tendency to become “predictable or shut off from new ideas.” Part of the problem is through the length of any tenure, your direct reports and others will learn what you want to hear so you must constantly fight against that going forward.

To combat this, you must take the initiative to ask people questions about what they really think about how things are going and why they think that way. You can also use this as an opportunity to get out of the ivory tower at the corporate headquarters and visit the organization’s grass roots. One very interesting technique came from former Becton CEO Edward Ludwig who said, “he would bring together a dozen trusted people from the level below his direct reports, give them a two-page summary of the company’s strategy, and invite honest input. “You need to surround yourself with people who are willing to tell you the truth and create mechanisms where they can tell you the truth,” he said. Just as important, “you need to demonstrate that you can act on their input intelligently and will not shoot the messenger.””

  1. Spend your leadership with bold moves

If you have done well and are into the middle of your CCO tenure, you should have the internal leadership capital to tackle some big projects. Go to your CEO or Board of Directors and lay out a vision for compliance 2022 or something similar. Show them how and, more importantly, why a best practices compliance program will not only increase company efficiency but also company profitability. Study such initiatives as PepsiCo’s Performance with Purchaseand incorporate those elements that would work for or within your organization. Former Reynold CEO Susan Cameron told the authors, “In midtenure you have the opportunity to envisage a different enterprise and then to make some disposals and acquisitions to support that,” she said. “Once you have developed confidence in yourself and your top team and are satisfied with the business plan and operating model, you need to dream and strategize about what could be.”

Perhaps the most interesting observation the authors came to was that your CCO career is in many ways like life’s journey. It is not a unidimensional continuum. It is series of distinct phases; early term, middle term and late term. Based upon this, “Leaders need to look at the organization and the markets in which it plays with fresh eyes and keep evolving their strategy and approach to their team. They can’t take their foot off the gas—if anything, they need to push down harder.” Great thoughts to keep in mind as your CCO tenure progresses.

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

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