Ed. Note-I must announce that the Houston Astros will not be going back-to-back this year as they were knocked out of the ALCS by the Boston Red Sox Thursday night. It has been a magical year which I will never forget. Good luck to the Sox with whomever they meet in the World Series. 

Today, we continue Classic Movie Monster Month with the 1944 film the House of Frankenstein, which along with 1945’s House of Dracula, marked the end of Universal Pictures classic monster movie run which began back in 1931 with the original Draculaand Frankenstein. While some have completely derided the movie as an over-spiced potpourri containing every type of monster movie trope: the Monster, the Mad Scientist, the Hunchback, the Wolfman and the Vampire; others found the inclusion “expanded the successful formula of its predecessor, Frankenstein Meets the Wolf Man (1943), sufficiently to include no less than five ‘monsters’” and “it is not to say the film was not one of the best in the whole Universal Frankenstein saga.”

The cast was a who’s who of Universal films from that period, with Boris Karloff, George Zucco, J. Carrol Naish, John Carradine, Lon Chaney Jr., Lionel Atwill and, in his first credited appearance, Glenn Strange as the Monster. However, for myself, I was always troubled by Karloff’s role as the Mad Scientist. The ‘Mad’ moniker was not driven by his dream in the sanctity of science or even a desire for creation of life from inanimate objects but madness from hate against those whom he had perceived had betrayed him and put him in the gaol. But his performance was typically Karloffian and the film is a stylist entry into the Universal pantheon.

This week I have been exploring a recent Harvard Business Review (HBR) article, entitled “Why Design Thinking Works”, by Jeanne Liedtka. I began a consideration on why design thinking can be such a powerful tool to create a fully operationalized best practices compliance program. I next reviewed some of the steps you should take in that process. Today, I conclude by considering how one might take these actions directly to a compliance program.

Perhaps the most important insight is that design thinking is social technology. As much as compliance revolves around internal controls and technology; it is, at the end of the day, about people. Just as I write about people, sports and even classic movie monsters as introductions to topics about compliance; compliance programs must work for and with people. The key insight from design thinking is that it works with the human input, in a way that many other innovation strategies do not.

In a section entitled “Shaping the Innovators Journey” Liedtka wrote that while many innovators are “trapped in their own expertise and experience” design thinking “provides immersion in the user’s experience, shifting an innovator’s mindset toward a better understanding of those being designed for.” This speaks to the need for a Chief Compliance Officer (CCO) or compliance practitioner to work directly with their customer base to come up with a process solution to more fully operationalize a best practices compliance program.

One of the areas many compliance practitioners struggle with is data and data analytics. Simply put, they do not know what numbers to look at and what they mean. Liedtka observed that many  are simply “overwhelmed by the volume and messiness of qualitative data.” Yet with design thinking, a compliance practitioner can begin to make “sense of data by organizing it into themes and patterns, pointing the innovator toward new insights and possibilities.” This is precisely why compliance practitioners should embrace this process as the process itself helps a lawyer-trained CCO-type to not only make sense of disparate data but find a way to garner new understandings and perceptions. Another way to consider the power of design thinking is that when a compliance practitioner is “confronted by too many disparate but familiar ideas,” the process of design thinking “encourages the emergence of fresh ideas through a focused inquiry, shifting team members toward a limited but diverse set of potential new solutions.” This type of process can drive a compliance risk management process closer to those on the front line of an organization and are required to implement it most closely to the business involved.

This use of a compliance professional’s customers, i.e. employees, has added benefits for the process and the organization as a whole. While many in the corporate office are constrained by existing biases about what may or may not work from the compliance perspective; the design thinking process “fosters articulation of the conditions necessary to each idea’s success and transitions a team toward a clarity on make-or-break assumptions that enables the design of meaningful experiments.” Finally, one of the challenges any compliance professional always faces is the resistance to change by employees and the “ambiguity surrounding the new future.” Design thinking “delivers learning in action as experiments engage staff and users, helping them build to create a shared commitment and confidence in the new product or strategy.”

One of the key reasons I think design thinking will work well in the compliance arena, is that the compliance profession and compliance programs have matured past the point where its consists of simply rules and regulations. That approach probably was required to make the changes needed in corporate culture and mindset. The Justice Department’s aggressive approach to enforcement of the Foreign Corrupt Practices Act (FCPA) in the first decade of this century made it too legally risky to continue doing business as usual. Yet businesses responded with more sophisticated compliance programs that have become ingrained in business processes.

Through involving employees and other stakeholders in the definition of compliance innovation and the development of solutions, compliance professionals who use design thinking can obtain a broader commitment to taking a compliance program to the next level. This is moving compliance from a legal focused Go/No Go to a business process which works to make a company run more efficiently and at the end of the day, more profitably. As Liedtka ends her article, “That is social technology at work.”

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