So far in this 5-part series, we’ve dived deep into the different aspects of ‘front line’ compliance. For the final episode, Tom discusses the process of innovation itself. In an article in the MIT Sloan Management Review, entitled “Finding a Lower-Risk Path to High-Impact Innovations,” authors Joseph V. Sinfield and Freddy Solis came up with a different method to view the innovation process. They call it the ‘Lily Pad’ approach, and Tom breaks down some interesting ways to apply it.
- Tom begins with the premise of the article, found in the traditional risk-reward theory, that talks about how the way an organization views innovation affects the way the company goes about it. Those that invest more want to see more return, and those who don’t often see more incremental changes.
- Which one is more effective? The authors of the article mentioned above believe the incremental approach, or the ‘Lily Pad’ approach, allows a progressive cascade of innovation moving forward – or leaping from one lily pad to the next.
The Lily Pad approach can be adopted for compliance. Ask the following questions:
- Does the innovation “offer multiple pathways from first principles to impact” and how relevant is the innovation to multiple business lines or units?
- Will the innovation change the perspective of employees and even move towards reconfiguring the compliance ecosystem?
- Finally, is there potential for both growth and improvement in the innovation going forward?
After you have gone through and answered these questions, you should be ready to move forward with what the authors called ‘enabling actions’ and implement one or more of the innovations. By using their approach, the authors write that “Lily pad applications for an enabling innovation provide opportunities to match capability, purpose, and context in a manner that advances select performance dimensions of the innovation, aligns elements of ecosystems, and/or begins to shift” employee views across your organization. But more than simply the singular innovation, the lily pad approach allows your company to reduce the time and cost to jump to the next iteration of development.
Here are 4 key questions to ask yourself about your compliance program:
- First, do you understand the role of innovation in your compliance strategy?
- Second can you spot the innovations as this may well require you to think differently, particularly if you come from the legal department or have legal training, which certainly does not favor or foster innovation.
- Next, do you have the ability to adapt to innovations in your compliance function to the company as a whole?
- Put another way, can you demonstrate how an innovation in compliance will help the company do business more efficiently and in compliance with applicable laws?
We hope you have enjoyed this special five-part series highlighting some ways to innovate in compliance. For more information on the innovation process in compliance, check out my latest book, The Compliance Handbook.
If you’re a compliance professional looking for a convenient and effective way to fulfill your continuing education requirements, visit Tom’s website and choose from 4 hour-long training packages that will keep you up to date with the latest developments in the compliance field.