One of the greatest things about the compliance profession is that it is only limited by its collective imagination. If you can think it up, you can probably do it. This has led not only continuing evolution of compliance programs but continuing innovation in the compliance function. As compliance programs evolve and innovate, regulators take note and the cycle becomes almost a continuous feedback loop. One technique new to compliance but squarely in the 360-degree view of communication is internal crowdsourcing, to enlist new ideas from employees, to open new sources of compliance innovation.

Internal corporate crowdsourcing was explored in  “Developing Innovative Solutions through Internal Crowdsourcing, where the authors noted, “It allows employees to interact dynamically with coworkers in other locations, propose new ideas, and suggest new directions to management. Because many large companies have pockets of expertise and knowledge scattered across different locations, we have found that harnessing the cognitive diversity within organizations can open up rich, new sources of innovation. Internal crowdsourcing is a particularly effective way for companies to engage younger employees and people working on the front lines.” They came up with seven key elements companies should use to aid in moving such an effort forward, which apply forcefully to the CCO and compliance practitioner.

  1. Keep the focus on innovation. You should use this technique for long-term initiatives and not short-term improvements. Establish the grounds for employee creativity with criteria such as (1) ability to meet employees’ unmet needs, (2) delighting the employee, (3) the solution’s newness, (4) marketability, (5) commercial viability, and (6) scalability.
  2. Give internal crowdsourcing participants slack time. If your company wants you focused solely and only on your day job, it will, by definition, limit your participation in a company crowdsourcing project to nights and weekends. This may not be when and where you do your best work. Companies must arrange to allow employees the time and space during working hours to participate meaningfully.
  3. Allow for anonymous participation. Trust is always a key issue in these types of project. Anonymous participation can help build and maintain that trust because when organizational identities are revealed in an internal crowdsourcing project, “some individuals may feel compelled to defend their formal positions.” Companies need to ensure participants “feel safe about contributing knowledge, regardless of their seniority or role in the company.”
  4. Take steps to ensure that company experts don’t exert their influence too heavily. Internal company experts will have their ideas given additional heft if their identities are known. This can have the unintended effect of intimidating others or lessening their voices in the process. Yet you must work to keep the process open to diverse perspectives, for internal crowdsourcing to produce innovative outcomes. You should have the company’s compliance experts operate as moderators and to do what they can to encourage others to come up with compliance innovations.
  5. Use a collaborative process for internal crowdsourcing. Much like Louis Sapirman’s use of social media to communicate with and obtain information from D&B’s employee base, use of an internal crowdsourcing project has the positive by-product of engagement, stating, “It’s also to build a system through which people within the organization share knowledge, learn from one another, and offer pertinent knowledge for use in new solutions.” If you can engage your employees in compliance, you will not only have a better chance of keeping them engaged, but you will also more fully burn compliance into the fabric of your organization or operationalize compliance in your organization.
  6. Design platforms that facilitate shared development and evolution of solutions. A key to internal crowdsourcing success draws inspiration from open source software. It is that employees need to see what other employees have contributed so they can build upon it. You must find a way to share knowledge among the employee base on an ongoing basis. The authors found three major benefits to such an approach: “(1) knowledge sharing among the crowd across a variety of knowledge types (not just ideas); (2) the opportunity for coevolution of solutions by the crowd; and (3) the degree to which feedback from the crowd helps to refine ideas.”
  7. Be transparent about plans for follow-up post-crowdsourcing. Not surprisingly, one major defect around internal crowdsourcing projects is lack of follow-up and lack of transparency for the employee participants. Simply put, employees not only want to know the results but they also want to know if their ideas were used. This can be a powerful motivator for future participation or the opposite. Companies need to make the process open and fair.

By internally outsourcing compliance function enhancements, a CCO can increase employee engagement in compliance. The entire process draws from your diverse employee base which brings both organizational learning and knowledge diffusion into the continuous improvement of your compliance program. Just as the data in your organization is your data, so you should not only utilize it but monetize it; your employee base can be a large and untapped source of information which can more readily be implemented and have a more rapid impact on your compliance program going forward.

Three Key Takeaways

  1. In compliance, you are only limited by your imagination.
  2. Build trust and be transparent in your process.
  3. Through internally outsourcing compliance function enhancements, a CCO can increase employee engagement in compliance.

 

This month’s podcast series is sponsored by Dun & Bradstreet.  Dun & Bradstreet’s compliance solutions provide comprehensive due diligence reporting and analysis to reduce your risk of working with fraudulent companies by accessing a company’s beneficial ownership, reputation risk and more.  For more information, go to dnb.com/compliance.

 

How can a Chief Compliance Officer use 360-degrees of communication with compliance stakeholders who are outside your organization, such as those in the Supply Chain? Obviously, the communications with those third parties about your compliance evaluation is a critical element for compliance program’s success. Just as 360-degrees of communication is more than simply a two-way street of passing information, a more holistic approach is needed when dealing with third parties as they can also be a key to more than simply adherence to a compliance program but also providing back to you valuable information and modeling the culture you expect going forward. Yet how can you achieve such a more holistic approach?

This issue was explored by Jennifer Blackhurst, Pam Manhart and Emily Kohnke, in a manner in their piece “The Five Key Components for SUPPLY CHAIN”. They began by asking “what does it take to create meaningful innovation across supply chain partners?” Their findings identified five components that are common to the most successful supply chain innovation partnerships which derive from the 360-degree approach to communications.

It is almost universally recognized that third parties are your highest compliance risk. What if you could turn your Supply Chain from a liability under the FCPA to an area that brings innovation to your compliance program? This is an area that not many compliance professionals have mined. The authors set out five keys to successful innovation spanning Supply Chain partners. They are: “(1) Don’t Settle for the Status Quo; (2) Hit the Road to Hit Your Metrics; (3) Send Prospectors Not Auditors; (4) Show Me Yours and I’ll Show You Mine; and (5) Who’s Running the Show?”

Don’t Settle for the Status Quo

You should not settle for simply the status quo. Innovation does not always come from a customer or even an in-house compliance practitioner. The key characteristics are to be “cooperative, proactive and incremental”. You need to be leading the innovation change rather than catching up from behind.” If a company in your Supply Chain can suggest a better method to do compliance, particularly through a technological solution, it may be something you should well consider.

Hit the Road to Hit Your Metrics

To truly understand your compliance risk from all third parties you should get out of the ivory tower and on the road. This is even truer when exploring innovation. You do not have hit the road with the primary goal to be innovation but through such interactions, innovation can come about organically. There is little downside for a compliance practitioner to go and visit a Supply Chain or other third-party partner and have a face-to-face meeting simply to get to know the partner better and precisely identify that partner’s compliance issues.

Send Prospectors Not Auditors

While an audit clause is critical in any Supply Chain contract, both from a commercial and compliance perspective, “Too often firms use supply chain managers as auditors when they are dealing with supply chain partners.” This is wrong as you should consider these types of managers’ innovation partners and not auditors. Every third party should have a relationship manager, whether that third party is on the sales or Supply Chain side of the business. Moreover, the innovation partners are “able to see synergies where [business] partners can work together for the benefit of everyone involved.”

Show Me Yours and I’ll Show You Mine

If there has been one key theme throughout this chapter, it has been trust. In the Supply Chain and third-party arena “Trust plays an extremely important role in supply chain innovation. Firms in successful innovations discussed a willingness to share resources and rewards and to develop their partners’ capabilities.” Moreover, “Through the process of developing trust, firms understand their partner’s strategic goals.” I cannot think of a more applicable statement about compliance. Another way to consider this issue is that if your partner has trust in you and your compliance program, they could be more willing to work with you on the prevent and detect prongs of compliance regimes. Top down command structures may well be counter-productive.

Who’s Running the Show?

This really means what is each side bringing to the relationship, both in terms of resources and capabilities. In the compliance regime, it could well lead to your partner taking a greater role in managing compliance in a specific arena or down a certain set of vendors. Your local Supply Chain partners might be stronger in the local culture, which could allow it to lead to collaborations by other vendors in localized anti-corruption networks or roundtables to help move the ball forward for doing business ethically and in compliance with relevant anti-bribery/anti-corruption laws.

Finally, as a rule, utilization increases through innovation. Imagine if you could increase your compliance process performance by considering innovations from your third parties? From the 360-degree perspective, it could lead to (1) trust and culture alignment strengthened, leading to future innovations and improvement; (2) seeing what is needed in other partners to facilitate their role in compliance innovations; and (3) both sides reaping rewards in a low cost, low risk, highly achievable manner.  Your company’s Supply Chain is literally there at your fingertips, why not tap into them with a 360-degree approach.

Three Key Takeaways

  1. 360-degree approach to communication in compliance includes stakeholders outside your company.
  2. Remember the five keys to successful innovation spanning Supply Chain partners.
  3. Your company’s Supply Chain is literally there at your fingertips, why not tap into them with a 360-degree approach.

This month’s podcast series is sponsored by Dun & Bradstreet.  Dun & Bradstreet’s compliance solutions provide comprehensive due diligence reporting and analysis to reduce your risk of working with fraudulent companies by accessing a company’s beneficial ownership, reputation risk and more.  For more information, go to dnb.com/compliance.

One of the ways that CCOs and compliance practitioners can better use 360-degrees of communication is through Twitter. In “How Twitter Users Can Generate Better Ideas”, authors Salvatore Parise, Eoin Whelan and Steve Todd found “employees with a diverse Twitter network – one that exposes them to people and ideas they don’t already know – tend to generate better ideas.” Their research led them to three interesting findings: (1) Employees who used Twitter had better ideas than those who did not do so; (2) There was a link between the amount of diversity in employees’ twitter networks and the quality of their ideas; and (3) Twitter users who combined idea scouting and idea connecting were the most innovative.

I do not think the first point is too controversial or even insightful as it simply confirms that persons who tend have greater curiosity tend to be more innovative. The logic is fairly-straightforward, good ideas emerge when new information received is shared with what a person already knows. In today’s digitally connected world, the amount of information in almost any area is significant. Yet by using Twitter, “the potential for accessing a divergent set of ideas is greater.”

The key concept for the compliance profession are the roles of Idea Scout and Idea Connector. An idea scout isan employee who looks outside the organization to bring in new ideas. An idea connector, is someone who can assimilate the external ideas and find opportunities within the organization to implement these new concepts.” It is the ability to identify, assimilate and exploit new compliance ideas, which makes this concept so powerful. However to improve your compliance innovation, “you need to maintain a diverse network while also developing your assimilation and exploitation skills.”

For the compliance practitioner, Twitter is a gateway to solution and a way to obtain different perspectives and to challenge the status quo in one’s thinking. The key is not your number of followers on Twitter but rather the diversity within your Twitter network, as “Diversity of employee’s Twitter network is conductive to innovation.” An Idea Scout will “identify external ideas from experts and resources on Twitter.” The compliance practitioner can take advantage of experts within the anti-corruption compliance field, but there is an equally rich source of innovation from those outside this arena.

Even with modern social media tools, the first key to good leadership is to listen. Listening can be enhanced, through the “breadcrumb” approach of finding innovation leaders and thought-provokers. This entails listening to colleagues and industry leaders who are Twitter “including what they are tweeting about, who they are following and replying to on the platform, who is being retweeted often”.

Equally important to this Idea Scout is the Idea Connector, who is putting the disparate strands from tweets together. For the compliance function, this will be someone who identifies compliance best practices or other information from Twitter ideas, can then put them together and direct the information to the relevant company stakeholders. Finally, such a person can “Curate Twitter ideas and matches them with company resources needed to implement them.”

There are a variety of ways an Idea Connector can use Twitter. One is to try to sift through your Twitter feed and look for trends and relationships between topics. You bring value when you stamp your own analysis and interpretation on it. Another method is to focus on analytics and one user “filtered specific subsets of the topic for different stakeholders” at his company. Another method was to create “social dashboards or company blogs based on the insight” received thought Twitter. Interesting, one of the key requirements for successfully mining Twitter was in finding ways to share its content “since many employees, especially baby-boomers don’t use the platform themselves.” Conversely by mining information from Twitter and presenting it, this can allow these ‘technologically challenged’ older employees to ascertain how they can target millennial’s.

But as much as these concepts can move a CCO or compliance practitioner to innovation in a compliance program, it can also foster additional communication through the following of your own employees. It is well known that Twitter can facilitate greater communication to and between the compliance function and its customer base, aka the company employees. The use of Twitter to enable this same type of innovation because it “is different than email and other forms of information sources in that it enables continuous engagement”.

Twitter was created to allow people to connect with one and other and communicate about their activities. However the marketing potential was immediately seen and used by many companies. Now a deeper understanding of its use and benefits has developed. For the compliance practitioner one thing you want to consider is to align your Twitter and great social media strategy with your compliance strategy; match your Twitter strategy to your compliance strategy.

Twitter can be powerful tool for the compliance practitioner. It is one of the only tools that can work both inbound for you to obtain information and insight and in an outbound manner as well; where you are able to communicate with your compliance customer base, your employees. You should work to incorporate one or more of the techniques to help you burn compliance into the DNA fabric of your organization.

Three Key Takeaways

  1. Twitter can be powerful tool for the compliance practitioner.
  2. Data mine twitter for not only best practices but see what the regulators may be saying.
  3. Curiosity may have killed the cat but it makes for a far better and more effective compliance practitioner.

 

This month’s podcast series is sponsored by Dun & Bradstreet.  Dun & Bradstreet’s compliance solutions provide comprehensive due diligence reporting and analysis to reduce your risk of working with fraudulent companies by accessing a company’s beneficial ownership, reputation risk and more.  For more information, go to dnb.com/compliance.

Other than the skill of listening, asking questions is about as important to the compliance practitioner as any other that can be employed. Yet, equally critical is to ask the right question, which is an issue explored Brian Grazer and Charles Fishman explored this concept in their book “From a Curious Mind: The Secret to a Bigger Life.

Grazer is a well-known and successful Hollywood director who has directed such movies as Splash, A Beautiful Mind and Cinderella Man. He believes that much of the success he has achieved is because he asks lots of questions and that “Questions are a great management tool.” This is because “Asking questions elicits information” and it also “creates the space for people to raise issues they are worried about that a boss, or colleagues, may not know about.” By asking questions, you allow “people to tell a different story than the one you’re expecting.” Finally, and perhaps most significantly, “asking questions means people have to make their case for the way they want a decision to go.”

Getting your employees to not simply talk to you but tell you the truth about how they feel or what they may be thinking is a key skill for any leader. As a CCO, you may find this particularly difficult in far-flung reaches of an international company, which is subject to the FCPA, UK Bribery Act or other anti-bribery/anti-corruption law. Whether you are performing a risk assessment or simply getting out of the corporate home office, you need to be able to engage employees across the globe and from a variety of cultures.

Ask open-ended questions so you will not receive back a simple Yes/No answer. Some key foundational questions include, “What are you focused on? Why are you focused on that? What are you worried about? What is your plan?” By asking these or other questions, such as “What are you hoping for? What are you expecting? What’s the most important part of this for you?” as a CCO, you can get much more engagement from the people with whom you work.

Consider pursuit of a high profit deal in a high-risk geographic area. You might want to sit down with the business unit person in charge of the project and ask them, what is your plan to sign this contract and execute it, consistent with your obligations within the company’s compliance program? In doing so you are communicating two key concepts, using a 360-degree approach. First, you make clear there should be a plan in place. Second, you are make clear the employee is in charge of that plan. Therefore, by simply asking the question, you are communicating the employee has both the responsibility for the problem and the authority to come up with the solution. This type of approach allows those who so desire to step up to do so, as “It’s a simple quality of human nature that people prefer to choose to do things rather than be ordered to do them.”

Equally important are the values you can transmit by asking questions. If you do have to fly to China or some other local office, you do not want to be seen as the US corporate executive coming to deliver some bad news or that costs need to be cut. By asking questions you can solicit ideas to help solve problems. This is because asking questions creates the authority in people to come up with ideas, coupled with the responsibility for moving things forward. Questions create space for all kinds of ideas and the sparks to come up with those ideas. Most important, questions send a very clear message: We’re willing to listen, even to ideas or suggestions or problems we weren’t expecting.” This is not about being warm or fuzzy, it is demonstrating curiosity in the employee.

You should also consider asking questions in the context of 360-degrees of communication. Louis Sapirman has made clear this concept is more than simply a two-way; up and down approach. It really demonstrates not only a level of knowledge but the communication itself important in every other direction in the workplace. People should ask their bosses questions. If employees feel comfortable enough to ask these questions, it allows CCO to be clear about things that they think are clear, but more importantly which may not be clear at all. Finally, if a person asks a question, they most usually listen to the answer. This is because “People are more likely to consider a piece of advice, or a flat-out instruction, if they’ve asked for it in the first place.”

You too can use this simple and straight-forward technique to improve not only your leadership qualities in the compliance function but your organization’s compliance function as well. The reason that asking questions is so much better than simply giving orders is that you have a vast talented workforce you can tap into it help you do business in compliance. But the how of doing a business process that is, or should be, burned into your company can be facilitated by possibilities that are out there in your employees’ minds.  360-degrees of communications allows you to create an atmosphere where nobody is afraid to ask a question. Perhaps equally importantly no one is afraid to answer a question.

Three Key Takeaways

  1. Asking questions is a great technique to elicit information.
  2. Asking questions creates the authority in people to come up with ideas, coupled with the responsibility for moving things forward.
  3. Create an atmosphere where no employee is afraid to ask or answer a question.

 

This month’s podcast series is sponsored by Dun & Bradstreet.  Dun & Bradstreet’s compliance solutions provide comprehensive due diligence reporting and analysis to reduce your risk of working with fraudulent companies by accessing a company’s beneficial ownership, reputation risk and more.  For more information, go to dnb.com/compliance.

A 360-degree approach to communications entails looking at all forms of interactions as a way to interconnect. This means both verbal and non-verbal and in clues, hints in addition to directly. This concept can be particularly helpful in relating to and with cultures outside the United States as one of the things most critical issues to a compliance function is breaking through a company’s internal cultural boundaries. In “Getting to Si, Ja, Oui, Hai and Da; How to negotiate across cultures”, Erin Meyer explained that “managers often discover that perfectly rational deals fall apart when their [business] counterparts make what seem to be unreasonable demands or don’t respect their commitments.” She laid out a five-point solution that I have adapted for the CCO or compliance practitioner in communicating a compliance program across a multi-national organization.

Initially look for as many cultural bridges as you can find as it will help you understand what your international audience is communicating to you, in both verbal and non-verbal formats, during a wide variety of activities familiar to any compliance professional such as training, investigations or simple meetings where the compliance perspective must be articulated in any business setting. If you fail to have an understanding or even a person who can navigate these signs for you, here are five steps to help you out: (1) Adapt the way you express disagreement; (2) Know when to bottle it up and let it all pour out; (3) Learn how the other culture builds trust; (4) Avoid yes or no questions; and (5) Be careful about putting it in writing.

Adapt the way you express disagreement

Simply because someone disagrees with you, it is not a sign that the discussion is going poorly but that it is an invitation to engage in a lively talk. The key is to listen for verbal cues when interacting. These sources are “what linguistics experts call “upgraders” and “downgraders.” Upgraders are words you might use to strengthen your disagreement, such as “totally,” “completely,” “absolutely.” Downgraders – such as “partially,” “a little bit,” “maybe” – soften the disagreement.” It is incumbent to understand upgraders and downgraders within their own cultural context.

Know when to bottle it up and let it all pour out

Some cultures have very demonstrative ways of speaking and gesturing. However other cultures are not comfortable with such displays. You need to understand this key difference. Meyer writes, “So the second rule of international negotiations is to recognize what an emotional outpouring (whether yours or theirs) signifies in the culture you are negotiating with, and to adapt your reaction accordingly. Was it a bad sign that the Swedish negotiators sat calmly across the table from you, never entered open debate, and showed little passion during the discussion? Not at all. But if you encountered the same behavior while negotiating in Israel, it might be a sign that the deal was about to die an early death.”

Learn how the other culture builds trust

Most Americans think that building trust in a business setting is gained by demonstrating your usefulness and competency in providing solid information. However, this type of approach is not always the most effective across the globe. There are two different approaches to building trust:  cognitive and affective.

In the cognitive approach, you gain trust by “the confidence you feel in someone’s accomplishments, skills and reliability.” In short, you know your stuff and for the compliance practitioner there is usually not much higher a compliment. This type of trust is more valued by Americans, Germans, Australians and Brits. Meyer says this is the trust that comes from the head. Conversely, affective trust may be termed to come from the heart. But it is not simply emotive. It derives from “emotional closeness, empathy, or friendship.” It means that you see each other on a personal level. In the BRIC countries, Southeast Asia, trust of this type is not likely to be achieved until this type of connection can be made.

Some of the techniques you can employ to build trust are to, “Invest time in meals and drinks (or tea, karaoke, golf, whatever it may be), and don’t talk about the deal during these activities. Let your guard down and show your human side, including your weaknesses. Demonstrate genuine interest in the other party and make a friend. Be patient: In China, for example, this type of bond may take a long time to build. Eventually, you won’t have just a friend; you’ll have a deal.”

Avoid yes or no questions

This is something Americans have an innate amount of trouble getting our heads around. Most generally when we ask a direct question requiring a direct Yes-or-No answer; we expect that whichever the answer is, it will be adhered to going forward. In many other cultures that may not always be correct. In some cultures, it is rude to tell someone you respect and have trust for ‘No’ directly. While they may say ‘Yes’, they may really mean ‘No’. Conversely, even when the verbal response is a strong or even a multiple ‘No’ answer, it may simply mean that the party needs more time to respond.

This means you should try to avoid a simple Yes-or-No response, by asking a more open question that elicits additional information that will help provide the context for the answer. You should also watch body language and other signals more closely, “Even if something is affirmative, something may feel like no: an extra beat of silence, a strong sucking of breath” or a muttering. Be watchful and listen closely.

Be careful about putting it in writing

This last point may be the most difficult for the CCO and compliance practitioner, especially if you accept my mantra to Document, Document, and Document. In many cultures, even the follow up to a conversation with something in writing could well seem like a slap in the face, the lack of trust or even communicating that the listener did not comprehend what you were communicating. You may need to do some additional amount of explanation around your written compliance documentation. Do not be dogmatic about it, but emphasize the need for written materials in the appropriate situation.

Communications in compliance must be largely drawn around trust. For any compliance practitioner, this is a key to working with your employee base across the globe. Implicit in building trust is that you get out of your home office and travel to your other office locations. While you can build cognitive trust through demonstrating your usefulness to an overseas business unit from your home office in America, you will never build affective trust sitting in the corporate office. Get out and about and meet your employees and build the trust that will allow a successful a 360-degree approach to communication.

Three Key Takeaways

  1. Communications in compliance must be largely drawn around trust.
  2. Look for as many cultural bridges as you can find as it will help you understand what your international audience is communicating to you.
  3. One of the things most critical issues to a compliance function is breaking through a company’s internal cultural boundaries. 

 

This month’s podcast series is sponsored by Dun & Bradstreet.  Dun & Bradstreet’s compliance solutions provide comprehensive due diligence reporting and analysis to reduce your risk of working with fraudulent companies by accessing a company’s beneficial ownership, reputation risk and more.  For more information, go to dnb.com/compliance.