On this day in 1970, Apollo 13 landed safely in the Pacific Ocean four days after disaster struck. 2 days into the mission, some 200,000 miles from Earth, an oxygen tank blew up and Astronaut Swigert reported to Mission Control, “Houston, we’ve had a problem.” The drama was followed by the entire world as both the three-man crew and “Mission Control were faced with enormous logistical problems in stabilizing the spacecraft and its air supply, as well as providing enough energy to the damaged fuel cells to allow successful reentry into Earth’s atmosphere. Navigation was another problem, and Apollo 13‘s course was repeatedly corrected with dramatic and untested maneuvers.” (history.com, 2017)
If you watched the movie or read the story, who will recall it was largely the staff who developed the solutions that brought the spaceship home, not senior management. It was as fine an example of operationalizing a solution as one could hope for in an organization. The key concept from the Department of Justice’s (DOJ) Evaluation of Corporate Compliance Program (Evaluation) is operationalization. For instance, under the query Shared Commitment is the following question – “How is information shared among different components of the company?” Under the Prong relating to Policies and Procedures the Designing Compliance Policies and Procedures asks, “What has been the company’s process for designing and implementing new policies and procedures? Who has been involved in the design of policies and procedures? Have business units/divisions been consulted prior to rolling them out?” Lastly, under the same Prong is Responsibility for Integration, with the following question “Who has been responsible for integrating policies and procedures?”
These questions point to a Chief Compliance Officer (CCO) or compliance practitioner demonstrating how compliance is being burned into the fabric of an organization. While leadership at and from the top has long been considered by both the DOJ and compliance professionals as a key element to move compliance forward, the Evaluation has also crystalized thinking around compliance leadership from the middle and the bottom. I thought about these concepts when reading a recent Financial Times (FT) article in Employment Global Best Practice by Andrew Hill, entitled “Leadership from the bottom up”. I was particularly struck by a quote from Shlomo Ben-Hur, a professor at IMD business school, who said, “We teach the top 5 per cent — but the majority of this work is carried out by the other 95 per cent.”
In Ben-Hur’s work he found that many executives came from the middle management ranks. They tended to be persons “with a determination to “take what I have responsibility for and make it truly great.”” Anecdotally, he related “They typically said, ‘I’ve responsibility for the minibus,’ and people then asked them to drive bigger and bigger buses until one day they drove the whole business.”” Think of the military and the responsibility given to front line commanders and how that “is increasingly reflected at large companies.”
The key for companies is that senior management must “find ways to transmit leadership skills to people who do not have ‘leader’ in their job description and will probably never attend a top-level leadership program.” Hill noted, “Ben-Hur’s work has focused on ensuring that managers understand how to assign the right jobs to their team members and motivate them to perform well, using theories of behavioural change that senior executives have typically never learnt on their way to the top. Dedicated managers well below the executive board need to know how to use these tools.”
For the CCO or compliance practitioner, this provides a clear path to help in the operationalizing of compliance by providing the tools to persons far down the organization to put compliance into the operations of a business. One thing Hill writes about is a company should nuture such learning because by doing so, it will both teach practical skills around compliance but also foster a strong internal network of compliance advocates who can move initiatives up and down and organization. Moreover, as these individuals progress through the company ranks, they can take their compliance message with them at each new level.
Building on the writings of Hill and the work of Professor Ben-Hur, my suggestion is to build a Compliance Excellence Center in your company. Bring in middle-managers to focus on understanding not only their roles in compliance but also how to assign the right team members to a compliance initiative and motivate employees going forward. Hill wrote that Airbus has recently established a corporate ‘university’ to spread leadership ideas through the company. Airbus’ theory behind this push is “being a leader isn’t just about being a vice-president; it’s about being able to push the company towards new ways of doing things and executing the things we have to execute. That could [apply to] a blue-collar worker on the shop floor or a VP.”
A key is not simply to train such middle and front line managers on compliance but getting them to consider rollout, effectiveness, testing and improvement. In other words, as Jay Martin would say, it is all about execution. One way to help facilitate this is through exercises using incentives to “make leadership insights stick and change workplace behavior.” Hill also writes that concepts from entrepreneurship can assist in such learning by encouraging managers to “think and act independently” to operationalize compliance. Finally, never forget mentoring as a manner to spread good compliance practices throughout a company if a more formal approach is not possible.
Too often, strategies to move a compliance program or even an initiative come from the top of an organization and are pushed down. To fully operationalize compliance, you must have leadership in compliance further down the organization which (hopefully) has been a part of the design process and can lead the implementation throughout an organization. Do not forget the example of Apollo 13 and the operationalized engineers who developed the solution to bring the damaged spaceship home. If you put a system in place to train your middle managers in compliance it will go a long way towards taking your compliance program from good to great.
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