Innovation in compliance is one of my passions for every Chief Compliance Officer (CCO) and compliance practitioner. So much so that I dedicate an entire podcast series to the topic, aptly named Innovation in Compliance. I was therefore intrigued with a recent Harvard Business Review (HBR) article, entitled What Kind of Chief Innovation Officer Does Your Company Need?, by Darko Lovric and Greig Schneider. The authors work as corporate advisers and executive recruiters. Through this role they have assisted “nearly 80 companies hire senior innovation executives over the past five years”. Moreover, they have worked with innovators and entrepreneurs across all industries. This has led them to develop six-character types for innovators. I have taken their work and adapted for the different skills set a CCO might need to create innovation in compliance.
Research skills
Researchers “define innovation as “the invention of entirely new things.”” They use research skills to get their arms around new ideas and garner insights from large amounts of data. Research skills are as important to “determining the right questions as it is about finding the answers.” These skills are most useful where there is a regulatory overlay and compliance can certainly lay claim to that mandate. Research skills in innovation are most useful for organizations which are willing to make “near-term investments for longer-term gains.”
Engineering Skills
Engineering skills are used “to build something that works right now.” It is used to “tinker with ideas and technology and try things out until something sticks” or improves a process. Someone with this skill set defines innovation as “always working to make something a little bit better.” Engineering skills are often seen as “hands-on exploration, expert brainstorming, and many (sometimes expensive) tests.” They tend to lend themselves to the intersection of technology and its integration into business processes to “create opportunities for myriad incremental improvements and occasional leaps of imagination” in process improvement.
Investor skills
Investor skills are some of the rarest in compliance innovation. It is because an investor, using these skills, “sees innovation as the means to an end, and that end is growth. Not just any kind of growth, however — big growth.” Yet investor skills involve “carefully allocating resources in order to optimize selective opportunities.” These skills are useful in “fast-moving environments where innovation can come from any direction — customers, competitors, start-ups, labs — and in many forms, from new markets” to create more effective compliance to improve business processes. Investor skills need to partner with a “technical expert who can help them assess the feasibility and future potential of ideas, not just their current performance.”
Advocacy skills
Advocacy skills help to deliver something new for the end user. That end user can be a customer, stakeholder or, for the compliance professional, your employees. Advocacy skills understand what their customers needs are and “are on a mission to explore and fulfill their needs.” Advocacy skills work in technologically fast-moving businesses, which would seem to be a function definition of compliance in nearly 2020. These skills are used to keep the compliance brand in your organization relevant and keep a step ahead of where the regulators currently are in their best practices. Advocacy skills can work to deliver “usable innovation and sensing where the customers wish to go next.” Advocacy skills should be “partnered with a strategist who can discipline their thinking and channel their insights into a long-term course of action.” That sounds precisely like a compliance professional.
Motivational skills
You might not think about motivational skills in innovation but the authors found they “work to unleash the employees’ (and sometimes the customers’) creative spirit. That often involves getting the people and the culture focused on vision and imagination while reducing bureaucracy, complexity, and risk aversion.” They are most useful when “unlocking the ideas of others” and are “distinguished by their fascination with narrative, people, and talent — and their friendly texts and voicemail messages.” In short, they can listen. Through this most basic leadership skill, they can “skillfully shake up the organization by creating an inviting space for others to innovate within: putting in place the right incentives, organizational designs, and capabilities; and protecting the mavericks while encouraging the quiet voices to contribute.”
Organizational skills
Organizational skills are the true process focused skill set, focusing on extents like key performance indicators (KPIs), metrics, and stage gates. Organizational skills look directly at process improvement. They are often found in professional services; i.e. lawyers and compliance professionals. Organizational skills are “highly valuable in companies where innovation efforts require wide employee participation and the real challenge is adequately managing them.” Such skills can “create momentum, galvanize support, and deftly navigate politics to help innovations go from idea to reality.” Organizational skills should be partnered with those who can “help them focus on the right issues – and motivators to help them see when risk taking should prevail.”
While you may not find one person with all of those skills, by identifying them a CCO might be able to bring a range of skills to an innovation project. Further, by tempering some of the more extreme aspects of each skill set by partnering it with a countervailing skill set, a CCO can bring a much more robust response to innovating. Also remember that innovation in compliance does not necessarily require a high cost of entry. You can innovate by looking to process improvement and moving outwards.
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