Perhaps the most prescient comment I heard during the height of the pandemic came from Jed Gardner, Group Director of Transformation at Linedata, which was that we have moved from disaster recovery to business continuity to business as usual. It appears that not only was the comment correct but now we are moving in the business world from crisis to crisis to crisis. This month’s Harvard Business Review magazine dedicated its Big Idea Series to the topic of crisis. Over this short week I am exploring what this new reality means for the compliance professional. Yesterday we looked at compliance as a trip wire to alert businesses a crisis is on the horizon, through the article A New Crisis Playbook for an Uncertain World. Today we look at cultures that are built to sustain during a crisis.
Our starting point for today is the article, Building a Culture That Can Withstand a Crisis by John E. Katsos, Jason Miklian, and Patrick L. McClelland. This article is based upon an interview the authors did with Alice Laugher, the head of Committed to Good (CTG), a private company founded in Afghanistan and based in Dubai, that provides specialist staffing and logistics to the humanitarian community. Since the company’s founding in 2006, its clients have included most major humanitarian organizations; it now operates in 26 countries. In 2019 Laugher was awarded the prestigious Oslo Business for Peace Award. In the article, the authors visited with Laugher on “what she and her team have learned about uncertainty through working in crisis zones, and how this might help managers new to the type of crisis leadership our tumultuous time requires.” It turned out she had some very interesting insights for the compliance professional to help a company in times of crisis.
1.When a New Crisis Appears
The most current crisis CTG is facing is in Afghanistan. Here Laugher said, “We navigate a new normal every day. The situation, the rules, the regulations, and the needs of the local population shift constantly. Can you imagine running a business in a place where banks are not operating? Or where corporate accounts are frozen? There is still active fighting and hostility in parts of Afghanistan where we have staff. How do you deliver salaries and make payroll to thousands of employees scattered across the country in such an environment? When the Taliban took over, we were forced to reevaluate our core objectives, achievements, and progress.” She said it “test[s] how strong our relationships with our staff, clients, and partners really are. We ride the waves together. It’s as simple as that. We share the same goal: to build humanitarian projects so that aid can get to the people who need it no matter the danger or challenge involved in getting it there.”
Compliance Lesson
Everyone in your compliance function must be on the same page. If an ethical issue arises, everyone must know what the corporate response should be; that is, we will only do business ethically and in compliance with not simply our policies and procedures but our culture and mission. So, are you communicating that message? Here I recall Louis Sapirman when, when he was Chief Compliance Officer (CCO) at Dun & Bradstreet, used the phrase Do the Right Thingto communicate the culture and values of the organization as it navigated a Foreign Corrupt Practices Act (FCPA) enforcement action. Does your compliance function and indeed entire organization have such a succinct, forceful and clear statement of culture values?
2. Uncertainties During a Crisis
When asked about dealing with uncertainties during crisis, Laugher said, “Each country is radically different, but preparation goes a long way everywhere we operate. You have to navigate local laws, some of which may be unpublished. In one country, the tax law is from 1921, so it certainly cannot be found easily and downloaded from the internet! And meeting tax obligations — something that is considered a back-office task — has much more serious consequences in conflict zones.”
Compliance Lesson
Here the lesson is you must have local compliance support ready and able when called upon by the business team or the greater organization. If you cannot have your compliance team embedded in high-risk areas, you should have local compliance assets trained to provide such support. A Regional Compliance Committee can be of great assistance here as they will have an ear closer to the ground. Indeed, Laugher noted, “it’s so important to have local staff members as part of your core team. They can help navigate the nuances and sensitivities of their country, and they have a deep understanding of their environments, a level of insight that can’t be matched by outsiders no matter how much research they do.”
It’s Really About Culture
Laugher believes that the culture at CTG drives the entire organization. She stated, “We have a culture that encourages people to go the extra mile because of the value of the work that we are enabling. We believe in what we are helping to deliver. Our people share a fundamental desire to make a difference and help those in need. Everyone trusts that we will jointly make the right decision for security and safety based on local knowledge and information, while still getting the job done. CTG is not a “look to the CEO for the answer” culture. I don’t pretend to have all the answers. Instead, we work together to find solutions to complex problems.”
Compliance Solution
Once again you have to drive your compliance message throughout the organization. Even when you do not have the answer immediately, compliance should be seen as a function to go to when you need to solve a problem. This is not simply being Dr. No from the Land of No but affirmatively being seen as a business enabler. As Laugher stated, “We embed it in everything we do.” As a CCO you should do so as well.
4. The Speed of Change
Covid-19 highlighted the speed of change. In literally a few days, companies had to figure out how to do business remotely, literally across the world. CTG was no different. How are you going to respond to the speed of a crisis, such as one that might damage your organization’s reputation in literally days across the world? Laugher said, “We have several plans of action as part of our day-to-day business in each country. Nonetheless, a lot of times our emergency plans do have to be used. So, we must remain versatile at both the local and leadership levels, and our culture and the trust we have in our team approach are essential.”
Compliance Lesson
Long term preparation is the key. Not only should you have plans in place, but have you cultivated and built relationships? Do you have relationships with the local, regional and state communities you are working, do you have relationships with both your outside sales agents and Supply Chain vendors who all may well be a part of the solution you need to have to activate? But building those relationships take time, effort, and care. You cannot start during the throes of a crisis; you must do so now.
The bottom line that the time to prepare for a crisis is now. Learn to work together as a team. As a CCO you will have to rely on your entire compliance team, from the most junior to the most senior. Know everyone and everyone’s role before crisis hits. Know who your key resources and assets will be throughout your company if you need to call upon them. Built up that trust with internal and external stakeholders.
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