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5/17/2012
02:42 PM
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Manage Risk As A Strategy, Comply With Regulations As A Tactic

Compliance alone should never be the only goal

Good business management makes it easier and safer to run a business correctly. And as a benefit, this makes compliance with applicable regulations and laws easier and natural, not merely a huge distraction.

I have a prospective client I have met with occasionally for a couple of years. They are in constant agony about how they can meet regulation requirements, deal with the associated cost, and find the time required to focus on compliance. At the same time, many of their business processes and computer systems are a patchwork fraught with very real risks and expensive manual processes. Their mindset is to find a cheap compliance approach to "add on" to their current systems and work procedures.

I have failed to get this prospective client to recognize that, while compliance is very important, the biggest risks to business survival are their current processes, procedures, and systems. They are literally only one big internal failure away from closing the doors for good. In the meantime, they keep searching for an unrealistically inexpensive compliance plan that will fit their one-of-a-kind approach to business.

These business leaders have an emotional need, not a logical approach. Out of habit, they feel safe with their current operations and have become blind to the dangers. With these obstacles firmly in place, it’s clear that nothing is going to change until it’s too late.

The irony of this situation is that, if this company leadership truly addressed their operational risks and flawed processes, almost every one of their compliance issues would be addressed with little extra effort or cost.

For many organizations, I recommend using compliance as a guide to improving their businesses. Regardless of your industry or applicable laws and regulations, compliance efforts include a focus on security, processes, procedures, documentation, oversight, and planning. By working to become compliant, or by maintaining compliance, businesses actually have a great guide to addressing many of their business risks. The guidelines for compliance in any industry can give businesses discreet actions to take, measurable outcomes, and documented metrics.

Regulations and laws can seem like a costly burden for organizations. There are costs of time, attention, and money to ensure compliance. We find the best-run companies understand that compliance with their applicable requirements is not an add-on task. In fact, they don’t even consider compliance to be an end goal. The best-run companies understand compliance is a valuable added benefit of simply running their businesses well.

Glenn S. Phillips, the president of Forte' Incorporated, works with business leaders who want to leverage technology and understand risks within. He is the author of the book Nerd-to-English and you can find him on twitter at @NerdToEnglish.

Glenn works with business leaders who want to leverage technology and understand the often hidden risks awaiting them. The Founder and Sr. Consultant of Forte' Incorporated, Glenn and his team work with business leaders to support growth, increase profits, and address ... View Full Bio

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