Corporate culture is one of those business phrases that is often thrown into conversation, with little thought given to what it actually means. According to the Harvard Business Review, corporate culture must be shared, pervasive, enduring, and implicit. Take a harder look at your corporate culture, your organization’s purpose and perception, and see how much of it is guided by strategy and leadership, as well as your employees. In our rapidly evolving culture, how can you make sure that your corporate culture doesn’t just talk the talk, but it also walks the walk? Developing a strong culture of compliance within your organization isn’t just good for you and your employees, it is also good for your bottom line and the world at large.
“Credibility is a competitive advantage… Are you protecting me? Are you protecting the world? Are you protecting the product?”
Asha Palmer, Convercent’s Chief Ethics and Compliance Officer (CEC) and Executive Vice President (EVP) of CONVERGE, knows how to build a culture of compliance, what the benefits are, how to measure compliance across your organization, and what the cost of non-compliance really is. Stick with us and by the end of this post, you will know exactly what next steps you need to take in order to build your compliance culture.
What does a culture of compliance look like?
A culture of compliance is built on a strong foundation of trust. According to Palmer, “I honestly think the foundation of building a culture of compliance is establishing trust; we have to do what we say we’re going to do, when we say we’re going to do it, and how we say we’re going to do it.” It isn’t just about the words you use when discussing your organization’s commitment to compliance, but rather, it is about what you do, day after day, to show that you actually believe it. Do your employees and public stakeholders believe that you possess the courage of your convictions? Do your employees know that you also hold yourself to the same standards? When rules are broken, do your stakeholders, both internal and external, trust you to do the right thing? Palmer continues, “If you’re trying to build a culture, you have to be a part of that culture. You can’t just be ‘my way or the highway,’ right? A culture is formed through mutual accountability and responsibility.”
Gone are the days of smoke-filled back rooms, behind locked doors of power, where leaders made decisions and never had to disclose their reasoning. Business has evolved. We are living in a world of regulations, benchmarks, and endless data, so when you’re considering your compliance culture, you know you must be transparent in order to get buy-in. Your “why” is just as important as your “how.” According to Palmer, “When it comes to transparency, I ask: What are your processes? What are your expectations? What are the rewards? What are the consequences? Are they consistently applied to everyone across the company?” Developing a culture of compliance is all about harnessing the healing properties of daylight, and honest communication is just as important as what particulars you’re trying to communicate. Communicating exactly what is expected from your employees, in an easy-to-understand format, is made easier with an ethics & compliance portal.
So, you have committed to building trust and transparency at your organization. That’s great! Now the final piece of the puzzle is consistency. Over time, do you stick to your convictions and clearly demonstrate how each benchmark, regulation, and data point serves the overall goal of compliance? According to Palmer, “Building that culture of compliance is about making sure you are consistent. You’re transparent, you’re fair, and you constantly evaluate what actually makes sense and what is meaningful and what’s not.” If you throw a new set of expectations without explanation at your employees every quarter, how can you expect them to adhere to them in a meaningful way? How can your customers know what you and your company stand for? How can you, as a leader at your organization, successfully “set the tone from the top?”
Benefits of Fostering a Compliance Culture
Beyond simple compliance, that is, adhering to your industry-specific standards and laws, fostering a culture of compliance can help your staff and every third party who interacts with your company feel good about the work they do and who they work with. Have you ever worked in an environment where your physical well-being was on the line? Have you ever worked at a company where your psychological health was deteriorating because of toxic culture and personalities? If you have, then you know the implications: when you don’t feel safe at work, either physically or psychologically, you will never be able to do your best work. When compliance is built into your corporate culture, your employees know that your company values their well-being. It seems overly simple, but according to Palmer, “When people come to work, they understand that everyone is working toward the same things, in the same way, and are held accountable to the same standards. That produces a psychological safety that is deeper than any level or seniority.”
Maslow’s Hierarchy of Needs states when physiological needs are met (food, water, warmth, rest), an individual can attend to needs higher up the five levels of the pyramid. Once an individual covers their need to feel safe, they can then focus on their needs of belongingness and love, esteem, and finally, their own self-actualization. Any manager, regardless of industry or training, should strive to pave the path to self-actualization for their employees. If an employee feels free to achieve their own potential, they will add so much more to the company culture by producing their best work and challenging themselves and others to do the same.
Organizational Trust and Buy-In
Fostering a culture of compliance means that your organization will always be striving to live up to its own standards. Implementing benchmarks, conducting surveys, integrating policy trainings into onboarding, etc. may all sound well and good, but in order to maintain organizational trust and buy-in, every level of your organization must play by the same rules. If your staff trusts the culture at your organization, they will not be afraid to speak up when they witness unethical or illegal behavior. As Palmer puts it, “If there’s a double standard at any level within the organization, that culture is undermined, and you won’t empower people to speak- up because they’re afraid and they don’t trust you; that’s why it’s very important to have a pulse on people’s sentiments, their feelings about accountability, and behaviors at every level in the organization.” A culture of compliance may seem like an overly intellectual endeavor, but without it, your organization is vulnerable to many more costly, dangerous, and unpredictable factors.
Measurements and Metrics of Compliance
Accurate Qualitative and Quantitative Data
By now, you’ve seen how a culture of compliance will benefit your company, but how do you measure such a constantly evolving and sometimes invisible entity? Your data will help you identify your blind spots and hot spots (more on that below), so its accuracy is paramount. Think your internal surveys are enough to get an accurate pulse on your corporate culture? According to Palmer, “The important thing is layering the data between what people tell you and what you see objectively.” You will need to rely on multiple data sources in order to get an accurate picture. Palmer continues, “Try to get as many qualitative and quantitative data points as you can and figure out what kind of story they tell you about the ethical health of your organization.”
Identify Blind Spots and Hot Spots
So, you’ve gone out and conducted focus groups, surveys, and individual interviews. Still feel like you don’t have the hard data to measure your compliance effectiveness via more holistic qualitative methods? According to Palmer, that is where you can really lean into the data available via a compliance portal. An interactive portal with integrated analytics will show you which policies or questions get the most views, which regions are generating the most traffic, and much more. “You need that data about interactions in something like an ethics and compliance portal, where you see where people are coming from and why. You can dissect data in a lot of ways and see where you might have some gaps or where you might have some hotspots. I think those are all opportunities.” With your employee awareness and engagement quantified, you’ll be able to identify where your blind spots and hot spots are, based on frequency, location, or department.
Compliance and Lawfulness –
The Cost of Non-Compliance
We are living in a saturated news environment where every corporate misstep could land a company in the headlines. Businesses need to shield their reputations from any negative coverage in order to compete. Consumers are overwhelmed by choices, so a reputation for fairness will only add to your competitive advantage. Palmer asks, “Is compliance embedded in everything that we do? Is it embedded in our sales incentive structure? Is it embedded in our employee benefit? Is it embedded in our community strategy? Is it embedded in fill-in-the-blank? If the answer to any of those is no, or no one is thinking about the answer to those questions, you’re going to have a problem.” If you bake compliance into everything your company does, then you can spend less time worrying about preventing missteps from becoming public, and more time coming up with ways to publicize how your company lives up to its values.
Trust in the Marketplace
By now, if you haven’t been convinced that cultivating a culture of compliance is in your organization’s best interests, consider the fact that your reputation can be a huge asset, impacting your bottom line. Palmer simply states, “Credibility is a competitive advantage. Go back to that psychological safety of employees; it also exists with consumers as well. Are you protecting me? Are you protecting the world? Are you protecting the product? Because if you’re cutting corners internally, you’re likely cutting a corner when you’re developing that product, and you’re likely cutting corners I can’t see.” When consumers are shopping around, a purchase may come down to the differences between corporate cultures and their perception in the marketplace. If you have a healthy culture of compliance in place, your organization will benefit from that hard-earned trust in the marketplace.
Take a closer look at your compliance culture and put it into action with our speak-up culture ebook. Download our step-by-step guide to improving your speak-up culture by filling out the form below and we’ll send you a free copy!