EDITOR’S NOTE: Fresh Perspectives is an exclusive series of The Compliance Report that features expertise across Convercent. Each week we will feature a different Convercent expert, capturing their opinion and unique voice. Fresh Perspectives will be published weekly on Fridays.
Let’s be real, I’m a sales guy leading Convercent’s sales team. We live and breathe the intricacies of scouting out, massaging and landing killer deals. We are competitive, driven and thrive with a good challenge. We can talk to you for days about the dynamic nature of Salesforce, the importance of relationship building, knowing when to place the big ask and negotiating contracts; but today, we’re going to talk about a strategy that my team and I use day in and day out, and apply this strategy to what you do best: compliance and ethics.
Red Ocean vs. Blue Ocean Strategy
In sales, the red ocean versus blue ocean strategy is about competing in existing market space (red ocean) but striving to create an uncontested market space (blue ocean). It’s about taking a good, hard look at not only beating the competition (red ocean) but making the competition irrelevant (blue ocean). It’s about exploiting existing demand (red ocean) and taking that further to create and capture new demand (blue ocean).
An example of a company that freely swims in the blue ocean is Apple. Steve Jobs created an uncontested market space by bringing what was a stationary item, the telephone, into our pockets. He defined a market, and his products made mobile phone designs and functionality that followed the iPhone irrelevant. And by doing so, Jobs created this psychological sense in his customers that they NEED this device even though before it arrived in the market they lived life fine without; he created a need we didn’t know we wanted and improved and totally changed the way we communicate as a society forever – literally.
For you as a compliance expert, there is a narrative in the market that highlights a very prevalent challenge. Large companies are dealing with shifts in their business that are impacting how they go to market, attract and retain talent and grow on a global scale all the while remaining ethical and compliant. That’s no easy undertaking.
As a result, compliance and ethics leaders and their teams are under a massive amount of pressure because they suddenly have a seat at the table as a proactive voice versus a preventative one, which creates this chasm between being a trusted advisor and the opportunities and challenges that are now put at their feet.
Business decisions are productivity based
New opportunities and horizons for the business because of changing employee demographics, globalization, attitude of the company
Solve tactical problems
Be strategic, forward-looking and big picture
Prevent risk by reacting
Mitigating risk by analyzing trends and preventing them before they happen
|Make improvement only once a year|
Improve performance with a revolving approach, that is constantly reviewed, iterated and improved regularly
The blue ocean strategic mentality is driving this industry mind-shift about managing something as complex as COI that hasn’t traditionally been something CCOs pay much attend to no matter how much they maybe should have been. It’s imperative for you to get out of the mindset where you have the same set of responsibilities, managed with the same old system. Avoid seeing the benefit in taking on something new as an unreachable challenge or added responsibility, but as a short-term change for a long-term benefit.
The Risk is Real
COI opens companies up to detrimental risk from comprising integrity and improper channeling of funds to bribery, corruption, fraud and money laundering. You can bucket these risks by what they could cost your company from a financial, time or corporate opportunity perspective.
Technology understands where amongst 10,000 employees, for example, conflicts are increasing, risk is high and the stakes are insurmountable while providing you a clear warning on when and where to take action—but you have to let it do its job. The industry is trying to better themselves, but you have to kick into proactivity and take your business mindset to the next level in the pursuit of solving this big global problem.
- COIs are the third most commonly observed type of misconduct, according to the 2013 National Business Ethics Survey (NBES), with only 49 percent of workers who observe COI misconduct report what they see.
- A combined 74 percent of companies use internal/desktop tools, or none at all, to manage COIs, according to the 2015 Compliance Trends Survey from Deloitte and Compliance Week, which reveals the lack of sophistication around managing this risk area.
There are many case studies to reference where COI has become a major problem and severe risk area for any company big or small, in any industry and in any country. I was talking with a large company the other day that employs over 25,000 people and has over a dozen locations. That’s a hell of a lot of people to ensure are remaining compliant, disclosing conflicts on in timely and appropriately documented ways, especially with the changing regulatory landscape the industry faces.
They saw they had a broken COI process – disparate and multiple system were in use, inconsistent management methods, which in turn, results in a very dysfunctional and ineffective COI process. Data living in different systems, a total lack of access to internally support this kind of infrastructure. Too much reliance on IT, the capacity of disclosures for large firms leaves them wide open to detrimental risk on all levels. This, in my experience, leads to frustrated employees, loss of compliance team credibility and a severe delay in remediating COI disclosures. Forcing employees that are taking the initiative to disclose a COI through a manual and clunky process increases the likelihood they will abandon it all together and not attest at all.
As a forward-thinking compliance executive, in order to restructure your program effectively, you must:
- Believe in an integrated platform vision for all areas of compliance
- Invest in an integrated platform that overlays data, compiles reports and spots trends
- Have Board and other executives buy-in to improve your COI
Enter COI 2.0
This is where my sales charm comes into the picture.
We are approaching COI in a new way with the latest version announced earlier this week – COI 2.0.This software is a more powerful disclosure management tool than what has been available to do date, and more purposefully built to align to the way companies handle disclosures from an operational level. Check out the interactive demo for a better view.
The Risk Is Too High — and Severe — to Continue to Sweep COI Under the Rug
When you give your employees an intuitive way to make and manage disclosures, more of both will get done—in a more efficient and consistent way. Armed with more (and better) disclosure data, you can finally understand, address, anticipate and manage the conflicts that create risk and misconduct within your organization and make strategic business decisions that will reduce risk, create validity and position you as a pioneer for adapting solutions that allow you to make better strategic decisions. Even though I’m the head of sales here at Convercent, this goes far beyond closing any deal – it’s much bigger; it’s about eliminating the detrimental risk that COIs can (and will) cause if they fall idle.