Ever heard someone say, “We are interested in improving safety, but only if it reduces costs.” Or maybe it’s closer to this: “We are interested in improving compliance, but only if it reduces costs.”“It’s a cost reduction message, and it’s heard across all industries and across all compliance programs, be it safety, security, quality, environmental, and regulatory. All of these programs are often seen as an overhead that doesn’t add value,” explains Raimund Laqua, founder and Chief Compliance Engineer at Lean Compliance Consulting, Inc. Lean Compliance Consulting helps ethical and ambitious companies in highly-regulated, high-risk industries to improve their compliance programs. Raimund has helped companies increase trust, decrease risk, and sustain growth for more than 25 years. The problem with this message, explains Raimund, is that compliance activities are seen as necessary, but they’re also seen as a waste. That also means compliance is perceived as something to reduce or get rid of. No effective compliance program can exist if that’s how a company values compliance. Let’s explore this further.
How Do You View Compliance?
Think about how many companies are focused on continuous improvement. The question is: what are you trying to improve? The answer for many companies will be cycle time and cost reduction. At some level, this makes sense, but not if compliance and safety suffer as a result. “We have always had problems finding a spot to place compliance within the organization, so it often ends up as an overhead, or as a tax on production,” explains Raimund. Again, that can result in a reactive approach to compliance or it can result in compliance being seen as something that just takes away from the bottom line. “No wonder people leave certain fields to work in areas where their efforts will be valued and rewarded. Ask anyone who has been involved in a merger or acquisition as to what areas are cut first, and you will have proof as to what is valued. Compliance programs in all their forms end up being the first to get cut,” adds Raimund.
Let’s face it: Viewing compliance as a way to improve productivity is outdated.
Compliance has changed and has a different role than “just” improving productivity. “The role of compliance is fundamentally to ensure that business outcomes are achieved, and it does this by reducing risk,” explains Raimund. That takes a mindset shift in many organizations in order to understand and apply.
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Many reading this may agree that compliance is not a waste. Instead, when done right, it’s designed into and part of the DNA of what and how a company operates. “Another way of saying this is while productivity programs improve margins, compliance ensures that those margins are achieved,” adds Raimund. So what are a few of the characteristics, then, of an effective compliance program? Raimund shares a few characteristics of an ideal compliance program:
- It focuses on outcomes
- It includes a learning curve around compliance
- It has clear and comprehensive obligations
- It uses standards to ensure the right behaviors are the norm
- It “embeds” compliance
- It doesn’t add drag to work processes
- It can easily adapt to meet new compliance obligations
- It’s ethical
- It’s transparent
- It allows for high degree of integrity
- It has the capacity to improve
There’s no doubt it takes commitment to make compliance an integral part of your company’s DNA. Part of that may include an assessment of where you’re at now, and where you want to be in the future. When companies can do these things, and when they continuously improve compliance, the payoff will be great. After all, safety doesn’t just happen on its own.
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Helping you to make decisions for the future, iReport gives you the data and insights to continually improve compliance and safety. See why iReport is trusted by the world’s safest businesses—big and small: Schedule a Demo to learn more about iReportSource.