#382 Organisation, values and compliance
Organisation, values and compliance
Organisational development in volatile times
Changes are happening faster than ever, especially those of an (allegedly) unforeseen nature.
The past week has already shown this clearly. Donald Trump became President of the United States of America, the German government collapsed partially and then completely, after which new elections were called — all of this happened in less than 24 hours. Many people emphasise living by values, and organisations are no exception. Compliance can be helpful here but often becomes a source of criticism and conflict.
How can compliance sustainably help with the management and development of an organisation?
Alignment
Regarding values, it is helpful to check where you stand right now. Would Donald Trump be compliant as a manager in today's corporate world? Trump is not showing the openness often demanded with his call for border closures. There is also no evidence of open communication in his agitation. For minorities and their rights, the LGBTQIA+ community or women's rights, he offers nothing or, with the demand to criminalise abortions, even less than nothing. He lacks the moderate behaviour that is appropriate today in cases of conflict. He also lacks a sense of community, demonstrated by his rhetorical derailments aimed at dividing society.
Kudos to those people and organisations that have clearly committed themselves to sustainable values. Those who have failed to do this and expect business from such people should not be surprised as leaders if they are denied any credibility, support, or social legitimacy.
No, a person like Trump would not be acceptable in today's working world.
Goals
Compliance quickly becomes an aspect of conflict, even though a compliance department is essential to today's organisational requirements. On the one hand, risk management and limiting liability risk are practised. This is primarily about the factual and not the emotional side. Furthermore, the protection and promotion of a positive organisational culture are ensured. This is not just about numerous emotional issues; it is about the values of the organisation that need to be represented. There is also transparency and responsibility.
Safeguarding these creates trust. Integrity is attributed to people and leaders. Resources and the environment are conserved, sustainability and the role model function are strengthened. In addition, social contributions often happen under the leadership of CSR (Corporate Social Responsibility).
How can these topics nevertheless so often lead to conflicts?
Implementation
Good compliance starts with professional training for the people involved. You also need people in these departments with expertise and experience in the subject matter and the practical implementation. Nothing is more frustrating than guidelines that make sense in theory but are declared unrealistic or impractical within two sentences by professionals with practical experience. Good compliance content and objectives must be communicated proactively to be understood. Just written communication is insufficient. Due to the changes already described, all rules must be subject to constant, at least annual, review. Outdated rules are not accepted, are circumvented and, quite rightly, criticised. If complaints from one side are taken seriously, acceptance on the other side will also be high.
Conclusion: very good and sustainable compliance ensures very good and sustainable results.
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More on this topic in this week's podcast: Apple Podcasts / Spotify
Read below for Podcast Transcript.
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Niels Brabandt is an expert in sustainable leadership with more than 20 years of experience in practice and science.
Niels Brabandt: Professional Training, Speaking, Coaching, Consulting, Mentoring, Project & Interim Management. Event host, MC, moderator.
Podcast Transcript
Niels Brabandt
Living in wild times, don't we? That is a pollier question that many of us had during the last week. And to keep these wild times sort of under control in corporate environment, we usually have a department which is called compliance. And the reason why we have this episode today is, I mean, I really love when you send me emails. Last week was enormous. I thought it was a bit of a post office. I mean, I I I love to answer all of your questions.
However, something must have happened that so many people got angry about their compliance department. I received a ton of email last week where people and let's put it into ratios. 20% said compliance is sort of helpful, but I have a couple of questions, but 80% pretty much said compliance should be abolished by tomorrow. It's it's all just useless. And the question is, especially when people talk about values and people love to talk about values, how can you develop an organization sustainably in a volatile world, especially in the volatile volatile times we have right now? Just to give you my last week. We all remember last Wednesday when Donald Trump became president.
And not even 24 hours later, first, the government in Germany collapsed partially, then completely, then they said there will be a voter of no confidence in January with potential new elections in March. And now they said it might happen even earlier. So you see pretty much anything's changing in circumstances right now.
It's quite wild. Compliance should keep things in order. However, something must have gone wrong when so many people are so angry. And let's face it, change is omnipresent. Everything changes very quickly. We all know that we live in a volatile world. Trump is president.
The German government disappeared pretty much or is now not functioning anymore. There's a very unclear geopolitical landscape which we have on a global scale and people love to talk about values. Just a personal message here to every single colleague. When you follow my profiles online on social media, no matter if it's Facebook, Instagram, or or LinkedIn or wherever else, I made unambiguously clear that I'm with the democrats here for obvious reasons because the message Donald Trump sent is not really a sustainable one, factually speaking. Very special thanks to all the trainers, speakers, coaches, mentors out there who once more haven't said a single word about this election. The people who say they stay neutral on human and equal rights, not only are the people you have to avoid completely. Don't give them a single penny because they are useless.
They will say anything as long as you pay them. Also, you contribute to make this planet a worse place than it already is. So thank you very much to all of you for being utterly useless. Special thanks to so called speaking associations who once more showed that they are a place for the spineless and clueless. Back in the days I only said clueless, I add Spineless on top of that. Congratulations to all of you, absolutely no exception. So when we now talk about values and corporate compliance, how to deal with that?
So let's ask a question, would Donald Trump be compliant? Let's say you are an organization, Donald Trump becomes your CEO or program manager or whatever else, manager x y z in a certain position. So what are the usual things you look at when you are an organization and you present yourself to the outside world? So it's it's first you usually say that you're pretty open minded. Well, that's not Donald Trump. Closing down the borders is not open minded. Usually have a certain level of communication.
Keep the communication open and friendly. Not really Donald Trump as well with his agitation. Usually, especially when it comes to diversity, you're in for minorities, the LGBTQIA plus community, equal rights for minorities and women. But Donald Trump, no diversity. He's anti community, anti abortion, anti women's rights, anti equal rights for women and minorities. So, that's 0 points out of 10 here as well. Usually, you have a message that you want to accomplish things together, that you have some sort of message that you want to achieve goals together.
That's on Donald Trump as well. He is he is just there for the separation. He always does the us versus them or them versus us, rhetorics. And usually also have some sort of moderation where you say, when we communicate first, we take it slowly and we only go more aggressive if needed. That's on Donald Trump as well. When you look at how he dealt with extremist organizations, for example, the Proud Boys or similar, there's nothing in there as well. So Donald Trump will probably be the least compliant person in your organization.
So let's see how you can do better because I've seen many people very angry about the compliance department. I know how frustrating it can be. However, first, we have to define what is the goal that corporate compliance actually has. Because no one sets up a department just to torture you. You sometimes might think that, however, that's that's not the goal. The goal of compliance is minimizing risk. So that's the factual side by the way.
They look at what are our liabilities and I give you a very simple example. Back in the days when I started working you had this time of the year usually where you send out gifts and the gift sometimes were enormous. I remember that one of our suppliers sent me a box and in this box was a fully functioning espresso machine when I worked for a corporation. Surprise, surprise, we had to send that back. I don't drink espresso so I told my colleagues, hey, look, this might be a couple of €100 back in the day still Deutsche Mark.
And they said, no, no, this is a couple of 1,000. I didn't even know that because I don't drink espresso. So everything was sent back, of course. The factual side, not the emotional side. That's the first part of compliance, minimizing risk, minimizing liabilities. Because today when you send out these gifts, people would say that's bribery. And anyone accepting these gifts would usually use lose their job very, very quickly.
The second aspect is that you want to have some sort of protection and promotion for a positive entrepreneurial, positive organizational culture. That is the value side of compliance. You stand up for certain values and with compliance you want to protect these values. So for example as we had with the football soccer team for American listeners football team Wolfsburg in Germany, when one of your players makes a homophobic statement that is not in the first place illegal in the way he said that. However, it went against the values of Volkswagen and their sponsor, the it went against the values of Volkswagen, the team, and Volkswagen, their main sponsor. And they put him on the spot to either apologize or lose his job, and he apologized from there and still pretty much has sealed his fate in football anyway after that statement for very good reasons. It's right to deal with him in that way.
So you're protecting the values you stand up for. Different organizations stand for different things, and they, of course, protect their values. When you do not align with certain values, so for example, when you say I am anti capital capitalism or I am anti interest rate or anti making any kind of profit, you cannot work for for profit companies or for banks or for insurances. And when you say, oh, I'm someone who thinks that you can negotiate with any kind of terrorist, we should never have weapons, which in my opinion is not a very valid point, but, of course, not illegal to have that point, you cannot work for anyone in the defense industry. You stand up for your values, however, organization stand up for their values and that is all regulated by the overarching law that you have in certain countries. So you protect your organization's values. However, you you need to be clear what are the values that you stand up for.
These become part of compliance as well. They protect their organization. And the 3rd aspect of compliance is transparency and accountability. So you want to make very clearly what you do that usually gives trust to people, you look very integer, so integrity something people will at least think you have or will tell you that you have it. And of course, that also goes beyond what you only have within your organization. When you, for example, say, want to save resources, you do not mean that only within your organization. Resources should be protected but also in the outside world, saving the environment, working sustainably, being an example to others, for example, being on the frontier of an eco friendly program and also helping others by, for example, having certain social aspects in your either donations or spending that you help other people which is often labeled CSR probably.
You've heard of that corporate social responsibility. And again, when you for example look at Bayern Munich, the soccer for the American listeners here football club, the former CEO Ole Heughan is and he's far from perfect we agree here, but he always said we do social things but we do it help not to advertise. They did very good many many very good things that they they don't have to by the way it's professional football club. They could just play football and make money with it. They did many good things, but they didn't advertise it. So that's something which many organizations are very good at. Often they say do good things and then advertise with them.
So you're not really sure. Do they really do it because they wanna do something good or do they actually do just to have an advertising piece they can put on social media? So this kind of corporate social responsibility is also part of the compliance department or often connected to it that you do something out of the right reasons. The question now is how do you implement all of that? And it always starts with training the people professionally and you need people when you train them who have expertise and experience on the matter but also in real world practice because otherwise there is no chance that anyone takes you seriously. And I give you a very simple example where I could really understand how frustrated people were with their organization. An organization that deals with books and of course people have to travel so they meet authors or people who are interested in writing books or publishing books with them.
Especially when you have to deal with books, you need to be very much on the frontier of innovation because just having books is not enough anymore to make enough money to make a business worthwhile. So the question is, what do you do? You often go to expos, for example. You go to expos or fairs and especially when you have, for example, the Frankfurt book fair and you stay somewhere, the hotels become reasonably pricey.
So what do you have? A travel guideline. And the travel guideline is perfect for 98% of the year. However, when you then want to stay anywhere near or at least in the same city as the Frankfurt book fair, probably hotels will double the price of what your usual guidelines allow. And then you need people who have the experience and the expertise the expertise and the experience on the matter and then we will practice to say, hey, the guideline is valid for absolutely anything. However, when you can make a good point, give proper reasoning, then you can go beyond the travel guideline. That is just perfectly reasonable.
What happened in this organization, the compliance department said, no, the rule is the rule. There's no exception. Find a hotel which is within the travel policy, and the next hotel in the travel policy was somewhere in the towners area, which is an hour and a half per direction travel to the Frankfurt book fair and back. People, of course, are totally motivated to do that for you, and then work 12 hours a day at the expo or at the fair. Good luck for any kind of manager or executive who decide on that. The main issue here is you often have people who have the expertise but not the experience. They're experts on the matter but have no experience in real world practice and you need both.
Experience and expertise on the subject matter and then real world practice to see what are the guidelines and where are the few exceptions we make per year. 2nd aspect when it comes to implementing is you need proactive communication of all the content and the goals you have. Don't tell people this is the rule full stop. Tell them this is the rule because and then you give reasoning. And these reasons need to be updated and so and and so the same applies to the rules. There must be at least anything which is, by the way, connected to money at least needs an annual checkup because things become more expensive every year. And as soon as someone says, well, some things got cheaper in the past, please send me an email and tell me which aspects of corporate spending or corporate travel got cheaper on the absolute number in the last 5 years.
I'm really looking forward to hearing your point. What when it comes to corporate travel got cheaper in the last 5 years? Because I couldn't think of something, but maybe I'm wrong and probably someone can name something. I'm really looking forward to that. Just text me. So always check at least annually if these rules still apply. Look at what other facts are there and then if anyone complains about the rules or a larger number of people complain about the rules, please take them seriously.
You want that they take your rules seriously, so you need so you need to take their concerns seriously. As soon as you take their concerns seriously, people will see compliance not as a weapon or as something which is just made out of thin air, which by the way many people think it was. It will see it it will be seen as guideline and as help, and that's where you want to be. Compliance is not a weapon. It's not regulatory. It's not just someone checking and auditing things.
That's not the idea. That's not the core idea at least of compliance. Compliance is a guideline that should never be seen as a weapon, but when you do it well, you regularly check on your rules, you communicate them proactively with people, and when you train them, you have people in place who have the expertise and experience of the subject matter and the real world practice, and you take seriously whatever people tell you about the rules and at least consider that you might be in the place that you need to change them, as soon as you do that people will see compliance as a helpful guideline and act accordingly on the matter. So wrapping this all up, excellent compliance always ensures that you get excellent results on all counts and all of that fully compliant. And with that, I wish you all the best to implement this. And when you now say, I think I have about 28 questions about this because I know that this topic gets heated up very quickly. Feel free to send me an email.
My email is nbnbhyphennetworks. com. I put this email address in the show notes of this podcast. I also put my link in there so you can connect with me on there, And then we can, chat on there. If you have something very specific where you say, hey. I need training, speaking, coaching on the matter. Also happy to talk about that, but we can also just talk about your issues or question, anything, all free of charge.
Looking forward to hearing from you there. By the way, you can, of course, also go to my website, nbhyphennetworks. biz. You also find the transcript of the podcast on my website. And by the way, some people said, do you have a new website? Yeah. I do.
Thank you very much for the compliments on the new website. It's very minimalistic as my lifestyle and business also is. We all run to be the most sustainable on the minimum carbon footprint. Thank you very much for the positive words about that. So looking forward to seeing you there and speaking with you there. 2nd aspect, which I always recommend, when you now say, hey. I need more than this.
I have a podcast, but people who work in my organization want to have an article on the matter, for example. Go to expert.nbhyphennetworks.com. Put your email address in there. You only receive one email every week, every Wednesday morning. And this Wednesday morning is where you get with with this email, you get free access to everything I published in writing and, of course, on the audio channel as you hear right now. Also, you see, in this email which you receive every week, which, by the way, 100% content at free guarantee, You see when is the next live session. We do live sessions, and the last live session which we had last Friday was the most busy one we ever had.
Thank you very much for being part of that very live discussions. Excellent. Really an excellent forum. Thank you very much for being part of it. So as soon as you are there with this with the email you receive, you always find the date, the time, and a link to access the live sessions.
It's, by the way, international. It's available in English and in the German language as well. So feel free to bring your international colleagues with you. The last aspect, the third one is the one which I always mentioned at the end as, you know, apply apply apply what you heard in this podcast because only when you apply what you heard, you will see the positive outcome, the positive change, the positive results that you obviously want to see in your organization. I wish you all the best doing so. So when you implement all of this, when you now say, what to do next? Well, probably listen to next week's podcast, but also feel free to contact me anytime.
And at the end of the podcast, there's only one thing left for me to say. Thank you very much for your time.