Compliance can be a profit driver and at least a mitigator of risk (even in Port Elizabeth)

Compliance is a major concern for many businesses as it has so many facets. just like the mythical Hydra, it just keeps appearing with new heads, which all appear to be equally menacing. The general trend in Port Elizabeth businesses, appears from initial interviews to be very piecemeal.  Various managers are tasked with aspects which relate to them.

On the face of it, it makes logical sense to approach compliance this way, after all you have subject experts dealing with their particular areas and that should solve the problem. What is evident is that compliance and risk, share many of the same attributes. They both are constantly evolving and they both have the uncanny skill of working their way around silos and matrix systems which do not have a clear co-ordinated approach which is approached strategically.

I have have many times addressed this with clients, who initially confidently professed full compliance and then later were found to have areas were compliance was incomplete or in some cases completely lacking. Compliance in such cases becomes a risk and in a business environment, which is increasingly unfriendly to business, this could be a element of the business, which should not be neglected.

The case of Walmart's latest big hire, as head of compliance is a golden example of the need of not only having 'boots on the ground on site', having specialists in place in key areas and having a compliance and risk system in place; but you also need a central lynch pin which can bring it all together into a working whole.

The future looks to be increasing compliance driven and Walmart have taken a vital step in ensuring that co-ordination and strategic alignment of the compliance and risk functions.

Responsible leaders build sustainable businesses

Item 2 of Chapter 1 of the King 3 report stipulates the following:

Responsible leaders build sustainable businesses by having regard to the company‘s economic, social and environmental impact on the community in which it operates. They do this through effective strategy and operations.

The tone of this point is clearly set from the outset. The drafters clearly make mention  of "Responsible leaders" which shows that they are referring to not only wanting these individuals to be responsible, from which can be inferred accountable, but also that they want them to be leaders. It may be stated that referring to the various persons as leaders implies a more leadership driven approach which includes the collaborative nature of that relationship.

It is valuable to consider that these leaders are to be found throughout the business. It will be interesting to see to what degree lower level leaders may be help to the values espoused in the report.

The key point is that businesses need to be sustainable and by inference long term commercial citizens of the country; with rights, duties and obligations; which accompany that privilege.

The clause also highlights the fact that the business needs to be responsible not only in its business dealings as a business but it also needs to heed its expanded responsibilities such as its environmental impact and its social impact on  society. This expanded view of a business's responsibilities has become a global phenomenon. The importance of this expanded view of corporate responsibility has triggered a whole new view of what good governance is.

The report's drafters clearly mention that 'operations and strategy' should serve these lofty aims and that these should operate as the channels through which the above mentioned objectives must be achieved.

It may be noted that in the spirit of a completely aligned organisation, that these aspects and values shall need to form part of mission statements etc because only through inclusion will this provision truly be taken on board and not merely be seen as a beautifully word craft. It is through incorporation and alignment that these values can truly become inculcated in the very fibre of the organisation.

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Thinking - have we decended into 'Group Think'?

Innovation unlikely

Einstein once said that: "We cannot solve our problems with the same thinking we used when we created them."

In business we often lament about lack of innovation and our corporate sounding mission statement's flowery tributes to our forward change orientated culture. But at the same time we hold onto our existing structures and organograms while chanting the mantra of "We have always done its this way" or its modestly better sounding variation "This is the way we do things." 

It is good to have stability and its natural to aspire to a state of stasis for these are normal and natural human tendencies. Why should be invite change? Why should we even allow a dissenting voice who questions everything we hold so dear? Why should we encourage the new?


If we go back to Einstein's sage words we learn one important lesson; unless we shake the tree, unless we add a measure of agitation, unless we invite an element of chaos and different view we will always get the same outcome and never will the result be worse; but neither will it be better.


But 'Group Think' is a natural outcome of homogenised hiring processes ('We only hire from within") and teams that are together for too long, who have in most cases been sourced from the same pool of employees, who have all been subjected to the same policies and procedures and whose thinking is all very much in line. The question is how different is their thinking really going to be?


Which brings me to 'Competitive Advantage' it is often seized by entrepreneurs who break the mold who disrupt the industry, but as time progresses these businesses begin to do the same stuff every one is doing, the net result cultures begin to mingle and apart from the logo everything begins to be the same.


But what if you allow some room for alternate views, make outside hires into key positions, change the status quo and even if a process is working, why can it not work better of be done more efficiently? Can we not save costs by rethinking? Innovation comes from agitation and disrupting the comfort zone.


Practically, I have found that 'Group Think' can be far more insidious, it allows potential to go unrealised, it hides risk, it threatens the very vital soul of innovation within the organisation. 


So not only can the same thinking not solve our problems we have now its suffocates an organisation and creates the semblance of security and comfort, while the organisation's culture is sacrificed and team members are transformed into mindless clones.

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