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Life is all about balance – trying to eliminate boom and bust, if you will. I love the Chinese ying-yang symbol: without a word, it brilliant encapsulates this and more. Businesses need to find balance, too. So, in the spirit of the Adviser Lounge and sharing ideas for better business, here goes.
The motivation to write came from a blog by Paul Gorman, sharing a fellow adviser’s frustrations with rigid compliance (and other themes, besides). The underlying cause of the problem Paul’s friend experienced can affect any function of a business, not just compliance. As companies grow, people specialise more narrowly: some functions become focussed on accentuating the positive, others on eliminating the negative.
The division of labour (if you’ll pardon the economics-speak) can give big companies huge advantages. However, it also leads to imbalances – ying and yang get out of whack. Accentuating the positive gets concentrated in functions like sales and marketing; eliminating the negative becomes concentrated in functions like compliance and IT. If one side comes to dominate an organisation, you either get a run-away train (certain financial institutions, perhaps) or sclerosis (certain government bodies, perhaps). This tends not to happen when the organisation is very small: the boss is genuinely very close to everything. Unless they outsource functions, such as compliance, in which case it affects them, too.
I’ll take eliminating the downside as my example. Being generally risk-averse creatures, I suspect that dominates more frequently. Success in compliance and IT are particularly measured by what you don’t see. If you don’t get complaints and are not sued for compensation, compliance earns a tick. If your systems aren’t hacked and your data remain intact, IT are deemed to have done a good job. Marketers who can’t get effective financial promotions completed or sales people who can’t access websites needed for important leads or meetings will readily tell you that’s not the full picture.
Everyone needs a stake in the whole – “computer says no” should never be allowed to “complete” a task and count as success. For example, a financial promotion may be risky as drafted but if the issue never gets resolved and the promotion delivered, does that count against marketing only or compliance, too? If you have a cross for one and a tick for the other, you’ll be assessing imbalance as balance.
So what do we do about it? We’ve just been going through our annual Personal Development Reviews. As you might expect at a firm with a strong actuarial history, there’s a real effort to make these objective – for example, assessment against SMART objectives. But there’s another element: anonymous feedback from others. I don’t mean hand-picked buddies; it comes from those we need to work with across the business. So, to flip my example round, if I were lazy in drafting articles then blamed compliance for my poor output, they’d get the chance to tell it as they see it. This isn’t the only reason I get on well with our compliance people but it doesn’t do any harm!
There’s a comment box below – why not give it a go and share what you do to maintain the balance or frustrations you’ve experienced and their causes? You can always change the names to protect the innocent!