During our two months of workshops exploring how large, incumbent companies can regain their Founder’s Mentality, we spent a lot of time talking about the importance of defining your “kings” (those most accountable for delivering your customer promise) and the “court” (those whose primary goal should be to support the kings). As we’ve written many times in this blog, clarity of this sort ensures that the whole organization is customer focused, either directly or indirectly.

It’s important to note, however, that some corporate roles are simply nonnegotiable (as much as we wish they weren’t). Companies must operate with legal and regulatory constraints and must avoid actions that put the company’s reputation at risk. The Founder’s Mentality does not presume liberty for all—we talk about freedom within a framework. But this can create tension, especially among those on the court in charge of compliance and those on the front line who must comply.

As we meet with management teams on this subject, executives in legal and compliance roles have no trouble identifying the challenge. They usually frame it this way: I understand fully that the job of the court is to empower and support the front line, but my job demands that at times I stop people in our organization from doing things. If I fail to do my job, people can go to jail or my firm’s brand and reputation can be put at serious risk. How can I do this job in a way that is consistent with the themes you raise around the Founder’s Mentality?

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This is a very good question, and it goes well beyond the legal and compliance functions. Compliance roles are probably the hardest on the court in this regard. But if you can solve the problem for compliance there is no reason to believe that you can’t get the rest of the court to be more supportive of the front line. With this in mind, we interviewed several executives in compliance roles who do their jobs exceptionally well to ask how they organize themselves to support, not hinder, the kings. While this is certainly not an exhaustive list, we’ve come up with six best practices:

1. Recruit the right people. The experts warned that very often the recruiting brief is too simplistic. A statement like “We need a lawyer who has worked in a regulated industry” isn’t precise enough. What you really want is someone who has helped people in commercial roles do their jobs successfully in a highly regulated industry. The kind of experience you recruit for is vitally important. For example, you are not looking for “years as a lawyer” but “years spent supporting an action-oriented commercial organization undergoing regulatory change.” This requires a very special outlook. As one lawyer we talked to put it: “The job demands that when you say no to something, the organization listens and complies 100%. The only way I know this can happen is if the people in charge can find a way to say yes 90% of the time. They develop a reputation for making things happen, for opening, not closing, opportunities. And only through the power of yes can they find the power of no. You need to find people who can make yes happen 90% of the time, so the organization stops in their tracks when they say no.”
2. Frame compliance issues in commercial language. The best organizations are commercial. The best change programs go with the grain of the culture. So to make compliance policies stick in a commercial organization, you need to frame them in commercial language. As one expert said, “You want to sell a salesman on compliance, sell him on the idea that if he fails to comply he loses sales. But this means you have to pick your issues wisely and be right.” For this reason, the best compliance practitioners “cocreate” their policy language and approach with the most commercially savvy folks in the business. They also actively seek out those who are most likely to oppose them. As one compliance officer noted: “Every good business has cultural carriers—icons of the business who everyone looks to. In a lean, mean, sales-oriented culture, those icons are predisposed to hate some of the messages from the chief legal officer or head of regulatory and they aren’t shy about letting others know their views.” He said that one of the first things he does is work directly with these people to get them on board. “I ask for their help in crafting the message and language so that it works for them,” he said.
3. Favor heroes over “the system,” but make clear that leadership requires discipline. Cocreating policy with the front line biases that policy to action. It favors heroic behavior on behalf of customers over process-oriented behavior that mainly serves the bureaucracy. But as we’ve noted, framework is also crucial. The same compliance officer who strives to win over his detractors told us that it is equally important for the front line to understand that “leadership is not simply about going forward with all guns blazing. Discipline matters, and our heroes should be the ones who drive fast within the lane markers. Those markers are there for a reason.” Another chief legal officer told us, “I try to avoid the echo chamber where I surround myself with all the legal team and compliance officers and we talk to ourselves, admiring our echoes. We need to be engaged with those that are most commercially successful and aggressive and find a way of working together.”
4. Use horror stories wisely. Sadly, humans find car crashes fascinating. We slow down to check out the carnage and then moderate our speed for the next few miles, driving along in quiet reflection. The best compliance folks use horror stories wisely (but in all their bloody glory) to produce the same braking effect. As one compliance officer noted: “I know this is about hearts and minds. And I’ve learned that folks have a hard time understanding how bad noncompliance can be. So when I have an example of where noncompliance has hurt us hugely, I make sure everyone understands it and feels the pain.”
5. Don’t use up your brand equity on stupidity; fess up and move on. Horror stories about noncompliance are one thing. But in most large organizations there are usually just as many stories of compliance gone horribly wrong. The legal team has inevitably done something pretty stupid, forcing people to go through tortuous loops to comply. The practitioners we spoke with said the big lesson from this is that you shouldn’t use your limited brand equity to defend the indefensible. Stupid is as stupid does. Just own up to the issue, adjust and move on. One noted that these instances also provide a valuable opportunity to signal that you and your team are responsive. “[These opportunities] show that you are open-minded and willing to learn from the front line,” he said. “It reinforces one’s reputation for having good commercial instincts.”
6. Don’t show them how hard the duck is paddling. The final lesson is simple: A lot of compliance is drudgery—form filling and box ticking. Spare your people from that. Figure out how to get all that done for them and focus their attention on things where they can really screw up. As one practitioner said, “The best way to keep the commercial side on board is to work with them on the really important things, where they can make a difference. We try very hard to keep the drudge work off their plate. We’d like the ‘compliance duck’ to look like its floating softly across the water— only a few people need to know how hard we’re paddling beneath the surface.”

We should note that we picked companies for our interviews where we knew the salesforce considered their compliance team a critical partner in their commercial success. And as we noted above, companies that can get it right for compliance can typically get the court-king relationship right in other areas of the company. These six practices don’t translate exactly to other “court” functions. But the spirit is the same. Organizations set up to help the front line please and delight the customer are those that best retain and encourage the Founder’s Mentality.