Kuebler-Ross Curve:
Is Change in Compliance Sweet
Whenever we hear a speech or read an article related to change, it usually starts with a cliché but a reality like “Change takes time! And behavioral change even longer.” We can see your hands raising, especially compliance officers nodding their heads: “If we talk about establishing a compliance culture, it can take forever!”
More than just a boardroom buzzword, establishment of a “compliance culture” in a corporation is not only a significant and long-term topic but also a multi-layered issue with lots of pivots.
Some corporations may have a compliance organization which has not diffused itself into the organizational culture. The others may simply lack the existence of a compliance concept. Either way, making compliance engraved into the organizational behavior of a corporation is a significant endeavor and requires a systematic change management effort.
For this reason, other than IQ and EQ, compliance officers are expected to have a strong RQ (Resilience Quotient) to manage that change.
For many corporations, compliance is just a written policy that every employee is expected read and obey. A policy may be a good starting point but obviously not enough to trigger much of a behavioral change. Subsidiary policies derived from umbrella policies, internal regulations and compliance trainings are required to implement the formal compliance policies. In order to reflect onto action internal and external audits are performed for early risk detection and compliance related committees are formed consisting of experts for better guidance. Internal workflows are established to tackle various “topic-based” compliance projects such as third-party due diligences where the compliance officer partners with the business to drive results. These are all mission critical elements for a compliance management system but not enough to create a compliance culture. In a compliance culture policies, committees, regulations are seamless, employees trust the system, they take responsibility for their individual acts and have the courage to speak up.
Now let`s discuss how a compliance culture can be established, in other words how compliance can be engraved into an organizational culture, so it becomes the norm rather than the aim.
Infusing compliance to an organization is a change that needs to be managed, lead, and lived through. In literature, change management phases are often referenced with similarities to Kuebler-Ross stages of grief. Obviously not all changes are grieved. Yet similarity makes a lot of sense: introduction of a new concept eventually means destruction of an old concept resulting in a loss.
Infusing compliance to an organization is no exception. Therefore, a compliance officer should expect to go through the Kuebler-Ross stages.
Establishment of a compliance culture starts with internal corporate-wide and/or local policies. When they are published and announced to the employees from the top, curiosity takes over, but day to day business continues as usual. This is where “Denial” phase begins. In some countries employees do not even spend a few minutes to take a glance at such “boring”, formal papers. Since policies are not enough for the employees to understand what is expected from them, either because of the legal and formal language or because of the generalization of statements, vagueness needs to be cleared and an awareness should be raised with trainings. Trainings are perfect ground to confront the organization in its next stage in change management which is Resistance. Most of the times, whenever they hear “what not to do”, “what happens otherwise”, “what the corporation loses”, “how the business might be affected and even damaged” etc, employees who have not met such a culture before, might give a huge reaction, and sometimes with nerve-racking objections, thinking and stating in anger that compliance harms/stops/trips up the business. If the training continues with such a language and without a support, even sometimes, the tension of the discussion between the trainer/compliance officer and the employees can stretch the relation to a breaking point of hate. Resistance can either be active by out loud objections or silent by talking behind the scenes. The belief of “compliance organization” standing as a governing entity between their freedom of day-to-day business and themselves stokes the resistance up. At some points, at the trainings or daily talks, employees begin to bargain with the trainer asking, “what if I do that?” “What if I do not bribe (!) directly” “What about gifts in … amount?” “What if nobody sees it?” “What if our culture requires so?” “But the other companies’ employees are doing that! Why can’t we?” Bargaining, negotiation, and pleading are indeed healthy. Although such arguments seem destructive at first, they are rather constructive to carry the organization towards the next stages of the change. Referenced again to Kuebler-Ross stages, this brings the organization to the dip of the curve. From there on would begin the more positive stages towards adopting change.
Effective change management reduces the amount of time that the organization spends in the declining stages of the curve. In order to reduce resistance training language should be kept simple with concrete examples with lessons learned, should include understandable, reachable and user friendly workflows to show the path to be applied, and should include clearly answered questions like “how can we together protect ourselves at first place and our company therefore”, “what not to do but what can be done instead”, “we are here not as your police but your bodyguards to guide you through and to walk together on a compliant journey and to keep you peaceful and comfortable”. In the latter example the word “we” is not indicating the compliance team but should be the board and the management team who shall display leadership to the employees being role models. Besides individually being a role model, top management should use a “Tone from The Top” to stand together with and to empower the compliance organization.
Here another ingredient to successful change management comes into play: Sponsorship. Sponsoring a change is being an advocate, champion, and supporter of it. Furthermore, a coalition of sponsorship with peers and next level managers accelerates the diffusion of the change, in this case the compliance culture, within the organization. `Tone from The Top` defines the support of the executive sponsor and is a clear and consistent massage to the organization around the rationale of a compliance culture. With a solid sponsorship, the change curve uptakes and the organization moves from Understanding to Acceptance.
Trustworthiness of the compliance organization is one of the, maybe the most, significant element of the compliance culture. “Speak Up” campaigns (invitations to be a hero in the compliance organization’s view but a tattletale in the employee’s view), can never be the driver alone to encourage the employees. Therefore, while on one hand “Tone from the Top” is empowering the culture, on the other hand executive management should “walk the talk” by equal treatment from the lowest level employee to the upper levels like board members and even the CEO. If the employees see that the whistleblowers and witnesses are protected against retaliation, defamation and slander is prevented (this is another huge topic to write more articles), data is kept highly confidential, and mentioned precautions and sanctions are applied to all employees at all levels, not only trust of the employees is established but also such a justice bridges the possible gap between what organization communicates and expects, and what corporate does. As the compliance organization builds trust and as the employees see the benefits of the results on their business, they feel engaged and committed. With engagement and commitment, the measures are sustainable and compliance gets engraved into the organizational culture. And with that we achieve a compliance culture.
There is no doubt that each phase in such a substantial change management is passed through once in a blue moon. There may be practical utility in linking employee’s individual integrity targets and behavior as a part of the performance management of the employee and awarding the outcomes. This will expedite the personal commitment and at a wider angle will support the change management in establishing the compliance culture.
No matter what, establishment of compliance culture is a demanding and challenging change management topic and is not as easy as we brief here in a few pages. When Aristotle said “Change in all things is sweet”, compliance was not invented!
Author : Att. Bengü Halavut Yıldırım
Att. Bengü Halavut Yıldırım had a 12 years-experience as a Compliance and Legal Head in a multinational pharmaceutical company.
Change Curve:
Author : Özlem Arısoy, PhD
Özlem Arısoy, PhD is VP of Information Technology at Bayer USA responsible for Pharmaceutical Commercial IT and Digital for Americas. Besides her professional career, Özlem Arısoy has taught “Change Management in Organizations and Organizational Behavior” at Ozyegin University.