We continue our exploration of compliance leadership through the article Warning: Upgrade your personal operating model by McKinsey authors Arne Gast and Suchita Prasad. Today, we look at leadership as a compliance function within the corporate corpus. In Part 2 of our exploration of the article, we consider compliance mandates and what they mean for compliance in this tumultuous year of 2025.
As compliance professionals, our responsibilities often revolve around understanding and executing mandates clearly articulated by regulators, boards, and senior management. But how frequently do we step back and reflect deeply on whether we genuinely grasp the nuances of these mandates, especially in moments of high-stakes transformations? The effectiveness of your compliance program depends greatly on your ability to understand and balance stakeholder expectations, prepare strategically for critical leadership conversations, and decisively simplify your priorities.
Fully Understanding Your Compliance Mandates
The cornerstone of compliance success lies in deeply understanding your stakeholders’ mandates, explicit or implicit. Internal stakeholders, such as your board of directors, senior executives, and various employee groups, set mandates that reflect the organization’s culture, risk appetite, and strategic direction. Meanwhile, external stakeholders, including regulators, investors, customers, suppliers, and advocacy groups, shape mandates by articulating compliance expectations clearly through regulations, industry standards, or advocacy initiatives.
Begin by identifying your key stakeholders. Who can influence your compliance activities, and who is directly affected by the outcomes? Then, consider whether you have fully captured their expectations and priorities. It is critical to discern their minimum thresholds for compliance performance and their maximum aspirations.
Experience indicates that compliance leaders often avoid ambitious targets due to apprehension about potential opposition. However, leaders must embrace ambitious goals and manage expectations thoughtfully to drive meaningful compliance change. Harvard scholars Ronald Heifetz and Marty Linsky highlight that leadership often involves “disappointing your people at a rate they can absorb.” Compliance leadership is no different.
Consider the example of a new CEO at an Asian telecommunications firm widely known for its harmonious workplace culture. Initially, he hesitated to pivot toward a performance-driven compliance culture, worrying he would disrupt cherished organizational traditions. However, after meaningful conversations with his leadership team and employees, it became clear that the cultural shift was overdue and broadly expected. Recognizing this explicit mandate empowered him to move decisively, driving the compliance culture transformation the organization needed.
Preparing for Your Critical Compliance Leadership Conversations
As compliance professionals, we know that executing effective compliance frameworks doesn’t solely rely on intricate diagrams, complex spreadsheets, or dense policies. Instead, compliance culture grows from critical conversations. Whether they’re one-on-one meetings addressing specific compliance concerns, more extensive group dialogues about emerging risks, or formal regulatory reviews and hearings, the narrative you establish and sustain across these discussions defines compliance success.
Start your planning by identifying the five or ten most critical compliance conversations you anticipate in the coming months, and these are your “moments of truth.” Define explicitly what you hope participants will feel, understand, and commit to after each interaction. Clarify the outcomes that represent success versus those indicative of mere mediocrity or outright failure. And importantly, consider how these conversations weave together over time, collectively driving the larger compliance narrative forward.
During a business turnaround, one European retail CEO mapped out ten moments of truth over three months. Her leadership team meticulously crafted scripts and messaging, preparing carefully for possible setbacks, assigning clear roles, and ensuring smooth transitions between discussions. Treating the conversations as linked scenes in a cohesive movie enabled her to lead effectively and deliver impactful change. Compliance leaders can adopt similar meticulousness to foster clear, compelling compliance narratives.
Prioritize by Simplifying: What Can You Quit Doing Now?
Compliance roles are notoriously complex, and practitioners often find themselves mired in endless initiatives, overlapping responsibilities, and underperforming projects. While traditional advice, hard work, persistence, and extensive hours are helpful, they overlook the importance of strategic selectivity. Knowing what to stop doing is as critical as deciding what to pursue.
Evaluate your current compliance initiatives candidly. Identify lower-impact activities consuming disproportionate resources. Compliance departments frequently carry legacy programs or processes out of habit or inertia. Challenge yourself and your team by asking tough questions: Can you scale from multiple “must-win” compliance battles to fewer, high-impact engagements? Are there pet projects consuming attention without delivering measurable compliance value?
The story of a new CEO in the toy industry vividly illustrates this principle. Inheriting an organization historically focused on expansive growth, she quickly realized her mandate was to streamline and improve profitability. Despite her passion for growth and innovation, she strategically withdrew from unnecessary meetings and halted initiatives outside critical compliance and operational frameworks. She freed essential bandwidth by explicitly quitting these peripheral engagements, allowing her team to prioritize and execute tasks directly tied to profitability and compliance improvement.
A Focused Approach: Rocks, Not Pebbles
Leadership effectiveness amplifies when focusing energies on areas where your unique talents create maximum impact. Compliance leaders, facing myriad responsibilities, should take a page from McKinsey’s research, underscoring the importance of prioritizing tasks uniquely suited to their strengths.
Consider carefully which compliance projects truly require your direct involvement, end-to-end oversight, or visible engagement. Recognize those initiatives where your expertise uniquely influences outcomes, be it establishing new compliance cultures, managing strategic regulatory engagements, or steering high-stakes investigations.
Leverage your team effectively, clarifying your expectations explicitly around roles, outcomes, risks, and the precise nature of your support. This clear delegation empowers your compliance organization to achieve greater effectiveness while building future compliance leadership strength.
Who’s Supporting Your Compliance Efforts?
Lastly, compliance leaders require strong, proactive support teams, assistants, or chiefs of staff who prioritize your time, anticipate compliance demands, and help sustain your professional effectiveness. Periodic changes to these roles can break ineffective patterns and optimize your ability to manage compliance responsibilities sustainably and productively.
In a high-pressure services industry role, a senior leader switched assistants to overhaul his professional rhythm radically, prioritizing essential compliance tasks, global engagements, and personal wellness. The new assistant actively understood his work deeply, prioritized exercise and health routines, and proactively managed compliance demands. This thoughtful approach markedly boosted the leader’s productivity, sustainability, and compliance impact.
Compliance success hinges significantly on understanding your mandates thoroughly, preparing meticulously for key conversations, simplifying priorities strategically, and leveraging your unique strengths. Regularly reassess stakeholder expectations, communicate transparently, and focus on impactful compliance actions. By embracing these disciplined approaches, compliance professionals can lead their organizations confidently through the complexity and change inherent in modern business environments.
