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Transforming Culture: Part 5 – Ongoing Monitoring and Continuous Improvement of Culture

Boeing is not the first company to find itself amid a massive scandal. You can think of Siemens’ bribery and corruption scandal, the VW emissions-testing scandal, the Wells Fargo fraudulent accounts scandal, or any other myriad of corporate scandals where culture failed and created a toxic culture. The question for any organization in such a situation is how to transform its culture. Currently running on the Culture Crafters podcast on the Compliance Podcast Network is a 5–part of podcast series with myself and Sam Silverstein, the most trusted voice in America on accountability. (The Culture Audit™ is the sponsor of this blog post series.)

In this companion, 5-part blog post series, we have looked at how a company in the depths of such a toxic culture can begin to make a comeback by planning and taking concrete steps to turn around and rebuild its culture. In this concluding Part 5, we show why you must not simply stop after implementation but must monitor your culture continuously and work to improve it continuously. It is an ongoing work in progress, and you can always continue working on your corporate culture.

Ongoing monitoring is not something compliance professionals are unaware of or have never heard about. This concept must be used in your culture management strategy as well. You must assess how your culture management strategy is doing continuously. This is one of the power outcomes of The Culture Audit™ (the sponsor of this blog post series). Not only have you created a baseline of where your culture is at any point in time, but through ongoing use of the Culture Audit, you can measure your specific indices of culture on a go-forward or ongoing basis. You can then continually work to update as appropriate. If your organization needs greater trust, you can put further work into this through your speak-up culture.

Creating an organization’s speak-up culture is essential for fostering open communication, transparency, and employee trust. Such a culture encourages individuals to raise concerns, flag potential issues, and contribute to a safer and more accountable work environment. By prioritizing a speak-up culture, companies can proactively address challenges, prevent safety risks, and promote a culture of continuous improvement.

The significance of a speak-up culture must be balanced as a critical factor in ensuring organizational success and psychological safety. Silverstein emphasized the need for employees to feel safe, valued, and empowered to voice their opinions without fear of reprisal. He highlighted the role of trust and psychological safety in enabling individuals to speak up, noting that a culture that supports open communication leads to better decision-making processes and overall performance. The insights shared underscored the pivotal role of a speak-up culture in shaping a positive and proactive organizational environment.

Accountability in leadership is fundamental in setting the tone for organizational culture and fostering a sense of responsibility and integrity among team members. Leaders who demonstrate accountability model desired behaviors and create a culture where individuals take ownership of their actions and outcomes. By holding themselves and others accountable for their commitments and decisions, leaders cultivate a culture of trust, respect, and ethical conduct.

Leadership will always have a transformative impact on organizational dynamics. Emphasizing that accountability is a way of life rather than a mere task demonstrates leaders’ profound influence in shaping the values and norms within their teams. There must be consistency and fairness in holding individuals accountable. Leaders play a pivotal role in setting expectations and driving cultural change. The discussion underscores the critical role of leadership accountability in fostering a culture of integrity and excellence within organizations.

Changing organizational culture is a complex and multifaceted endeavor that requires a deliberate and strategic approach. Organizations seeking to shift their culture must assess the existing norms, values, and behaviors that shape their environment. By identifying areas for improvement and aligning cultural practices with desired outcomes, companies can embark on a journey of cultural transformation that enhances employee engagement, performance, and overall organizational success.

Companies can initiate meaningful change by defining and measuring the current culture, investing in training and education, and holding individuals accountable for upholding cultural values. You must align cultural initiatives with business objectives and ensure that cultural transformation efforts are embedded in every aspect of the organization. Organizations face challenges and opportunities when navigating cultural change, highlighting the critical role of leadership in driving lasting transformation.

The crucial role of leadership in shaping organizational culture provided valuable insights into the steps leaders can take to create a positive and thriving workplace environment. By prioritizing values, fostering open discussions about culture, and making data-driven decisions, organizations can pave the way for long-term success and employee well-being.

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Sustaining Culture: Continually Improve Company Culture

What’s measured is treasured. If it is important, you want to know what is going on and improve on it. And it’s data; it’s factual. And so right away, we know what to do, and we can see the improvements we’re making because we can measure and improve them. Sam Silverstein.

I am in the middle of premiering a new podcast series, Culture Crafters, on the Compliance Podcast Network. In this series, together with Sam Silverstein, we are taking a deep dive into corporate culture: how to measure it, assess it, monitor it, and improve it. Through this exploration, we have uncovered the surprising truth behind sustained success in company culture. We have taken a deep dive into maintaining a high-performing culture that attracts and retains top talent. We have discussed the often overlooked strategy that propels companies to celebrate every win, big or small, and compound their growth year after year. Today, we continue our journey by considering why you should continuously audit and assess your culture to improve it.

Achieving and sustaining a great culture within organizations is foundational to long-term success. It involves creating an environment where individuals feel valued and motivated to contribute meaningfully towards shared goals. This process starts with leadership setting the tone by exemplifying behaviors prioritizing people’s well-being and professional growth. Leaders can inspire employees to engage fully and commit to the organization’s vision by fostering a culture of trust, respect, and open communication. Consistently reinforcing core values and recognizing contributions are key components in nurturing a positive culture that endures challenges and fosters innovation.

Regular culture audits are essential for organizations seeking to understand and improve their cultural dynamics. These assessments provide a baseline for measuring progress and identifying areas for growth. By gathering data on employee perceptions, engagement levels, and alignment with organizational values, companies can pinpoint strengths and weaknesses within their culture. This information allows leaders to tailor interventions, policies, and initiatives that align with the organization’s desired cultural outcomes.

Moreover, ongoing assessments enable organizations to adapt to changing circumstances and ensure that the culture remains aligned with evolving goals and external influences. Sam Silverstein’s discussion on culture audits highlights the value of using data-driven insights to inform decision-making and drive cultural improvements. He stresses the importance of combining qualitative feedback with quantitative metrics to understand the organization’s culture comprehensively.

By being transparent about assessment results, leaders can foster a culture of accountability and continuous improvement. Sam’s emphasis on the iterative nature of culture assessments underscores the need for organizations to view cultural dynamics as dynamic and evolving. The conversation underscores that continual assessment is not merely a one-time exercise but a strategic tool for maintaining a healthy and adaptive culture over time. You should develop a plan to assess and regularly improve your culture.

  • Culture Audit: Develop a culture audit to assess the current state of your company’s culture. This can help identify areas for improvement and set a baseline for future assessments.
  • Documentation: Document your culture assessment findings and improvement plans. Utilize tools to create and maintain detailed records of your culture assessment and improvement initiatives.
  • Regular Assessment: Implement a schedule for culture assessments, such as quarterly or bi-annually. Use tools to gather feedback and measure progress over time.
  • Celebrate: Incorporate a culture of celebration within your organization. This can include employee recognition programs, town hall meetings, or even small gestures like personalized notes or tokens of appreciation.
  • Continuous Improvement: Based on the results of your culture assessments, develop a plan for continuous improvement. Use project management tools like Asana, Trello, or Monday.com to track and execute improvement initiatives, ensuring that progress is ongoing and continuous.

The bottom line is that authentic leadership plays a pivotal role in shaping a thriving culture. Compliance professionals and business leaders go beyond superficial gestures and genuinely prioritize the well-being of their teams. Leaders can create a culture where individuals feel respected and valued by demonstrating care and investment in employees’ development. Key traits include actively listening to employee feedback, providing growth opportunities, and demonstrating ethical decision-making. Ultimately, the conversation reveals that sustained success in company culture hinges on leaders’ commitment to prioritizing people and consistently reinforcing a positive work environment.

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Compliance Tip of the Day

Compliance Tip of the Day: Continually Evolving Compliance

Welcome to “Compliance Tip of the Day,” the podcast where we bring you daily insights and practical advice on navigating the ever-evolving landscape of compliance and regulatory requirements.

Whether you’re a seasoned compliance professional or just starting your journey, our aim is to provide you with bite-sized, actionable tips to help you stay on top of your compliance game.

Join us as we explore the latest industry trends, share best practices, and demystify complex compliance issues to keep your organization on the right side of the law. Tune in daily for your dose of compliance wisdom, and let’s make compliance a little less daunting, one tip at a time.

In this episode, we consider how your compliance program should continually evolve from your Code of Conduct to Risk Assessment to Continuous Improvement, all in a process oriented, documented approach.

For more information on Ethico and a free White Paper on top compliance issues in 2024, click here.

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31 Days to More Effective Compliance Programs

31 Days to a More Effective Compliance Program: Day 9 – Continuous Monitoring and Continuous Improvement

Continuous monitoring and continuous improvement are two of the most important phrases for any compliance program. These twin concepts were further enshrined in the 2023 Update to the Evaluation of Corporate Compliance Programs (2023 ECCP). In 2023, all companies’ risks changed as we moved from Working From Home to Return To Office and, now, a hybrid model. In addition to this straight-forward change in risk due to working locations, new risks in the form of geopolitical, supply chain, and export control, as well as increased risk due to social media, continue to impact compliance programs.  Your compliance program must be ready to respond to whatever those risks might be going forward.

Continuous improvement runs the gamut in a best practices compliance program, from risk assessments to policies and procedures to periodic testing and review.

Three key takeaways:

1. How have your company’s risks changed over the past year, and how will they change in 2024?

2. What is your process for continuous monitoring and improvement?

3. What sources of information do you use that come from outside your organization?

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Innovation in Compliance

Unlocking Success: The Crucial Role of Culture in Compliance: Part 5 – Alexander Cotoia on the Continuous Improvement of Culture

Welcome to a special series on building a stronger culture of compliance through targeted and effective training sponsored by Diligent. I will visit with Yvette Hollingsworth-Clark, Viktor Culjak, Jessica Czeczuga, Michael Parker, and Alexander Cotoia in this series. Over this series, we will consider what culture is, how to assess culture, putting together a strategy to manage culture based upon this assessment, monitoring that strategy in the future, and using information from your monitoring to improve your culture continuously. In this concluding Part 5, we visit with Alexander Cotoia to discuss a strategy to enhance your compliance program in the future constantly.

Alexander Cotoia, a regulatory compliance manager and consultant at the Volkov Law Group, has a rich background in commercial litigation and has spent a significant part of his career in an in-house role at Virgin Galactic. Alexander strongly emphasizes the importance of compliance culture in organizations, believing that a culture promoting compliant behavior reduces the likelihood of ethical lapses or legal violations. He argues that creating a culture of compliance is not only ethically sound but also makes good business sense in today’s era, where consumers are well-informed and employees prioritize alignment with organizational values. Alexander suggests that organizations should reinforce their values and highlight the economic benefits of compliance to gain employee buy-in and engagement, emphasizing the need for continuous improvement, conducting root cause analysis, and involving various stakeholders to address cultural issues effectively. Join Tom Fox and Alexander Cotoia as they dive deep into how to continuously improve your compliance program in this episode of Unlocking Success: The Crucial Role of Culture in Compliance Best Practices podcast episode.

Key Highlights: 

  • Cultivating CEO Involvement for Compliance Success
  • Improving Corporate Culture through Effective Monitoring
  • Cultivating Compliance Culture through Stakeholder Collaboration

Ready for Purpose-Driven Compliance? Diligent equips leaders with the tools to build, monitor, and maintain an open, transparent ethics and compliance culture. For more information and to book a demo, visit Diligent.com.

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31 Days to More Effective Compliance Programs

Day 21 – Continuous Improvement in a Compliance Program

The 2020 Update was clear about the need for continuous improvement in any compliance program. It succinctly stated, “One hallmark of an effective compliance program is its capacity to improve and evolve. Implementing controls in practice will necessarily reveal areas of risk and potential adjustment. A company’s business changes over time, as do the environments in which it operates, the nature of its customers, the laws that govern its actions, and the applicable industry standards. Accordingly, prosecutors should consider whether the company has engaged in meaningful efforts to review its compliance program and ensure it is not stale.”

Continuous improvement through monitoring or similar techniques will help keep your compliance program abreast of any changes in your business model’s compliance risks and allow growth based on new and updated best practices specified by regulators. A compliance program is, in many ways, a continuously evolving organism, just as your company is. It would be best to build a way to keep pace with the market and regulatory changes to have a truly effective anti-corruption compliance program.

 Three key takeaways:

  1. Your compliance program should be continually evolving.
  2. Monitoring and auditing are different yet complimentary tools for continuous improvement.
  3. Cultural assessment and monitoring are also now required as well.
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31 Days to More Effective Compliance Programs

Day 2 – Continuous Monitoring and Continuous Improvement

Continuous monitoring and improvement are two of the most important phrases for any compliance program. These twin concepts were perhaps the biggest modifications in the 2020 Update to the Evaluation of Corporate Compliance Programs. In 2021 and 2022, all companies’ risks changed as we moved from Working From Home to Return To Office and now a hybrid work model. Of course the great resignation has also played a part.These changes in our basic work location drove home perhaps the most prescient comment I heard during the pandemic, which was by Jed Gardner, who said, “We have moved from disaster recovery to business continuity to business as usual.” This means that risks will change in ways you may not see at speeds you do not anticipate. Your compliance program must be ready to respond to whatever those risks might be going forward.

In the 2020 Update, the DOJ began to address this from the compliance program perspective with several questions. “Is the risk assessment current and subject to periodic review? Is the periodic review limited to a “snapshot” in time or based upon continuous access to operational data and information across functions? Has the periodic review led to updates in policies, procedures, and controls? Do these updates account for risks discovered through misconduct or other problems with the compliance program?”

The next area for continuous monitoring and improvement was an area of compliance that is not normally associated with those concepts, Policies, and Procedures. Here questions included “When was the last time your policies and procedures were updated? Perhaps more importantly, under the 2020 Update, what was your process for doing so? Was there any rigor around your process? Did that rigor include incorporating information and data collected through continuous monitoring, real-time monitoring, or continuous access to operational data and information across functions?”

The final area in the 2020 Update for consideration is called Continuous Improvement, Periodic Testing, and Review. The question included the following, “How often has the company updated its risk assessments and reviewed its compliance policies, procedures, and practices? Has the company undertaken a gap analysis to determine if particular risk areas are not sufficiently addressed in its policies, controls, or training? What steps has the company taken to determine whether policies/procedures/practices make sense for particular business segments/subsidiaries? Does the company review and adapt its compliance program based on lessons learned from its misconduct and/or other companies facing similar risks?”

Three key takeaways:

1. How has your company’s risks changed over the past year?
2. What is your process for continuous monitoring and improvement?
3. What sources of information do you use that come from outside your organization?

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Innovation in Compliance

Corporate Case Management in the Era of the DoJ’s Monaco Memo: Episode 5 – Data Drives Prevention

Welcome to a special podcast series, Corporate Case Management in the Era of the DoJ’s Monaco Memo, sponsored by i-Sight Software Solutions. Over this five-part podcast series, I visit with Jakub Ficner, Director of Partnership Development at i-SIght. This series considers how the Monaco Doctrine and Monaco Memo have impacted compliance in several key areas. In this concluding Part 5, we consider how data and data analytics are even more critical after the Monaco Memo and how using data can drive prevention and detection.

Highlights include:

  • How does ongoing monitoring lead to continuous improvement, and how does it relate to investigations?
  • How your investigative protocol can supplement ongoing monitoring.
  • How the outlays for your investigative process are a critical step going forward.
  •  Employing root cause analysis, corrective actions, and preventative action recommendations can provide valuable data from a holistic perspective.

For more information, check out i-Sight here.

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Note Navy Seals Way: Moving from Continuous Monitoring to Continuous Improvement

Decision making is a critical skill for any Chief Compliance Officer (CCO) or compliance professional. Continuous monitoring and continuous improvement are now accepted as standard components of any table stakes compliance program. The Department of Justice (DOJ), in the 2020 Update to the Evaluation of Corporate Compliance Programs, made clear the need for continuous improvement in any compliance program. It stated quite succinctly, “One hallmark of an effective compliance program is its capacity to improve and evolve. The actual implementation of controls in practice will necessarily reveal areas of risk and potential adjustment. A company’s business changes over time, as do the environments in which it operates, the nature of its customers, the laws that govern its actions, and the applicable industry standards. Accordingly, prosecutors should consider whether the company has engaged in meaningful efforts to review its compliance program and ensure that it is not stale.”

Indeed, the 2020 Update posed the following questions that the DOJ might ask a company under a Foreign Corrupt Practices Act (FCPA) investigation, “How often has the company updated its risk assessments and reviewed its compliance policies, procedures, and practices? Has the company undertaken a gap analysis to determine if particular areas of risk are not sufficiently addressed in its policies, controls, or training? What steps has the company taken to determine whether policies/procedures/practices make sense for particular business segments/subsidiaries? Does the company review and adapt its compliance program based upon lessons learned from its own misconduct and/or that of other companies facing similar risks?”But one question not posed is around your decision-making process in when to move from continuous monitoring to continuous improvement. I was therefore interested in a recent FastCompany.com article, entitled “3 Steps Navy SEALs Use to Make Decisions”, by Stephanie Vozza. Vozza quotes former Navy SEAL and Chief Executive Officer (CEO) of ADS, Inc., Ryan Angold who said, “With so much information out there, a lot of people get analysis paralysis. You want to do your research and you want to access all the resources you have so you can make the right decision. But you can’t sit in analysis paralysis forever. Ultimately, there’s no 100% perfect decision.”

For her piece she also interviewed former Navy and current VMWare Chief Digital Transformation Officer Mike Hayes and author of the book, Never Enough: A Navy SEAL Commander on Living a Life of Excellence, Agility, and Meaning, who laid out a framework he used as an active SEAL for decision making.

  1. Gather Input

When you are a CCO or compliance professional in a corporate compliance function, you most probably have created experiences from which you can draw. Angold noted, “The requirement in SEAL teams is that you have you’ve gone through multiple different scenarios, you’ve trained for the most extreme environment, the most challenging environment, the worst-case scenarios. These reference points are helpful. You can say, ‘Okay, we’ve seen something like this before.’ Maybe this isn’t the exact scenario—it never is. But you’ve learned how the team works and can make quick decisions.”

Both Jonathan’s from the award-winning Everything Compliance gang, Jonathan Armstrong and Jonathan Marks, talk about not simply crisis and scenario planning but practice as well. Such practice not only gives you the muscle memory of what to do when a true crisis appears but also provide the types of experiences that Angold references that the SEALs then use in missions.

Hayes added that you should listen to difference voices or inputs, noting, “Too often, we tend to seek out like-minded input. Artists tend to hire artists and engineers hire engineers. By getting input from people who don’t think like us and by having a culture that celebrates differences and raising other ideas, you help people be comfortable saying things like, ‘Hey, sir, I don’t think that’s a great idea. Here’s how I would do it.’ That framework enables the best possible decisions.” Note that Hayes’ remarks also illuminate the importance and benefits of a true “Speak-Up Culture”.

  1. Decide When to Decide

 Most interestingly, the first thing you have to determine is when to make your decision. Hayes said, “The first decision is when to make your decision. That’s the thing that most people get wrong.” Obviously in combat your decision-making window can be quite short, but the same principle applies in the corporate world. Here Hayes noted, “At some point, the value of those extra inputs in your input streams costs more than the time associated with getting more inputs. At that inflection point is when you want to make your decision. You start losing value by waiting longer.”

But this point is where experience can become more paramount. In the corporate compliance world, you will likely get information, which is both quantitative and qualitative, particularly through continuous monitoring. Do not become paralyzed at this point, and you can rely on your gut or, as Hayes said, “there are other times where you need to operate in instinct. Instinct is really a set of experiences that you can’t quite crystallize, but that you extract logic from.”

  1. Be Willing (and ready) to Course Correct

Here a key CCO and compliance professional soft skill, that of humility, both “intellectual and real will help you get to the right decision.” Do not let your ego get in the way or start considering your sunk costs. You may garner new information which gives new input. Even John Maynard Keynes said, “When my information changes, I alter my conclusions. What do you do, sir?

Hayes said this is “the ultimate sign of leadership because it’s a sign of comfort in your own skin and not needing to look good in front of an organization. Instead, you’re putting the organization before self and doing the right thing.” Angold phrased it as “It takes a lot of humility for someone to be able to recognize it was the wrong call,” he says. “That’s where the communication is important and having that transparency with your team. You can gain a lot of additional trust from your team, when you acknowledge a wrong decision.”

Continuous improvement through continuous monitoring or other similar techniques will help keep your compliance program abreast of any changes in your business model’s compliance risks and allow growth based upon new and updated best practices specified by regulators. A compliance program is in many ways a continuously evolving organism, just as your company is. You need to build in a way to keep pace with both market and regulatory changes to have a truly effective anti-corruption compliance program. By using this three-step approach, you can best determine how to move from the monitoring to the improvement phase.

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31 Days to More Effective Compliance Programs

Day 24 | Updates and feedback

One of the critical elements found in the 2020 Update is the need to use the information you obtain, whether through risk assessment, root cause analysis, investigation, hotline report or any other manner to remediate the situation which allowed it to arise. Your company should establish a regular monitoring system to spot issues and address them. Effective monitoring means applying a consistent set of protocols, checks, and controls tailored to your company’s risks to detect and remediate compliance problems on an ongoing basis. To address this, your compliance team should be checking in routinely with local finance departments in your foreign offices to ask if they have noticed recent accounting irregularities. Regional directors should be required to keep tabs on potential improper activity in the countries in which they manage. These ongoing efforts demonstrate that your company is serious about compliance.
It is a function of the CCO to reinforce the vision and goals of the compliance function, where assessment and updating are critical to an ongoing best practices compliance program. If you follow this protocol, you will put a mechanism in place to demonstrate your company’s commitment to compliance by following through on intentions as set forth in your strategic plan. What should you do with this information? Put a strategic plan in place ready to implement your findings of continuous improvement, by using the following:

  • Review the goals of the strategic plan. This requires that you arrange a time for the CCO and team to review the goals of the Strategic Plan, which the CCO should lead to determine how this goal in the Plan measures up to its implementation in your company.
  • Design an execution plan. The KISS method (Keep it Simple Sir) is the best to move forward. This would suggest that for each compliance goal, there should be a simple and straight forward plan to ensure that the goal in question is being addressed.
  • Put accountabilities in place. In any plan of execution, there must be accountabilities attached to them. This requires the CCO or other senior compliance department representatives to put these in place and then mandate a report requirement on how the task assigned is being achieved.
  • Schedule the next review of the plan. There should be a regular review of the process. It allows any problems which may arise to be detected and corrected more quickly than if meetings are held at a less frequent basis.

Continuous monitoring is a key step but it is only the first step. It is not simply that you tested your compliance program but that you did something with the information you obtained to improve your program.
Three key takeaways:

  1. Innovation can come through a new way to think about and use data going forward.
  2. Have a plan in place to use the information garnered in your monitoring incorporated back into your compliance program.
  3. Always remember that Document Document Document is critical if the regulators come knocking.