“And, action!” Have you ever wondered why good movies progress seemingly without effort? It is not just the fame and skill of the actor, or director to capture the right dialogue or scene. It really comes down to having a playbook, thinking strategically through the plot from start to finish and then putting it into practice.
That’s why I oftentimes wonder why companies don’t spend more time to develop a playbook for their compliance program. What they do, instead, is to “just go for it”, and hope for the best. Yes, there are low hanging fruits and some clear candidates for audits. But wouldn’t it make much more sense to plan your work, and then work your plan? Here are a few questions you should ask yourself when you are either about to engage in compliance activities or if you already do have a program in place and wonder if it is the best bang for your buck:
- How do I define Shareholder Value and communicate it to my various constituents?
- Do I know what my current and desired state look like?
- What are some of the strategic implications a compliance program should consider?
- What are the different components of an effective compliance program, and how do they influence each other?
- What are the KPIs that my management will be most likely interested in to determine the success of the program?
- What are my benchmarks?
Getting Started: Understanding Shareholder Value
Starting from scratch to find those answers can be daunting. I recommend talking to your peers and attending relevant events (here’s a list of upcoming events that might be worth attending) to broaden your perspective. Look for the thought leaders and those with scars that can help you make the compliance program successful.
A really good way to start thinking about the impact of your compliance program is by asking yourself what your Shareholder Value looks like and how it impacts your organization internally, as well as externally. I have written another blog article about it, so check it out here.
In a nutshell, you want to define four main criteria for your Shareholder Value matrix: Revenue Growth, Operating Margin, Asset Utilization, and Expectations. There are different variables underneath each that make up the value proposition, so take the time to fully understand what this means to your organization and your shareholders.
Once you map out this first step, work through the other questions that will naturally form your Compliance Playbook. Like with anything else, the more thoughts, variables and experience you put into this exercise, the more comprehensive your strategic roadmap will look like.
Plan your work. Work your plan. It’s an elegant and successful strategy to set you up for success.
If you missed Parts 1 and 2 of this blog series, check them out below:
- Part 1: Using License Compliance to Help your Organization through an Economic Downturn
- Part 2: License Compliance and Shareholder Value – here’s what you need to consider
Let me know what you think in the comments. Thanks!