The first 90 days in compliance

June 3, 2014

The good news is that there are systematic methods you can employ to both lessen the likelihood of failure and reach the break-even point faster. The specific business situations that confront transitioning leaders vary, but specific types of transition situations, such as start-ups and turnarounds, share certain features and imperatives. Further, there are fundamental principles that underpin success in all transitions at all levels, such as securing early wins.

The First 90 Days, a book written by Michael Watkins, a professor at Harvard Business School, is a must-read for anyone starting a new role in a new company. The following tips are taken from that book, and are very relevant to all compliance officers. Where appropriate, we have added some specific actions that a compliance officer can take to manage the success strategy for a new leader.

Prepare yourself

Take a mental break from your old job and prepare to take charge in the new one. The fact that you have been successful in the past does not necessarily mean you will be successful in the future. Try to take a month between roles where you don’t do any work other than prepare for the new role.

If taking time off between jobs is not an option because you have to work out your notice at your existing role, work nine to five and spend every night studying and preparing for the new role. Think like you are back in university and cramming for an exam. There is absolutely no need to work a 70-hour week at your current company; no one will remember you for it. Buy your way out of the notice period if possible. The longer you stay there the harder it will be to make a clear transition.

Start getting mentally prepared for the new company. Distance yourself from any of the politics that may have been at your old company. Hide any corporate-logoed cups or other things that remind you of the old company. Get the new company into your headspace and the old company out as quickly as possible.

Accelerate your learning

You need to understand the new company and its markets, products, technologies, systems and structures, as well as its culture and politics. There is a lot to learn and you must be systematic and focused about deciding what you need to learn and how you will learn it most efficiently. Clearly the most important aspect is the compliance programme and how it is managed.

Make sure that you look at the company’s:

  • investigations and hotline issues, which tell a lot about the compliance programme
  • any internal audit documents relating to compliance
  • annual reports, to look for any notes around investigations or SEC or listing-rule violations – often these tell a good story about the company and its record on compliance
  • industry, to see what is happening in that industry and see if it is being investigated or there is a regulatory crack-down.

You might also like to reconnect with any peers you have in the industry so that you can learn as much from them as you can.

Try to connect with 50 people at the company in the first week at the new job to interview them about the company’s existing compliance programme (even a 15- or 20-minute meeting is enough). You could reach out, build a network and start learning even before you start at the company. If possible, have an administration assistant start scheduling meetings for you well in advance so that on your first day you have a week-long series of meetings already planned. If you wait until your first day to do this it may take you a month to schedule calendars.

Match your strategy to the situation

Different types of companies will have different compliance issues. All compliance is broadly focused on risk. It is your role to quickly work out where the most risky practices are and which risks will have the biggest effect on the business. This is not rocket science, however. The part that is more challenging is managing risk while focusing on the areas that have the biggest business value. Business value can be measured in country value, profit or reputation. It can also be measured in reducing potential exposure in fines or prosecutions, or growing revenue and profits.

In the first 90 days in a new role you need to diagnose the compliance infrastructure: work out where the risks are, work out which risks are being managed and which are not, and work on identifying the major gaps that need to be filled. Remember that the biggest risk a company has (for example corrupt practices) may actually have been managed fairly well. Although there are things to improve in the anti-corruption compliance programme, and although it is a major risk, it is being managed. The risks you want to focus on are the biggest risks that are not currently being managed.

Secure early wins

In the first few weeks you need to identify opportunities to build both personal credibility and credibility for the compliance function as a whole. Do not try and fix the entire compliance programme in the first 90 days. You need to focus on a piece of it – whichever piece has the most “noise” around it so at the end of the 90 days your contribution will be seen as a great step forward.

You need to get credibility from all your stakeholders, but especially from your boss. Compliance officers, like everyone else in business, need to “manage up”. If you have not gained the necessary credit from your boss in the first 90 days, the situation is likely to collapse.

Credibility is not a stamp that you get from a previous employer; it is earned by adding value in your new company. For many compliance teams, gaining credibility is easy: all it takes is an attitude change from being the department that continually puts up walls to the business to being the “can-do” department. A large amount of early wins can be as simple as the new compliance team focusing on adding value, removing obfuscation and helping to grow the business, rather than being a roadblock.

If all you come away with after the first 90 days is a change of attitude towards compliance and a willingness to invest in changing compliance behaviour, you have a winner.

Negotiate success

The relationship with your new boss is of utmost importance. You need to figure out how to build a productive working relationship with your boss (or bosses) and manage their expectations. You should schedule some critical conversations about the situation, expectations, working style, resources and your personal development. You must gain consensus on your 90-day plan. Without agreement from your boss, your plan will be destined for failure.

There are some key things to think about when negotiating with your manager:

  • There is no value in trashing the existing compliance programme; you were hired to build upon it and improve it.
  • You need to drive the discussions with your boss. The fact that he or she may be travelling or busy is no excuse for not meeting – get on a plane and track them down in a hotel lobby for an hour if you have to. Your job is at stake in these first 90 days and therefore you can’t afford to wait.
  • Like all good managers, your boss is looking for solutions, not problems. Never be proud of yourself for pointing out the obvious places where the compliance programme is failing or has gaps. Your boss knows where the programme has faults and that is why they hired you.
  • Your boss is not interested in running through your checklist of things to do. That is for you to manage, not them.
  • Make sure that you connect with the people that your boss values and admires, such as their mentor. Your boss will probably seek advice and input from that person on your first 90 days so you want to make a good impression on them.
  • Most importantly, set expectations. The first 90 days is not there to address everything and make it all perfect.

Achieve alignment

You need to be aligned with your boss, the CEO and the board on what compliance actually means and what you are covering in your role. There are plenty of definitions of compliance which vary across different companies and, indeed, within the company itself. You need to work out precisely what is covered by the compliance function. If the company fails its Section 404 SOX compliance testing, is that your fault? Are you managing tax compliance, health and safety corruption, regulatory requirements for an Indian subsidiary?

Build your team

You will need to make some tough early personnel calls and your ability to select the right people for the right positions is among the most important drivers of success during your transition and beyond. You also need to hold onto the right people. The focus for every solid manager is to focus on the best people and only those people – the rest should quickly be managed up or out.

If you have “old-school” compliance people in the business that are generally disliked and not seen as adding value, remove them quickly. It will send a message to the business that you are serious on your focus of achieving a value-added compliance team.

You need to get a core team in place that that will keep the company moving forward while you build out the rest of the team. The key for a compliance officer with a team (even a small team) is to grow that team rather than trying to handle everything themself. Arrogance about your own ability is detrimental.

Create coalitions

Your success depends on your ability to influence people outside your direct line of control. Supportive alliances, both internal and external, are necessary if you are to achieve your goals. You should therefore immediately begin to identify those whose support is essential for your success, and then figure out how to get them onside.

There is no doubt that sales teams and sales people are key people to have on a compliance team’s side – they are essential to building a sustainable future for the company and for your role. You need to build those coalitions, and fast.

Do not just focus on creating coalitions with your manager and the CEO – focus on the people that actually bring in the money or directly contribute to profit. It might take some time to identify these people, and in many cases they will be overseas. If travel budgets allow, get to the main overseas markets as soon as possible to build those relationships. A lot of value comes from visiting people on their own turf and building those relationships in the field. Your boss is likely to be someone that can help work on the connections as it is likely that they can open doors for you.

Keep your balance

It is essential that you preserve your ability to make good judgements. This is generally done when you are awake, rested, sober, not jetlagged and happy at home.

The risks of losing perspective, becoming isolated and making bad calls are ever-present during transitions when you are under stress. The right advice-and-counsel network is an indispensable resource. Use your network of mentors, coaches and friends to discuss your part at the company and what you have been experiencing.

You have 90 days to prove yourself and get it right – use whatever resources you have available to maximise that time.

Accelerate everyone

Finally, you need to help those in your organisation – direct reports, bosses, and peers – accelerate their own transitions. The fact that you’re in transition means they are too. The quicker you can get your new direct reports up to speed, the more you will help your own performance.

Conclusion

The first 90 days are key for anyone moving into a new role, and for a compliance officer it is no different. Some of the basic steps referred to above can help you make a success out of the first 90 days and win the respect of your boss and the company as a whole. It is essential to build your team, focus on some early wins and build the network which is essential to your success.

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