The compliance profession has changed exponentially over the past decade. We are finely attuned to the news headlines of the latest corporate scandals and how our jobs are on the line. We are often the last line of defense for corporate reputation and protecting the interests of employees, shareholders, and the public.
So how exactly have things changed in terms of the skills, knowledge, and abilities we need to be effective? What attributes are needed now that weren’t on the table 10 years ago? Here is my list of top 10 attributes, and I consider them all equally important:
1. A VUCA mindset. We live in a VUCA (volatile, uncertain, complex, and ambiguous) world. New risks constantly pop up, and keeping track feels like a game of whack-a-mole. Consider the last decade’s worth of entrants to the pageant of compliance and ethics challenges: social media, artificial intelligence, data privacy, #metoo, cyber-security, and gender identity awareness, to name a few. And threats will continue to shift and evolve every year. To stay a step ahead of newly surfacing risks, CCOs need to cultivate a VUCA mindset and help their business partners do the same. CCOs need to be at the ready to build or buy subject matter expertise for emergent threats affecting their organizations. They also need to build intra-organizational partnerships, working cooperatively on a coordinated communications strategy. This provides an effective foundation for disclosure of possible risks to the board and investors while at the same time demonstrating cohesive corporate culture and mission.
2. Financial acumen. Compliance officers should be able to digest their company’s profit and loss statement for two reasons: (1) it enables you to “follow the money” and intelligently scan for where your compliance risk factors live (e.g. fraud, pressure to sell, incentives, and other leading indicators), and (2) it’s required business acumen in order to participate equally and be respected as a business partner on your executive team.
3. Records and information management (RIM). No matter who owns this—compliance or another department—effective records management underpins all other risk types. CCOs need to be conversant in RIM best practices and aware of how this is managed in their organization.
4. Adult learning theory. Compliance is generally responsible for the lion’s share of required employee training. In highly regulated industries, employees can spend 40 hours a year—an entire workweek—on required training. CCOs need to be aware that there is an entire professional field dedicated to adult learning theory and instructional design; CCOs need to keep this in mind and ensure company training materials are built utilizing the best practices, tools, and resources chosen from this field. While our compliance training needs to work, it also needs to be something our employees want to do and can do with relative ease.
5. Project management skills. As CCOs, we are often leading the creation of new products or services to effectively meet the goals of our compliance mandates. Recognizing when an activity is actually a “project” is in itself important, so you can properly apply sound project management practices to initiate, plan, execute, control, and close out the work to achieve your goals and meet your success criteria at the specified due date.
All projects are constrained by scope, time, money, and quality, so the primary challenge of project management is to achieve all of the project goals within the given constraints. Understanding the interdependencies of these variables—and how to manage them—can be crucial to the effective delivery and functioning of your ongoing compliance program build.
As a leader, you need an endless feedback loop from your boss, key stakeholders, and your team so you have a clear understanding of your leadership behaviors. Not knowing is a blind spot that undermines everything you and your team try to achieve. Knowing gives you the ability to leverage your strengths and mitigate your weaknesses.
6. Executive presence. CCOs need this in spades to be taken seriously and have a seat at the table. Executive presence is 70 percent presentation skills, 20 percent gravitas (grace under pressure) and 10 percent appearance (good grooming and a wardrobe that fits your company culture). Ignore at your peril.
7. Change management expertise. Organizations, like people, have a natural tendency to resist change. This homeostasis is a constant challenge for chief compliance officers. By the very nature of our jobs, we are charged with implementing constant operational and cultural changes to stay ahead of the risk curve. Change management, a critical discipline based on behavioral psychology principles as applied to industrial organizations, equips CCOs to meet this natural resistance strategically and thoughtfully so that our most important work is built to last. The five change management principles are:
- Establish urgency
- Create the guiding coalition
- Communicate your vision and strategy
- Empower employees and generate short-term gains
- Sustain the change
If a major change is poorly managed, your compliance initiative may be rejected or only partially adopted, damage business relationships, and fail to receive information that would improve compliance results.
8. Influencing skills. Some might refer to this as political savvy, emotional intelligence, or good negotiation skills. No matter what you might call it, with limited resources and the heavy responsibility of managing the universe of risk, chief compliance officers need to influence and leverage other executives, departments, and ultimately all employees to get stuff done and meet their mandate. If you want to influence people, they need to trust you. And to trust you, people need to believe two things: (1) that you care about them and (2) that you are open to THEIR influence. For CCOs, this means good listening skills, empathy, and curiosity are key to gaining organizational influence.
9. Courage. CCOs are the unsung heroes of all organizations—first to be blamed, take the fall, suffer sleepless nights, and often excluded from a seat at the table. Yet the CCO must be willing to take a stand on challenging issues, deliver bad news to powerful people and, after fighting the good fight, ultimately be able to walk if the organization is unprincipled. This requires strong moral character, grit, and courage.
10. Humility. The best leaders understand there is always more to learn. They adopt a growth mindset, continually learning new substantive skills and cultivating an awareness of how they show up and how their actions impact others. Leaders who view mistakes as a learning opportunity and feedback as a gift can inspire and motivate entire organizations.
As a leader, you need an endless feedback loop from your boss, key stakeholders, and your team so you have a clear understanding of your leadership behaviors. Not knowing is a blind spot that undermines everything you and your team try to achieve. Knowing gives you the ability to leverage your strengths and mitigate your weaknesses. Knowing gives you the power to change and puts you on the path to owning your career and success.
More importantly, you’ll be demonstrating the kind of leadership that creates healthy, profitable, sustainable workplaces and inspiring the kind of culture that makes the world a better place.
Special report: Inside the Mind of the CCO
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10 skills needed by the CCOs of today