The Parable of the Compliant Company

Posted August 21st, 2007

Once upon a time, there was a company. It doesn’t really matter what company, because the company is representative of many organizations. This company had a secret strategy, one which it practiced but did not publicize.

The company was committed to compliance with regulations that governed the industry. “What’s wrong with that?”, you might ask. Companies that comply with regulations are meeting the letter of the law. Isn’t that true? Yes, and the compliant company devoted much effort to ensuring that they only did the minimal necessary programs and tasks to be compliant.

When the leaders and people had discussions about compliance, the important question was, “What is the least we can do to meet the regulation?” As a result, this emphasis on doing the least possible resulted in implementation of less than the least. At the local level, people made exceptions to the minimal standards.

Over time, these “work arounds” become common practice and part of the company culture. No one saw anything unusual in these practices because they knew the company only wanted to be compliant with regulations. And hardly anyone knew the regulations anyway. What everyone knew was that, when it came to rules and regulations, the company wanted to do the least possible to satisfy any rules.

Does this parable apply to any companies you know?

This entry was posted on Tuesday, August 21st, 2007 at 9:32 am and is filed under Observations, Operational Excellence.