Compliance 2.0 System Requirements

For years, I've been tracking the evolution of compliance technology—and I've noticed a persistent gap between what organizations need and what the market delivers.

Many, and perhaps most, compliance systems are designed around a basic understanding: they treat compliance as a documentation problem, or at most a data problem, rather than an operational problem.

This made sense when compliance was only about legal adherence, where the goal was to provide evidence of compliance to regulatory requirements.

However, compliance is no longer just about that, and hasn't been for decades, particularly in highly regulated, high-risk sectors.

Compliance does not mean just passing an audit or obtaining a certificate. Compliance is about meeting obligations across many domains, including safety, security, sustainability, quality, ethics, regulatory, and other areas of risk. This requires contending with uncertainty and keeping organizations on-mission, between the lines, and ahead of risk. It's about making certain that value is created and protected.

We have called this Compliance 2.0, although each domain has its own name for it: Total Quality Management, Safety II, HOP, Functional & Process Safety, Cybernetics, Lean, and others. It's all about reducing variability to make certain that value is created rather than waste, which is what you get when risk becomes a reality. Compliance 2.0 requires operational capabilities to achieve targets and advance outcomes towards better safety, security, sustainability, quality, ethics, legal adherence, and other expectations. 

Some may argue about the particulars, but overall most agree that this is the purpose of compliance (not the department) implemented as programs led by director and officer-level managerial roles. Compliance 2.0 programs are built on systems and processes that implement and deliver on promises associated with both mandatory and voluntary obligations. The essential (not the basic) capacity to deliver is what we call, Minimum Viable Compliance (MVC).

The problem is that while compliance has changed, most technology and practitioners have not kept up. Traditional methods and practices based on inspection and audits are firmly entrenched and are difficult to change. This is why I created Lean Compliance close to 10 years ago—to bridge this gap.

To help organizations evaluate their compliance systems, I've created a list of system requirements for what is needed to support an operational view of compliance. This is not complete, and more work needs to be done. However, it's a start that I hope you might find helpful.

Requirements for Compliance 2.0 Systems

 Managing Operations, Not Just Documents:

1. Manage ALL four types of obligations—prescriptive rules, practice standards, performance targets, and program outcomes

2. Trace promises to the operational capabilities required to fulfill them

3. Track promise-makers and promise-keepers—who commits versus who delivers (RACI Model)

4. Maintain the golden thread of assurance from obligation through to operational delivery

5. Establish provenance—knowing where obligations come from and how they flow through operations

6. Align stated values with how work actually gets done

7. Integrate cross-functionally, breaking down silos between compliance, operations, and quality

Real Intelligence, Not Just Documentation:

1. Monitor compliance status AND operational capacity to maintain it in real-time

2. Distinguish between operational risk (failure to keep promises) and compliance risk (failure to deliver value)

3. Surface operational insights before issues become incidents

4. Establish cybernetic feedback loops between operational reality and compliance commitments

5. Enable self-regulating mechanisms that maintain compliance through operational design

6. Advance capabilities that drive better outcomes across safety, security, quality, sustainability, and ethics

7. Provide balanced scorecard/dashboard across the hierarchy: outcomes (results) → performance (capacity) → conformance (practices) → adherence (rules)

Forward-Looking Operations: 

1. Enable management pre-view instead of only management review

2. Plan front-view capabilities instead of reporting rear-view activities

3. Conduct pre-incident investigations and program pre-mortems—not just post-mortems

4. Assess organizational capability to fulfill obligations (close the "compliance effectiveness gap")

5. Improve continuously across conformance, performance, effectiveness, and assurance

6. Provide end-to-end visibility from obligation to operational outcome

Built-In, Not Bolted-On:

1. Integrate compliance requirements into operational design from the start

2. Build in compliance (poka-yoke principles) rather than inspect for it

3. Make obligation alignment immediately visible through operational transparency

4. Generate evidence as operational by-product, not separate activity

5. Identify and eliminate compliance waste—redundant controls and non-value-adding activities

What's Next?

If you want to learn more about Compliance 2.0, I invite you to sign up for our upcoming, Lean Compliance Leadership Workshop: How to Lead Compliance 2.0 Transformation (Feb 11).

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Raimund Laqua (Ray) is a Professional Engineer (P.Eng.) and Project Management Professional (PMP) with over 30 years of experience in highly regulated industries including oil & gas, medical devices, pharmaceuticals, financial services, and government sectors. He is the founder of Lean Compliance Consulting and co-founder of ProfessionalEngineers.AI. Ray serves on ISO's ESG working group, OSPE's AI in Engineering committee, and as AI Chair for Engineers for the Profession (E4P), where he advocates for federal licensing of digital engineering disciplines in Canada.