Over the last several years I have written, along with others, concerning the need for compliance to be more proactive.
This is set against a prevailing reactive approach characterized by waiting until something bad happens or compelled by laws, or pressured by stakeholders to improve compliance particularly with respect to safety, security, sustainability, environmental, and other high-risk objectives.
Reactivity, in these contexts is not desirable or the best behaviour for organizations that want to stay between the lines and ahead of risk.
However, reactivity is not on its own negative. There are many cases where reacting to past events is exactly what's needed.
One such place, critical to compliance, is to adapt to variations in systems and processes to ensure systems perform within specified boundaries. This is accomplished by measuring outputs and comparing them to a defined standard. Deviation from standard results in corrective actions to eliminate the gap and return back to normal operations.
This reactive process is foundational for regulating processes of all kinds including those used in compliance. It's found everywhere within organizations and contributes to shaping overall corporate culture.
In this article we consider how to exploit the power of reactivity to achieve more than just staying between the lines. We will explore how to hack reactivity in pursuit of future goals, so that we can also stay ahead of risk.
The Power of Systems - Resisting Change
Compliance systems are used to meet procedural obligations such as adherence to standard operating procedures, controls, measurements, management review, audits, and so on.
In addition, compliance will also have performance obligations associated with goals and targets connected with commitments. These will include, for example, targets connected with zero emissions, zero violations, zero defects, zero breaches, and other vision zero initiatives.
In both cases, processes are established to measure change from conformance or performance standards. Any change from standard (called a deviation) is then eliminated.
The presence of deviation initiates corrective actions in the form of a CAPA (Corrective Action and Preventive Action). Corrective actions may arise from audits or inspections but also as part of system level monitoring. To address a deviation, an iterative process such as a Plan-Do-Check-Act cycle may be conducted and repeated until the deviation is minimized or eliminated.
While this process is reactive since corrective actions are triggered by past events, it's possible to harness this reactivity to meet future goals. The key to leveraging reactivity for proactive ends lies in bringing the future into the present, by making anticipated goals into actual goals and raising standards to meet future needs.
When embracing a new goal, a gap emerges between the current and desired system states. This gap shares similarities with deviations that are addressed by means of corrective actions. Since this gap has not yet happened, instead of executing corrective actions in response to actual performance, improvement actions are conducted in anticipation of future levels of performance.
An example of this approach is the Toyota Kata, a process associated with the Toyota Production System. It involves:
The Improvement Kata, a four-step routine focused on setting challenging objectives, understanding the current situation, defining the next target, and experimenting toward that target.
The Coaching Kata represents leadership's role in guiding individuals or teams through this improvement process, fostering continuous learning and problem-solving.
Toyota Kata can be viewed as an adaptive process that integrates both proactive and reactive behaviours to pursue a better future state. Defining future objectives and targets is proactive while experimenting towards successive targets is reactive.
Improvement methodologies such as Toyota Kata are not the only way that we can harness reactive behaviours to achieve proactive ends. Another approach is to leverage the system itself to improve.
Raising standards induces the affected system in the present to adapt to new levels of performance targets by invoking reactive behaviours. The system will initiate corrective actions to achieve and sustain the new level of performance. In this case, corrective actions are used as improvement actions triggered by the adoption of higher standards.
This approach is considered proactive in terms of the future state of the system but reactive concerning addressing the gap between the old and new standard.
An Integrative Approach
The cases we have considered share similarities. They both change system performance triggered by either past or future events which create: corrective or improvement actions respectively. When combined together they form an adaptive system:
Adaptive systems refer to systems that have the ability to adjust and modify themselves in response to changes in their environment or in accordance with specified goals. These systems are designed to be flexible and responsive, allowing them to thrive in dynamic and evolving conditions.
Adaptability, is one of the properties of the Operational Compliance Model we introduced in previous articles:
Instead of building compliance systems that react only to past events, we design them to respond to anticipated future events. This is accomplished by introducing feed-forward processes and behaviours that when combined with feed-back processes and behaviours create adaptive cycles of change across three critical aspects: conformance, performance, and effectiveness.
Creating an adaptive system harnesses the power of reactivity to achieve proactive ends.
When it comes to compliance, proactivity is needed to stay ahead of risk, and reactivity to stay between the lines. However, together they provide a powerful means for compliance to continuously adapt in the midst of changing obligations and uncertainties. This ensures that organizations always stay between the lines and ahead of risk.
Not a luxury, but a necessity for mission success.