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We Don't Protect What We Don't Value

Business success is often measured by a single metric: profit. However, in today's economic climate, organizations are increasingly recognizing the importance of a broader concept - Total Value. This goes beyond just the financial bottom line and encompasses protecting value creation across all aspects of a company's operations.

Protecting Total Value

The saying goes,

"we don't protect what we don't value."

This contributes to why compliance doesn't have the role that it should.

Organization's just don't value the outcomes needed to ensure mission success.

When a company prioritizes short-term gains over compliance, it essentially devalues the very things that contribute to its long-term success.

By neglecting safety regulations, environmental standards, or ethical practices, a company puts its reputation, integrity, and even the safety of its employees at risk. These are the very things it needs to protect to build trust with stakeholders and achieve corporate sustainability.

Present Bias Is Not A Gift

Imagine a business that cuts corners to maximize profit. This may lead to non-compliance with safety and security regulations along with breaking promises made to stakeholders to achieve adequate safety and security performance targets.

While short-term profits might increase, a potential incident could damage the company's reputation, incur hefty fines, and erode stakeholder trust. It only takes one violation, one incident, or one non-conformance to realize significant loss of value.

This is an example of "Present Bias" – the tendency of people to give stronger weight to payoffs that are closer to the present time when considering trade-offs between two future moments.

Here's where the concept of Total Value Advantage comes in.

Building on Michael Porter's Value Chain Analysis, this approach recognizes that competitive advantage goes beyond just price and product features. It encompasses all aspects that deliver value to a company's stakeholders in the broadest sense of the term: customers, suppliers, shareholders, employees, communities, or the public at large.

Total Value Chain
Total Value Chain

Establishing effective compliance programs that actively manage its role to protect and ensure Total Value both in the present and the future, a company gains a significant advantage. It demonstrates its commitment to responsible practices, builds trust with customers and partners, and fosters a safe and productive work environment. This, in turn, attracts and retains talent, enhances brand reputation, and ultimately leads to corporate sustainability.

The Bottom Line

Focusing solely on profit is a short-sighted strategy. However, by embracing the concept of Total Value and recognizing the crucial role compliance plays to protect its creation, businesses can improve the probability of mission success.

This leads to a Total Value Advantage, fostering trust, building resilience, and ultimately achieving corporate sustainability.

It's time to change the sign for compliance to read,

"We Protect Total Value."



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