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Writer's pictureRaimund Laqua

What Corporate Compliance Still Hasn't Learned

While recently listening to a podcast about leveraging AI to extract insights from complaints, it highlighted something that's long bothered me.


Despite manufacturing's strong embrace of proactive quality assurance, most corporate compliance systems still operate in firefighting mode - reacting to issues after they emerge.


This reactive approach not only wastes resources but poses serious risks to companies and everyone connected to them. Instead of transitioning to proactive strategies, many are investing more and doubling down on reactive processes.


Complaint-Driven Compliance

The Problem with Complaint-Driven Compliance


Think about this: Would you trust a car manufacturer that relied solely on customer complaints to identify defects? Of course not. Yet many organizations effectively do just that with their compliance programs, waiting for whistleblowers, customer complaints, or regulatory findings to identify issues.


When we depend on complaints to drive compliance improvements, we're essentially outsourcing our quality control to stakeholders who never signed up for the job. This approach is problematic for several reasons:


  1. Late-Stage Detection: By the time a complaint surfaces, the compliance failure has already occurred, potentially causing harm to individuals, damaging trust, and exposing the organization to liability.

  2. Incomplete Coverage: Not all compliance issues result in complaints. Many stakeholders stay silent, leading to blind spots in our compliance programs.

  3. Resource Drain: Investigating and resolving complaints is far more expensive and time-consuming than preventing issues in the first place.

  4. Reputation Risk: Each complaint represents a stakeholder who has had a negative experience with your organization—something that could have been prevented.


Learning from Quality Management


The manufacturing sector learned decades ago that quality control alone isn't enough. This led to the development of Total Quality Management (TQM) and other frameworks that embed quality throughout the entire production process. The same principles should apply to compliance:


Quality Control vs. Quality Assurance in Compliance


Traditional Approach (Quality Control):


  • Audit findings

  • Customer complaints

  • Regulatory investigations

  • Internal reports of violations


Modern Approach (Quality Assurance):


  • Process-integrated controls

  • Predictive analytics

  • Continuous monitoring

  • Design-stage compliance considerations

  • Continuous risk & performance assessments


The Path Forward: Building Quality into Compliance


To truly advance corporate compliance, organizations need to shift from reactive to proactive approaches. Here's how:


1. Design-Stage Integration


Compliance considerations should be built into new processes, products, services, and organizational functions from the beginning. This means:


  • Include compliance expertise in design meetings

  • Conduct compliance impact assessments during planning

  • Build automated controls into workflows


2. Continuous Monitoring


Instead of waiting for complaints:


  • Implement real-time monitoring systems (measures of adherence, conformance, performance, and effectiveness)

  • Use data analytics to identify potential issues before they escalate

  • Regularly assess control performance and effectiveness


3. Process-Oriented Thinking


Move beyond checkbox compliance to:


  • Map compliance requirements to business processes

  • Identify essential compliance capabilities

  • Build in preventive controls to detect and prevent issues


4. Proactive Thinking


Make proactive thinking part of organizational culture:


  • Train employees to recognize risks including those associated with compliance

  • Encourage proactive reporting of potential issues

  • Reward proactive behaviour: anticipate, plan, and act


The Bottom Line


Organizations that continue to rely on complaints as their primary compliance feedback mechanism are operating on borrowed time. In today's complex regulatory environment, we need to move beyond reactive approaches and embrace proactive compliance management.


Just as manufacturing evolved from quality control to quality assurance, compliance must evolve from complaint resolution to managed obligations. The cost of not making this transition—in terms of regulatory penalties, reputational damage, and lost opportunities—far outweighs the investment required to build a proactive compliance program.


The question isn't whether to make this transition, but how quickly we can implement it. Our stakeholders deserve better than being our unpaid quality control team.


 

Lean Compliance offers an advanced program design specifically to help organizations transition from reactive to proactive compliance. This program is called, "The Proactive Certainty Programâ„¢". You can learn more here:


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