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In this blog article we continue to explore the topic of cyber security or more rightly cyber safety. Cyber security mostly refers to protection from hostile forces which is a critical aspect of keeping what we value safe. However, it does not go far enough, cyber security must also protect against failure, breakage, or accidents. It must maintain a state of safety – the condition of being protected from harm or non-desirable outcomes which is what a managed cyber safety program does. A Managed Cyber Safety Program A managed safety program is an implementation of what is referred to as a " Safety II " approach with a focus on outcomes but may also incorporate attention to behaviors and activities as found in " Safety I". A managed cyber safety program will answer the following questions: What do we need to keep safe? What are the effects of uncertainty on safety objectives? What threatens safety? What and how strong do defenses need to be to achieve safety objectives? How do we maintain the performance of your defenses How do we continuously improve effectiveness? Answers to these questions form the context for the implementation of a managed safety system or Cyber SMS. To meet objectives of a managed cyber safety program we need a means of protection which we call "security" when it addresses hostile forces. In general terms, these are risk controls and measures. The level of protection is roughly speaking equal to the safeguards or margins that buffer us from the effects of the threats should they occur. The greater the effects, the greater the margin or buffers needs to be. We call this, "irreducible uncertainty." We can't reduce the threat from occurring, so we are left with creating a wall (safe guard) or at least buying insurance to address its effects. However, there is another kind of uncertainty, "reducible uncertainty", which we can buy down by improving our knowledge, our models, and our measures to prevent threats from occurring in the first place or minimize their effects should they manifest themselves. A managed cyber safety program will effectively address both kinds of uncertainty. It will safeguard against irreducible risk and buy-down reducible risk to provide the necessary total protection needed to keep what we value safe. It does this through a business-like approach that uses a systematic, explicit and comprehensive process for managing safety risk. This is reinforced by a risk-based culture where risk is viewed as something to optimize rather than ignore. Now, how is a managed cyber safety program implemented and managed? It's important to point out that many companies will most likely be doing many of the activities involved to manage cyber safety. Every company has a cybersecurity program, some are more effective than others. A managed cyber safety system will help you to coordinate your efforts more efficiently and effectively to ensure the safety outcomes that you have targeted are achieved and the undesirable outcomes are avoided. And that's a good thing. And that’s what we want. Cyber safety is not only a technical problem; it is a business problem that requires a business solution. A managed cyber safety system will therefore coordinate and manage two kinds of processes. Technical processes - are risk measures used to contend with threats, vulnerabilities, and risk. These are the controls to prevent or recover from threats to safety. Management processes - coordinate these controls, their performance, and their effectiveness at achieving a targeted level of safety. Both of these types of processes are needed to establish effective layers of defense and where any weaknesses in either will create an opportunity for a breach. Many companies invest in traditional cyber security which focuses on technology and equipment such as: firewalls, VPNs,, networks, software and so on. All of these are needed, but how much, and how well do they need to perform, and how effective do they need to be to achieve your cyber safety objectives? It is reported that 75% of companies do not measure the effectiveness of their compliance programs. This means that most companies do not know if their efforts are helping to prevent a breach or increasing the certainty of one happening. Companies that are effective at achieving their cyber safety outcomes will have the essential management processes to ensure safety is achieved, consistently, and that improves over time to address new uncertainties and risks as we are now experiencing with COVID-19. In our next blog article we will look into what a selection of available guidelines, standards, and frameworks available to help organizations realize their cyber safety goals.

Instead of in or out the question should be how close and which direction are we heading. Organizations are periodically asked to attest to their compliance. The question usually boils down to a simple one "Are you in our out of compliance?" The answer expected and often given is something like this, “Of course, we are fully complaint with all applicable laws, regulations & standards, and internal policies as far as we know.” This will, of course, be verified by internal and external audits. The answer may be true for the most part but perhaps not as useful as it could be. Organizations might be in compliance today or at the time of their last audit. But tomorrow a misstep may find them off-side. In fact they may have been heading off-side for some time but were not paying attention. Single point evaluations are poor predictors of risk. What organizations don’t know is how close they are to stepping over the edge and as importantly if they are heading closer or farther way from that edge. Where staying between the lines is mission critical, risk and compliance programs to be operational must provide credible answers to these questions: How close are we to an incident occurring? and Are we moving closer or farther away from that point? These would be considered as measures of assurance. Unfortunately, most organizations don't consider risk exposure in their decision making and so don't expect it from their risk and compliance programs. No wonder everyone is surprised when an incident occurs. Although, successful organizations will expect more from their programs and ensure that they get the answers they need to keep the organization between the lines today and every day they choose to operate.

Evaluating risk is important but handling risk is better. To meet obligations requires contending with threats as well as opportunities. Deciding how best to handle these may well make the difference between staying between the lines or crashing through a guard rail. Unfortunately, many organizations jump from obligation to risk controls and skip the step of deciding which risk handling strategy to use. In this post we explore the application of the US Department of Energy (DOE)’s risk handling strategies as defined in the DOE G 413.3-7A – Risk Management Guide to help meet obligations. While this guideline is directed towards projects the same principles can be applied to meeting an obligation – a project in it’s own right – particularly when obligations include targets to achieve net-zero emissions by 2050. Risk Handling Risk handling covers various strategies to contend with uncertainty. After obligations have been identified, risks have been evaluated, uncertainty estimated, and consequences determined, a decision needs to be made on how best to handle the risk. The first step is to chose a strategy which the DOE Risk Management Guide suggests include: acceptance, avoidance, exploit, mitigative, enhance, transfer and share. Let’s unpack each one. Acceptance Acceptance of risk means that it is acknowledged without measures to address the risk. The organization accepts both the positive and negative effects of the uncertainty left untreated using ISO 31000 terminology. This strategy is often chosen when the risk is irreducible or no other means are feasible to buy down risk. In this case, the risk is assumed will occur and the loss included in the overall contingency fund or management reserve. Acceptance is not the same as ignoring the risk. Risk is ignored when it is not identified and/or costs are not accounted for in management reserve. Ignoring risk amounts to hoping for the best but NOT preparing for the worst which is the same as gambling. For opportunities, instead of accounting for the cost in a management reserve the benefit is identified (in an outcomes register) and monitored. If the opportunity happens then further action may be taken to leverage the opportunity further. Avoidance / Exploit Avoidance is a risk handling strategy when organizations are risk adverse or if the risk cannot be tolerated. This strategy is accomplished by introducing measures to eliminate / prevent the potential threat from occurring. For opportunities risk handling introduces exploitive measures to increase the probability of the event happening. In both cases, the focus is on ensuring that the uncertainty is removed and the opportunity definitely happens and the threat definitely doesn’t. In other words, eliminate the uncertainty / hazard; eliminate the risk. Mitigation / Enhance Mitigation is a risk handling strategy to reduce the likelihood of occurrence of an identified negative impact (i.e. consequence) for a threat. The goal of mitigation is to reduce the risk to an acceptable level (e.g. ALARP, etc.) The rule for mitigation is not spend more on the mitigation than what the risk even would cost if it occurred. Enhancement is used for opportunities to increase the positive impact or benefit or reinforce the conditions that trigger it. The rule for enhancement is not to spend more on the enhancement costs than the benefits realized from the opportunity. Transfer / Share Transferring risk in most cases involves the purchase of insurance as the transference of the risk. This transfers the cost of the effects and distributes it across a larger group. This strategy does not help you meet the obligation. It only helps address the cost of non-conformance provided that you can coverage. Risk that is shared refers to positive consequences (i.e. benefits). Those that share the risks share in the benefits. For example, achieving safety compliance creates benefits that are shared across an organization. Applying Risk Handling to Obligations The best strategy to contend with risk may well be not to accept the obligation in the first place. However, if an organization accepts an obligation it must contend with the associated risk. If the obligation must be met either by regulation or internally imposed then an organization should do what it can to improve the probability that it meets the obligation. When deciding on which risk handling approach to take the following should be considered: 1. Is the obligation mandatory or voluntary? Mandatory obligations are often considered as necessary to avoid fines, and other effects of non-conformance. These may require a higher degree of rigour as the effects may be more immediate and may lead to loss of a license to operate. However, voluntary obligations tend to be seen as investments and measured against a ROI. One might be more inclined to accept an opportunity risk without introducing any enhancement or exploitive measures. The risk tolerance for voluntary obligations is usually higher than mandatory ones. 2. Is meeting the obligation necessary for meeting another obligation? To avoid a cascading or propagation of risk similar strategies should be used to avoid weaknesses in the compliance chain. Obligations should consider risk handling strategies used by dependant obligations to so that they do not become the weakest link. 3. Do the benefits outweigh the costs? The cost of the handling should be commensurate with the cost of the risk. This evaluation may position some strategies as too expensive compared with the loss or benefit anticipated. 4. Is the risk handling strategy feasible? Deciding on a risk handling strategy is necessary, but so is having feasible measures available to implement. It is best not to rely on the invention of new technologies to handle critical uncertainties. The lack of available risk measures may demand choosing a different risk handling strategy. 5. How effective is the risk handling strategy? Risk measures may be available, feasible, but not effective enough to buy down risk below the risk tolerance level. This may require additional strategies to contend with the residual risk. In DOE terms this means promoting the residual risk to the primary risk category along with the inherent risk. Evaluating the effectiveness of a selected risk strategy is necessary to knowing how much residual risk is left which in turn needs to be handled. 6. How long does the obligation last? Obligations typically have a long life-cycle which means the effectiveness of risk measures should be monitored continuously and adjusted when necessary. To help with this the decision of risk handling strategy should be captured in the obligations-risk register along with other obligation and risk information to provide context for the risk controls. If over the course of the obligation's life-cycle the chosen strategy does not perform as specified improvements may be required. In some cases, a different risk handling strategy may be needed. If the obligation is retired then the corresponding controls may be decommissioned if not needed by another obligation. Conclusion As regulations continue to expand to include outcome and performance-based designs choosing the best risk handling strategies will become increasingly important. This reflects the growing shift of risk transferring or shared by regulators with industry and individual companies. The DOE guidelines provide a robust framework for managing project risk that can be applied to compliance to improve the probability of meeting obligations. At a minimum it will help organizations know why risk controls have been chosen so they can better evaluate their effectiveness and make adjustments when and if necessary.

Registration is now CLOSED Why is this training needed? Over the last decade regulators have started to modernize their programs to become more risk-based moving towards performance and outcome based designs. The new compliance landscape requires organizations to take a proactive and systems approach instead of the prevailing reactive and siloed approach to compliance. Unfortunately, many organizations are unable to keep up and are falling behind. Adopting the new mindset along with the necessary skills takes time which many find they don't have. That's why we are offering this micro learning series. We have designed each module in bite sized portions. By spending just 1-hour a week over 15-weeks you will gain knowledge and skills to meet the demands of this new compliance landscape. Each module focuses on an essential principle for effective compliance: 1. Develop systems that always keep you in compliance 2. Continuously improve your compliance capabilities and effectiveness 3. Improve the probability of meeting all your obligations. These modules are designed for practitioners across all risk & compliance domains to improve their knowledge and skills. Each module consists of: 5 one-hour "HOW-TO" sessions (40-minute instruction with worked examples / 20-minute Q&A) Worksheets and reference materials Quiz (optional) Certificate after successfully completing all quizzes in the module. Sessions will be hands-on conducted over Zoom on Tuesdays @ 1:00-2:00pm (EDT) following the schedule below. Each session will be recorded and available to participants. Price is $300 (CAD) per module or $750 (CAD) for all three. We encourage you to take advantage of this opportunity to improve your knowledge and skills. The first module starts April 5th so register today. SYSTEMS MODULE - "Keep it Green" In this module you will learn tools & techniques to always stay in compliance. We start with classifying obligations followed by identifying goals and objectives, defining measures for success, and establishing actionable metrics to keep you between the lines. DATE SESSION TOPIC Tuesday, April 5, 2022 SYSTEMS-1 Module Overview - concepts and principles Tuesday, April 12, 2022 SYSTEMS-2 How to define and classify obligations Tuesday, April 19, 2022 SYSTEMS-3 How to define compliance outcomes, objectives and targets Tuesday, April 26, 2022 SYSTEMS-4 How to define measures of conformance, performance, and effectiveness Tuesday, May 3, 2022 SYSTEMS-5 How to define leading / lagging indicators and actions for compliance LEAN MODULE - "Keep it Lean" In this module you will learn how to apply Lean tools & techniques to continuously improve your compliance at the process, systems, and program levels. DATE SESSION TOPIC Tuesday, May 17, 2022 LEAN-1 Module Overview - concepts and principles Tuesday, May 24, 2022 LEAN-2 How to use Lean 5M to identify areas for improvement Tuesday, May 31, 2022 LEAN-3 How to use Lean A3 to conduct compliance Improvements Tuesday, June 7, 2022 LEAN-4 How to use Lean X-Matrix to stay on course Tuesday, June14, 2022 LEAN-5 How to use Lean Startup to achieve operational compliance RISK MODULE - "Keep it Certain" In this module you will learn how to improve the probability of keeping all your promises by contending with uncertainty. DATE SESSION TOPIC Tuesday, June 28, 2022 RISK-1 Module Overview - concepts and principles Tuesday, July 5, 2022 RISK-2 How to evaluate compliance risk Tuesday, July 12, 2022 RISK-3 How to identify risk measures and controls using bow-tie analysis Tuesday, July 19, 2022 RISK-4 How to track compliance risk using risk scores Tuesday, July 26, 2022 RISK-5 How to manage risk due to regulatory change

Dilution can be defined as "the process or action of making something less strong or valuable." Over the years I have experienced this effect at work when it comes to compliance systems in support of quality, safety, environmental, and regulatory objectives. The following are steps that many companies follow in hopes to strengthen their compliance but all too often results in the dilution of compliance instead. Step 1: Company decides to adopt a compliance management system As always it begins at the beginning with good intentions to use a management system to raise the standard for a particular set of obligations. This is often triggered by the occurrence of a significant incident, but not always. It may also be legislated, or strongly encouraged as part of membership in an industry association. An organization may just be proactive and choose to raise their standards on their own (wouldn't that be something!). Whatever the motivation might be resources are rallied behind the decision and implementation begins in earnest. Step 2: System elements are mapped to existing functions and activities The next step usually involves learning about the chosen system standard followed by a reductive analysis where each part of the system is divided up and mapped to existing functions and activities within the organization. This is a component-first approach as compared with a system-first approach . The goal of the component-first approach is to divide and conquer, utilize existing practices, identify and address procedural gaps, and realize early wins (i.e. low hanging fruit ). All of these goals are good in and of themselves. However, together they seldom lead to an operational system as we soon shall see. Step 3: Company focuses on the elements and loses sight of the system After the elements have been incorporated into the organizational structure sight of the system and the original purpose is often lost. People go back to their "day jobs" and management processes take on the task of managing the various parts of the compliance system. Reports and scorecards are updated to add such things as key performance indicators, and objectives. It is here that we can start to see the "dilution of compliance." This is the forest for the trees problem. The failure in implementation (which is to come) was not performing the " synthesis " step to work on the interactions of the elements to function as a whole. The performance of compliance systems depends on how the parts interact, not on how the parts perform separately. The parts on their own can never fulfill the purpose of the system. This lack of understanding now sets in motion the "dilution process". Failure is soon to follow. Step 4: The system fades away and only the elements remain The "dilution of compliance" process is now at work. The compliance system as a whole is now lost and perhaps was never really there since it was never implemented. Only the parts and probably only some where incorporated, many just were lost in action management systems. This can be observed by the lack of accountability for the system expressed in the organizational structure. There is no person who has the scope, authority, or resources to contend with ensuring that the overall system is operational and is performing at the levels needed to improve outcomes. At best silos exist for the elements, at worst, the components are fractionated, and dispersed beyond their ability to produce any real value towards system outcomes. Step 5: With the system out of sight even the elements start to fade away as people forget why they were even there The dilution of compliance is now complete. We might still believe that if we double down on audits we might get back to having an operational system. The problem is that we never had one to begin with and dynamics have been set in motion to produce failure. It's just a matter of time. Here is a video animation that stitches all these steps together: When an incident comes (and it will) you will ask yourself how it happened. You will launch an investigation, review findings, and mandate corrective actions. You will try to fix the problems unknowingly with the same behaviours and practices that caused the failure to begin with. You will try to fix the parts of a system rather than the system itself. What makes it worse is that you never had an operational system to start with. This is the trap that many organizations are caught in which we call The Reactive Uncertainty Trap. The good news is that you don't need to repeat this pattern. You can escape this trap and achieve a much better outcome.

If you are a Star Wars fan, you could call this "Creating balance in the 'work' force." Finding ways to accommodate new and changing regulatory demands is a challenge for most organizations. Very often I hear that operations is too busy to take on yet another process for their work force to follow. Even when the compliance process is as streamlined as it can be, front line workers may not have the capacity to properly execute and manage, let alone make continuous improvements to a new process. When compliance is layered on top of an already busy work force how could it be otherwise? One step that companies can take to create space is to simplify their existing processes before adding new ones. An effective way to do that is to remove sources of waste from existing processes by: eliminating unnecessary steps, reducing delays in acquiring resources, reducing unnecessary approvals, and no longer collecting information that is not needed By eliminating sources of waste you free up time for everyone to work on activities that are better aligned to the desired outcomes. Plan -Do-Check-Act Questions: What sources of waste do you see in the processes you use? What steps can you take to reduce or eliminate these sources of waste? What step can you take today to create space for compliance?

It is often when new recruits are hired that although they are trained on the new processes and procedures (which takes time) they will still have their intuition informed by what they did in their previous jobs. In fact, people will have a predilection to follow the old ways until new neurological paths are created and strengthened by repeated practice. Until that happens the risk of doing the wrong thing persists and why training and testing need to happen often during employee transitions particularly for safety critical positions.

Are your systems operational and capable to meet all your performance and outcome-based obligations this year? Companies that take ownership of their obligations know in real-time the status of their compliance. They don't wait for auditors to tell them when and if they are off-side or for something bad to happen before they make improvements. They continually strive to keep their promises to meet all their obligations.

For those who have been to Toronto, Canada you will know that one of the places you are likely to visit is the CN Tower. It remains as one of the tallest structures in the world and affords an unparalleled view of the city, and surrounding areas. On a clear day you can see for miles including all the way from the observation deck to the ground. The observation deck consists of a floor that is partially made from glass blocks. You can walk on them and look all the way down, unless you are like me. No matter how much I try my body will not let me walk on the glass blocks even though in my head I know it is safe. Is there a real risk here to explain my behavior or is there a problem with my perception? There is no doubt that a hole in the floor of the CN tower would be dangerous like many of the other dangers we are taught to avoid. When I was young my parents taught me (among other things) not to put my hands in an open flame, stick my fingers in an electrical socket, or play too close to the edge of a cliff. All of these are dangerous and pose real threats to our well being. Being fearless in the presence of these dangers is not wise and so it is good that we teach our kids and ourselves to have a proper respect for them. However, many of the risks that we face in life and in business are less physical (at least not directly) and do not illicit the same fear response. These risks are anticipated threats predicted by risk models, observations of past events, or other forms of analysis. It is with these that we often find a lack of proper respect, and sometimes even awareness of their existence. As an example, the introduction of mobile devices created the possibility to answer calls, text messages and emails, all while driving. It also created the opportunity for risk. However, for most people the perceived risk is not "real" as demonstrated by continued use of cell phones while driving. Unless involved personally in an automobile accident many are not likely to stop using cell phones. For behavioural change to occur we need to learn that distracted driving is dangerous just like we had to learn to not play too close to the edge of a cliff. Until the perception of risk is changed many will endure the consequences of fines, loss of demerit points and possibly their drivers license all introduced for the purpose of curtailing distracting driving. Although it does not have to be this way, as we instead can choose to change our behaviors and develop a proper respect (you might call this fear) of the dangers involved. The way we deal with the risks of "distracted driving" has similarities with how some companies contend with the risks associated with compliance. Organizations may find that in the pursuit of opportunities they end up being distracted with respect to safety, quality, environmental and regulatory objectives. Just like many who continue to use cell phones while driving they may comfort themselves by saying that they have not yet had any accidents and they can handle it. However, the risks still remain even if not perceived, ignored, or not personally experienced. Until these companies change their behaviors they will also endure the consequences of fines, the loss of reputation and trust, and possibly the loss of their operating licence. Even for them it does not need to be this way – they can choose to be more proactive with their compliance. Now back to me and the CN Tower glass floor. What was going on? In my case the glass blocks created an illusion of danger when none exists. It tricked my perception of reality. While it is good to fear things which are "really" dangerous it is not good to fear things which are not. That is why for some it important to face our fears to discover if they are based on reality. This is another example of how risk perception affects our decisions. My perception of danger was too high rather than too little as in the case with those who continue to text while driving. Both extremes are problematic. However, calibrating risk perceptions is not always easy to do. So it's back to the CN Tower to face the glass floor dragon again. Wish me luck!

When it comes to compliance there is a boundary that exists between what is inside an organization and what is outside. This compliance boundary is so important that the ISO standard on Compliance Management Systems (CMS) - ISO 19600 , calls out twelve (12) places where it should be considered: Section 4. Context of the Organization Internal / external issues Internal / external aspects Internal / external obligations Section 5. Leadership Internal / external stakeholders Section 6. Support Internal / external policies Internal / external communications Internal / external reporting Section 7. Performance Evaluation Internal / external inspections Internal / external reporting Internal / external issues Internal / external audit Section 8. Improvement Internal / external notification and escalation Taking external and internal factors into account helps to ensure that compliance is comprehensive and exhaustive across all of its roles and activities. The compliance boundary also helps to identify important factors with respect to where obligations might be found, who is accountable to meet them, and who is responsible to ensure that they are. The internal / external line also signals that different approaches and practices may be necessary depending on which side of the line a particular aspect resides. For example, how one identifies and incorporates internal / external stakeholder expectations might be different as external obligations tend to have regulatory and legal implications whereas internal obligations tend to be more voluntary and require different forms of incentives to achieve. The compliance boundary is a line that should be monitored regularly and not only once as if it was something that is entrenched or static as the physical parts of a business might be. The compliance boundary is more fluid and subject to change with new regulations and when companies take on more or less ownership of their obligations within their organization and across their supply chain. It is often that what is considered as internal or external will have more to do with who is accountable for the risk than who is responsible for providing the service or function. An example of when ownership of obligations is a driving force is when contractors are used and where accountability for safety remains with the company that’s procuring the service. The fact that an external party is responsible for the work doesn't necessarily result in the transfer of accountability for safety obligations. In this case, the line used to separate work packages is not the same as the line used to separate compliance obligations. For compliance to be effective, organizations must pay close attention to the compliance boundary which r equires that they: Define the line between what is internal and external with respect to meeting compliance obligations. Identify the role that internal / external factors have on meeting compliance objectives. Ensure that internal / external account-abilities and responsibilities are clearly defined and there are no gaps in coverage. Establish a process that anticipates and contends with impacts arising from changes to internal / external factors. Continually monitor the internal / external boundary. Lean Compliance helps companies adopt and improve compliance programs to better meet performance and outcome-based obligations. Schedule a call with us today to find out more. You can book your appointment here.

When it comes to risk & compliance it is important to identify, collect, and monitor data of all kinds. However, what data should be collected and which is most useful? To answer this it is helpful to consider two principle meanings behind the word measure: Measurement - Estimate or assess the extent, quality, value, or effect of something Method - A plan or course of action taken to achieve a particular purpose The first meaning uses the word measure to refer to measurements usually tied to values and most often the counting of things: How many injuries did we have this year? How many complaints did we receive? What was the amount of green house gas emissions this year? These are the easiest to capture and are useful to provide the status or condition of a particular risk or compliance system. The second meaning of measure refers to a plan or course of action to achieve an effect or result. These measures or you could say methods take the form of controls to achieve specific risk & compliance objectives. W. Edward Deming reminds us that, “ A goal without a method is nonsense.” Similarly, for risk & compliance – methods without measurements is also nonsense. While it is essential to know the status of risk & compliance system it is also important to know the effectiveness of the measures that are keeping an organization operating between the lines and within a specified level of risk. These are most useful when assessing the performance of a risk & compliance program. Measuring the effectiveness of risk & compliance controls (i.e. measures) will help to identify if the underlying systems are capable of keeping an organization in compliance today and in the future. Measures of effectiveness and performance are some of the best predictors of organizational resiliency. Unfortunately, many organizations do not measure the effectiveness of their risk & compliance controls. Work is done but without the assurance that this work will produce the desired effect or result. These companies have measures without measures which is waste. To reduce this waste the first step is to evaluate the effectiveness of the most critical risk & compliance controls. Effectiveness will be connected with progress towards targeted outcomes and objectives. Identifying which controls are effective will form the basis for determining which should be eliminated or improved.

In a previous post I introduced the scaffolding for a compliance assurance program that is capable of meeting the challenges of an Environment-First future. This framework focused on operational policy as the means to bridge the gap between environmental intention (i.e. commitments) and action (how commitments are assured). This week I explore the nature of policies themselves and how their designs can make a world of difference between what you intend and what you actually achieve. Policy Designs Let's consider an example policy statement using different design approaches: 1. Environment as an Assumption Based upon principles of quality-first our organization aims to achieve customer satisfaction, job security and company prosperity. This policy statement contains no explicit environmental intentions. This does not necessarily mean that environment objectives are being overlooked. However, without explicit environmental objectives, accountability and assurance will be difficult to achieve. 2. Environment as a Constraint Based upon principles of quality-first our organization aims to achieve customer satisfaction, job security, company prosperity while protecting the environment . In this case, environmental intentions are expressed as a guard rail or constraint on existing direction and goals. This may reduce negative impacts on the environment but most likely not result in substantive change to environmental outcomes. This policy design is commonly used as it allows organizations to make some commitment to the environment without needing to make significant changes to the way they operate. 3. Environment as an Outcome Based upon principles of quality-first our organization aims to achieve customer satisfaction, job security, company prosperity, and better environmental outcomes. This policy expresses environmental intention as a goal. Environmental outcomes can be optimized along side of other objectives which is more likely to result in environmental improvements rather than only environmental protection. This policy design is used by organizations that value environmental concerns at the same level as their other objectives. 4. Environment as a Principle Based upon principles of environment-first our organization aims to achieve customer satisfaction, job security, and company prosperity . In this last example, environmental intentions are expressed as the principles by which outcomes are achieved. Quality-first as an overarching principle is replaced or rather subsumed under an environment-first mandate. In the former case, quality-first is more than just making defect free products or services – it is about creating value. In the latter, environment-first is more than just protecting the environment – it is about creating sustainable value. Which Design is Better? The choice of policy design depends closely on the level of commitment that an organization has made or wants to make towards environmental objectives. The adoption of ESG and increasing environmental regulations will no doubt drive organizations to higher levels of commitments. At the same time, others may voluntarily raise their commitments. Whatever the case, these commitments will need to manifest as policy. You can choose whether or not environmental objectives are expressed as an assumption, a constraint, an outcome, or as a principle, Your choice will guide how your business will operate and the outcomes that will be achieved. So choose wisely.