This week, I presented at the For Purpose Conference in Toowoomba. While the focus of my presentation was on encouraging people to go beyond focusing solely on compliance within audit processes and looking for ways that innovation can occur, other presenters were also examining the role of compliance and innovation for not-for-profit organisations. There were many different perspectives on what these topics meant for organisations and individuals in practice, and I am sure participants were left with much ‘food for thought’ as a result of attending the conference.

Reflecting on the day, what I saw and heard included a lot of discussion about the increasing focus on compliance as a way of ensuring the safety, health and wellbeing of customers, while at the same time protecting people from fraudulent activities. Over the past twenty years, we have seen the increasing use of standards as a way of ensuring organisations comply with government and community expectations about how funds are spent and what deliverables are actioned to make a difference in the lives of people seeking assistance from these organisations. Complying with standards means organisations have to take responsibility for their actions and be accountable to their customers.

In my role as an auditor/assessor, I often hear customers praise and genuinely appreciate the efforts of organisations that demonstrate compliance with standards as well as with legislation and regulations. Transparency and trustworthiness are also valued, and goodwill is usually evident when organisations need to take action to demonstrate making the services they provide even better and in alignment with the requirements identified in standards. Conversely, when organisations do not comply or are found to be operating in a fraudulent and dishonest manner, customers are increasingly taking the funds and going elsewhere. Once reputations are damaged and trust is lost, it is very difficult to regain these important factors. You don’t have to look very far to see examples of this in practice. For example, the banking industry and the aged care sector are both under increasing scrutiny in these areas – and both the government and the community are demanding improvements.

Discussion on the day also included examples of not-for-profit organisations encouraging and welcoming opportunities to innovate at the same time as demonstrating compliance. These organisations are often led by people who are open to different ideas that make their organisation stand out from the rest. The reality though is that in order to innovate and improve, at some point the organisation had to break out of the usual and known ways of doing things to create something new. This means seeing something that is missing or needs improvement in the ways things are done and then wanting to do something to ‘fill the gap’. Of course, for many organisations this is easier said than done.

However, when organisations commence on the compliance pathway, there are often many opportunities to use the standards to drive new thinking. Disrupting the usual ways of doing things requires a very strong leadership value to hold organisations together while new strategies are being considered and implemented. Some organisations find that, as a result of courageously disrupting their internal thinking and making improvements, it takes effort to maintain that ‘edge’ when they grow from a small, tailored operation to a larger organisation that employs many people, sometimes across regions and states. Again, this comes back to the leadership of the organisation and the stewardship that is demonstrated over time to continually consider alternative ways to improve the organisation.

Personally, I believe that compliance and innovation actually work very well together. I think there are several ways to strengthen the ways this can happen:

1. Look beyond just what the standards are saying and what you know works already. Look for other ways the standards can be interpreted as well as what other sectors understand the indicators to mean. This may mean suspending our own views about what the standards mean on one level and being open to other opinions.

2. Actively encourage customers to challenge you with what the standards mean. For example, seek the opinion of Gen X and Gen Y customers and find out how the standards operate for them. Look at how technology, as well as younger customers and their expectations, will impact on the organisation.

3. Consider the possibility of ‘group think’ with the ways things are done, both strategically as well as operationally across your organisation. Are people afraid to ‘rock the boat’ and make suggestions because they want things to be comfortable in the workplace or are people punished for making these suggestions? Punishments may be very subtle but nonetheless incredibly damaging to the ways the organisation can innovate and continually progress.

4. Look at how disruptive thinking can contribute towards innovation as well as compliance. Make sure these are documented and open to ongoing review for further innovations and evidence of compliance.

I also believe compliance and innovation depend on courageously being disruptive while also attending to the needs of people who may have very different expectations and fears about these considerations. Experience tells me that not everyone is thrilled about the concept of change or about living through disruptions to the ways they do their work – while at the same time other people (including customers) may be comfortable with these elements when they have a say and can control what the end result will look like. It all comes back to leadership, respect and genuine, trustworthy communication, factors that today’s organisation needs more than ever before.

Thinking ahead:
1. How open is your organisation in its approach towards compliance as well as to innovate? How does it demonstrate its approach towards these factors?
2. In what ways is leadership demonstrated throughout your organisation in relation to compliance and innovation? Do the leaders disrupt the status quo or do other people? What is this like for both internal as well as external customers?