Are You Short Changing Your Company?

Recently I entered a debate about the purpose of a company. I stated it was to actualize the goals of the business owner. The gentleman stated that it was to solve a problem that society had. I said solving a problem is the theme in which the business is built not the purpose of the company. The same is true with compliance governance. How does a company create a profit center compliance program? The answer is the same way you build a company.

Most companies that have less than 50 employees treat compliance as another task within someone’s job simply because it is viewed as a necessary evil and does nothing to elevate the company’s value or bottom line. So IT, HR, owner, or staff people are asked to perform compliance tasks. They have no methodology of how to create value and return on investment simply because it is not recognized as a business strategy built into the business model. It is not a view point taught, mastered, or understood well.

Many companies do not require a full time compliance officer. But having a person whose sole responsibility is compliance is better than incorporating it into someone’s job function. Renting a compliance officer, so to speak, allows the company to do what it does best and allows a compliance officer the ability to see the organization from a 10,000 foot perspective. Not just daily activities. It’s an important skill for profitable results.

Working in collaboration with the owner and employees independently encourages compliance programs that not only meets state and federal expectations, but provides greater value in return for the invested effort. The value must contribute to actualizing the goals of the business owner as well as meeting regulatory requirements to stay in business. Are you short changing your compliance efforts thus short changing your company?

Business Owners Hate Spending Money on What they Can't See

I had a conversation today about trying to get business owners to recognize that they need to comply with certain laws. While the choir understands that not doing so puts businesses at risk, the choir still can't get why the business and the owner is willing to take their chances despite law.

I stated that business owners and small businesses are reluctant to pay for something that doesn't have an immediate ROI emotionally or economically. For example, if a supplement company were given an opportunity to distribute their product internationally for the cost of liability insurance, they are motivated to make the investment provided the opportunity far exceeds the cost. But the same company may not want to purchase liability if it involved something more remote like PCI compliance when they don't see the value. Especially in unfunded mandates. Every company is subject to one or more of five major privacy mandates and all of them are unfunded. Most companies don't even know they are required.

In addition, they are unwilling to part with funds for something that has a million and one chance of ever happening in their eyes. "We're too small for anyone to care" is the usual mantra. However, when it comes to identity theft, it only takes one to put a small business out of business. The likelihood is not "if" but "when" and far greater than all of the other risks that businesses must contemplate.

So how do you motivate a business or organization to comply? Fear doesn't work because most companies are immune to what feels remote them. Instead, what hits home now? Did a customer loose a wallet or have a credit card turn down? Did an employee have a credit problem due to a bad profile? Did the company computers get infected or go down for any length of time recently? Did an employee loose a laptop or blackberry? Ask who they turned to when it happen and why?

Another way is to show companies how unfunded mandates actually have hidden wealth opportunities they can acquire immediately in employee morale, growth opportunities, and economically. If you are interested email me at witsowitz@verizon.net and write in the subject "Wealth in Unfunded Mandates".