Metrics that Matter: Part 2 - Policies and Procedures

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Metrics that Matter: Part 2 - Policies and Procedures

Author Pearl Zhu defined metrics thus: “Performance metrics are numbers in context, results related to the strategic goals of the business.”  I couldn’t agree more.  Today we’re going to explore metrics relating to policies and procedures.  This is part 2 of our series.  If you haven’t read Part 1, I recommend you go back and start there, as it sets the stage regarding why certain metrics should be chosen.

Policies and Procedures

Very few things are as fundamental to a compliance program as policies and procedures.  After all, how would people in far-flung places know what is expected of them if it isn’t written down?  There are many considerations that go into making sure you have good policies, but that isn’t the focus of this post.  This post relates to metrics that track the effectiveness of policies and procedures. 

Not all examples will fit your program.  Metrics, by their nature, need to be tailored so that they match the maturity of your program, the nature of your business, the size and geographical expanse of your business, etc. 

So What?

The most important question when it comes to metrics is this: So what?  Each metric needs context, so it tells a story.  In addition, each metric needs to be tied to a goal or Key Performance Indicator (KPI), so you can tell if the trend is going in the right direction.  Metrics without context are useless. 

For instance, let’s say you choose to track the percentage of the employee population that accesses compliance-related policies and procedures on the intranet.  So what?  Well, a growth in people accessing policies and procedures may indicate that there is an interest in the policies, and an awareness that they exist.  When trying to decide on your KPI for this metric, you may find that less than ½ of 1% of the employee population accessed the policies and procedures page of your company’s intranet last year.  Therefore, you set your KPI at 5% annually.  The metric has now been put into context, and a KPI has been assigned to it so that it is obvious whether the company is making progress toward the goal. 

When you choose a metric, make sure you ask, “So what?”  If you can’t answer why the metric matters, or what the goal is for that metric, choose something else.

Examples…

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White Paper: Ground-breaking Research on how to Benchmark Your Compliance Reputation

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They say you never have a second chance to make a first impression.  And yet, most compliance officers don’t think about how their compliance program looks to the outside world.  It’s the first thing regulators, customers, potential investors, shareholders and employees see.  What does your external appearance say about your company’s commitment to compliance and ethics?  What are others in your industry doing?  And perhaps most importantly, what are best practices in this critical space?

We’ve created a white paper exploring our groundbreaking results from our research into how compliance programs look from the outside.  In this white paper you’ll find out how other companies in your industry scored using Spark Compliance’s proprietary algorithm, which employs 25 specialty inputs to determine the scoring of the program in six critical areas, including:

  • Code of Conduct

  • Corporate Governance

  • Whistle-blower Provisions

  • Anti-Bribery Commitments

  • Data Privacy

  • Supply Chain / Modern Slavery / Sustainability

Spark Compliance has reviewed over 120 companies in the past two months to obtain this data.  You’ll learn best practices for each area, and find out how to benchmark your own program to see how it appears to the outside world.  Download for free for an exploration of the new compliance benchmark. 

Download here

Download here

Combating the $150 Billion Problem – What Compliance Can Do About Human Trafficking

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Combating the $150 Billion Problem – What Compliance Can Do About Human Trafficking

This is a guest post written by Ramsey Kazem, East Coast Vice President of Spark Compliance Consulting.

Last month, the City of Atlanta hosted Super Bowl LIII.  A sporting event of this magnitude brings a lot of energy and excitement to the host city.  This year was no exception.  In the days leading up to the “big game”, the City of Atlanta showcased spectacular parties and special events, a diverse range of music concerts, and countless celebrity sightings.  While there was much to celebrate, this event also brought with it a darker side and highlighted an issue that does not receive the attention it deserves:  Human Trafficking. 

Just days before the Superbowl, authorities announced that 33 people were arrested in Atlanta on sex trafficking charges.  This roundup was the result of a cooperative effort between the Department of Homeland Security, the FBI and local law enforcement.  The details of the arrests are undisclosed as the investigations are ongoing, but it has been reported that at least four victims have been rescued as a result of the effort.

Sadly, this issue is not limited to major sporting events where big-spending tourists from across the globe gather in one location.  Indeed, sex trafficking, human trafficking and forced labor (collectively referred to as “human trafficking”) are far more prevalent than many realize.  Human trafficking extends to all corners of the world –even to developed nations – and targets men, women, and children.  This global scourge, commonly referred to as Modern Slavery, generates $150 billion a year in illegal profits making it the third largest criminal industry behind drugs and arms trafficking. 

The International Labor Organization estimates that there are 40.3 million victims of human trafficking globally.  One in four victims are children, and more than 16 million people are exploited in the private sector throughout a wide range of industries.  While governments around the world are beginning to address this issue with increased urgency, commercial enterprises can play an important role in combatting this evil.  That is, by ensuring their business activities are not indirectly supporting, encouraging or financing Modern Slavery, companies can substantially diminish the market for this illegal and immoral practice. 

Before discussing the proactive steps to mitigate the risk of human trafficking in a company’s business activities, it is important to first understand what it is and in which industries it is most prevalent. 

What is Human Trafficking?  While the legal definitions of human trafficking tend to be broadly worded to cast as wide a net as is practicable, at its core human trafficking has three primary elements: (1) the transporting of people, (2) by illegal means, and (3) for a specific purpose.  For example, the Trafficking Victims Protection Act of 2000, a United States Federal Law, defines each part of the formula as follows: 

  • Transporting:  the recruitment, harboring, transportation, provision or obtaining of a person

  • Illegal means:  use of force, fraud, or coercion

  • Specific purpose:  involuntary servitude, peonage, debt bondage, slavery or commercial sex acts. 

Other laws and regulations addressing this issue take a similar approach to define this term. 

No discussion on the definition of human trafficking is complete without dispelling the common myth that human trafficking only involves the transporting of people for commercial sex.  This is simply not the case as forced labor is a large part of this illegal industry.  In fact, by some estimates, there are more instances of labor trafficking than sex trafficking….

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Metrics That Matter: Part 1: Setting the Stage

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Metrics That Matter: Part 1: Setting the Stage

“Llamas are up 5% this quarter, while 22% of people have chosen blue instead of red year-to-date.”  So what?  Do I care if llamas are up?  Is that a good or a bad thing?  Is there a goal associated with whether red or blue is chosen?  Why do these things matter?

Too many compliance departments track metrics because they think they are supposed to.  Managers, the C-Suite and the Board are used to getting metrics from other departments, so they assume they’re appropriate from Compliance as well.  But many metrics tracked by compliance programs don’t inform the business about anything.  And because of that, tracking them isn’t useful.

A New Series

We’re creating a new series of blogs on metrics that matter.  We’ll be delving into examples of metrics being used by the most forward-thinking companies in the world.  We’ll also be examining how to use metrics effectively to understand the trends in your business and in your program.  Lastly, we’ll be giving lots of examples for you to choose from so you can bring your metrics to the next level.

What is a Metric?

Management consulting guru Peter F. Drucker said, “What gets measured improves.”  A metric is simply a measurement.  If you can measure it, it can be a metric.  Compliance departments typically use metrics to monitor and audit the state of the program.  They can also be used to drive efficiency and identify areas for improvement.  Ideally, they should provide critical data to show whether Key Performance Indicators (KPI) are being met.

Good Metrics vs. Bad Metrics

Good metrics provide important information.  They can tell you whether your program is effective.  They can help you to prove that your program is adding value to the business.  They can also tell you whether your program is improving over time. 

Bad metrics don’t provide any of this information.  Creating and reporting on bad metrics has two disadvantages.  Number one – it probably takes a long time to collect the information, which is time you’ve wasted at work.  Number two – management isn’t getting anything out of the metrics, so they won’t pay attention to them.  What’s worse – management may think you’re not adding value because your metrics don’t show effectiveness, efficiency, or positive change in the organization.

We’re Not Confident…

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Feeling Morally Queasy at Work? Tips for Voicing Your Values

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Feeling Morally Queasy at Work? Tips for Voicing Your Values

This is a guest post by Andrew (Andy) Rudin, Managing Principal of CONTRARY DOMINO.

I’d like to encircle the workplace with yellow safety tape. Long ribbons of it. “Caution! Do not enter!” That would give others an inkling of the dangers lurking within. I’m not talking about back pain, eyestrain, and paper cuts. I’m talking exploitation, harassment, and passive aggression.

I’d use safety tape to protect people from the risks that threaten their personal values. Since 1943, Norman Rockwell’s Rosie the Riveter has inspired workers with her power, ebullience, and obvious self-reliance. Today she’d be tweeting #metoo.

In an uncertain world, we can count on one thing: our personal values will be challenged in the workplace. They will be challenged by what we witness, experience, and are asked to do. Mine have, many times.

Concern over this problem was revealed in a 2001-2002 Aspen Institute  survey conducted on a group of MBA students. “When asked whether they expected they would have to make business decisions that conflicted with their personal values during their careers, half the respondents in 2002 (and more than half in 2001) believed they would. The vast majority of respondents both years reported it would be ‘very likely’ or ‘somewhat likely’ that they would experience this as stressful,” according to Professor Mary Gentile, author of a book, Giving Voice to Values: How to Speak Your Mind When You Know What’s Right.

Predictably, that issue spreads risks across the organization like foul air propelled by the wind. “In 2001, over half of respondents said their response to such a conflict would be to look for another job; in 2002 that number declined to 35 percent, still a significant number.”

Nearly two decades on, the Aspen Institute findings corroborate what I see today: employees are under-prepared for responding when their values are challenged at work. Most business schools don’t teach techniques or approaches, and the few that do present choices through a moral lens that defines or prescribes right and wrong. That turns people off.

Professional development in sales and marketing is no better. Aside from the ambiguous demand, “put customers at the center of everything you do,” practitioners ignore the issue altogether. “Don’t lie. Ever.” Huzzzzahh! Easy to say at the sales kickoff. Looks nifty on PowerPoint. But Job #1 for business developers is customer persuasion. Such admonishments are flimsy, and don’t penetrate the thorny dilemmas employees routinely encounter, like choosing between pressuring customers to buy and keeping their jobs another quarter.

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