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Changing the Compliance Mindset: How to Inspire Proactive Improvement

By Roger Price - July 26, 2016

Compliance_for_Retail_and_Store-Based_Businesses.jpgIf you’re leading a retail or franchise business, then you know all too well that ensuring all of your various operating locations comply with appropriate regulatory requirements and maintain their industry-based certifications is critical to the business.

At a minimum the consequence for compliance failures is that your brand suffers. At worst it can result in certain locations being shut down.

How it is vs How it Should be

For this reason many store-based businesses have developed an entire managing process to ensure compliance. This typically involves conducting regular audits at each location by trained professionals who develop long action lists to address any and all compliance gaps. However, the locations that are subject to this process rarely see it as an opportunity to improve. Instead it’s all-too-often viewed as a distraction to the business… a “dog and pony show” that makes their lives harder and doesn’t add value.

And in my view that’s a huge problem, because if the belief among folks working at the location-level is that compliance is a hassle, then tangible opportunities to improve the business are being missed. In other words, something needs to be done to change employee mindsets so that they don’t see compliance as a nuisance, but rather a mechanism for improving the overall performance of the operation.

There are a few ways you can do this, but here are two recommendations for how to change that mindset.

Think in Terms of an Improvement Model

I once came across the following quote by an author named Brian Tracy: 

"Goals allow you to control the direction of change in your favor."  

I think that’s a profound statement and applies to this topic in a very particular way.  Namely, if compliance to standards is the only goal (or it’s perceived that way), then once that goal has been achieved, you’re no longer able to tap in to employees’ desires to get better in a meaningful way. Simply maintaining adherence to a previously achieved standard is hardly motivating. 

Runner_completing_a_marathon.jpgThink about a person who sets a goal of completing a marathon. Once that goal is achieved, they are unlikely to be equally as motivated to train the next year based on the same goal.  Instead, they will typically raise the goal, perhaps by bettering their race time or committing to complete two marathons in one year instead of just one. 

In retail and franchise environments, most organizations try to address this perceived lack of motivation through negative reinforcement, warning of the consequences of non-compliance, which is a notoriously ineffective over time. While it might get people to comply, it won’t drive discretionary effort. And if they’ll do only what they need to do and nothing more, you're not accomplishing anything.

In our experience, one tactic to move past this lack of motivation is to frame the compliance requirements in terms of an overall operational improvement model. To accomplish this, the standards for compliance must be woven into a framework that employees can use to make sustainable progress toward operational maturity. Compliance to standards is merely the initial step in that journey. Think back to our marathon runner. While year 1 may be about training to finish a marathon, the performance goals and training plan for years 2 and beyond are also mapped out. 

AAHA_Veterinary_Standards.jpgAs an example, we’re working with a veterinary group that operates about ½ a dozen locations in the Mid-Atlantic and is now actively looking to expand elsewhere. 

In the veterinary world there are a set of standards established by the American Animal Hospital Association (AAHA) that many clinics adopt both to ensure that they’re providing the proper care and because the AAHA certification helps them to differentiate competitively.

However, these AAHA standards don’t begin to cover everything that’s required to ensure that a veterinary clinic is running a tight ship operationally.  Just a few of the issues that any franchise veterinary business would need to standardize to optimize customer experience and ensure brand integrity include:

  • Organization and management of exam room supplies
  • Patient check-in and check-out process
  • Policy and practices for advertising 3rd party services
  • Dos and Don’ts when it comes to clinic decor
  • How daily work assignments are made and communicated
  • Inventory management policies and practices
  • Equipment inspection and calibration – frequency, responsibility, quality assurance, etc.
  • New employee hiring and onboarding process
  • Role descriptions and job responsibilities

The point is that compliance to a minimum standard is not sufficient to ensure that each location is doing everything it can to operate as efficiently and effectively as possible. However, if those standards are woven into an overall improvement model that each location can use to drive consistent progress toward maturity, then you can tap into people’s desire to be the best at what they do, which fosters a totally different mindset. 

Craft an Iterative Improvement Routine

Cramming_for_the_next_exam.jpgIn high school, I took four semesters of Spanish. I got straight A's and even won an award my junior year. Despite my success, I decided not to take Spanish my senior year because I had fulfilled my requirement, and I didn't plan on studying the language in college. In hindsight, not my best decision. 

Fast forward to my Freshman year of college and I come to find out that the university I had chosen had a strict foreign language requirement. When it came time for the mandatory language proficiency test, I had forgotten almost all of what I learned in high school, did poorly on the test, and ended up having to take yet another four full semesters of language classes in order to graduate.

Procrastinate > Cram > Pass > Repeat

So what does any of that have to do with compliance? Unfortunately, the dynamic within any business that’s primarily compliance focused is often similar to my experience learning Spanish. 

Namely, the operating locations become adept at preparing to pass the compliance audit (the test) and, once passed, things quickly return to status quo until it’s time to prepare for the next audit. We're simply stuck in the age-old vicious cycle of procrastinate, cram, pass, repeat. Of course this defeats the entire purpose behind having standards. 

So... what works?

Some organizations have tried to overcome this challenge by running informal audits periodically or being less transparent about when an audit might take place, which can have an effect but doesn’t truly address the issue of mindset. What we’ve found works quite well is to make it easy for the locations to regularly self-assess their operational maturity (and set the expectation that they do so) and use those self-assessments as the basis for a constantly updated and highly transparent action plan.

In fact, our clients have found this approach, when combined with an improvement model like we described above, can dramatically improve the operational maturity profile of the entire organization because it allows all locations to move forward autonomously and in parallel.

The goal should be to routinize a focus on improving operational maturity in a way that it becomes ingrained in how each location does business. When that happens, compliance to standards becomes almost an afterthought.

Looking for more specifics on how to get better results from your improvement efforts? Check out our latest guide below, How to Ensure ROI from Your Continuous Improvement Approach

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