Law & Order

When innovators should engage Legal/Compliance

In highly regulated industries like healthcare, adherence to specific laws and regulations is critical, but may slow down or even inhibit innovation. It doesn’t have to: many highly regulated industries have been extremely innovative, think finance or aviation.

Often, compliance implementation creates a risk averse environment and is perceived by business teams as a reason not to innovate. Innovation leaders can address this barrier to innovation by engaging with their legal/compliance partners, explain what the specific innovation is about, create trust and discuss collaboration.

Timing is essential. Ideally, Compliance should be part of the earliest innovation phases. If it is not possible to engage Compliance in the ideation stage, then at least include them before the early qualitative assessment stage and before exposing customers to innovative solutions. Workload is typically a barrier, so it is more effective to connect with Compliance when ideas have been narrowed down to a few promising ones. This can be done (sometimes even better) informally. This approach will help Compliance to be “part of the solution” and join the innovation team to help think along on how the innovation can help achieve the business objective. This will avoid that Compliance will have to take on the role of “policeman” at a later (approval) stage.

I engaged with Compliance colleagues in both the headquarters and peripheral parts of the organization. My most important goal was to ensure that innovators in the field engaged timely with their Compliance colleagues, to assess and constructively mitigate legal and reputation risk. My other goal was to have the headquarters Compliance leadership communicate, stimulate and facilitate collaboration on innovation to their Compliance colleagues in the field.

• I recall an innovator, who wanted to solve a business challenge in an African country by providing patients with an innovative “around the pill” reminder tool. When discussing this idea with Compliance, a major concern was raised that the tool might be perceived as an unacceptable financial value for the patient. Although the innovator didn’t have an immediate solution to address this, it was agreed upon that a qualitative assessment with patients could be done. During the interviews, it became overwhelmingly clear that the patients saw so much value in the tool that they wanted to pay for it. This allowed us to change the original plan and not provide the tool for free, eliminating the compliance concern. If we would have done the interviews first and then checked with Compliance, we would not have been able to address this concern and might have stopped the experiment, or incur additional costs and delays.
• A major accelerator in the partnership with Compliance was the identification of one regional Compliance colleague who was passionate about innovation, was eager to collaborate with business colleagues to experiment, was well respected by her colleagues and was an excellent communicator. This collaboration created experiences, learnings, trust and opportunities to showcase how to collaborate and what can be accomplished.

Each time I identified a new, really out of the box Innovation, I ran it by the headquarters Compliance officer, to help alleviate some of the pressure that might be felt by the field Compliance person – and to help speed up the experiment.

As William Randolph Hearst said:

“You must keep your mind on the objective, not on the obstacle.”

So, as Innovation Leader, I worked both top-down and bottom-up: with senior Legal/Compliance colleagues to set the mindset for their teams and with the field business teams to ensure early stage engagement with their local Legal/Compliance colleague.

More reading: Is Compliance Killing Corporate Innovation? and When legal and compliance meet agile

What are your thoughts, experiences? Please share below!