Whatever your view on regulation, the reality is that it has increased since 2008. The responsibility of the FCA (Financial Conduct Authority) has crept into new sectors, now making it the regulator for consumer credit.
Martin Gibson from OEE Consulting shares how businesses can use regulation to their advantage and ensure a culture of continuous improvement.
Most of the arguments we hear about burdensome regulation focus on the internal effects: “it’s adding to my costs”/“detracting focus from core activities”/“complicating for my employees”.
We often see similar debates and circumstances surrounding quality management systems and their value to a business – but could these attitudes be part of the problem?
If regulation is always perceived as negative or disruptive it can become a tick box exercise, a ‘bare minimum’ approach where organisations only target individual aspects of non-compliance.
Organisations often ignore the context of regulation, and therefore neglect the intention of the regulators, handing off to a specialist internal team without a strategic overview.
These teams often operate in isolation from the business itself, the process as a whole, and crucially from the end user.
Remember, you and the regulators both want to help the same people: your customers!
We see plenty of instances where the regulatory requirements of an organisation are undertaken as a separate activity, in isolation from the processes they are designed to improve.
Whilst having a quality and regulation team may be the easiest way to show you are implementing requirements, it doesn’t always ensure that the best outcome is achieved for customers, and leaves room for compliance issues.
The only way to counter this is to change the organisational approach to regulation. It must become endemic within the business, and within its process structure.
This means that any specialist internal teams must be fully integrated and led by credible and proven experts with a pan-business remit. Their targets should be aligned with the overall business unit target, making the director of the unit directly responsible and accountable for implementing and integrating regulatory change.
We work hard alongside our clients to ensure requirements for regulation are developed and embedded successfully.
Our five-step approach aligns regulation, risk and quality requirements to overall business goals. This ensures they become embedded with the minimum of disruption to the ongoing operation itself.
Regular review and amendment ensures that controls are up to date and valid. It can even identify if they can be removed altogether due to changes in regulation or system opportunities.
Applying OEE Consulting’s five step model provides a simple method for ensuring that the organisation can adopt regulations in a way that is beneficial, ensures compliance and works towards continuous improvement.
As consumer trust in organisations decreases, regulation and enforcement are likely to continue to increase.
It has never been more important for organisations to think about the wider context, and focus on the customer.
Regulation adherence can’t simply be a veneer of lip service or minor process change. In successful organisations, it will be firmly embedded within the business, acting as a mechanism for genuine and sustainable continuous improvement.
To put it simply, regulation must be perceived as an opportunity, not a threat.