Our first two posts about data analytics considered why analytics is so important to compliance programs, and how compliance officers can start building analytics capability more quickly than one might expect.
Now let’s jump to the far side of this issue. What does an analytics-driven compliance program look like? Or, more precisely — when you harness the full potential of data analytics, what does that allow you to do?
If we had to distill all the benefits of data analytics into a single word, that word would be visibility. Data analytics allows you to see how employees (and third parties) do or don’t engage with your compliance program. That, in turn, also lets you see how well the program is or isn’t meeting your expectations.
We alluded to that concept in our previous post, when we gave the example of an interactive Code of Conduct. Today let’s give a few more examples and show how they support the compliance officer’s quest for an effective compliance program.
Visibility into employee questions and activity. Through vehicles such as an interactive Code of Conduct or an interactive policy manual, you can see how much use the Code gets, and just how much of your audience returns to it within a given quarter.
You can also see what compliance issues are on employees’ minds. Then you can look for correlating factors that might explain sudden swings in interest — say, a surge in interest around harassment that coincides with new anti-harassment training (good) or the arrival of a new senior executive (warranting further investigation).
Visibility into culture and attitudes. Want to know what employees are thinking or doing? Ask — then collect and analyze the data! Do they think integrity is a top organizational priority? Who sets the ethical tone? Do they know how to contact the helpline? Do they believe they can speak up without fear of retaliation? Where could they use more guidance? It’s possible today to seamlessly embed such questions into the training and communications your program already has planned. This elevates those initiatives from a one-way directive to a two-way conversation, showing your employees that they have a voice in your program. Collecting and tracking hard data on questions like these, not just once but periodically over time, will help you draw connections between your program activities and your organization’s real-time culture and help you assess whether your messages are having the intended effect.
Visibility into sub-cultures across the enterprise. Data analytics also lets compliance officers compare the various groups within your enterprise: one function versus another, one geographic location versus another, or even one demographic group against another. You can uncover attitudes or perceptions that might drive non-compliance, difficulties with training, good practices that should be implemented in other employee groups, and the like.
Visibility into employee activity over time. Data can also provide an historical record of how employees interact with the compliance program. That lets you see how they respond to training courses you might implement, or executive messaging about ethical conduct, or even new operating structures (acquisitions, restructurings, and so forth) that might drive them to behave in new ways.
The examples above are only a glimpse of what’s possible with data analytics; we could list many more. The technology to capture that data, and then apply seasoned, smart analysis to generate insight — that all exists today. In fact, a number of our clients are making use of this approach via Rethink’s Drive Analytics (™) service.
Moving From Analytics to Progress
Data analytics needs to do more than provide mere visibility into what’s happening among your employees, of course. When operating at its full potential, data analytics will provide actionable intelligence that compliance officers can use to elevate your organization’s culture of compliance.
In practice, that would manifest as two important capabilities.
First, data analytics would be able to help you identify weak spots in your compliance program, which in turn would help you to anticipate future needs. For example, strong analytics in your training program would allow you to see which groups of employees engage most with the material and which ones don’t. Analytics in your policy manual would help you understand the issues most likely to surface as complaints in your whistleblower hotline.
Those insights could then help you understand which internal controls are most important (say, approvals for spending on high-risk clients, or documentation necessary for granting discounts to resellers). That, in turn, could guide your audits of compliance controls.
Second, strong data analytics will allow you both to set your compliance program objectives, and to measure progress on achieving those objectives. That is, by understanding how your employees do or don’t engage with the compliance program and the topics they indicate or demonstrate a need for guidance in, you can then inform curriculum plans and set objectives to increase engagement — and define key performance indicators to measure that engagement.
For example, rather than racking up higher completion rates for training, you might measure whether employees are scoring better on their training; then see whether that greater knowledge of compliance policies results in higher or lower call volume to your internal hotline.
The value here is that you can demonstrate both the logic of your compliance program and the progress of your compliance program — to senior executives, the board, and ultimately to the Justice Department. Data analytics lets you see more deeply into your organization’s compliance risks, which so often are dictated by how employees engage with the company’s policies and procedures. Once you have that holistic perspective, you can introduce improvements as necessary and see how they perform.
Or, to put it another way, you can determine whether the compliance program is well-designed, adequately resourced, and works in practice. That’s the definition of an effective compliance program, and data analytics firing on all cylinders can help you get there.