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Want to measure corporate compliance? Look for the dirty socks.

December 11, 2017 10:16:46 PM CST / by Ricardo Pellafone

If you read our blog, you are probably on board with the concept that corporate compliance should produce measurable results. We talk about it on this blog and in our book and at conferences and in this podcast.

But you are going to run into people who feel otherwise.

And that's normal. Because even if you believe there's no way that compliance programs are the one thing that can't be measured, people have just said that for so long that it's natural to need some convincing.

When you run into folks like that (and you will), here’s a quick analogy you can use to help them out and explain why compliance programs are measurable—and how to do it.


Please, think of the dirty socks.

Let’s pretend you have a teenaged son.

And—go with me on this—let’s pretend that your teenaged son is gross.

And so one of your personal struggles is to get him to keep his bedroom clean. Not "hospital operating room" clean; you know that is impossible. Just less gross.

So, you decide to tackle just one aspect of teenaged-son-grossness: leaving dirty socks on the floor. You sit him down and explain that cleanliness is a value in your house, that you have a policy that socks need to go in the dirty clothes hamper, and then you show him how to do that by putting a sock in the hamper while he watches.

That is, you articulate a household value and then issue a policy and training in support of that. Classic compliance and ethics stuff.

Got it? Good. So how would you measure if your efforts worked?

Well, here are three options. 


Option #1: the “you can’t prove a negative” approach.

The first option is to say that “no dirty socks left on the floor” is more or less proving a negative: after all, how can you prove the absence of a dirty sock, let alone that this was caused by your policy and training?

And so you don’t try to measure the dirty sock problem itself.

Instead, you spend a lot of time with other parents benchmarking your no-dirty-socks policies and training, and then you get your no-dirty-socks approach certified, and you end up winning an award for “Best No-Dirty-Sock Household."

You do not know if there are fewer dirty socks on the floor because you never actually look. Instead, you amass binders full of records and certifications and awards, all of which say you are trying your best—so you have something to show in case the sock situation gets really bad and a neighbor calls Child Protective Services on you.

Option #2: the “culture” approach.

You decide that “no dirty socks left on the floor” is too rules-based, so instead you decide to focus on your family’s culture of cleanliness. You issue monthly surveys to everyone in your household about what they think “cleanliness” means in your house and their perception of cleanliness as a way to capture this culture.

You do not know if there are actually fewer dirty socks left on the floor, because no one but your son actually goes into his room. But your son keeps giving you data that says he thinks the house is getting cleaner, so you assume that it must be true.


Option #3: the “just go look” approach.

You go in your son’s room on a regular basis and look. If the number of socks on the floor go down, you take that as evidence that your efforts are working. If not, you adjust and try again.

Whatever the outcome, you use that as one datapoint that helps show your household's cleanliness culture—because you base “culture” on what people are actually doing, not just what they self-report.


Measurement is monitoring.

Option #3 is the right approach. It is called “compliance monitoring,” and that's how you measure corporate compliance.

Now, if “monitoring” sounds familiar, it should—it's part of a compliance program under the Federal Sentencing Guidelines. And the Federal Sentencing Guidelines are just enshrining the basic fact that compliance is about human behavior, and human behavior is measurable; this is not exactly groundbreaking stuff.

And so—when you run into people who tell you that compliance isn’t measurable? You are probably just talking to people who don’t do any monitoring.

Because if they did, they’d just say “sure, we measure compliance; here’s all the stuff we monitor and how it changes over time in response to our efforts.”

Of course, you still have to figure out what to monitor, and how to do it, and how often to get the data.

But these are questions of logistics and design, not possibility; they’re the type of questions that social scientists and businesspeople have to answer every time they try to run an experiment or see if a business initiative was worthwhile.

Sometimes these questions are really easy and obvious and sometimes they are really hard and complex, but the answer is never “well, there’s no point in trying, so let's do some other stuff instead.”

That is, sometimes the dirty socks are sitting right there in a big pile, and sometimes you have to get down on the floor and look under the bed. But either way, you can find them and count them and track them over time to see if the number is going down.

And that's how to explain why and how corporate compliance is measurable. Using socks. 



PS: If you want to do surveys and certifications and awards, cool. There is nothing wrong with that, and they have value in their own right. But they are not a substitute for monitoring. 

For example, social scientists certainly use surveys, and well-crafted, carefully-written surveys could be used as a method of monitoring areas where observation might be excessively difficult. But these should complement your monitoring in limited, targeted areas, not act as a substitute for doing monitoring in the first place. 

Ricardo Pellafone

Written by

Ricardo Pellafone

Ricardo used to be in-house compliance, leading investigations for a sovereign wealth company in Abu Dhabi and a Fortune 500 tech company in California. He has degrees in psychology and law.