On this date in 1917, the United States declared war on Imperial Germany, which entered America into World War I (WWI). The Declaration was largely brought on by Germany’s policy of unrestricted submarine warfare designed to starve Britain out of the war before the US could mobilize enough troops to make a difference in the conflict. Germany also made the additional strategic blunder of offering to return to Mexico, Texas, California and other parts of the southwestern US lost after the Mexican War (1848-49).
There were about 50 votes opposing America’s entrance into WWI. One was from Congresswoman Jennette Rankin of Montana who based her ‘No” on the lack of female suffrage. She stated, how could Congress support a war to “make the world safe for democracy” yet still refuse “the small measure of democracy to the women of our country” by denying them the right to vote? Vilified after this vote, she was not returned to Congress in the next election. Rather amazingly, Rankin was returned to Congress. In 1941 she was the sole vote, of 389, against America entering World War II (WWII) against Japan, declaring “As a woman, I can’t go to war and I refuse to send anyone else.”
The US entry into WWI informs today’s blog post which is about innovation. One of the areas that compliance professionals voice frustration about is resources, both monetary and head count. The seemingly perceived or real dearth of resources can lead to frustrations around the innovation process. However, according to a new article in HBR.org, entitled “Innovation Starts with Defining the Right Constraints”, authors Fiona Murray and Elsbeth Johnson believe that what drives big, breakthrough innovations is often constraints or “limitations that force designers to rethink the whole problem and come up with something completely new to address it.” Over the next couple of blog posts, I will be exploring their article from the compliance perspective.
According to their research, the authors believe “a consistent lesson from the research on innovation: while unshackled creativity might intuitively seem to be the best route to novelty, actually some of the most innovative outcomes are produced when innovation is constrained.” Yet, there are caveats to constraints, which are usually two, budget and risk. Budget means innovation will “cost no more than a certain amount — a figure based on assumptions about what kind solution the team will deliver.” Risk is not risk management but more simply, “don’t do anything too risky, especially something that might cannibalize existing business” or “don’t fail because that’s not what gets you promoted.”
Last year saw many compliance budgets restrained so that all innovation products were put on hold until greater certainty could be garnered about the economy and the political climate. The Biden Administration has turned both around with its economic stability and move to vaccinate the vast majority of Americans. Yet during the pandemic year other constraints also came to the fore. The authors identified two additional alternatives: constraining outcomes and constraining times. The authors believe these constraints actually “support genuine innovation”. Constraining outcomes requires a limited number of outcomes while constraining time limits the duration of the project.
The authors believe, “Constraining outcomes and time has precedent in a number of existing strategy concepts.” This means that leaders, most particularly as we come out of the pandemic year, “in the content of strategic change, leaders need to specify clear, long-dated outcomes if managers are to be able to respond with the best ideas about how to deliver a new strategy or change.” They also point out the related concept of the “Commander’s Intent.” In their formulation, “military leaders give their soldiers a clear message about what needs to be achieved and by when, e.g., “we need to capture that territory by the tomorrow,” but leaves it to those on the ground to decide how to do this. Notice that the Commander’s statement doesn’t say: “you can’t spend more than this much” or “we can’t lose any men.” Instead, it states outcome and time constraints so soldiers own how this gets done and can respond as on-the-ground conditions change and enemy tactics emerge.”
The bottom line is that if compliance embraces these two constraints as we move out of the pandemic year and forward with all the changes mandated by the Department of Justice (DOJ) in its 2020 Update to the Evaluation of Corporate Compliance Programs around data, data analytics, risk assessments, continuous monitoring leading to continuous improvement and effectiveness of training; corporate compliance functions organizations can become even more innovative. Compliance can afford to be less concerned about the traditional constraints, “largely because the clear imposition of outcome and time-bound constraints helps deliver more valuable innovation (the objective of a budget constraint, after all) and at lower risk.” For every compliance practitioner coming out of 2020, this will be welcomed news for innovation in compliance.
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