Compliance breakdowns are in the headlines and on every manager’s mind these days. Organizations help manage the risk of becoming the next headline by creating a robust and effective compliance program – and training is a critical part of a successful program. Despite this, many organizations fall short with their training programs. Some of the most common and problematic shortfalls include failing to have a dedicated budget, not planning out programs, and not being able to measure the effectiveness of ethics and compliance training programs to determine if they work.

Less than a third of organizations use sophisticated measurement methods such as gathering data from ethics hotlines to gauge whether employees are absorbing their ethics training guidelines.

As you can guess, these challenges are closely intertwined.

The results from our 2017 Ethics & Compliance Training Benchmark Report (to be released on July 27) suggests companies understand the importance of compliance. Fifty-nine percent of survey respondents chose “comply with laws and regulations” as their top objective – but knowing whether their program is actually advancing this objective is still elusive. And even more elusive is the ability to understand and articulate to those who control the budget dollars (include C-level executives and directors) the value that a program brings to the organization.

Less than a third of organizations use sophisticated measurement methods such as gathering data from ethics hotlines to gauge whether employees are absorbing their ethics training guidelines. Even fewer survey their workers or thoroughly evaluate the performance of their compliance programs. Lack of adequate program assessments makes it harder for compliance managers to illustrate the ROI to justify their programs with C-level executives and directors.

Measuring Actions vs. Measuring Behavior Change

Eighty-five percent of organizations did report some kind of effectiveness measurement. The bad news is most of those approaches are not as sophisticated as they could be – e.g., they rely on completion rates (an activity measurement, not an effectiveness measurement). Far fewer companies actually attempt to evaluate employee behavior to see if all those tests are having an effect.

Given the huge potential damage from an ethical breakdown, this is surprising. Not only can an organization’s market capitalization suffer a devastating hit from a corporate scandal, but uncontrolled propagation across social media can take a brand down immediately. The litany of recent corporate missteps should have any executive or director wondering what’s hiding under a rock that could blow up on social media tomorrow.

Program sophistication is a key indicator of a program’s success. Whether a program is basic, reactive, maturing or advanced tells us a lot about the offerings, results and budget of that program.

Mature program assessments return actionable effectiveness measures. This type of useable data has been key to guiding programs through deploying one of the most advanced practices – risk-based training.

There’s a quote that is frequently misattributed to management sage Peter Drucker: “If you can’t measure it, you can’t manage it.” Drucker wrote those words, but only within a statement about how measurement is one part of a larger job that requires communication above all else. But in the ethics and compliance space, measurement of a tool as critical as training is becoming increasingly important.

Risk-Based Training: Targeting the Message

Budget constraints are a persistent challenge for training programs and according to our 2017 Ethics and Compliance Training Benchmarking Report, almost a quarter of respondents cited “learner fatigue” as a top challenge to their ethics and compliance training, while 19 percent reported it was “not seen as relevant or useful.”

Tailoring training to the risk level of the employee (making it relevant and useful) is an effective way to counter employee ethics training burnout and spread limited resources more effectively across the organization.

Tailoring training to the risk level of the employee (making it relevant and useful) is an effective way to counter employee ethics training burnout and spread limited resources more effectively across the organization. Domestic workers who have no involvement in foreign sales probably don’t need training in the Foreign Corrupt Practices Act, for example, though they do need to be up to date on anti-discrimination laws and their organization’s whistleblower hotline.

Things to Consider When Launching a Risk-Based Training Program

• Be prepared to spend time categorizing your employees into groups by the risks they present Maybe you start at a very simplistic level (by job title or geographic location); this is a must if you plan to assign training based on risk-level
• Identify your risk areas as an organization – what topics do you need to cover, and at what depth. Figure this out for each group of employees (low risk, medium risk, and high risk)
• Ensure that you have a defined budget to support your initiative; lack of budget is often the best way to ensure that your program won’t be successful
• Make sure directors are aware of your compliance program and regularly informed about results

Benchmark your company’s objectives and outcomes against competitors and industry standards.

So to develop an effective environment where ethics and compliance are practiced by all in the organization, both sides of the equation are necessary. Measure performance on the key metrics of compliance, and use the results of those measurements to engage in training across the organization to ensure everyone understands that breaking the rules is unacceptable.

As we say in our business: Culture eats compliance for lunch. But building an effective culture requires close attention to whether the message is being disseminated properly, absorbed, retained and applied.

View original article at Ethics & Compliance MattersTM